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Service tax

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Service tax

  1. 1. 1 SERVICE TAX WHAT IS SERVICE TAX Service Tax is a tax levied by Central Government of India on services provided or to be provided excluding services covered under negative list and considering the Place of Provision of Services Rules, 2012 and collected as per Point of Taxation Rules, 2011 from the person liable to pay service tax. WHAT IS SERVICE ‘Service’ has been defined in clause (44) of the new section 65B and means –  any activity  for consideration  carried out by a person for another  and includes a declared service. The said definition further provides that ‘Service’ does not include –  any activity that constitutes only a transfer in title of (i) goods or (ii) immovable property by way of sale, gift or in any other manner  (iii) a transfer, delivery or supply of goods which is deemed to be a sale of goods within the meaning of clause (29A) of article 366 of the Constitution  a transaction only in (iv) money or (v) actionable claim  a service provided by an employee to an employer in the course of the employment  fees payable to a court or a tribunal set up under a law for the time being in force SERVICE TAX AND CONSTITUTION OF INDIA No tax can be levied without authority of the law and no law can be made without the authority of the constitution. Accordingly, power to levy service tax has been derived from the entry No. 92C of the List I (called as Union list) of the Seventh Schedule read with article 246 of the Constitution of
  2. 2. 2 India. Entry No. 92C is appearing as under: “92C Taxes on services”. This entry has been inserted by the Constitution (Eighty-eighth Amendment) Act, 2003. TAXABILITY OF SERVICE TAX According to Section 66B, to be taxable, a service should be –  provided or agreed to be provided  by a person to another  in the taxable territory, and  should not be specified in the negative list. Please note that a taxable service may also be exempt under notification number 25/2012 dated 20/06/2012. From the point of view of service provider it is also relevant to note that the service may be taxable but the service provider is not liable to pay service tax if he is availing exemption available to the small service provider. APPLICABILITY OF SERVICE TAX Define the applicability of Service tax provisions given under Sec 64 of the Finance Act 1994 This Chapter extends to the whole of India, except the State of Jammu and Kashmir. Definition of INDIA: According to Sec 65B(27) India means –  the territory of the Union;  its territorial waters, continental shelf, exclusive economic zone or any other maritime zone;  the seabed and the subsoil underlying the territorial waters;  the air space above its territory and territorial waters; and  the installations, structures and vessels located in the continental shelf of India and the exclusive economic zone of India, for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof
  3. 3. 3 HISTORY OF SERVICE TAX Dr. Raja Chelliah Committee on tax reforms recommended the introduction of service tax. Service tax had been first levied at a rate of five per cent flat from 1 July 1994 till 13 May 2003, at the rate of eight percent flat w.e.f 1 plus an education cess of 2% thereon w.e.f 10 September 2004 on the services provided by service providers. The rate of service tax was enhanced to 12% by Finance Act, 2006 w.e.f 18.4.2006. Finance Act, 2007 has imposed a new secondary and higher education cess of one percent on the service tax w.e.f 11.5.2007, increasing the total education cess to three percent and a total levy of 12.36 percent. The revenue from the service tax to the Government of India have shown a steady rise since its inception in 1994. The tax collections have grown substantially since 1994-95 i.e. from Rs. 410 crore (US$61 million) in 1994-95 to Rs. 132518 crore (US$20 billion) in 2012-13. The total number of Taxable services also increased from 3 in 1994 to 119 in 2012. However, from 1 July 2012 the concept of taxation on services was changed from a 'Selected service approach' to a 'Negative List regime'. This changed the taxation system of services from tax on some Selected services to tax being levied on the every service other than services mentioned in Negative list.
