India - Service Sector: NSS 63rd Round, Schedule 2.345, July 2006 - June 2007

- Items 301 to 339: This block will record important operating expenses during the reference period. There are 7 sub-blocks in block 3 for different activities. Each sub-block has to be filled up only for relevant NIC codes.
No separate sub-block is there for other community, social and personal services (NIC 04 division 90 to 93).
Information for these activities will be covered in block 3.1 only.
- All expenditures in these blocks are to be recorded on payable basis.
- In oral enquiry, expenses are to be properly apportioned for the reference period and recorded. For items where payments are not yet made, payable amount may be obtained and recorded. For example, amount payable for fuel consumed or electricity purchased during the reference period may not be readily available.
- The valuation of the consumption of material is done in terms of purchase price, which means delivered value including agent’s commissions and taxes/ duties paid if any. In case of home-grown raw materials, ex farm price will be considered. Imputation of values for freely collected materials will not be made. However, any labour charge, transportation charges actually incurred will be recorded.
- The items of blocks 3 to 6 have been given 3-digited item numbers to facilitate data processing. The “total” item always ends with 9. The value to be reported in the schedule will be in whole number only.
- The value of consumption relates to all the materials utilised in the process of production of goods or services.
These may be purchased during the reference period, or prior to the reference period, or the household may supply these. The values of these materials are to be calculated by taking the purchase price, where purchase price will mean the delivered value of the goods at the enterprise, i.e., it will include agents’ commissions and taxes/duties paid, if any. Evaluation of the materials supplied by the household will be done at the ex-farm price.
- For recording data from books of accounts, figures appearing in the P&L account or income & expenditure account will be considered in its entirety, except a few items (like fines and penalties, etc.) which will not be recorded in the schedule. If entries are clubbed in the enterprise account, necessary bifurcations may be made after consulting proper records. If it is not possible to get bifurcations, entries may be recorded in the schedule based on majority criterion.
First sub-block of block3: Hotels and restaurants (NIC-04 group 551 and 552)
Item 301: articles consumed for food & drink preparation: Values of all articles consumed for preparation of food and drink will be recorded for the reference period. All spices, oil, vegetables, meat, eggs, curds, milk, sauce, squash, etc. will be taken into account. The articles consumed as soft drinks and alcoholic drinks are also to be considered. The value should include consumption out of the credit purchases as well.

Item 302: purchase value of goods traded: Some articles like cold drinks, cakes, pastries, beer, wines etc. are traded by the hotels and restaurants. The purchase value of such goods may be recorded against this item.

Item 303: crockery, glassware, bedding and other consumables: Expenditure on all items like crockery, glassware, bedding and other consumables i.e. items those are of semi durable nature during the reference period , will be recorded against this item. Care should be taken so that the fixed assets are not covered here. Furnishing materials like curtains, flower vases, etc. will also be reported here.

Item 304: fuels and lubricants: Expenses on fuel and lubricants used for cooking and transport will be reported against this item. Note that cooking oil reported in item 301 will not be reported here. Whatever is reported here will not be repeated again in item 342.
Second sub-block of block 3: transport (NIC-04 group 601, 602, 611, 612, class 6301 and 6303 to 6309): The major items of transport enterprises will be recorded against items 305 to 311. Care may be taken that items reported here are not duplicated in item 342 of block 3.1.
Items 305 and 306: Petrol, diesel, lubricants, etc. / tyres, tubes, batteries and retreading expenses: Value of petrol, diesel and lubricants consumed during the reference period will be entered in item 305. Expenses incurred on changing batteries, tyres, tubes and retreading cost of the tyres will be reported against item 306.
Item 307: repair and maintenance charges of the transport equipment: Repair and maintenance charges of the transport equipment will be entered in item 307. Expenditure on repair and maintenance should not include expenditure of a capital nature, which can enhance the longevity of the equipment. Replacement of some major part of the transport equipment (like reconditioning of engine, fitting of LPG/CNG unit, retreading of tyres, etc.) will not come under this item. These should be treated as addition to fixed assets. If animals are used for drawing transport equipment, then fodder cost as well as medicines and service cost for herding the animal will also be incorporated in item 307.

Item 308 and 311: toll tax, octroi, local fees, and insurance charges, etc./ charges paid towards storage of goods:
Item 308 will contain the taxes, local fees, insurance charges paid each time a vehicle is run. But annual road taxes and registration fees, to be recorded in item 508, will not be a part of item 308. Charges paid for storage of goods and parking of vehicles will be reported against item 311.
Third sub-block of block 3: storage (NIC-04 class 6302): Items 312 and 313 are provided for storage and
warehousing enterprises.
Items 312 and 313: consumable used in the storage/warehouse and insurance charges etc.: All consumable stores used in the warehouses will be recorded here and not in item 355 of block 3.1. The warehousing enterprises are generally insured for some risk coverage. The insurance charges payable for the commodities stored will be reported in item 313.

