Overview of Service Tax Welcome 09.12.2013 Yogesh Desai Advocate Topics covered What is Service ? Overvie w of Service Tax Evolution of Service Tax Concept of Negative List Overview of Service Tax Case Study Two Things are certain in the World
Benjamin Franklin Death & Taxation Both Though both are bad for individuals they are good for social purpose Inevitable death is a better certainly! Unlike tax it happens only once and does not get worse every year Death kills once while taxes kills ever. unhappy Indirect Tax Toilet Municipality Tax
Bath Breakfast Tea & coffee tax For going to office Vehicle.. petrol / diesel tax For dwelling Salary Income Tax
Service Service tax Burdensome Life covered with taxes Water tax Soap tax Hair oil tax Cloth Tax House Tax Unhappy ? What is Service People contest elections, take kick-backs, block traffic for rallies, get themselves courtarrested, burn buses all in the name of 'serving the nation.
'serving' the almighty and the mankind includes turning into a 'Baba', who travels in Mercedes and survives only on pomegranate juice and dry fruits But fortunately such services are not taxed presently and not expected to be taxed even in future. ? What is Service
Dictionary meaning doing of work for another Chartered Accountant. services of a provision or supplying of a public need, e.g. transport, water, gas, electricity, etc.. employment as a servant. I am a railway servant state or period of employment (resigned after 15 years' service). public or Crown department organization (civil service). or serving of food, drinks, etc. food is served in the airlines an act of serving in tennis etc.. Experts
There are experts who believe that the economic world can be split into the hemispheres of 'goods' and 'others', and it is the latter half that can be called the 'services' Latin the word originated from a Latin word 'servitium Servus Slaves which means the condition of a slave or servant. Over a period of time, the scope of the word has expanded and it has gained a lot of respectability Activity service is an activity,
having an inherent dynamism and are driven by human will. service needs to be provided by one person to another person / persons. contract In fact, provision of service is an implicit contract, having its essential ingredients,
namely, offer, acceptance and consideration. Unlike goods, services can not be stored as they end (except for their sweet memories????) as soon as the flow of activities ends. Therefore, while one should preserve 'goods' for the rainy day, the 'service' has to be received and consumed (and enjoyed???) while barber being provided a barber giving a shave not only uses his skill but also uses goods like shaving cream and the razor blade to do his job. ????
(GST) It is a continuum with pure service on one terminal point and pure commodity good on the other. In fact, this opaqueness is one of the major factors that have led many economists to advocate the concept of Goods and Services Tax (GST). Bloody marry GST is like 'Bloody Mary', you don't have to
pay separately for the juice and the liquor but you pay for the concoction that takes you to new heights. E Its Yogesh Desai Presentation Thank You 2-Evolution of Service Tax Coverage
Evolution of Service Tax Introduction of Service Tax Rationale for levy of service tax Reasons for selective taxation of services Constitutional & Legal provisions for levy of Service Tax Administration of Service Tax Evolution of service tax
Service Tax has recommendation of been levied Dr. Raja on the Chelliah Father of Tax Reforms
Committee on Tax Reform. Committee appointed in 1991 and submitted final report in 1993 The Committee recommended charging of Tax on advertising, insurance, share broking and telecom on the pattern of foreign countries. Introduction of Service Tax Recommendations accepted and introduced vide Finance Act, 1994 with 3 services Telephone, General insurance,
advertising Stock broker Gradually increased from 03 and lastly covered around 119 taxable services Dr. Evolution of service tax There is no sound reason for exempting services from taxation, when goods are taxed and many countries treat goods and services alike for tax purposes. The Tax Reforms Committee has also recommended imposition of tax on services as a measure for broadening the base of indirect taxes. I, therefore, propose to make a modest effort in this direction by imposing a tax on services of telephones, non-life insurance and stock brokers. Rationale
Rationale for levy of service tax To widen the tax base and generate more revenue Both goods and services are consumed by people If goods alone are taxed and services left out of the tax net, there will be tax induced distortions in the consumption pattern which is against the principle of tax neutrality To bring about an element of progressivity in the indirect tax structure People consume more of services (than goods) as their income levels goes up. Hence ethically it is imperative to tax services. large participation of citizen in the economic development of the nation.
Reasons for selective services Reasons for selective taxation of services To make the tax acceptable to the tax payer Services sector in India is highly disorganized and a one time levy on all services might lead to chaos and confusion Administrative convenience When service tax was introduced no separate staff was sanctioned for levy and collection of this tax Government itself is the biggest service provider in many areas (health, education, electricity, water supply and sewage, judicial services, railways & so on) and the liability itself initially may fall on the government Many services provided by Government are subsidized (-ve tax) and it may not be desirable to put a service tax
on such services Addition of New Addition of new services Year New Service 03 2004 03 65 03 06 2005 09 74
1997 07 13 2006 15 89 1998 11 24 2007 07 96 2000
02 26 2008 07 103 2001 15 41 2009 04 107 2002 11
52 2010 08 115 2003 10 62 2011 04 119 Year New Service
1994 03 1996 Total Total what is tax What is Tax ? A compulsory contribution to the support of government levied on persons, property, income, commodities, transactions etc. Bombay Conductors v/s G.O.I 1986 (23) E.L.T. 87 (Del) No tax shall be levied or collected except by authority of law - Article 265 of the Constitution of India Seventh Schedule to the Constitution of India has been divided into three categoriesa) Union list (only Central Government has power of legislation) b) State list (only State Government has power of legislation) c) Concurrent list (both the Central and State Government can pass legislation). Constitutional
Constitutional & Legal provisions for levy of Service Tax Entry No. Text of Entries List I Union List - Seventh Schedule 83 Duties of customs including export duties. 84 Duties of excise on tobacco and other goods manufactured or produced in India except alcoholic liquors for human consumption, opium, narcotic drugs, but including medicinal and toilet preparations containing alcoholic liquor, opium or narcotics. 92A Taxes on the Sale or purchases of goods in inter State Trade or commerce other than newspapers
92B Taxes on consignment of goods in interstate trade or commerce. 92C Tax on services - Amendment passed by the Parliament on 0701-2004. 97 Any other matter not included in List II, List III and any tax not mentioned in list II or list III. (These are called Residual Powers.) List II Constitutional & Legal provisions for levy of Service Tax Entry No. Text of Entries List II State List - Seventh Schedule 51
Excise duty on alcoholic liquors, opium and narcotics. 52 Tax on entry of goods into a local area for consumption, use or sale therein (usually called Octroi). 54 Tax on sale or purchase of goods other than newspapers except tax on interstate sale or purchase. List III Concurrent List - includes matters where both Central Government and State Government can make laws. 17A Forest 17B Protection of wild animals and birds Taxabilty under S/C Taxability under State / Central Act VAT / Sales Tax Commercial Dealings in Goods
On Sale of goods Works Contract Tax On Deemed Sales Excise Duty On Manufacturing Customs Duty On Imports Entry Tax / Octroi On entry of goods + Commercial dealings in Services Service Tax On providing/receipt of Services
Proposed New Taxation >>>>>>Goods & Service Tax Legal provisions Legal provisions governing Service Tax in India Chapter V of the Finance Act, 1994 governs the provisions relating to levy and collection of service tax This chapter contains 47 sections from section 64 to section 96J. There is no definition of service provided for in the law; however, the law defines taxable service in respect of various services vide section 65(105) which has clauses from (a) to (zzzzw) i.e. 135 clauses adimnistration
M i m d e o i o e r n n o f e i E tf s r C o x o t e
c f rf R n i C y e s t e e v r n & a e t n l r C E u
a u e x l c s E ti x o s c m e i s s e Administration of Service Tax Who needs to know about service tax?