  4. 4. 4 PROVISION OF SERVICE TAX Short title, extent and commencement (1) These rules may be called the Place of Provision of Services Rules, 2012. (2) They shall come into force on 1st day of July, 2012. 2 Definitions In these rules, unless the context otherwise requires,- (a) “Act” means the Finance Act, 1994 (32 of 1994); (b) “account” means an account bearing interest to the depositor, and includes a non-resident external account and a non-resident ordinary account; (c) “banking company” has the meaning assigned to it in clause (a) of section 45A of the Reserve Bank of India Act, 1934 (2 of 1934); (d) “continuous journey” means a journey for which a single or more than one ticket or invoice is issued at the same time, either by one service provider or through one agent acting on behalf of more than one service provider, and which involves no stopover between any of the legs of the journey for which one or more separate tickets or invoices are issued; (e) “financial institution” has the meaning assigned to it in clause (c) of section 45-I of the Reserve Bank of India Act,1934 (2 of 1934); (f) “intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the ‘main’ service) between two or more persons, but does not include a person who provides the main service on his account; (g) “leg of journey” means a part of the journey that begins where passengers embark or disembark the conveyance, or where it is stopped to allow for its servicing or refuelling, and ends where it is next stopped for any of those purposes; Service Tax in India A Handbook 71 (h) “location of the service provider” means- (a) where the service provider has obtained a single registration, whether centralized or otherwise, the premises for which such registration has been obtained;
  5. 5. 5 (b) where the service provider is not covered under sub-clause (a): (i) the location of his business establishment; or (ii) where the services are provided from a place other than the business establishment, that is to say, a fixed establishment elsewhere, the location of such establishment; or (iii) where services are provided from more than one establishment, whether business or fixed, the establishment most directly concerned with the provision of the service; and (iv) in the absence of such places, the usual place of residence of the service provider. (i) “location of the service receiver” means:- (a) where the recipient of service has obtained a single registration, whether centralized or otherwise, the premises for which such registration has been obtained; (b) where the recipient of service is not covered under sub-clause (a): (i) the location of his business establishment; or (ii) where services are used at a place other than the business establishment, that is to say, a fixed establishment elsewhere, the location of such establishment; or (iii) where services are used at more than one establishment, whether business or fixed, the establishment most directly concerned with the use of the service; and (iv) in the absence of such places, the usual place of residence of the recipient of service. Explanation 1:- For the purposes of clauses (h) and (i), “usual place of residence” in case of a body corporate means the place where it is incorporated or otherwise legally constituted. Explanation 2:- For the purpose of clause (i), in the case of telecommunication service, the usual place of residence shall be the billing address. (j) “means of transport” means any conveyance designed to transport goods or persons from one place to another;
  6. 6. 6 (k) “non-banking financial company” means- (i) a financial institution which is a company; or (ii) a non-banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; or (iii) such other non-banking institution or class of such institutions, as the Reserve Bank of India may, with the previous approval of the Central Government and by notification in the Official Gazette specify; (l) “online information and database access or retrieval services” means providing data or information, retrievable or otherwise, to any person, in electronic form through a computer network; (m) “person liable to pay tax” shall mean the person liable to pay service tax under section 68 of the Act or under sub-clause (d) of sub-rule (1) of rule 2 of the Service Tax Rules, 1994; (n) “provided” includes the expression “to be provided”; (o) “received” includes the expression “to be received”; (p) “registration” means the registration under rule 4 of the Service Tax Rules, 1994; (q) “telecommunication service” means service of any description (including electronic mail, voice mail, data services, audio text services, video text services, radio paging and cellular mobile telephone services) which is made available to users by means of any transmission or reception of signs, signals, writing, images and sounds or intelligence of any nature, by wire, radio, visual or other electromagnetic means but shall not include broadcasting services. (r) words and expressions used in these rules and not defined, but defined in the Act, shall have the meanings respectively assigned to them in the Act. 3 Place of provision generally The place of provision of a service shall be the location of the recipient of service: Provided that in case the location of the service receiver is not available in the ordinary course of business, the place of provision shall be the location of the provider of service. 4 Place of
