Certain issues were raised regarding the scope of the definition of Business Auxiliary Services. They have since been clarified through service tax notifications:

• Business Auxiliary Services have been described as covering activities such as evaluation of prospective customers, processing of purchase orders, customer management, information and tracking of delivery schedules, accounting and processing of pricing policies and managing distribution and logistics.
• The services provided in relation to getting a customer, verification of prospective customer, processing of purchase order, etc. would also be covered under the service tax, as the law specifically provides for the inclusion of such services as Business Auxiliary Support Services.
• The introduction of Business Auxiliary Services had a direct impact on call centers and medical transcription centers, considered a part of the Business Auxiliary Service segment. Subsequently, Business Auxiliary Services provided by call centers (i.e. commercial concerns providing assistance, help or information, through the telephone, on behalf of another person) and medical transcription centers (i.e. commercial concerns transcribing medical history, treatment, medical observations and the like) have been fully exempted from the levy of service tax, with effect from July 1, 2003 through a Service tax notification.
• It has been clarified that Information Technology service implies any service in relation to designing, developing or maintaining of computer software or computerized data processing or system networking or any other service associated with the operation of a computer system.
  In this regard, it is stated that only if the output service provided by a service provider is in the nature of the above operations, such exemptions would be available. Consequently, the individual service has to be examined with reference to the explanation provided on the definition of business auxiliary services and only such output services, which qualify to be IT services in terms of this explanation, will be excluded from taxable service under the Business Auxiliary Service segment.

The above clarifications should bring cheer to the software sector and to medical transcription and call centers, and as such their services may not be regarded as Business Auxiliary Services.