Declared Services Page

According to Section 65B (22) "declared service" means any activity carried out by a person for another person for consideration and declared as such under section 66E.

According to Section 66E (e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; shall constitute declared service.

In terms of this entry the following activities if carried out by a person for another for consideration would be treated as provision of service.

• Agreeing to the obligation to refrain from an act.

• Agreeing to the obligation to tolerate an act or a situation.

• Agreeing to the obligation to do an act.

Further, the activities of (1) Refraining or forbearing to do an act in return for provision of service, (2) tolerating an act or a situation in return for provision of a service or (3) doing or agreeing to do an act in return for provision of service - amounts to non-monetary consideration. The non-monetary consideration also needs to be valued for determining the tax payable on the taxable service since service tax is levied on the value of consideration received, which includes both monetary consideration and money value of non-monetary consideration.

Would non-compete agreements be considered a provision of service?

Yes. In case a company or any other person enters into a non-compete agreement with another person for a consideration then it would be a provision of service.