Services rendered by sub-brokers to commodity brokers not taxable

Services provided by an authorised person or sub-brokers to the member of a commodity exchange are not taxable and no service tax is required to be paid on such services, the finance ministry said today.

Those services on which service tax was not being levied during the period between 10 September 2004 and 30 June 2012, will not be taxed as per the prevalent practice, the ministry has clarified.

''The central government has directed that the service tax payable on services provided by an authorised person or sub-broker to the member of a recognised association or a registered association, in relation to a forward contract, shall not be required to be paid in respect of such taxable service on which the service tax was not being levied during the period commencing from the 10th day of September 2004 and ending with the 30th day of June 2012 in accordance with the prevalent practice,'' a finance ministry release said today.

The central government, it added, is satisfied that a practice was generally prevalent regarding levy of service tax (including non-levy thereof), under section 66 of the Finance Act, 1994, on services provided by an authorised person or sub-broker to the member of a recognised association or a registered association, in relation to a forward contract.