Manufacturer ? Trader? Professionals? Financial institutions? Any person who receives service? Any person who provides service? Category of Taxable Services Main category of taxable
services Financial Services Communication Services Transport and Allied Services Goods Handling Services Professional Services Immovable Property
Other Services Financial services Banking and other Financial Services Credit Rating General Insurance Life Insurance Insurance Auxiliary Stock Broker Forward contract service Automated teller machine operation Recovery service Underwriting
Communication services Online Information & Database Access Broadcasting service Facsimile service (Fax) Leased Circuit Pager Telegraph
Internet telephony service Telephone Telex Transport and allied services Air Travel Agent Airport Services Courier
Goods Transport Agency Transport by cruise ship Transport of goods in containers by rail Transport of goods by air services Transport of goods through pipeline or other conduit service Transport of passengers by air on international journey Transport and allied services
Authorized Service stations Services Travel Agent ( other than air & rail) Ship Management service Rent a Cab Steamer Agent Tour Operator Port Services Rail Travel Agent Goods handling Services Clearing and Forwarding Agent Cargo Handling
Custom House Agent Storage and Warehousing Packaging services Professional services Erection, Commissioning or Installation Commercial Training/Coaching Engineering consultation service
Advertisement services Chartered Accountant Cost Accountant Company Secretary Architect Professional services Technical Inspection and Certification Scientific / Technical Consultancy
Fashion Designer Interior Decorator Management Consultant Manpower Recruitment or supply Market Research Agency Technical Testing or Analysis Services relating to immovable
property Construction of Residential Complexes Real Estate, Broking & consultation service Site formation and clearance Construction Services Convention Service Mandap Keeper Other services
Health club and Fitness center Business Support services Auction Service Beauty Parlour Business Auxiliary Business Exhibition Other Services
Authorized Service Station Dry Cleaning Franchise Event Management Photography Video Tape Production
Security Services Sound Recording Other services Clubs or association membership Cleaning service Dredging services Intellectual property service
Pandal or Shamiana services Registrar service Sponsorship service Other services Survey & exploration of minerals service TV & Radio programme production service Management, Maintenance or Repair
Catering out door catering service Survey & map making service Rupee comes Rupee Comes From 201314 Excise; 10.00% Non-debt capital Corporate tax; 21.00% receipts; 3.00% Non-tax revenue; 9.00% Income-Tax; 12.00% Service Tax & other taxes; 9.00% 28% Customs; 9.00% Borrowings & others; 27.00% Rate of tax
Rate of Service Tax Rate of service tax as per section 66/66B Period Tax Rate % Edu. Cess % S.Cess % 01.07.1994 to 13.05.2003 5 - - 14.05.2003 to 09.09.2004 8
- - 19.09.2004 to 17.04.2006 10 2 - 18.04.2006 to 10.05.2007 12 2 - 11.05.2007 to 23.02.2009 12 2
1 24.02.2009 to 31.03.2012 10 2 1 01.04.2012 onwards 12 2 1 collection Increase in Service Tax collections Service tax collections in crores 140000 132697 124000
120000 95000 100000 80000 60000 51133 71016 58422 37482 40000 20000 0 60940 406 1957 3302
4122 Service tax collections (in crore) 7890 14196 23053 Growth in service tax revenue over 1994-95 Service Tax collections have shown a steady rise since its inception in 1994 Tax collections have grown manifolds since 1994-95 ie from INR 406 Cr in 1994-95 to INR 132697 Cr in 2012-13 Budgeted revenue for the year 2013-14 is INR 180141 Cr
Source: India budget, CBEC, Legal provisions governing Service Tax in India Chapter V of the Finance Act, 1994 governs the provisions relating to levy and collection of service tax This chapter contains 47 sections from section 64 to section 96J. There is no definition of service provided for in the law; however, the law defines taxable service in respect of various services vide section 65(105) which has clauses from (a) to (zzzzw) i.e. 135 clauses E JA D
E D SS SI C KE D pa B D ss AP ed PA & C O Classification Issue Chartered Accountants services ? 2008 (9) S.T.R. 239 (Tri. - Bang.) JADED SIDDAPPA & CO. Versus CC.E., MANGALORE Clause 83 of section 65
"practising chartered accountant" means a person who is a member of the Institute of Chartered Accountants of India and is holding a certificate of practice granted under the provision of the Chartered Accountants Act, 1949 (38 of 1949) and includes any concern engaged in rendering services in the field of Chartered accountancy; Section 65(105) (s) "taxable service" means any service provided or to be provided to any person, by a practising chartered accountant in his professional capacity, in any manner; 2008 (9) S.T.R. 239 (Tri. - Bang.) JADED SIDDAPPA & CO. Versus CC.E., MANGALORE Chartered Accountants services - Professional services Scope of - Meter reading, billing and ledger keeping as part of outsourced work under additional activity of Chartered Accountant - Activities carried on by unskilled
employees who were neither Chartered Accountants nor being trained as such, but were covered under various labour welfare legislations - Unskilled personnel without qualifications doing only manual work HELD : Such activities were not within ambit of professional services of Chartered Accountants, and they were not liable to Service tax thereon - Sections 65(83) and 65(105)(s) of Finance Act, 1994 - Chartered Accountants Act, 1949.2011 (23) S.T.R. 210 (Kar.) CCE., Mangalore v/s Rai & Associates E THANK YOU CBEC It deals with the tasks of formulation of policy concerning levy and collection of Customs, Central Excise duties and Service Tax, prevention of smuggling and administration of matters relating to Customs, Central Excise, Service Tax and Narcotics. The Board is the administrative authority for its subordinate organizations, including Custom Houses, Central Excise Commissionerates and the Central Revenues Control Laboratory.