  7. 7. 7 provision of performance based services. The place of provision of following services shall be the location where the services are actually performed, namely:- (a) services provided in respect of goods that are required to be made physically available by the recipient of service to the provider of service, or to a person acting on behalf of the provider of service, in order to provide the service: Provided that when such services are provided from a remote location by way of electronic means the place of provision shall be the location where goods are situated at the time of provision of service: Provided further that this sub-rule shall not apply in the case of a service provided in respect of goods that are temporarily imported into India for repairs, reconditioning or reengineering for re-export, subject to conditions as may be specified in this regard. (b) services provided to an individual, represented either as the recipient of service or a person acting on behalf of the recipient, which require the physical presence of the receiver or the person acting on behalf of the receiver, with the provider for the provision of the service. 5 Place of provision of services relating to immovable property The place of provision of services provided directly in relation to an immovable property, including services provided in this regard by experts and estate agents, provision of hotel accommodation by a hotel, inn, guest house, club or campsite, by whatever, name called, grant of rights to use immovable property, services for carrying out or coordination of construction work, including architects or interior decorators, shall be the place where the immovable property is located or intended to be located. 6 Place of provision of services relating to events The place of provision of services provided by way of admission to, or organization of, a cultural, artistic, sporting, scientific, educational, or entertainment event, or a celebration, conference, fair, exhibition, or similar events, and of services ancillary to such admission, shall be the place where the event is actually held. 7 Place of provision of services provided at more than one location Where any service referred to in rules 4, 5, or 6 is provided at more than one location, including a location in the taxable territory, its place of provision shall be the location in the taxable territory where the greatest proportion of the service is provided. 8 Place of provision of services where provider and recipient are located in taxable territory Place of provision of a service, where the location of the provider of service as well as that of
  8. 8. 8 the recipient of service is in the taxable territory, shall be the location of the recipient of service. 9 Place of provision of specified services The place of provision of following services shall be the location of the service provider:- (a) Services provided by a banking company, or a financial institution, or a nonbanking financial company, to account holders; (b) Online information and database access or retrieval services; (c) Intermediary services; (d) Service consisting of hiring of means of transport, upto a period of one month. 10 Place of provision of goods transportation services The place of provision of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of the goods: Provided that the place of provision of services of goods transportation agency shall be the location of the person liable to pay tax. 11 Place of provision of passenger transportation service The place of provision in respect of a passenger transportation service shall be the place where the passenger embarks on the conveyance for a continuous journey. 12 Place of provision of services provided on board a conveyance Place of provision of services provided on board a conveyance during the course of a passenger transport operation, including services intended to be wholly or substantially consumed while on board, shall be the first scheduled point of departure of that conveyance for the journey. 13 Powers to notify description of services or circumstances for certain purposes In order to prevent double taxation or non-taxation of the provision of a service, or for the uniform application of rules, the Central Government shall have the power to notify any description of service or circumstances in which the place of provision shall be the place of effective use and enjoyment of a service. 14 Order of application of rules Notwithstanding anything stated in any rule, where the provision of a service is, prima facie, determinable in terms of more than one rule, it shall be determined in accordance with the rule that occurs later among the rules that merit equal consideration.
  9. 9. 9 POINT OF TAXATION RULES USE: It decides taxable event date and due date of payment of service tax. As per rule 6(1) of service tax rules, service tax shall be deemed to be paid to the credit of government by 6th of the month /quarter immediately following the month/quarter in which service is deemed to be provided. Point of taxation covers following rules:  Rule 2A of POT rules : Meaning of date of payment  Rule 3 of POT rules: Determination of point of taxation.  Rule 4 of POT rules: Point of taxation when there is change in effective rate of tax  Rule 5 of POT rules: point of taxation when service is taxed first time.  Rule 7 of POT rules: Point of taxation for specified services – reverse charge mechanism.  Rule 8 of POT rules: Royalty services POT rules  Rule 8A of POT rules: best of judgement rule (residual rule) RULE 3 OF POT RULES: DETERMINATION OF POINT OF TAXATION: As per rule 3 of POT rules, POT is earlier of the following  When invoice is issued within due date of issue of invoice  When payment is actually received by service provider Due date of issue of invoice: Invoice should be issued within 30 days from the date of completion of service. There is another condition that when invoice is not issued within due date, POT is earlier of the following:  When payment is actually received by service provider  Date of completion of service DATE OF PAYMENT MEANING UNDER POT RULES ( RULE 2A): Date of payment for payment shall be earlier date from the following  Date when payment is entered in the books of accounts  Date when the bank account of the person is credited. or cash received.
