According to Section 65 (105) (zzzk), any service provided or to be provided; to any person, by any other person, in relation to automated teller machine operations, maintenance or management service, in any manner is a ‘taxable service’.
According to Section 65 (9b), “Automated teller machine operations, maintenance or management service” means any service provided in relation to automated teller machines and includes site selection, contracting of location, acquisition, financing, installation, certification, connection, maintenance, transaction processing, cash forecasting, replenishment, reconciliation and value-added services.
According to Section 65 (9a), “Automated teller machine” means an interactive automatic machine designed to dispense cash, accept deposits of cash, transfer money between bank accounts and facilitate other financial transactions. (Write above 65 9b)
ATMs (Automated Teller Machines) may be owned by banks and other financial institutions who outsource a number of activities related to ATMs such as operations, maintenance or management of hardware and soft ware, cash replenishment etc. In other cases, there is comprehensive outsourcing of entire ATM related services. Such outsourced services are taxable under this category. Some of the specific areas of outsourcing are mentioned in the definition of ATM operations, maintenance or management
Service Tax is not levied on use of ATM; therefore, the persons who are using ATM services are not charged Service Tax. The taxable service is operation, maintenance or management of ATM
(a) Small service providers whose aggregate value of taxable services rendered in the previous year has not exceeded the limit of Rs. 10,00,000/- (Service Tax Notification No. 8/2008-ST dated 01.03.2008)
(b) Services provided to the United Nations or International Organisations
(c) Services provided to Special Economic Zones (SEZ) units (including unit under construction) and SEZ developers
(d) Services which are exported as per ‘Export of Services’ Rules
(e) Services provided for official or personal use of foreign diplomatic missions and family members of diplomatic missions.
(f) Services provided by Reserve Bank of India
(g) Out of total value of service provided proportionate value of goods and material provided by the Service Provider