---- 3-Mandap Keeper MANDAP KEEPER with effect from 01.07.1997 MANDAP KEEPER W.E.F 01.07.1997 Section 65(66) - mandap means any immovable property as defined in section 3 of the Transfer of Property Act, 1882 (4 of 1882) and includes any furniture, fixtures, light fittings and floor coverings therein let out for consideration for organising any official, social or business function. Section 65(67) - mandap-keeper means a person who allows temporary occupation of a mandap for consideration for organising any official, social or business function. __ Section 105 (m) - taxable service means any service -provided or to be provided to a client, by a mandap keeper
2003 (157) E.L.T. 182 (Tri. - Bang.) ommissioner of Central Excise, Mangalore Versus Krishnapur Mutt (05.08.2003) Facts of the case: Mutt giving Hall on charging some consideration for organising in its premises functions such as marriages. The hall is given to the followers of the Mutt to perform function strictly free of rent. Sometimes, the followers are giving the money as donation or Padakanika to the Pontiff of the Mutt. 2003 (157) E.L.T. 182 (Tri. - Bang.) omm. of Central Excise, Mangalore Versus Krishnapur Mutt Issue for consideration. Whether receipt of any consideration either by way of rent or in the form of donation or Padakanika for organising such function is liable to charge under the Service Tax ? 2003 (157) E.L.T. 182 (Tri. - Bang.) Commissioner of Central Excise, Mangalore Versus Krishnapur Mutt Arguments of the Excise Department. Mutt is giving the hall for social functions such as marriage. In almost all the cases, a uniform amount of Rs. 2,500/- has been
collected from the clients and accordingly, the party is rendering taxable services by letting out the premises of the Mutt to the followers of the said Mutt for commercial considerations. __ __ 003 (157) E.L.T. 182 (Tri. - Bang.) mm. of Central Excise, Mangalore Versus Krishnapur Mutt Judgment of the Tribunal.. It is well settled position from the time immemorial that, marriage is sacred & sacrament as recognised under Hindu Law. It is a religious functions and not a social functions. it cannot be said that the mutt is collecting rent or Padakanika for social functions and entertainment. MANDAP KEEPER 2004 (174) E.L.T. 285 (Commr. Appl.) MUSLIM EDUCATIONAL ASSOCIATION OF SOUTHERN INDIA (11.10.2004) 2004 (174) E.L.T. 285 (Commr. Appl.) MUSLIM EDUCATIONAL ASSOCIATION OF
SOUTHERN INDIA The Appellant submitted that Islamic marriages are highly religious, sacred and sacrosanct. They are not social functions. Sanyasam , brahmacharyam are not permitted in Islam and Samsaram is compulsory. 2004 (174) E.L.T. 285 (Commr. Appl.) MUSLIM EDUCATIONAL ASSOCIATION OF SOUTHERN INDIA Observation of the Commissioner The argument of the appellant that Islamic Marriages are religious and therefore is not a social function cannot be
2004 (174) E.L.T. 285 (Commr. Appl.) MUSLIM EDU. ASSO. OF INDIA Marriage (Nikah) in Islamic law is defined to be a contract which has for its object the procreation and the legalising of children. Marriage according to the Mahomedan law is not a sacrament but a civil contract. Hence it should attract all the incidents of contract as any other stipulated in the Contract Act Mahmad Usaf Abasbhai 2005 (180) E.L.T. 18 (Cal.)
IN THE HIGH COURT AT CALCUTTA DALHOUSIE INSTITUTE Versus ASSISTT. COMM. SERVICE TAX CELL Service tax - Club vis-a-vis mandap, mandap keeper Members of club allowed exclusively to participate in the services rendered by the club and its fund - No third party is allowed to participate in such services Providing such facility to the members by its club cannot be termed to be a letting out nor the members using the facility of any portion of the premises for any function can be termed to be a client __ Registration certificate obtained by petitioner Karnavati Club Ltd V/s UOI 2010 (20) STR 169 (Guj) A member of a club is not a client of a club Confirmed by Supreme Court in 2010 (20) STR J44 2007-TIOL-71-CESTAT-MUM IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL M/s KUTCH KADVA PATIDAR SAMAJ Vs COMMISSIONER OF CENTRAL EXCISE, NASIK
Learned advocate fairly agrees that some of the donations received by them are against the services provided as Mandap Keeper and as such had to be treated as amount charged by the service provider for such services rendered 2006 (4) S.T.R. 60 (Tri. - Del.) IN THE CESTAT, PRINCIPAL BENCH, NEW DELHI SHREE GUJARATI SAMAJ BHAVAN Versus COMMISSIONER OF C. EX., BHOPAL Final Order dated 6-6-2006 Place let out for marriage being religious ceremony can not be
accepted - In Krishnapur Mutt, the marriage is organized without any consideration that too in the Mutt. Constitutionality of service tax on mandap keepers upheld by Supreme Court Kalayana Mandapam providing place for organising marriage for consideration is taxable (67) mandap keeper means a person who allows temporary occupation of a mandap for a consideration for organising any official, social or business function; Explanation. For the purposes of this clause, social function includes marriage
(inserted by Finance Act, 2007 with effect from 01.06.2007) Justice is Blind Victory often changes her side Homer, Iliad Q.E.D. Greek & Latin an abbreviation of the Latin phrase "quod erat demonstrandum" (which was to be demonstrated). Q.E.D. may be written at the end of mathematical proofs to show that the result required for the proof to be complete has been obtained. - How nice it would be if Law was as precise as mathematics! The trouble with law is lawyers.