  10. 10. 10 But date of payment is date of credit in bank account when  There is change in effective rate of tax or the service is taxed first time during the period of credit in books of accounts and credit in bank account  The payment is credited after 4 working days from the date when there is change in effective rate of tax or the service is taxed first time. It is important because rate of duty is determined as per POT rule. When date of payment is before date of change of duty, old rate will be considered for service tax purpose. Kindly note that this rule is applicable for bank payment only and not when payment is received by cash. RULE 4 OF POINT OF TAXATION RULES: POT WHEN THERE IS CHANGE IN EFFECTIVE RATE OF TAX: This rule will be applied when there is change in effective rate of tax. New service tax rate 14% is applicable from 1st June, 2015. Note: First June should be considered as date of change of effective rate of tax. Consider three factors:  Date of provision of service  Date of payment received  Date of invoice issued. When two factors are before the date of change in service tax rate, old rate will be considered. If two factors are on or after the date of change in service tax, new rate will be applicable. Swachh Bharat cess is levied on 15/11/2015 and service tax rate is increased to 14% to 14.5%. RULE 5: POINT OF TAXATION WHEN SERVICE IS TAXED FIRST TIME: When service is taxed first time, no service tax should be payable
  11. 11. 11  When invoice has been issued and payment received for such invoice before the service becomes taxable.  If the payment has been received before the service becomes taxable and invoice has been issued within 14 days from the date when the service is taxed first time. RULE 7: POINT OF TAXATION WHEN SERVICE TAX IS PAYABLE UNDER REVERSE CHARGE MECHANISM: When service receiver is liable to pay service tax under RCM, the point of taxation shall be the date when the payment is made. There is one condition in this rule that the payment should be made within six months of date of invoice. RULE 8: POINT OF TAXATION FOR ROYALTIES, COPYRIGHTS ETC.: Rule 8 applies when amount received for royalties, patent, copyrights etc. The whole amount is not receivable in these cases. The amount is some percentage of sales amounts or sale value of copies sold. In this case, service shall be deemed to have been provided at earlier of the following:  Payment received or benefit is received  Invoice is raised. RULE 8A: RESIDUAL RULE- BEST OF JUDGEMENT: This rule is residual rule. When assessee has no information available for payment received or date of invoice (one or both), the central excise officer require to concern person produce such books of accounts or documents which are necessary and after taking into accounts all the facts and rate prevailing at that time, shall by order in writing, after giving opportunity of being heard, determine the point of taxation to the best of his judgement.
  12. 12. 12 NEGATIVE LIST OF SERVICES 66D. Negative list of services: - The negative list shall comprise of the following services, namely:–– (a) services by Government or a local authority excluding the following services to the extent they are not covered elsewhere— (i) services by the Department of Posts by way of speed post, express parcel post, life insurance and agency services provided to a person other than Government; (ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; (iii) transport of goods or passengers; or (iv) support services, other than services covered under clauses (i) to (iii) above, provided to business entities; (b) services by the Reserve Bank of India; (c) services by a foreign diplomatic mission located in India; (d) services relating to agriculture by way of— (i) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing; (ii) supply of farm labour; (iii) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market; (iv) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use; (v) loading, unloading, packing, storage or warehousing of agricultural produce; (vi) agricultural extension services; (vii)services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce;
  13. 13. 13 (e) trading of goods; (f) any process amounting to manufacture or production of goods; (g) selling of space for advertisements in print media; (h) service by way of access to a road or a bridge on payment of toll charges; (i) betting, gambling or lottery; (j) admission to entertainment events or access to amusement facilities; (k) transmission or distribution of electricity by an electricity transmission or distribution utility; (l) services by way of— (i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force; (iii) education as a part of an approved vocational education course; (m) services by way of renting of residential dwelling for use as residence; (n) services by way of— (i) extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount; (ii) inter se sale or purchase of foreign currency amongst banks or authorised dealers of foreign exchange or amongst banks and such dealers; (o) service of transportation of passengers, with or without accompanied belongings, by— (i) a stage carriage; (ii) railways in a class other than— (A) first class; or (B) an air-conditioned coach; (iii) metro, monorail or tramway; (iv) inland waterways; (v) public transport, other than predominantly for tourism purpose, in a vessel of less than fifteen tonne net; and
