Architect and interior designer services under service tax
“Architect” means any person whose name is, for the time being, entered in the register of architects maintained under section 23 of the Architect Act,1972 (20 of 1972) and also includes any commercial concern engaged in any manner, whether directly or indirectly, in rendering services in the field of architecture;
In case of an Architect, taxable service is a service provided, to a client, by him in his professional capacity in any manner. The nature and scope of the services rendered by architects are well delineated under the provisions of the Architects Act.
Broadly, the work of an architect starts from providing appropriate advice keeping in view the requirements of the client at the preliminary stage of initial sketches, specifications and drawing of plans, and consists of providing detailed drawings, approval of the drawings from the concerned authorities, supervision at each stage of construction, and till the point when the completion certificate is obtained from the authorities.
“Interior decorator” is a person engaged, whether directly or indirectly, in the business of providing by way of advice, consultancy, and technical assistance or in any other manner, services related to planning, design or beautification of spaces, whether man-made or otherwise and includes a landscape designer.
Taxable service is a service provided to a client, by an interior decorator in relation to planning, design or beautification of spaces, whether man-made or otherwise, in any manner.
Some departmental clarification
- The services rendered by art directors of films and others who render services of design etc. for setting up temporary structures/settings for shootings, etc. do not attract the service tax levy as such interior decoration is only of a temporary nature.
- Vasstu/feng shui consultants offering services by way of advise relating to planning and designing of spaces, so they come under the category of interior designers.
Point of taxation in case of architect services
It is important to note that rule 3 of Point of Taxation Rules, 2011 provides provision as to when services shall be deemed to have been provided under normal circumstances. As per Rule 3 of POT Rules, 2011 point of taxation shall be determined on earlier of the following dates:
1. Date of issue of invoice or payment, whichever is earlier
(If the invoice is issued within the prescribed period of 30 days from the date of completion of the provision of service)
2. Date of completion of the provision of service or payment, whichever is earlier
(If the invoice is not issued within the prescribed period as above)
3. Date of receipt of advance payment
Up to 31.03.2012, if the following 8 services provided by individuals or proprietary firms or partnership firms then these services shall be deemed to have been provided on the date on which payment is received:
- Consulting Engineer’s Services
- Architect’s Services
- Interior Decorator’s Services
- Practicing Chartered Accountant’s Services
- Practicing Cost Accountant’s Services
- Practicing Company Secretary’s Services
- Scientific or Technical Consultancy Services
- Legal Consultancy Services
From the combined reading of Rule 5B of Service Tax Rules, 1994 and Rule 7 of Point of Taxation rules, 2011 we can say that in respect of above 8 services rate of service tax shall be taken of the date on which payment is received irrespective of date of issue of invoice or completion of services