Clarence Darrow (1857-1938 ) Thank You 4-Tour Operator TOUR OPERATOR TOUR OPERATOR w.e.f. 01.09.97 Section 65 (113) tour means a journey from one place to another irrespective of the distance between such places Section 65 (115) tour operator means any person engaged in the business of operating tours in a tourist vehicle covered by a permit granted under the Motor Vehicles Act, 1988 (59 of 1988) or the rules made there under;
Section (105)(n) taxable service means any service provided to any person, by a tour operator in relation to a tour; --__ TOUR OPERATOR 2006 (4) S.T.R. 88 (Tri-Del.) IN THE CESTAT, PRINCIPAL BENCH NEW DELHI USHA BRECO LTD. V/s COMMISSIONER OF CENTRAL EXCISE, MERRUT-I Decided on 4.8.2006 Maa Mansa Devi 4 Kms. Rs. 26 Rs. 109 Haridwar
Haridwar Maa Chandi Devi TOUR OPERATOR Arguments of the appellant Tour is from Haridwar to the temples There is no tour between two boarding points of rope ways Tour has to be understood in the normal and natural meaning Natural meaning is a lengthy trip or excursion, as for sight seeing or business TOUR OPERATOR
Arguments of the appellant..cont. Road journey between two ropeway boarding points is purely incidental to the tour to the temples As per decision in case of Zee Telefilms limited 2006 iTIOL-945 (CESTAT-Mum), statue should not be so understood as to destroy the normal meaning of the word used in the statue. TOUR OPERATOR Arguments of the department Clause 112 defines tour as a journey from one place to another irrespective of the distance between such places Even though the road journey is 4 kms only, it is nonetheless a tour in the eyes of the law
It satisfy the other requirements in the statue like tour being in the tourist vehicle & tour being provided by the tour operator --- TOUR OPERATOR Decision of the Tribunal The levy of service tax is on the service provided in relation to tour Question to be asked is which is the tour in question Tour is the pilgrimage to the two temples Tour can not be between two boarding points of the transport hub
The transit is merely incidental to the tour To attract the levy , there must be a tour In the present case, there was a tour in a ropeway Gondola The road link between two boarding points is only an incidental link and can not displace the pilgrimage as tour TOUR OPERATOR Finance Act, 2008 W.E.F. 16.05.08 Section 65 (115) tour operator means any person engaged in the business of planning, scheduling, organizing or arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours in a tourist vehicle covered by a permit granted under the Motor Vehicles Act, 1988 (59 of 1988) or the rules made thereunder; - IN THE HIGH COURT OF UTTARAKHAND
2013-TIOL-20-HC-UKHAND-ST CCE,Meerut-I Vs M/s Usha Breco Ltd 3. That being the situation, there is no scope of interference. The appeal and the reference fail and the same are dismissed. Decided on 28.12.2012 Thank You 5-Budget proposals relating to service tax 09.12.2013 Taxation of Services based on Negative List Budget 2012 Contents Finance Budget 2012
Introduction What is service? Taxability Negative Rules A to negative list of services List of service of interpretation billion dollar question CBEC has over a period of time learnt that
teaching the assessees to swim by distance learning would not work; the best way is to push them into the water they will either swim or sink it's their fate! The budget summary 4. CX & ST Harmonization 5. Reverse charge 3. POPS Rules Budget 2012
2. Cenvat reforms GST 1. Negative List The negative list - Concept Activity For consideration Not mere IMAGE The negative list - Concept 1. Taxa ble territ ory 2. Nega tive list
3. Exe mpti on Taxable I : Immovable property M: Money A : Actionable claim G : Goods E : Employee Reverse charge 1 2 3 New services added: Service to business entities by govt/ individual advocates / arbitrators J&K Supplies: Covered by POS Rules;
reverse charged if provider in J&K Reverse charge new scheme: Tax payable to the extent stated on 3 specified services Reverse charge: new scheme Liability to pay Service provider Portion specified Transport: 60% Manpower: 25%
Construction:50% Security:25% Service receiver: Portion payable: Transport: 40% Manpower: 75% Construction: 50% Security:75% GST ? Unified Unified GST GST 2011-13 Towards Towards Central Central GST GST
2005 State State VAT VAT 2004 CENVAT CENVAT How it is implemented ? Insertion of New Sections / rules Section 65B 55 new definitions Section 66B Charging section Section 66C Determination of place of provision Place of Provision of Service Rules, 2012
Section 66D Negative list of 17 services Section 66E List of 9 declared services Section 66F Principles of interpretation of bundled services Section 67A date of determination of tax, valuation & rate of exchange Section 72A Provision of special audit Section 93B Application of rules made under section 94 to other than taxable services
Exemptions in mega notifications/other notifications E Does new service tax law cover illegal activities? A billion dollar question !!! hawala deals betting market bribe by corrupt bureaucrats / politicians scams including scams like the 2G supari contracts
escort services/brothels service Since the definition of service' under the new law does not distinguish between legal activities and illegal activities, service tax would be leviable on illegal activities as well. A billion dollar question !!! CIT v/s Thangamani Madras High Court
05.12.2008 the assessee having acquired income by unethical manner or by resorting to acts forbidden by law, cannot be heard to say that the State cannot be a party to such sharing of ill-gotten wealth; even if the assessee was prosecuted by Law Enforcing Authorities for commission of offence, the income earned by the offender still would be an income liable for assessment. Its Y B Desai Presentation Thank You What is Service? Clause (44) of section 65B Service has been defined in clause (44) of the new section 65B
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 a 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
transaction in (iii) money or (iv) actionable claim any 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 There are three explanations appended Activity What is service?
What does the word activity signify? Activity has not been defined in the Act. It is a term with very wide connotation. As per common understanding of the word activity includes an act done, a work done, a deed done,
an operation carried out, execution of an act, provision of a facility etc. forbearance to act. Agreeing to the obligation to refrain from an act, or to tolerate an act or situation or to do an act (declared service under section 66E) Consideration What is consideration?
What is the meaning of consideration? What are the implications of the condition that activity should be carried out for a consideration? What is the meaning of monetary consideration? What is non-monetary consideration? Examples which constitute consideration for service What is consideration? Is the value of non-monetary consideration important?
Yes. The non-monetary consideration also needs to be valued for determining the tax service since service tax is levied on the value of consideration received which includes both monetary consideration and money value of non-monetary consideration. How is the money value on non-monetary consideration determined? The value of non-monetary consideration is determined as per section 67 of the Act and the Service Tax (Determination of Value) Rules 2006, which is equivalent money value of such consideration and if not ascertainable, then as follows: On the basis of gross amount charged for similar service provided to other person in the ordinary course of trade; Where value cannot be so determined, the equivalent money
value of such consideration, not less than the cost of provision of service. What is consideration? Can a consideration for service be paid by person other than the person receiving the benefit of the service? Yes. The consideration for a service may be provided by a person other than the person receiving the benefit of service There should be link between the provision of service and the consideration. For example, holding company may pay for works contract service or architect services that are provided to its
associated companies. By a person for another By a person for another Delhi Kolkata What is the significance of the phrase carried out by a person for Lucknow another? Mysore The phrase provided by one person to another
Corporate signifies that services provided by a person to self are outside the ambit of taxable service. Mumbai Example of such service would include a service provided by one branch of a company to another or to its head Chennai Bangalore office or vice-versa. By a person for another Taxable Territory
Non-taxable Territory Are there any exceptions wherein services provided by person to the same person are taxable? Yes. Two exceptions contained in Explanation 2 of clause (44) of section 65B, are: XYZ J&K XYZ Mumbai XYZ London an establishment in taxable
territory and another establishment in non-taxable territory are distinct persons. [Similar provision exists presently in section 66A(2)]. an unincorporated association or body of persons and members are distinct persons. [Also exists presently in the explanation to section 65]. . By a person for another Who is a person? Is it only a natural person or includes an artificial or a juridical person?