  14. 14. 14 (vi) metered cabs, or auto rickshaws; (p) services by way of transportation of goods— (i) by road except the services of— (A) a goods transportation agency; or (B) a courier agency; (ii) by an aircraft or a vessel from a place outside India to the first customs station of landing in India; or (iii) by inland waterways; (q) funeral, burial, crematorium or mortuary services including transportation of the deceased
  15. 15. 15 EXEMPT LIST OF SERVICES List of Services fully exempt from service tax under Notification No. 25/2012 dated 20.06.2012 100% Exemption as Per Notification No. 25/2012- Service Tax Dated 20.06.2012 S. No Service Service Provider Service Receiver 1 Any service Any person 1. United Nations 2.Specified International Organization e.g. WTO 2 Health care Service i.e. Diagnosis/ treatment/ Care/ Ambulance/ hair transplant/ plastic surgery. 1. Clinical Establishment i.e. Hospital, Nursing Home, Clinic, Sanatorium, testing lab etc. 2.Medical practitioner i.e. Doctor. 3.Paramedics i.e. Nursing Staff. Any person 2A Preservation of stem cells i.e. Storage of blood. Any other service i.e. Bifurcation of blood. Core blood bank. Any person 2B Common Bio-medical Waste Treatment Facility i.e. treatment or disposal of bio-medical waste/ processes incidental. Operator. Clinical establishment. 3 Health care of animals or birds. Veterinary clinic. Any person
  16. 16. 16 4 Charitable activities i.e.1. Public health by way of- i) Care and counseling of* ii) Public awareness of prevention health, family planning, prevention of HIV infection. 2. Advancement of religion or Spirituality. 3. Advancement of educational programmer /skill development # 4. Preservation of environment including watershed, forests and Wildlife. An entity registered under section 12 AA of the IT Act, 1961. 1) (i) Care and counseling of* a) Terminally ill persons with physical/ mental disability. b) Persons afflicted with HIV. c) Persons addicted to a dependence- forming substance such as narcotics Drugs or alcohol. 2) Advancement of educational programmer /skill development i)Abandoned/ orphaned/ homeless children. ii)Physically/ mentally abused and traumatized persons. iii) Prisoners. iv) Persons over the age of 65 years residing in a rural area. 5 1.Renting of precincts of a Religious Place. Any person Any person
  17. 17. 17 2. Any religious ceremony. 5A Tour facilitated by the MEA of government of India. Specified Organization i.e. Kumaon Mandal vikas Nigam Ltd. (Undertaking of Uttarakhand govt.) or Committee/State committee. Religious pilgrimage. 6. Legal Services. 1. Arbitral Tribunal. 2. Individual as an Advocate or a partnership firm of advocates. 3. Person represented on an arbitral tribunal. 1. (i) Any person other than a Business entity. (ii) Business entity with a turnover upto Rs. 10 lakhs in preceding F/y. 2.(i) an Advocate or a partnership firm of advocates. (ii) Any person other than a Business entity. (iii) Business entity with a turnover upto Rs. 10 lakhs in preceding F/y. 3.An arbitral tribunal. 7. DELETED 8. Training or coaching in recreation activities related to Arts/ Culture/ Any Person Any Person
  18. 18. 18 Sports. 9. Any service Educational institution Students/ Faculty/ Staff of educational institution 1.Transportation of students/ faculty/ staff. 2.Catering including mid-day meals scheme sponsored by the government. 3.Security/Cleaning/House-keeping in educational institution.4.Related to admission to educational institution or conduct of examination by educational institution. Any Person Educational institution means any institution providing – 1. Pre-education and education up to higher secondary school. 2. Education as a part of a curriculum for obtaining a qualification recognized by Indian law. 3. Education as a part of an approved vocational education course. 9A Any Service 1.National skill Development Corporation (NSDC). 2.Sector skill council (SSC) approved by NSDC. 3.Assessment agency Any person
  19. 19. 19 approved by NSDC/SSC. 4. Training partner by NSDC/SSC. 10. 1.Participation in a tournament/ championship organized by RSB. 2.Any service 1. An individual as a player/Referee/umpire/ coach/manager. 2.RSB Recognized Sport Body (RSB). 11. 1.Sponsorship of sporting events where participating teams/ individual represent any district/ state/ zone/ country. 2. Sponsorship of sporting events. 3. Sponsorship of sporting events under Panchayat Yuva Kreed and Khel Abhiyaan(PYKKA) 1.National sport federation or its affiliated federations. 2.Association of Indian universities, Inter- university sports board, School games federation of India, All India sports council for the deaf, Paralympics committee of India, Special Olympics Bharat, Central civil service cultural and sports board. 3. Any person Any person 12. Construction/ erection/ commissioning/ installation/ completion/ fitting out repair/ maintenance/ renovation/ alteration of- 1. Civil structure or any other original works meant predominantly for use other than for commerce, industry, any Any person Govt./Local Authority/Govt. authority.