Fourth sub-block of block 3: communication activities (NIC-04 group 641 and 642): The major items of
communication enterprises will be recorded in this sub-block.
Item 314 and 315: Call charges, rent payable (local call/ STD / ISD, cyber café, radio paging, cellular etc.) and insurance charges: The communication expenses for local call/ STD / ISD, cyber café, radio paging, cellular etc. are collected in this item. The charges payable and the rent payable to the government / public / private corporate (original service providers) may be apportioned for the reference period (these charges are generally paid once in two months) and recorded in this item. The insurance charges, if any, are to be recorded in item 315.

Fifth sub-block of block 3: real estate, renting and business activities (NIC-04 division 70 - 74): Important
operating expenses like maintenance of building, machinery and equipment, travelling, hospitality, legal
expenses etc. incurred by enterprises will be recorded in items 316 and 317. If the fuel charges incurred in travelling are reported against item 317 should not be repeated in item 342.
Sixth sub-block of block 3: educational activity (NIC-04 group 801, 802, 803 and 809)
Major operational expenditure incurred in running the educational enterprises will be shown in this sub-block.

The recurring expenses on laboratory consumables and library books will be noted against item 318. Recurring expenses on newspapers, journals, periodicals etc. will be recorded in item 321. Expenses on different festivals like annual day, teachers’ day etc. will come in item 322. Expenses on computer consumables will be recorded

in item 323. Maintenance of furniture and fixtures like tables, chairs, projectors, laboratory equipment, computers etc. will be considered in block 3.1 against the appropriate items (344-348).

Seventh sub-block of block 3: health and social work (NIC-04 group 851, 852 and 853)
Major expenses relating to the health and social work activity will be recorded in this sub-block. Expenses on diet are to be recorded in item 324 and expenses on medicines and drugs given to the patients will be reported
against items 325. Expenses on Consumables used in operation theatre, sophisticated equipments, pathological, radiological and other diagnostic tests will be recorded in item 326. Expenses on syringes, intra veins drip sets, cotton bandages, plastering materials and other disposables will be recorded against item 327. Expenditure on uniforms of staff, nurse, doctors, linen and laundry material is to be recorded in item 328.Expenditue on organising health camps, awareness programmes and other related social activities should be reported against item 331. Expenses on meeting, training, publication, nutrition (in crèches etc) will come in item 332. Diet expenses of patients will not be repeated in this item. Expenditure on repair and maintenance of building,
professional equipment and other assets will be recorded in block 3.1.
Item 339: It will contain the total of all the items appearing in this page (i.e. total of items 301 to 332).
Block 3.1
Items 341 and 342: Electricity charges and fuel & lubricant:
If the total amount of electricity consumed during the reference period is not paid, the amount payable pertaining to the period will be ascertained and recorded here. If the exact amount of the bill is not known for reference period, the value will be estimated based on the electric bills paid during the recent past.
The value of coal/coke, other fuels, lubricants consumed will be recorded irrespective of whether full payment has been made or not. That part of fuel, which is produced and consumed in the process of production (intermediate products), wherever possible, is to be excluded.
While filling up item 342, duplication with item 304 and 305 has to be avoided in all respect.
Item 343: Raw materials consumed for own construction of building, furniture and fixtures (including labour charges):
Own constructions for the enterprise will include materials consumed for-
- construction of passage, raising wall, digging well, etc.,
- construction of rooms, roof, etc. of building or entire building,
- making furniture, fixtures and small machineries of the enterprise.
Items 344 to 348: minor repair and maintenance: These items will show the expenses made for minor repair and maintenance. Both the value of materials used in repair and service charges paid for maintenance will be included. Replacement of some major parts of fixed assets, involving considerable expenditure, and which increases the life of the fixed asset will not be included here. Some examples of expenses not to be included here are major overhauling of motors of a machine, retreading of tyre of car, replacing hard disk of a computer,
changing roofing material of a room, etc. On the other hand, minor repairs such as whitewashing of rooms, routine maintenance of machinery, repair of punctures of transport equipment, etc. will be included here.
Item 351: rent payable on fixed assets (other than land and building): Rent on assets other than land and building may be noted against this item. Hiring of machinery and equipment by the enterprise is a common phenomenon for many of the unorganised enterprises. But there may be cases where assets are neither owned nor hired (i.e. encroached). Assets may also be of freehold type. In such cases, rent may be shown as ‘zero’ and no imputation need be done.