Person is not restricted to natural person. Person has been defined Section 65 B of the Act. The following shall be considered as persons for the purposes of the Act: an individual a Hindu undivided family a company a society a limited liability partnership
a firm an association or body of individuals, whether incorporated or not Government (Central and State Governments, will be separate persons) a local authority, or every artificial juridical person, not falling within any of the preceding sub-clauses. By a person for another Would taxable services provided by Government or local authorities still be taxable if they are covered under any other head of the negative list or are
otherwise exempted? No. For example, transport services provided by Government by stage carriage is in the negative list. The specified services provided by the Government or local authorities are taxable only to the extent they are not covered elsewhere i.e. either in the negative list or in the exemptions
Activities specified in the declared list are services In the definition of service contained in clause (44) of section 65B of the Act it has been stated that service includes a declared service The following nine activities have been specified in section 66E: renting of immovable property; construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration is received after issuance of certificate of completion by a competent authority; temporary transfer or permitting the use or enjoyment of any intellectual property right;
development, design, programming, customization, adaptation, up gradation, enhancement, implementation of information technology software; agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; transfer of goods by way of hiring, leasing, licensing or any such manner without transfer of right to use such goods; activities in relation to delivery of goods on hire purchase or any system of payment by instalments; service portion in execution of a works contract; service portion in an activity wherein goods, being food or any other article of human
consumption or any drink (whether or not intoxicating) is supplied in any manner as part of the activity. It is clarified that they are amply covered by the definition of service but have been declared with a view to remove any ambiguity for the purpose of uniform application of law all over the country. Activity does not constitute service Activity does not constitute service Goods means moveable property like Immovable property Transfer of Activity to be taxable should not constitute only a transfer in title of goods or immovable property by way of sale, gift or in any other manner
Mere transfer of title in goods or immovable property by way of sale, gift or in any other manner for a consideration does not constitute service. Goods has been defined in section 65B of the Act as every kind of moveable property other than actionable claims and money; and includes securities, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before sale or under contract of sale. Growing Grass attached to earth Building For any other
consideration Gift Immovable property is not defined in the Act. Definition in the General Clauses Act, 1897 will be applicable. Immovable property to include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth. Activity does not constitute service What is the significance of the phrase transfer of title? Transfer of title means change in ownership. Mere transfer of custody or possession over goods or immovable property where ownership is not transferred does not amount to transfer of title.
For example giving the property on rent or goods for use on hire would not involve a transfer of title. Activity does not constitute service Transactions only in money or actionable claims do not constitute service What kind of activities would come under transaction only in money? Deposits in or withdrawals from a bank account. Advancement or repayment of principal sum on loan to someone.
Conversion of Rs 1,000 currency note into one rupee coins to the extent amount is received in money form. Activity does not constitute service What are actionable claims? As per section 3 of the Transfer of Property Act, 1893 actionable claims means a claim to any debt, other than a debt secured by mortgage of immovable property or by hypothecation or pledge of movable property or to any beneficial interest in movable property not in the possession, either actual or constructive, of the claimant, which the Civil Courts recognize as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent.
Illustrations of actionable claims are Unsecured debts Right to participate in the draw to be held in a lottery. Activity does not constitute service Provision of services by an employee to the employer is outside the ambit of services Are all services provided by an employer to the employee outside the ambit of services? No. Only services that are provided by the employee to the
employer in the course of employment are outside the ambit of services. Services provided outside ambit of employment for a consideration would be a service. For example, if an employee provides his services on contract basis to an associate company of the employer, then this would be treated as provision of service. Likewise a person engaged by the employer in private capacity and beyond the demands of employment will be taxable. Provision of services by an employee to the employer in the course of or in relation to his employment free transport or transport at concessional rates, to employees
providing of food, free cost or at concessional rates recoveries by the Company from the employees' salaries towards notice pay payment of mediclaim insurance premiums severance bonus or any gratuitous payment made to exemployees, after the cessation of employment. paying sales incentive/commission to its sales force, based on collections to its ex-manager Company sends its Sales Head and his family on a paid
holiday to Europe, on the surpassing of the annual sales target A company organizing a picnic for its employees Activity does not constitute service If. Then What is the status of services provided by casual workers or contract labour? Services provided by casual worker to These are services provided by the employer who gives wages on daily worker in the course of employment basis to the worker Casual workers are employed by a contractor, like a building contractor or a security services agency, who deploys them for execution of a contract or for provision of security services to a client Services provided by the workers to the contractor are services in the course of
employment and hence not taxable. However, services provided by the contractor to his client by deploying such workers would not be a service provided by the workers to the client in the course of employment. The consideration received by the contractor would therefore be taxable if other conditions of taxability are present. Activity does not constitute service Exclusions from the definition of service Explanation 1 clarifies that service does not cover functions or duties performed by Members of Parliament, State Legislatures, Panchayat, Municipalities or any other local authority, any person who holds any post in pursuance of the provisions of the Constitution or any person as a Chairperson or a Member or a Director in a body established by the Central or State Governments or local authority and who is not deemed as an employee.
Explanation 2 creates two exceptions, by way of a deeming provision, to the general rule that only services provided by a person to another are taxable. As per these deeming provisions establishment of a person located in taxable territory and establishment of such person located in non-taxable territory are deemed to be establishments of distinct persons. Further an unincorporated association or body of persons and members thereof are also deemed as separate persons. Explanation 3 explains that a branch or an agency of a person through which the person carries out business is also an establishment of such person. Taxability of services Section 66B Charging section 66B The taxability of services or the charge of service tax has been specified in section 66B of the Act.
To be a taxable a service should be provided or agreed to be provided in the taxable territory by a person to another and should not be specified in the negative list. Charging section 66B What is the significance of the phrase agreed to be provided?