  20. 20. 20 other Business or profession. 2.Historical monument, archaeological site or remains of national importance, archaeological excavation, antiquity specified under Ancient monuments and archaeological sites and remains Act, 1958. 3.Structure meant predominantly for use as an education/clinical/art of cultural establishment. 4. Canal/dam/other irrigation works. 5.Pipeline, conduit, plant for Water supply, Water treatment, sewerage treatment/disposal. 6.Residential complex predominantly meant for govt. use or the use of their employees or other persons specified in the explanation 1 to clause 44 section 65B of the said act. 13. Construction/ erection/ commissioning/ installation/ completion/ fitting out repair/ maintenance/ renovation/ alteration of- 1.Road/ Bridge/ Tunnel/ Terminal for road transportation for use by general public. 2. Civil structure or any other original works pertaining to a scheme under Jawaharlal Nehru national urban renewal mission or Rajiv Awaas Yojna. 3. Building owned by entity registered Any person Any person
  21. 21. 21 u/s-12AA of IT Act, 1961 and meant predominantly for religious use by general public. 4. Pollution control or effluent treatment plant except located as a part of a factory. 5. Structure meant for funeral, burial or cremation of deceased. 14. Construction/ erection/ commissioning/ installation original works (no Repair & maintenance) permitting to- 1. An airport, port, railways including monorail or metro. 2. Single residential unit otherwise as a part of a residential complex. 3. Low-cost houses up to a carpet area of 60 square meters per house in a housing project “Under the scheme of Affordable Housing in partnership”. 4. Post-harvest storage infrastructure for agriculture produce including a cold storage for such purchases. 5. Mechanized food grain handling system, machinery or equipment for unit processing agriculture produce as food stuff excluding alcoholic beverages. Any person Any person 15. Temporary transfer or permitting the use or enjoyment of a copyright of- 1.Original literary, dramatic, musical or artistic works covered u/s-13 of Copyright Act,1957. Any person Any person
  22. 22. 22 2. Cinematographic films for exhibition in a cinema hall or cinema theatre. 16. Performance of Folk/ Classical art in form of 1.Music 2.Dance 3.Theatre Any artist. Any person 17. Collecting/ Providing News Independent journalist/ PTI/ UNI Any person 18. Service for residential and lodging purposes having declared tariff of a unit of accommodation below Rs. 1,000 or equivalent to Rs. 1,000. Hotel/ inn/ guest house/ club/ campsite Any person 19. Serving of food or beverages. Restaurant/ Eating joint/ Mess other than those having the facility of air- conditioning/ central air-heating in any part of establishment at any time during the year. Any person 19A . Serving of food or beverages. Factory covered under Factory Act, 1948 having the facility of air-conditioning/ central air-heating in any part of establishment at any time during the year. Any person 20. Transportation by Rail or vessel from one port in India to another of Any person Any person
  23. 23. 23 following goods- 1. Relief material 2. Defence/ military equipment 3. Newspaper/ magazines registered with 4. Registrar of Newspaper 5. Railway equipment/ material 6. Agriculture produce 7. Foodstuff 8. Chemical fertilizer/ organic manure/oil cakes 9. Cotton/ Ginned/ Baled 21. Transportation of goods by GTA of following goods- 1.Relief material 2.Defence/ military equipment 3.Newspaper/ magazines registered with Registrar of Newspaper 4.Agriculture produce 5.Foodstuff 6.Chemical fertilizer/ organic manure/ oil cakes 7.Cotton/ Ginned/ Baled 8.Consignment transported in a single carriage does not exceed Rs. 1,500/- 9. All goods for a single consignee does not exceed Rs. 750/- Any person Any person 22. 1. Hiring of a motor vehicle meant to carry more than 12 passengers. 2. Hiring of any vehicle for transportation of goods. Any Person 1.State transport undertaking e.g. DTC.2.GTA. 23. Transport of passengers- 1. By air, embarking/ termination in an Any person Any person
  24. 24. 24 airport located in the state of Arunachal Pradesh/ Assam/ Manipur/ Meghalaya/ Mizoram/ Nagaland/ Sikkim/ Tripura / Baghdogra in West Bengal. 2. Non-air conditioned contract carriage other than radio taxi/ tourism/ conducted tour/ charter (special bus). 3. Ropeway/ Cable car/ Aerial tramway. 24. DELETED 25. 1. Water supply/ Public health/ Sanitation conservancy/ solid waste management/ slum improvement & up-gradation. 2. R&M of vessel Any person Govt./ Local authority/ governmental authority. 26. Service of General Insurance Business under Hut Insurance scheme/scheme for insurance of tribals/ Jan Arogya Bima policy etc. Any person Any person 26A . Service of Life Insurance Business under following schemes: Janashree Bima Yojna(JBY) Aam Aadmi Bima Yojna(AABY) Life micro-insurance product having maximum amount of cover of Rs. 50,000/-. Any person Any person 27. Any Service An Incubatee up to a total Business turnover of Rs. 50 lakhs in a financial year subject to the Any person
  25. 25. 25 following conditions- Total Business turnover had not exceeded Rs. 50 lakh during the preceding F/Y. Period of three years has not lapsed from the date of entering into an agreement as an incubate. 28. Reimbursement of charges/share of contribution- 1.As a trade union. 2. For the provision of carrying out any activity which is exempt from the levy of ST. 3.Upto an amount of Rs. 5,000/- per month per member for sourcing of goods and services from a third person for the common use of its members in a housing society or a residential complex. Unincorporated body or Non-profit entity registered under any law Members of Unincorporated body or Non-profit entity. 29. Services by the service provider in their respective capacities i.e. service provided by intermediate person. 1. Sub-broker/ authorized person. 2.Authorized person. 3.Mutual fund agent/ Distributor 4.Selling or marketing agent of lottery tickets. 5.Selling agent or distributor of SIM 1.Stock broker 2.Member of a commodity exchange. 3.Mutual fund/ asset management co. 4.Selling or marketing agent. 5.Telecommunicat
