Annexure IX
Authorised service station for service or repair of motor cars and two wheeled
motor vehicles
1. As per section 65(8), "authorised service station" means any service station,
or center, authorized by automobile manufacturer to carry out any service or repair
of any motor car or two wheeled motor vehicle manufactured by such
manufacturer. The taxable service, as per section 65(72)(zo) is any service
provided to a customer by an authorized service station, in relation to any service
or repair of motor cars or two wheeled motor vehicles.
2. Any service or repair provided by an authorized service station in relation to
motor cars and two wheeled motor vehicles, will be covered in the ambit of service
tax. Examples of taxable services include services provided during warranty period,
subsequent services such as routine check of performance of engine and vehicle,
engine tuning, engine oil check, gear oil check, wheel alignment, wheel balancing,
clutch and brake adjustment, wheel rotation, cleaning/washing and any repairs
undertaken. However cost of parts and accessories supplied during course of repair
and servicing of vehicle will not be includible in the taxable value. Such cost should
be shown separately in the bill/ invoice.
3. Authorised service station provides free service in respect of new vehicles
during the warranty period on behalf of the manufacturer and they are reimbursed
for the same by the manufacture of such vehicle. In this regard a point has been
raised as to whether service tax is leviable on the amount reimbursed to them for
carrying out free services. It is clarified that though the authorized service stations
are providing free service to the customer during the warranty period, they are
being reimbursed service charges for the same by the manufacturer of motor
vehicles. The definition for value of taxable service specifically provides that the
reimbursement received from the manufacturer of motor vehicles for free service
rendered to the customer is includible in the taxable value.