The phrase agreed to be provided has been retained from the definition of taxable service as contained in the existing clause (105) of section 65 of the Act. The implications of this phrase are Services which have only been agreed to be provided but are yet to be provided are taxable receipt of advances for services agreed to be provided become taxable before the actual provision of service advances that are retained by the service provider in the event of cancellation of contract of service by the service receiver become taxable as these represent consideration for a service that was agreed to be provided. Charging section 66B
Does the liability to pay the service tax on a taxable service arise the moment it is agreed to be provided without actual provision of service? No. The point of taxation is determined in terms of the Point of Taxation Rules, 2011. As per these Rules point of taxation is the time when the invoice for the service provided or agreed to be provided is issued; if invoice is not issued within prescribed time period( 30 days except for specified financial sector where it is 45 days) of completion of provision of service then the date of completion of service; the date of receipt of payment where payment is received before
issuance of invoice or completion of service. Therefore agreements to provide taxable services will become taxable only on issuance of invoice or date of completion of service if invoice is not issued within prescribed period of completion or on receipt of payment.. Charging section 66B Provided in the taxable territory Taxable territory has been defined in section 65B of the Act as the territory to which the Act applies i.e the whole of territory of India other than the State of Jammu and Kashmir. Detailed rules called the Place of Provision of Service Rules, 2012 have been made which determine the place of
provision of service depending on the nature and description of service. Service should not be specified in the negative list. section 66D How do I know that I am performing a taxable service in the absence of a positive list? S. No. Question 1 Am I doing an activity (including, but not limited to, an activity specified in section 65E (Declared Services) of the Act) for another person*? Yes 2 Am I doing such activity for a consideration? Yes
3 Does this activity consist only of transfer of title in goods or immovable way of sale, gift or in any other manner? 4 h f tclaim? Does this activity consist only of a transaction in money or actionable 3o No 5 Does this activity consist only of a transaction in money No 6 7 8 9 10
11 Answer e d ate mn olu orn cactionable i EN TH propertyveby o ab le b ta claim? No
Is the consideration for the activity in the nature ic of court fees for a court or a ind s r tribunal? e sw No Is such an activity in the nature as person in the course of employment? is No n ea h t ofr a service pe
provided by an employee of such s ion t s e any of the categories specified in Explanation 1 to clause Is the activity coveredquin e v o ethe Act (44) of section 65B ab of c he ervi t s o a rt Am I providing or have I agreed to provide the service? we iding s n ov a
the re pr If ua yo I providing or have I agreed to provide the service in the taxable territory? Am Is this activity entirely covered in any of the services described in the negative list of services contained in section 66D of the Act? No Yes Yes No [*if you are a person doing business through an establishment located in the taxable territory and another establishment located in non taxable territory OR a association or body of persons or a member thereof then please see Explanation 2 to clause (44) of section 65B of the Act before answering this question] Charging section 66B Will I have to pay service tax for all taxable services provided in the taxable territory?
No. You will not have to pay service tax on taxable services provided by you in the following cases: if in the previous financial year the aggregate value of taxable services provided by you was less than Rs.10 lakh and in the present financial year the aggregate value of taxable services provided by you is also less than Rs.10 lakh. (you start paying service tax after crossing the threshold of Rs 10 lakh) If the taxable service provided by you is covered under any one of the exemptions issued under section 93 of the Act. Service Tax is liable to be paid by you on all other taxable services provided by you. Charging section 66B
How do I know that the service provided by me is an exempt service? Refer Notification No. 25/2012 dated 20.06.2012. Charging section 66B Are services other than declared services taxable? Yes. All services, whether declared or not, which are covered under Section 66B of the Act are taxable if elements of taxability are present. The only purpose behind declaring activities as service is to bring uniformity in assessment of such activity across the country. Declared Services
section 66E In the definition of service contained in clause (44) of section 65B of the Act it has been stated that service includes a declared service The following nine activities have been specified in section 66E: renting of immovable property; Home Solutions construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration is received after issuance of certificate of completion by a competent authority; temporary transfer or permitting the use or enjoyment of any intellectual property right; development, design, programming, customization, adaptation, up gradation, enhancement, implementation of information technology software;
agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; transfer of goods by way of hiring, leasing, licensing or any such manner without transfer of right to use such goods; activities in relation to delivery of goods on hire purchase or any system of payment by instalments; service portion in execution of a works contract; - Daelims Ind Co ltd service portion in an activity wherein goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as part of the activity. Kalyan mandapam It is clarified that they are amply covered by the definition of service but have been declared with a view to remove any ambiguity for the purpose of uniform application of law all over the country.
Rules of interpretation Section 66F Rules of interpretation Section 66E Principles for interpretation of specified descriptions of services Although the negative list approach largely obviates the need for descriptions of services, such descriptions continue to exist in the following areas In the negative list of services. In the declared list of services.
In exemption notifications. In the Place of Provision of Service Rules, 2012 In few other rules and notifications. Rules of interpretation What is the scope of the clause (1) of section 66F: Unless
otherwise specified, reference to a service (hereinafter referred to Access to road on payment of TollSecurity of toll road as the main service) shall not include reference to a service which is used for providing the main service Transport through Inland water Agent to book transport Rules of interpretation What is the scope of clause (2) of section 66F: where a service is capable of differential treatment for any purpose based on its description, the most specific description shall be preferred over a more general description. Pandal and Shamiana is an existing service and will remain a subject of taxation. Likewise service provided by way of catering is a taxable service
and entitled to abatement. There is abatement when the two are provided in combination. Since the combination is more a specific entry than the two provided individually, there is no need to apply the later rule of bundled services, where the character could be judged by the service which provides it the essential character. Rules of interpretation Taxability of bundled services. Bundled service means a bundle of provision of various services wherein an
element of provision of one service is air transport services provided by airlines combined with an element or elements of provision of any other service or services. Each service involves differential treatment as a manner of determination of value of two services for the purpose of charging service tax is different. catering service on board Rules of interpretation Services which are naturally bundled in the ordinary course of business The rule is If various elements of a bundled service are naturally bundled in the ordinary course of business, it shall be treated as provision of a single service which gives such bundle its essential character
Illustrations - A 5-star hotel provides a 4-D/3-N package with the facility breakfast. This is a natural bundling of services in the ordinary course of business. Rules of interpretation Services which are not naturally bundled in the ordinary course of business Illustrations - A house is given on rent one floor of which is to be used as residence and the other for housing a printing press. Such renting for two different purposes is not naturally bundled in the ordinary course of business.