  26. 26. 26 cards/recharge coupon vouchers. 6.Business facilitator or Business correspondent. 7.Sub-contractor providing service of works contract. ion co. 6.Banking Co./Insurance co, in a rural area. 7.Another contractor who providing works contract service which are exempt. 30. Carrying out an intermediate production process as job-work in relation to- 1. Agriculture, printing, textile processing. 2. Cut and polished diamonds and gemstones or plain or studded jewellery of gold and other precious metals. 3. Any goods on which appropriate duty is payable by the principal manufacturer (i.e. dutiable goods). 4. Processes of electro-plating, zinc plating, powder coating, anodizing, heat treatment, painting including spray painting during the course of manufacture of parts of cycles or sewing machine upto an aggregate value of taxable service of the specified processes of Rs.150 lakhs in a F/Y subject to the condition that such aggregate value had not exceed Rs. 150 lakhs during the preceding F/Y. Any person Any person 31. Business Exhibition held outside India Any person Any person 32. Telephone calls 1. Departmentally run Any person
  27. 27. 27 public telephones. 2. Guaranteed public telephones operating only for local calls. 3. Free telephone at airport and hospitals where no bills are being issued. 33. Slaughtering of animals Any person Any person 34. Any purpose other than commerce, industry, any other Business or profession. Charitable activities. Any service. Person located in a non-taxable territory. Govt., local territory, govt. authority or an individual. Entity registered u/s 12AA of IT Act,1961. Person located in a Non-taxable territory. 35. Lending of books, publications or any other knowledge-enhancing content or material. Public Libraries. Any person. 36. Any services Employee’s State Insurance Corp. Person under Employee’s Insurance Act,1948. 37. Transfer of going concern (business) as a whole or an independent part. Any person Any person 38. Public conveniences such as facilities of bathroom, washrooms, lavatories, urinal, toilets. Any person Any person. 39. Any activities in relation to any function Any person Government
  28. 28. 28 entrusted to a municipality. authority. 40. Loading, unloading, packing, storage, warehousing of Rice, cotton, ginned, baled. Any person Any person. 41. Management of foreign exchange reserves. Person located outside India RBI 42. Tour conducted wholly outside India. Tour operator Foreign tourist
  29. 29. 29 PAYMENT OF SERVICE TAX DUE DATE FOR PAYMENT OF SERVICE TAX 2015 As per Rule 6(1) of Service Tax Rules, the service tax shall be paid to the credit of the Central Government before the following due dates Particulars Company, AOP’s, HUF Individual / Proprietary firm or Partnership firm Duration Month in which the service is deemed to be provided as per the POT rules Quarter in which the service is deemed to be provided as per the POT rules Payment by ECS: 6th day of the following month 6th day of the month following the quarter Payment by any other mode 5th day of the following month 5th day of the month following the quarter Month / quarter ending march 31st March 31st March Compulsory DUE DATES FOR SERVICE TAX RETURN Half yearly Return in Form ST-3 Period Due Date 1st April to 30th September 25th October 1st October to 31st March 25th April PROCEDURE FOR SERVICE TAX REGISTRATION ONLINE As per the rules framed by the Indian government, every service provider has to mandatorily apply for service tax registration if the value of services expected to be rendered by him in a
  30. 30. 30 financial year is more than Rs. 9 lakhs. However, if the value of services rendered in a financial year is less than Rs. 9 lakhs p.a. – the service tax registration is optional at the option of the service tax payer. HOW TO APPLY FOR SERVICE TAX REGISTRATION ONLINE The application for service tax registration has to be filed via ST-1 Form which can be submitted online. However, first time users have to create an account before furnishing the details in the ST-1 Form. The account can be created on the following website: http://www.aces.gov.in/STASE/ui/jsp/common/registerWithACES.do The account created on the above website would be permanent account for all matters related to service tax and you are requested to remember the username and the password for the same. ISSUE OF SERVICE TAX REGISTRATION As per rule 4 of the service tax rules, 1994- the superintendent shall after verification of the ST-1 Form either grant the service tax registration certificate (ST-2) to assessee or send intimation for non-acceptance of service tax registration. if either of the above 2 options is not exercised within 2 days by the superintendent the service tax registration shall be deemed to be granted. The service tax registration i.e. ST-2 Form would be issued in the manner as opted for by the applicant WHAT IS ACES ? Automation of Central Excise and Service Tax (ACES) is the e-governance initiative by Central Board of Excise and Customs (CBEC), Department of Revenue, Ministry of Finance. It is one of the Mission Mode Projects (MMP) of the Government of India under National e- Governance Plan (NeGP). It is a software application which aims at improving tax-payer services, transparency, accountability and efficiency in the indirect tax administration in India. This application is a web-based & workflow-based system that has automated all major procedures in central excise and service tax like registration, returns, accounting, refunds, dispute resolution, audit, provisional assessment, export claims, intimations and permissions.
