13246217659 service tax

Who is liable to pay Service Tax?Sec.68 1 of the Act says that-the ‘Person’ who provides the taxable service is responsible for paying the Service Tax to the Government.. • Any provider

“Money has no smell,”

A Roman emperor observed when he clapped a tax

on public toilets.

Which were the three

services that were taxed when the Service tax was introduced in

1994??

Introduction:

• Service Tax was introduced in 1994 vide Finance Act,

1994 with 3 SERVICES namely, Brokerage charged by stockbroker, Telephone services & premium on General Insurance Services.

• Applicable to whole of India except Jammu & Kashmir

• Today there are 109 services under section 65(105),

which are considered taxable.

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What is Service Tax?

• It is a tax levied on the transaction of certain

Specified Services, by the Central Government

under the Finance Act, 1994

• It is an Indirect Tax, which means that normally

the service provider pays the tax and recovers the amount from the recipient of taxable service

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Who is liable to pay Service Tax?

(Sec.68 (1) of the Act) says that-the ‘Person’ who provides the taxable service is responsible for paying the Service Tax to the Government

However this rule is subject to exceptions:

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in case service provided by a distributor to them

3.BODY CORPORATE OR

FIRM

in case of receipt of sponsorship service

2.INDIAN RESIDENT

in case of import of

service

1.INSURER

in case of service provided by insurance agent

Persons Liable

to Pay Service Tax in Certain

Cases

Section 69 read with Rule 4

• Every Person who is

liable to pay service tax

• Application shall be filed

REGISTRATION REQUIREMENTS

• As per Section 69, every person liable to pay service tax has to get themselves registered with service tax department

• Any provider of taxable services whose aggregate value of taxable service in a financial year exceeds

Rs 9 lacs, has to get themselves registered.

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• Application for registration in Form ST-1 to be made to concerned Superintendent of Central Excise.

• The application for registration shall be made within 30 days, from the date on which the levy of service tax is brought into force in respect of the relevant services or of the commencement of

business where services has already been levied

Contd…

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granted (Rule 4(5) of the STR, 1994)

• CBEC vide Circular no 35/3/2003 has made it

compulsory for every assessee to obtain the Service Tax Code number which is a 15 digit alphanumeric no

based on the PAN

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Assessee providing more than one taxable service should mention in single application, all the taxable services provided by him Rule 4(4), Service Tax Rule,1994.

Contd…

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DocumentS to be Submitted with ST-1

(a) Proof of address of the premises office

sought to be registered

(b) PAN number of the assessee

(c) List of Branches offices or premises of

the assessee

(d) Brief note on accounting system

adopted by the assessee

(e) Branch-wise series of invoices

maintained along with a sample copy

thereof

(f) Previous years audited balance sheet

along with gross trial balance of

different branches

(g) Details of records accounts

maintained at different branches and

Central Office

(h) Bank account numbers of the

Branches and Central Office through

which the receipts are deposited,

transacted.

I am confused what documents

to be filed with ST-1

Provision for Centralized Registration

Service providers having centralised accounting

or centralised billing system, at their option, can have Centralised registration at one or more places Commissioner of Central Excise / Service Tax in whose jurisdiction centralised account or

billing office of the assesses exists, is empowered to grant centralised registration

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Payment of Service Tax through G.A.R 7

on 31 st March Other Quarters Month of March Other Months

Upto 31 st March 5 following Quarter Upto 31 th of the Month st March Next Month 5 th of the

E – Payment of Service Tax

E – Payment of Service Tax

Rs 50 Lakhs or More

(Cash+CENVAT)

Optional E - Payment Mandatory E - Payment

Less than Rs 50 Lakhs (Cash+CENVAT)

In case of Large

Taxpayer Unit Other than LTU

Check the Limit

Return of Service Tax

 Return of Service Tax to be filed

Half Yearly – ST-3

 For 1st April to 30th September

 Due Date - 25th October

 For 1st October to 31st March

 Due Date - 25th April

E-filing of ST-3 return

 Basic Requirement

• PAN Based Service Tax Code (STC)

• File return on www.servicetaxefiling.nic.in

 Condo nation of Delay

 Only for those using e-filing Facility first time

 Assessee has faced technical difficulties

 Delay of 1 month shall be condoned as per Circular No 71/2004

Aggregate value of taxable service means the sum of first consecutive payments received during a financial year towards taxable service

provided or to be provided.

Rs

1000000/-Rs

900000/-Exemption Scheme for

Small Service Providers

Central Government, provides the basic exemption to the service providers whose aggregate value of taxable services provided in last financial year is less than Rs

10 Lacs.

Assessee should not charge the Service Tax if he/she is claiming the benefit of exemption If charged by mistake the same should be refunded to the service receiver.

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• Taxable services provided by a person under Brand Name or Trade Name, whether registered or not, of

any other person are not eligible for the threshold limit exemption of Rs. 10 Lacs [Notification No 6/2005]

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Exception

In case of certain services, the benefit of abatement (rebate) is allowed to the service provides In such cases, the portion of revenue is exepmted (abated) while computing the assessable value.

Example: If invoice for servicing is to be raised for Rs

1000/- and abatement of 75% is available(then service

250/-23

 Goods transport agency -75% abated.

 Construction of residential services-67% abated.

 Banking services- 30%

 Rent a cab-60%

And so on…

Service Tax Rate

Failure to Pay Service Tax

• Interest(sec 75) :- Interest @13% p.a is payable on the short-fall or unpaid tax for delayed period

Delay in Filing Return

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SERVICE TAX

CENVAT CREDIT

What is CENVAT Credit Scheme ?

The CENVAT Credit Rules, 2004, introduced with effect from 10.9.2004, provides for availment of the credit of the Service Tax paid on the input services / Central Excise Duties paid on inputs / capital goods / Additional Customs Duty leviable under the Customs Tariff Act, equivalent to the duties of excise

Such credit amount can be utilized towards payment of Service Tax by an assessee on their Output Services (Refer

to Rule 3 of CENVAT Credit Rules, 2004)

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 Duties paid on the inputs, capital goods and the Service Tax paid on the 'input' services can be taken as credit Education Cess paid on the Excise duty and Service Tax can also be taken as credit only for payment of Education Cess relating to output service

 The interest and penalty amounts cannot be taken as credit

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Contd…

New services taxable (introduced in Finance Act, 2010)

1 Games of chance (zzzzn)

2 Health services (zzzzo)

3 Maintenance of medical records (zzzzp)

4 Promotion of a ‘brand’ of goods, services, events, business entity etc (zzzzq)

5 Commercial use or exploitation of any event organized by a person or organization (zzzzr)

6 Electricity Exchange Service (zzzzs)

7 Copyrights on Cinematographic films and sound recording (zzzzt)

8 Providing of preferential location or external / internal development of complexes (zzzzu)

Whats happening:

 Total revenue earned through service tax was

Rs.38169 Crores which will go up to Rs 1,36,392

Crores.

 Recently a team of Bollywood producers visited

Finance Minister to get exemption for service tax But the request was denied.

High Service Tax Paying Event

 Indian Premier League pays a large chunk of service tax every year The revenue was 64 crores in 2009 and

29 crores in 2010.

Thank

You

Archana

Sowmya