Therefore, if a single rent deed is executed it will be treated as a service comprising entirely of such service which attracts highest liability of service tax. In this case renting for use as residence is a negative list service while renting for non-residence use is chargeable to tax. Since the latter category attracts highest liability of service tax amongst the two services bundled together, the entire bundle would be treated as renting of commercial property. What is the meaning of consideration? Consideration has not been defined in the Act. The definition of consideration as given in the Indian Contract Act, 1872 can safely be adopted to understand the concept
of consideration. When so applied to the Act, consideration for a service provided or agreed to be provided by service provider would mean anything which the service receiver or any other person has done or abstained from doing, or does or abstain from doing, or promises to do or to abstain from doing for receiving the service. In simple term, consideration means everything received in return for a provision of service which includes monetary payment and any consideration of nonmonetary nature as well as deferred consideration. ---- What are the implications of the condition that activity should be carried out for a consideration? To be taxable an activity should be carried out by a person for another for a consideration
Activity carried out without any consideration like donations, gifts or free charities are therefore outside the ambit of service Donations to a charitable organization are not consideration unless charity is obligated to provide something in return e.g. display or advertise the name of the donor in a specified manner or such that it gives a business advantage to the donor. ----- What is the meaning of monetary consideration? Monetary consideration means any consideration received in the form of money. Money includes not only cash but also cheque, promissory note, bill of exchange, letter of credit, draft, pay order, travelers cheque, money order, postal or electronic remittance or any such similar instrument when used as consideration to settle an obligation.
----- What is non-monetary consideration? Non-monetary consideration could be in the form of following: Supply of goods and services in return for provision of service Refraining or forbearing to do an act in return for provision of service Tolerating an act or a situation in return for provision of a service Doing or agreeing to do an act in return for provision of
service What is non-monetary consideration? Illustrations If And in return A agrees to dry clean Bs clothes B agrees to click As photograph A agrees not to open dry clean shop in B agrees not to open photography Bs neighborhood shop in As neighborhood A agrees to design Bs house B agrees not to object to construction of As house in his neighborhood A agrees to construct 3 flats for B on B agrees to provide one flat to A land owned by B without any monetary consideration Then For the services provided by A to B, the acts of B specified in 2nd column are non- monetary consideration provided by B to A.
Conversely, for services provided by B to A, similar reasoning will be adopted. Examples of services whether constitute consideration Nature of payment Amount dispute. received Whether consideration for service? in settlement of Would depend on the nature of dispute. Per se such amounts are not consideration unless it represents a consideration. If the dispute itself pertains to consideration relating to service then it would be a part of consideration. For example the amount may represent payments for an executed works contract in dispute.
Amount received as performance of service. advances for Such advances are consideration for the agreement to perform a service. Examples of services whether constitute consideration Nature of payment Whether consideration for service? Deposits returned on cancellation of an Returned deposits are in the nature of a agreement to provide a service. returned consideration. If tax has already been paid the tax payer would be entitled to refund subject to provisions in this regard. Advances forfeited for cancellation of an Since service becomes taxable on an agreement to provide a service. agreement to provide a service such forfeited deposits would represent consideration for the agreement that was entered into for provision of service. Security deposit that is returnable on Returnable deposit is in the nature of
completion of provision of service. security and hence do not represent consideration for service Examples of services whether constitute consideration Nature of payment Whether consideration for service? Security deposits forfeited for damages If the forfeited deposits relate to done by service receiver in the course of accidental damages due to unforeseen receiving a service actions not relatable to provision of service then such forfeited deposits would not be a consideration Fines and penalties paid for violation of These are not considerations as no provisions of law. service is received in lieu of payment of such fines and penalties. Examples of services whether constitute consideration Nature of payment Whether consideration for service?
Excess payment made as a result of a mistake If returned it is not consideration. If not returned and retained by the service provider it becomes a part of the taxable value. Demurrages payable for use of services This will be consideration beyond the period initially agreed upon e.g. use of containers beyond the normal period. 6-Overview of Service Tax Overview of Service Tax 1 Registration 2 Payment of Service Tax 3 Returns 4 Records 5 Penalties
Registration Section 69. Registration. (1) Every person liable to pay the service tax under this Chapter or the rules made there under shall, within such time and in such manner and in such form as may be prescribed, make an application for registration to the Superintendent of Central Excise. (2) The Central Government may, by notification in the Official Gazette, specify such other person or class of persons, who shall make an application for registration within such time and in such manner and in such form as may be prescribed. Registration rule 4 Every Person who is liable to pay service tax
Application shall be filed to Superintendent of Central Excise Application is to be submitted in form No. ST-1 within 30 days days of levy or commencement of service Registration shall be issued within 7 days in form ST-2 Deemed to be granted otherwise Single registration for more than one service Single registration permissible if services are provided from more than one premises or offices if
Centralized billing or Centralized accounting Change to be intimated within 30 days Fresh registration if business transferred Surrender registration if ceases to provide services Registration to be cancelled within seven days Documents required to be filed with ST-1 ST1- Properly filled
PAN Number of the assessee Proof of address of the office to be registered Utility bills - telephones, electricity rent/lease deed along with NOC from landlord Any other document which proves the address Residence of Director/Partner/Proprietor
Driving license, Passport, utility bills Brief note on accounting system adopted by the assessee Branch-wise series of invoices maintained along with a sample copy thereof Previous years audited balance sheet along with gross trial balance of different branches Details of records accounts maintained at different branches and Central Office Bank account numbers of the Branches Power of attorney
Memorandum/Articles of Association/ Partnership deed Payment of service tax Section 68 Rule 4A Every person providing taxable services is required to pay service tax Invoice to be issued within 30 days from the date of completion of provision of service or receipt of payment whichever is earlier Payment received either before, during, or after the provisions of taxable service are treated as amount received and service tax required to be paid M M u e tI
O o O n h o a r n t rt vi n d a t h t iv U h n e c t h
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A . R . 7 Payment of Service Tax E-payment of Service Tax rule 6(2) Payment of service tax Rule 6 (1) By Corporate 5th of the following month By Individuals, proprietary firms,
partnership firms 5th of the following quarter For March- on 31st March Service Tax Return Rule 7 File an application to the concerned Division at least 1 month before the date of filing of return. A user ID and password should be issued to him within 10 days along with technical details
Assesses to download ST3 and TR6 challans and enter the necessary details and file the returns Receipt is generated along with a key number which is a proof No documents required to be filed Service Tax Return Rule 7 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
Input Service Distributor For 1st April to 30th September Due Date - 30th October For 1st October to 31st March Due Date - 30th April Service Tax Return Rule 7 Value: Billed: Gross
Exempt Services Exported Service Net on which tax is to be paid Abatement Claimed Amount Received: taxable service rendered Advance received Service Tax Payable
Service Tax Return Rule 7 Details of Other Payments: Arrears Education Cess Interest Penalty Miscellaneous Excess amount paid and adjusted subsequently Credit Opening Balance Credit availed on inputs/capital goods/ input services Credit received from Input Service Distributor Credit Utilized Records Rule 5 No separate records prescribed The records including computerised data, as maintained in accordance with the various laws in force from time to time is acceptable.
