2. Introduction
Service tax is a type of indirect Tax that you are liable to pay to the
government once you consume the taxable services offered by different
service providers such as restaurants, cab services, hotels, travel agents,
cable providers etc.The consumer pays the service tax to the service
provider while paying the bill (for example, your restaurant bill has a
component of service tax).The government in turn collects the tax from the
service providers.
Service Tax was first introduced in 1994 when Dr. Manmohan Singh was
the Finance Minister. The initial rate was only 5% and was levied on only 3
services. With the introduction of Krishi Kalyan Cess, the Service Tax rate
in India is now 15%
3. Applicability of
service tax
Service Tax is applicable to the whole of
India except Jammu and Kashmir.
If a service provider provides taxable
services in Jammu and Kashmir, then it
is not liable to Service tax. However, if a
service provider provides taxable
services from Jammu and Kashmir to the
client anywhere else in the country, he
shall be liable to service tax.
.
4. Then & now
(Rate of service tax)
During the 2015 budget, the
Finance Minister had
incremented the service tax rate
from 12.36% to 14%, which had
been applicable from June 1,
2015. Further, from November
15, 2015, an additional Swachh
Bharat Cess got added at the
rate of 0.5%, which left the
service tax at 14.5%. After the
new proposal brought in during
the 2016 Union Budget, the
applicable service tax from June
1, 2016 is 15%.
5. Service tax law:
here is no separate service tax statute and following are the various
legislatures to cover service tax
Service Tax Rules, 1994
Service Tax (Registration of Special Category of Persons) Rules, 2005
Export of Services Rules, 2005
Cenvat Credit Rules 2004
Service Tax (Advance Rulings) Rules, 2003
Taxation of Services (provided from outside India and Received in India)
Rules, 2006
Service Tax (Determination of Value) Rules, 2006
Authority for Advance Rulings (Customs, Central Excise and Service Tax
Procedure Regulation, 2005
Central Excise (Appeals) Rules 2001
Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules,
1982
Service Tax Circulars, notifications and case laws.
6. Service liable to
service tax
All services are liable to service tax
except
➔ Activities specifically excluded in
definition of service.
➔ Services covered under the negative list
➔ Services covered under Mega Exemption
notification.
➔ Services provided outside the taxable
territory.
➔ Services received by a unit located in
SEZ (subject to conditions).
7. Negative list of
services
There are 17 categories of services which are not
chargeable to service tax
1.Services provided by Government or local authority.
(Except (a) services by Dept of post by way of speed post,
express parcel post, life insurance, and agency
services,(b)services in relation to an aircraft or a
vessel,inside or outside the precincts of a port or an airport,
(c) transport of goods or passengers, (d) support services)
2.Services provided by RBI
3.Services provided by a Foreign diplomatic mission located
in India
4.Services relating to agriculture
5.Trading of goods (commission agent or clearing agent)
6.Any process amounting to manufacture or production of
goods.
7.Selling of space or time slots for advertisement other than
advertisements broadcast by radio or television.
8.On payment of toll charges
8. Negative list of
services
9.Betting, gambling or lottery
10..Admission to entertainment events or access to
amusement facilities.
11.Transmission or distribution of electricity by an electricity
transmission or distribution utility
12.A few of services relating to education.
13.Services by way of renting of residential dwelling for use
as residence.
14.A few financial services like deposits, loans advance,
foreign currency sale or purchase by banks or authorised
dealers etc)
15.Service of transportation of passengers, with or without
accompanied belongings.
16.Services by way of transportation of goods
17.Funeral services
9. Following such activities are:
1.Renting of Immovable property
2.Temporary transfer or permitting the use or enjoyment
of any intellectual rights
3.Temporary trasfer or permitting the use or enjoyment
of any intellectual rights
4.Development, Designing, Programming, Up-gradation,
5.Customizing, Implementation, Enchancement of
Information Technology Software
6.Transfer of goods by way of hiring, licensing without
transfer of rights to use such goods.
7.Activities in relation to delivery of goods on hire
purchase.
8.Service portion in works contract
9.Service portion in an activity where food or any article
for human consumption or any drink is supplied in any
manner as part of such activity.
DECLARED
SERVICES
Section 66E of the Act
provides certain activities
which have been deemed
to be service and service
tax shall be levied
thereon.
10. 1.Such Activity is a service in terms of section 65B (44) of
the Act.
2.Such Service is not mentioned in negative list
3.Such service is provided or agreed to be provided in
Taxable Territory
4.Such service is provided by one person to another.
Tax can be levied
on an activity when
Story for illustration purposes only
11. Point of
taxation
¡Until March ,2011 service tax liability rose only after receipt
of payment from service receiver but since April, 2011 it has
been shifted from cash to accrual basis
¡Point of Taxation ,2011 were introduced on 01/04/2011 so
as to determine the point at which any service shall be
deemed to have been provided and the service tax thereon
become due.
Three important dates relevant for determining the point of
taxation are:
¡Date of Invoice
¡Date of payment- Date to Bank A/c or inb Books ,whichever
is earlier.
¡Date of Completion of service.
¡Generally ,Point of Taxation (POT) shall be the date of
invoice if the same is raised within 30 days of completion of
service shall be POT
12. Point of
taxation
¡However, cases where payment is received in advance
against any service then the date of receipt of payment shall
be the POT irrespective of the date of invoice.
¡Out of 3 dates ,occurring either before or after any of such
event , shall be considered for determining POT and the
date which occurs first shall be the point at which service tax
liability arises.
¡Services provider(individual or partnership firms) having
turnover of Rs 50 Lakhs in preceding Financial year has the
option to pay service tax on cash / receipt basis upto the
value of services of Rs 50 Lakhs in current year.
13. In this world nothing
is certain but death and
taxes.
Thank you!!
Presented by:
DIKSHA DIXIT
GOPIKA SETHUNATH
MUSKAN YADAV
SHIVAM SHARMA
SONALI BHADORIYA
