1. Bird’s Eye View of Service Tax Law
Introduction
Service tax was being collected in India 3000 years back for a plethora of services some of
them being ferry tax, betting tax, courtesans, and many others. Service Tax in its present
shape was bought into existence in the year 1994. Initially 3 services were brought into the,
net, but today except for negative list all services are taxable covering millions of service
providers. It extends to whole of India except for the State of Jammu & Kashmir.
Scope of Service Tax
Basic Concepts
What is Service Tax?
 Service Tax is levied on services
 It is levied on the value addition made by the provision of services.
 It is a destination based consumption tax i.e., service tax is a charge of tax on
services provided or agreed to be provided within the territory of India
General
Provisions
and
Procedures
Basic
Concepts
Service Tax
Rules, 1994.
Service Tax
(Determination
of Value) Rules,
2006
Taxable/
Declared
Services
Negative List/
Exemption
POT Rules, 2011.
&
POPS Rules,
2012.
Service
Tax Laws

2. Charge of Service Tax (Section 66B)
Includes Deemed Separate Person
a) An Individual,
b) A HUF
c) A Company
d) A Society
e) A Limited Liability
Partnership/ Firm
f) Association of Person or
Body of Individual whether
incorporated or not.
g) Government
h) Local Authority
i) Every artificial judicial
person not covered above.
a) (i) An Unincorporated or a
body of persons
(ii) member thereof;
b) (i) An Establishment of a
person in taxable territory and
(ii) Any of his other
establishment in a non-
taxable territory.
Means
Any Activity carried out by a person for another
person for Consideration
It means everything received or recoverable in
return for provision of service
It Includes Monetary and Non-Monetary Payment
But does not include grants or donations, fine or
penalty for violation of provisions of law
Ingredients of definition of Service
 It means any activity carried out by any person
 Activity shall be carried out from one person to
another
 Activity should be for consideration
Collection
Payment of Service Tax (Sec 68)
Service Provider liable to pay (Sec 68[1])
Reverse Charge Mechanism (sec 68[2])
Levied (Service Tax)
@12% On Value Of all Services Except
Negative List
Sec 67 - Valuation
And Rules thereof Section 65B
Provided or agreed to be provided.
in a Taxable Territory
by a Person to another person
(Two Separate persons required for levy)
a)The territory of the union of India
b)Its territorial water, continental shelf,
exclusive economic zones.
c) The Sea bed and its sub-soil.
d)Air-space above the territory &
territorial waters and
e)The Installations structures & vessels
located in the continental shelf & EEZ.
Taxable Territory
Person
(Sec 65B[37])
Includes
Declared Services
But Shall not include
a) An Activity which constitute merely.
- transfer of title of goods or immovable
property by way of sale, gift, or in any
other manner.
-transaction in money or actionable claims
b) Provision of service by an employee to
employer in course of or in relation to his
employment
c) Fees taken in any court or tribunal.

3. Section 67- Valuation
Section 67(1)- Subject to the provisions of this chapter where service tax is chargeable on
any taxable service with reference to its value then,
Section 67(2)-Where the gross amount charged by a service provider, for the service
provided or to be provided or to be provided is inclusive of service tax payable then,
Value of such taxable service shall be such amount as with addition of taxable payable, is
equal to gross amount charge.
Section 67(3)- The Gross amount charged for the taxable service shall include any amount
received towards the taxable service before, during or after provision of such service.
Service Tax (Determination of Value) Rules, 2006.
Subject to provisions of section 67, the value of taxable service is determined as per these
rules.
Refer forth coming table for summary of these rules.
Point of Taxation Rules, 2011.
The Purpose of Point of Taxation is to set out as to when service tax is payable by the service
provider and to determine the effective rate of service tax
Section 67A v. POT Rules
Section 67A provides that rate of service tax, shall be the rate of service tax in force or as
applicable at the time when the taxable service has been provided or agreed to be provided
Contrary thereto, Point of Taxation Rules, 2011 refer to date of raising invoice, and date of
payment also for determining applicable rate of service.
In this context the definition of Point of Taxation contained in Rule 2(e) of the Point of Taxation
Rules, 2011 is relevant, which defines that ‘Point of taxation’ means the point in time when a
service shall be deemed to have been provided.
Thus, if Point of taxation of a service is on 1st August, 2012 (as per POT Rules, 2011), then-
 such service shall be deemed to have been provided on 1st August, 2012; and
 as per section 67A, rate of service tax prevalent on that date shall be applicable.
i) In a case where the provision is
for a consideration in money
iii) In a case where the provision is
for a consideration which is not
ascertainable.
ii) In a case where the provision is
for a consideration not wholly
or partly consisting of money
Value shall be Gross amount
charge for service provided or to
be provided
Value shall be determine in such
a manner as may be prescribed
(i.e. as per Valuation Rules)
Value shall be such amount in
money with addition of service
tax charge is equivalent to
consideration