Every assessee shall a list of records in duplicate, of- all the records prepared or maintained by the assessee for accounting of transactions in regard to, providing of any service,] receipt or procurement of input services and payment for such input services; receipt, purchase, manufacture, storage, sale, or delivery, as the case may be, in regard of inputs and capital goods;
other activities, such as manufacture and sale of goods, if any. all other financial records maintained in the normal course of business Penalty for contravention of rule and provisions for which no penalty specified elsewhere- section 77 Sr. No Nature of contravention Maximum leviable penalty 1 Failure to take registration under Rs. 200.00 for every section 69 day of failure from the due date to actual or 10,000
which ever is higher 2 Failure to keep / maintained retained books f accounts 3 Failure to furnish information or produced documents called by officer or failure to appear before the officer when served with a summons Rs. 200.00 for every day of failure from the due date to actual or 10,000 which ever is higher 4 Failure to pay tax electronically
Rs. 10000 5 Issue of invoice with incorrect details Rs. 10000 or failure to account for invoice or Rs. 10000 Who is liable to pay service tax? Person to pay Relevant law Legal provision Service provider Section 68(1) of Periodicity as specified in liable to pay tax the Finance At, Rule 6 of the Service Tax when provided in 1994 Rules, 1994 taxable territory Person notified to Section 68(2) of 30/2012-ST dated 15/2012pay by the the Finance At, ST dated 17.03.2012 & Government 1994
36/2004-ST and service tx rules as amended by Notification No. 36/2012 ST dated 20.06.2012 wef 01.07.2012 Recipient of Recipient of 30/2012-ST, 28/2012-ST & taxable service in taxable service 36/2012-ST all dated taxable territory 20.06.2012 wef 01.07.2012place of provisions of service Person specified Rule 2(d) of 36/2012-ST dated in the Rules Service Tax rules 20.06.2012 wef 01.07.2012
The power of adjudication Sr. Central excise Officer No. of Amount of service tax or cenvat credit specified in the notice under section 83A 1 Superintendent Excise Central Not exceeding one lakh (excluding the cases relating to the taxability of service or valuation of service and cases involving extended period of limitation
2 AC/DC of Central Excise 3 Joint Commissioner of Central Above five lakhs Excise exceeding fifty lakhs 4 Additional Commissioner Central Excise Not exceeding five lakh (except the cases where Superintendent are empowered to adjudicate) but not of Above twenty lakhs but not exceeding fifty laks
Time limit for issue of Notice section 73 Five years in case of fraud, collusion, wilful misstatement, suppression of facts Eighteen months in other cases Section 73(1) If suppression etc. not proved at appellate authority, service tax to be determined for eighteen months. Section 73(2A) Offence and penalties section 89 Three years imprisonment -More than fifty lakhs knowingly evades the payment of service tax
avails and utilises credit of taxes or duty without actual receipt of taxable service maintains false books of account fails to supply any information Seven years imprisonment More than fifty lakhs collects any amount as service tax but fails to pay the amount so collected beyond a period of six months Cognizance of offences section 90
Where person committed an offence under Section 89 (1) (ii) and collects any amount of more than fifty lakhs as service tax but fails to pay the amount so collected to the credit of the Central Government beyond a period of six months from the date on which such payment becomes due Power to arrest Section 91 Arrest in Service Tax: Section 91 gives powers to Superintendent to arrest a service tax offender where amount involved is rupees fifty lakhs where imprisonment is for three years or imprisonment for one year (section 89(1)(i) & (ii) A Superintendent can arrest an alleged offender and an Assistant Commissioner can release him on bail. Offences and power to arrest Section 91
Nature of section 89 Offence Imprisonment Cognizance of Power to offense section 91 Section 90 arrest knowingly evades the 3 years payment of service tax amount > lakh if Non50 Cognizable bailable
AC/DC has power to & release on bail as same power under 436 of CCP avails and utilises credit 3 years without receipt of taxable amount > service lakh if Non50 Cognizable bailable AC/DC has power to & release on bail as same power under 436 of CCP maintains false books of 3 years account or fails to supply amount > any information lakh if Non50 Cognizable bailable
AC/DC has power to & release on bail as same power under 436 of CCP collects any service tax 7 years but fails to pay the amount > Government lakh if Cognizable & inform grounds and 50 Non bailable produce before magistrate within 24 hrs Professional opportunities Risky interpret ataions No clarity on both sides HAEVY
PENALTY Complex provision s New law Rising disputes FREQUENT AMENDMENTS Professional opportunities Interpretataio Interpretat ns aions Advise Opinions Before quasiBefore judicial & quajudicial
&Tribunals Tribunals Returns, Returns, payment payment ofof tax tax Opportunities & Role Appearance Training Updation in Law Compliance Law and iterpretataio n Professional opportunities Scope
Area Area Opinion Classification of services Valuation Applicability of tax Cenvat Credit Appearanc e Reply to Show Cause Notice Departmental representation Facilitation to Advocates (SCN) Drafting of appeals Complianc e Registration Disclosures Procedural aspects
Training Tax personnel/Other Maintenance of personnel accounts Updating of law Filling of Returns Advise Interpretation of law Tax planning issue Exemptions Assistance during Audit Review of systems and Guidance on understanding of procedure before effect of budget/recent changes Departmental audit on activities Computation of tax Return
verification/filing returns Review and quarterly audit Filing of Refund claims books of of Service tax issues Resulted in distortions / prejudice Point of Taxation Rules Reverse charge
Place of provision export / import of service Act/ rules Complia nce by Harmoni sing with Govt. Officials Support from Consult ants Clarity E THANK-YOU
Thank You! Department Audit Expenditure in foreign currency Turnover Misc. Income Advance Freight A/c
Cenvat GL Security, manpower recruitment, rent a cab, works contract ----