New Delhi: To dispel common misapprehensions resulting from Budgetary proposal regarding service tax on ATMS, the Finance Ministry on Wednesday clarified that the tax was not leviable for use of ATM by the card holders.
"Service tax on the proposed taxable service is leviable only if the services provided are in relation to operations, maintenance or management of ATM and are outsourced by banks to third parties," an official release said here.
The release said third parties who provide services to banks in relation to ATM operation, maintenance or management are covered under the category of the proposed service.
When ATMs are operated, maintained or managed by banks on their own, service tax liability does not arise.
"It is, therefore, clarified that the proposed service under Section 65(105)(zzk) of the Finance Act, 1994 will not result into any additional service tax liability on the users of ATMs," the release said.
Services provided in relation to Automated Teller Machine (ATM) operations, maintenance or management are proposed to be brought under the levy of service tax in the Finance Bill, 2006 vide section 65 (105) (zzzk) of the Finance Act, 1994.
The term 'Automated Teller Machine' is defined under clause (9a) of Section
65 and the term 'Automated Teller Machine operations, maintenance or
management service' is defined under clause (9b) of Section 65.
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