  31. 31. 31 ACES aims at reducing physical interface of the business community with the departmental officers and to provide a transparent and paper-less business environment with improved taxpayer services delivered through an automated process. ACES is also a valuable platform for a smooth and successful transition to the proposed GST regime and it provides the bedrock for a modern e-governance-based indirect tax administration in India COMPULSORY ECS PAYMENT: Every assessee is required to pay tax electronically. AC or DC of Central Excise may for reasons to be recorded in writing, allow the assessees to deposit the service tax by any mode other than internet banking. (N/N 9/14 w-e-f 1-10-14) WHAT IS THE MANNER OF PAYMENT OF SERVICE TAX? As per Rule 6(2), the assessee shall deposit the service tax with the bank designated by CBEC, by using GAR-7challan If the tax is paid by cheque, date of presentation of cheque to the bank shall be deemed to be the date on which service tax has been paid subject to realization of that cheque. UPDATES ON SERVICE TAX New Update applicable from 15-11-2015 – Effective rate of service tax plus SBC, post introduction of SBC, would be [14% + 0.5%]. Budget 2015 Update: Finance Minister while presenting the Budget 2015 has increased the Service Tax Rate from 12.36% to flat 14%. This new rate of Service Tax @ 14% is applicable from 1st June 2015. The rate of Service Tax for services provided before 1st June is 12.36% and for services provided after 1st June is 14%. If the Invoice is raised in the month of May 2015 for Services to be provided in June 2015 – Rule 4(b) of Point of Taxation Rules will apply and the rate of service tax applicable would be the date on which the payment is being made. The Service Tax Rate applicable from 1st June 2015 is 14%. This rate is an inclusive rate and SHEC and Education Cess is not required to be charged above this.
  32. 32. 32 CONCLUSION Service Tax is a tax levied by Central Government of India on services provided or to be provided excluding services covered under negative list and considering the Place of Provision of Services Rules, 2012 and collected as per Point of Taxation Rules, 2011 from the person liable to pay service tax. Dr. Raja Chelliah Committee on tax reforms recommended the introduction of service tax. Accordingly, power to levy service tax has been derived from the entry No. 92C of the List I (called as Union list) of the Seventh Schedule read with article 246 of the Constitution of India. Entry No. 92C is appearing as under: “92C Taxes on services”. This entry has been inserted by the Constitution (Eighty-eighth Amendment) Act, 2003. From 1 July 2012 the concept of taxation on services was changed from a 'Selected service approach' to a 'Negative List regime'. This changed the taxation system of services from tax on some Selected services to tax being levied on the every service other than services mentioned in Negative list.
  33. 33. 33 BIBLIOGRAPHY  taxpertpro.com/indirect-tax/  https://en.wikipedia.org/wiki/Service_Tax  http://abcaus.in/servicetax/negativelist.pdf  http://taxguru.in/service-tax/list-services-fully-exempt-service-tax-notification- 252012-dated-20062012.html  http://caknowledge.in/due-date-for-payment-of-service-tax/#ixzz3x6smBog4  http://caknowledge.in/procedure-online-e-registration-service-tax/#ixzz3x6uMnEpm  http://caknowledge.in/complete-details-for-service-tax-new-st-tax- rate/#ixzz3x6wiVW8W  http://www.charteredclub.com/service-tax-registration/  http://taxmasala.in/point-of-taxation-rules-2011/

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