4. Refer forth coming table for summary of these rules.
Place of Provision of Service, 2012.
The provisions are primarily meant for persons who deal in cross-border services or who
have operations with suppliers or customers in the State of Jammu & Kashmir so as to determine
whether their services are provided in taxable territory, attracting charge of tax. These provisions
will also be useful in determining availability of exemptions or precise taxable jurisdiction
applicable to their operations.
Refer forth coming table for summary of these rules.
RULES
Service Tax
(Determination of
Value Rules), 2006
Service Tax
Rules, 1994
POT Rules, 2011
Place of Provision
of Service Rules,
2012
1 Commencement Commencement Commencement Commencement
2 Definitions Definitions Definitions Definitions
2A
Service Portion in a
works contract
N.A. Date of Payment N.A.
2B
Value of Service in
relation to money
changing
N.A. N.A. N.A.
2C
Value of Service in
supply of food (Human
Consumption)
N.A. N.A. N.A.
3
Manner of
Determination of Value
Appointment of
Officers
Determination of
POT
Place of provision
generally
4 Rejection of Value Registration
Determination of
POT in case of
change in
effective rate of
tax
Performance based
services
4A N.A.
Taxable Service
to be distributed
on invoice, bill
or challan
N.A. N.A.
4B N.A.
Issue of
Consignment
Note
N.A. N.A.
5
Inclusion or Exclusion of
costs,etc
Records
Payment of Tax in
case of New
Services
Immovable property
5A N.A.
Access to
Registered
Premises
N.A. N.A.
6
Commission, costs,etc
will be included or
excluded
Payment of
Service Tax
N.A.
Provision of services
relating to Events
6A N.A.
Export of
Services
N.A. N.A.
7 N.A. Returns
POT for specified
services or
persons
Services provided at
more than one
location

5. RULES
Service Tax
(Determination of
Value Rules), 2006
Service Tax
Rules, 1994
POT Rules, 2011
Place of Provision
of Service Rules,
2012
7B N.A.
Revision of
Returns
N.A. N.A.
7C N.A.
Delay in
furnishing the
prescribed
Return
N.A. N.A.
8 N.A.
Form of Appeals
to Commissioner
of Central
Excise(appeals)
POT in case of
copyrights,etc
Provider and
Recipient are located
in taxable territory
8A N.A. N.A. POT in other cases N.A.
9 N.A.
Form of Appeals
to Appellate
Tribunal
Transitional
Provisions
Provision of Specified
Services
10 N.A.
Procedure for
Large Taxpayers
N.A.
Provision of Goods
transportation
Services
11 N.A. N.A. N.A.
Provision of
Passenger
transportation
Services
12 N.A. N.A. N.A.
Services provided on
board a conveyance
13 N.A. N.A. N.A.
Powers to notify
description of
services
14 N.A. N.A. N.A.
Order of Application
of Rules
Taxable/Declared Services(Section 66E)
The list of nine declared services is given in section 66E as follows:
a) Renting of Immovable Property.
b) Construction Services
c) Intellectual Property Rights Services
d) Software Services
e) Obligation to refrain from an Act
f) Hiring of Goods
g) Activities in relation to Hire Purchase
h) Works Contract services
i) Catering/Restaurant services
Negative List/Exemption
The List of 17 services under negative list is given in section 66D as follows:
a) Services by Government or a local authority excluding the following services to the extent
they are not covered elsewhere-

6. 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 related to agriculture or agricultural produce
e) Trading of goods
f) Any process amounting to manufacture or production of goods
g) Selling of space or time slots for advertisements other than advertisements broadcast by
radio or television.
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
utlity;
l) Services by way of-
i. Pre-school education and education upto higher secondary school or equivalent
ii. Education as a part of 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 of 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) Stage carrier
ii) Railways in a class other than-
A. First class
B. An air-conditioned coach
iii) Metro, monorail, tramway
iv) Inland waterways
v) Public transports, other than predominantly for tourism purpose, in a vessel
between places located in India and
vi) Metered cabs, radio taxis or auto rickshaws.
p) Services by way of transportation of goods by-
i. Road except the services of
A. Goods transport agency
B. Courier agency
ii. Aircraft or a vessel from a place outside india upto the customs stations of cleance
in india
iii. Inland waterways

7. q) Funeral, burial, crematorium or mortuary services including transportation of the
deceased.
Till date there are more than 88 exemption notifications which create a complex structure
for the general public. (Mega Exemption, Small Service Provider Exemption,etc)
General Provisions and Procedures
Payment of Service Tax(section 68)
Generally the liability to deposit the service tax is that of service provider(Section 68[1]).
But for notified services the burden to deposit shift from service provider to receiver
(section 68[2]). In all there are 12 services out of which 8 are under full reverse charge and 4
under partial reverse charge.
Procedural provisions under service tax law is quite similar to that of central excise law
Various other rules that are framed by Government under Service Tax laws are as follows:-
I. CENVAT Credit Rules, 2004
II. Service Tax (Registration of Special Category of Persons) Rules, 2005
III. Service Tax (Advance Rulings) Rules, 2003
IV. Service Tax (Publication of Names) Rules, 2008
V. Service Tax (Provisional attachment of property) Rules, 2008
VI. Service Tax (Settlement of Cases) Rules, 2012 and
VII. Service Tax (Compounding of Offences) Rules, 2012.