The Centre has taken several steps to boost the process of reforms, implementation of pending schemes and completion of delayed projects, as the nation heads towards the impending polls the following year.

With the Indian Prime Minister, Mr A B Vajpayee, taking the initiative to clear the backlog, the planning Commission has been working in consultation with the central ministries to chart out the priorities and monitor progress on each of the items to ensure successful completion before the end of this fiscal year.

Commissioning or installation of plant, equipment or machinery by a commissioning or installation agency, is chargeable to service tax. As commonly understood, the activity of installation means the act of putting an equipment, machinery or plant into its place and making it ready for use. The activity of installation will start after erection, which would refer to putting up civil structures. Commissioning of a plant would mean operationalising an installed plant / equipment / machinery. Thus installing a booster pump, air-conditioner, water filter, water heater, etc. would be covered in the definition and be taxable, as all these things connected to machinery or equipment.

A very recent notification has been issued, which exempts commission or installation services provided by a commissioning or installation agency other than a commercial concern. Accordingly the commissioning or installation services provided by an individual or a non-commercial concern will be exempt from service tax.

Further another notification has been issued which provides that in case of a contract which involves the commissioning or installation service along with supply of plant, machinery or equipment, and where the value of the supply is not separately ascertainable, service tax will be payable only on 33% of the gross amount charged for commissioning or installation and supply of plant, machinery or equipment. It is optional for the concern to avail of this notification. It is emphasized under this notification that the gross amount (33% of which is chargeable to service tax) shall include the value of the plant, machinery, equipment, parts and any other material sold by the service provider along with the commission or installation service. This notification is applicable to all contracts where the value for individual components of the contracts is not separately ascertainable.