- Rent payable reported against this item will be equal to the rent payable reported in column 7 for items 902 to 905 of block 9.
Item 352: service charges for work done by other concerns (contract, sub-contract, legal, audit, advertising and other accounting services, warehousing expenses, commission expenses, etc.): This item will include-
- Charges payable for work done by other concerns, i.e., commissions payable to agents and payment towards contract and sub-contract services availed by the enterprise,
- Payments which are made/ due to be made to other concerns for work done on materials supplied to them by the reporting enterprise,
- Charges paid to home-workers or sister concerns,
- Charges paid to other agencies for the services of night-watchman, driver, etc.,
- Charges paid to porters, sweepers, accountants, income/sales tax practitioner, etc., who generally work for many enterprises in a locality.

- When payments made by the enterprise to some individuals are recorded in this item, persons receiving these payments will not be counted as workers of the enterprise and payments received by them will not be considered is emoluments.

Item 353: travelling, freight and cartage (transport) expenses: Expenses on transportation of materials will be entered against this item. If these are already included in the value of materials consumed, these items should not be filled in separately. It may be noted that expenditure proportionate to the materials consumed during the reference period is only to be recorded.

- The travelling expenses associated with the entrepreneurial activity will also be shown against this item.
Transportation charges associated with selling of products are part of distributive expenses of an enterprise.
These will not be included here.
- Care should be taken to avoid duplication with item 317.

Item 354: communication expenses (telephone, telegram, fax, postal, courier, e-mail, etc.): Expenses on
communication like telephone, telegram, fax, postal, courier, e-mail, voice-mail, etc. are to be recorded here.
Care should be taken so that there is no duplication of this item with item 314.
Item 355: purchase of consumable stores, packing materials, etc.: Expenses on consumable stores, packing materials, etc., will be reported in this item. Care should be taken to exclude the materials consumed for the construction of fixed assets. The value of packing materials like paper, cloth, etc. will be recorded against this item. However, packing materials should not be confused with direct materials. The treatment of packing cost depends on the nature of products/ services sold. If the cost of packing forms part of the prime cost, i.e., the articles cannot be sold without a package or a container e.g., medicines, perfumes, etc., the package will be treated as direct materials. Stock of tins, cartons, wrappers, cases, boxes etc. in such cases must be treated
in the same manner as the stock of raw materials. Expenses on computer or photocopying consumables in educational institute will not come here.
Item 356: Newspaper, journal, paper, printing and stationery expenses: For any enterprise, some amount is paid for purchasing materials like paper, printing of bills or logos and other stationery articles. All such charges may be recorded against this item. It may be noted that the stationery may be purchased at one time and used for several months. In such cases, monthly consumption may be estimated and reported. Expenses on the above mentioned material in case of educational institute would not come here.
Item 357: taxes on products: All kinds of taxes on products and services produced by the enterprise are part of intermediate consumption and will be reported against this item. For details please refer to paragraph 3.0.8. If the receipts are valued excluding taxes on products, then it will not be reported against this item. In that case 0 will be reported against item 357.

Item 358 and 361: royalties and insurance charges payable: Sometimes the enterprises have to pay royalties for making a product to some other individual or organisation. However royalties paid on land and subsoil assets like minerals extracted will not come under this item. Enterprises also insure its properties like building, machinery, transport equipment, etc. These charges will be recorded here. Insurance premiums paid for the employees of the organisation, however, are a part of compensation to the employees and this will not be recorded here.

Item 362: Purchase value of materials consumed for manufacturing or goods incidental to manufacturing, if any:
An enterprise may also be indulging in manufacturing activity in addition to the major activity under coverage. In such cases, materials consumed for manufacturing activity is to be recorded against this item. Purchase value of all the materials (which the unit can also use for its manufacturing activity) sold in same condition as purchased,
termed as ‘goods incidental to manufacturing’ will also be recorded in this item. Care should be taken so that the entry in this item is consistent with the entry in item 431.
Item 363: Purchase value of commodities traded, if any: If some enterprise is selling certain goods in the same condition as purchased, in addition to its major activity, then purchase value of goods traded during the reference period is to be recorded against this item. There should be consistency between the entry in this item and entries in item 432 to 434.
Item 364: cosmetics, toiletry and laundry articles: Expenses incurred on cosmetics, toiletry and laundry articles will be reported here.
Item 365: Other expenses (customer entertainment etc.): other expenses: Any other intermediate consumption of the enterprise, which are not covered under any of the items 341 to 364, will be reported against this item.

Expenses towards customer entertainment, working lunch, are some such expenses. Regular puja expenses should not be reported in this item.