Finance Act 2011- Analysis of Service Tax & Excise

Budget Updates – Central Excise

Central Excise is already quite old law and existing for quite some time. In order to resolve problem created by illogical provision under CENVAT/MODVAT Credit Rules and its interpretation, there is a proposal for retrospective amendment for the same. Further there is increase in rate of duty by 1% on goods which were chargeable to 4% rate of tax i.e the rate would be 5%. The goods which are chargeable to 10% would continue to be taxable at the same rate. The brief summary of changes with analysis is given in this article.

Duty Rates:

The rate of Central Excise was increased from 4% to 5% across all goods which are chargeable to 4%. Other goods chargeable to 10% rate of tax would continue to be taxable at the rate of 10% only. The changes would be effective from 1^st March 2011. In this budget vide notification, as many as 130 entries of goods have been brought under the excise net and chargeable to duty at the rate of 1% duty without the benefit of Cenvat credit on inputs and input services vide notification no.1/2011.

In the Central Excise Rules, 2002,— It is provided that, where an assessee is availing the exemption notification No. 1/2011-Central Excise, dated the 1st March, 2011, and does not manufacture any other excisable goods other than those specified in the said notification, he shall file a quarterly return in the form specified by notification by the Board, of production and removal of goods and other relevant particulars, within ten days after the close of the quarter to which the return relates.(notification no.8/2011-CE(NT) dated 24.3.2011.)

Centralised registration

There is provision for centralized registration for every mine engaged in the production or manufacture of goods falling under chapter heading 2701,2702, 2703, 2704 and 2706 where the producer or manufacturer of such goods has a centralized billing or accounting system in respect of such goods produced by different mines and opts for registering only the premises or office from where such centralized billing or accounting is done.( notification no.10/2011-CE(NT) dated 24.3.2011).

Amendments in the Act:

The amendments in the provisions of Central Excise Act are cosmetic without affecting any major working of the law. The changes are as follows:-

°  The rate of interest payable as per Section 11AA has been increased to 18% from 13%. This change would be effective from 1^st April 2011.

°  The rate of interest payable as per Section 11AB for delayed payment of duty also has been increased to 18% from 13%. This change would be effective from 1^st April 2011.

°  Section 4A of the Central Excise Act 1944 which deals with the MRP valuation of goods has been amended to replace the words ‘Standards weights and measures Act 1976’ with the words ‘Legal metrology Act 2009’.

°  Section 11E is being inserted in the Central Excise Act to create a first charge on the property of a defaulter for recovery of Central Excise dues subject to the provisions of the Companies Act, Recovery of Debt due to Bank and Financial Institution Act, 1993 and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. This implies that after the dues, if any, owing under these provisions, dues under the Central Excise Act shall have a first charge.

°  It has been decided to empower the Joint Commissioner/Additional Commissioner of Central Excise (instead of Assistant Commissioner) to carry out the search of any premises or to authorize a central excise officer to do so. For this purpose, section 12F is being inserted in the Central Excise Act.

Central Excise Rules

°  Rule 4 has been amended to state that the person who gets the goods falling under chapter 61, 62 and 63 manufactured on his account on job work shall be responsible for payment of duty. However, the job worker can also be authorized for payment of duty by such person and comply with other provisions of the act.

Cenvat Credit Rules

°  The definition of ‘exempted goods’ has been amended and now it includes even those goods on which the option has been exercised by the manufacturer to pay the duty at concessional rate of 1% on 130 specified entries as per notification no.1/2011-CE.

°  The definition of ‘exempted services’ has also been amended. Now the definition includes even those services in respect of which the service provider has opted for exemption on part of the value with a condition that no Cenvat credit of input or input services. For example, if the service provider engaged in providing the service of ‘construction of complex’ service claiming the abatement of 67% as per the service tax notification no.1/2006 without the Cenvat credit benefit and pays tax only on 33% value, then even such service would be construed as ‘exempted service’.

°  The very important change in the definition has been brought in the definition of ‘exempted service’ by way of explanation in this budget. Now, the exempted service includes even ‘trading activity’.

°  The definition of ‘input’ contained in rule 2(k) has been revised. The requirement that goods should be used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not has been removed. Henceforth, all goods used in the factory by the manufacturer of the final product, except those specified in the negative list and goods having no relationship whatsoever with the manufacture of final product, would qualify for treatment as inputs. In addition, any goods including accessories cleared along with the final product and goods used for providing free warranty have also been included in the definition of inputs. Similarly, goods used for generation of electricity or steam for captive use also constitute inputs. As for exclusions, any goods used for the construction of a building or a civil structure or laying of foundation or making of structure for support of capital goods have been excluded. Another feature of the new definition is that goods used primarily for personal use or consumption of any employee including food articles etc. has been expressly excluded. Now the definition also does not include capital goods except when used as parts and components in manufacture of final products and also does not include the motor vehicles.

°  The definition of ’input service’ has also been rationalized to presumably to impart clarity. Now the input service definition excludes few services such as architect service, port service, air port service, other port services, commercial or industrial construction service, works contract service and construction of residential complex when they are used in construction of building or civil structure or even when used for laying foundation or making structure for support of capital goods. The definition also excludes services such as rent a cab service, general insurance service, authorised service station service and supply of tangible goods service unless they are used by service providers who have been allowed to take Cenvat credit of duty paid on capital goods. The definition also excludes services such as those provided in relation to outdoor catering, beauty treatment, health service, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefit extended to employees on vacation such as leave or home travel concession, when such services are used primarily for personal use or consumption of any employee.

°  Rule 3 has been amended to specify that the Cenvat credit would not be allowed on inputs on which duty has been paid under the benefit of notification no.1/2011. This change is effective from 1^st March 2011.

°  The provisions have also been amended to specify that the Cenvat credit shall not be utilised for payment of excise duty at concessional rate of duty of 1% under notification no.1/2011. This change is effective from 1^st March 2011.

°  Rule 3 (5) has also been amended to further include that the reversal of credit/ payment of duty would not be required on inputs when they are removed under free warranty. For this purpose, free warranty means ‘warranty’ provided by the manufacturer, the value of which is included in the price of the final product and is not charged separately from the customer.

°  Rule 3(5B) is also amended and now the rule requires that the Cenvat credit availed to be paid back even if the Cenvat availed inputs or capital goods are partially written off. Earlier it was required only when the goods are fully written off. This change is effective from 1^st March 2011.

°  Rule 4 is amended to state that the Cenvat credit would be allowed even on capital goods which are received outside the factory and used for generation of electricity for captive used in factory.

°  The Rule 4 (7) is amended to state that when any payment made towards the input service is returned then the manufacturer or service provider who has taken the credit on such input service shall pay proportionate amount to the cenvat availed in respect of such amount returned. This payment can be by utilizing the Cenvat credit or otherwise.

Major change in Rule 6

°  Rule 6 of the Cenvat credit Rules 2004 has undergone major change. The heading of the rule itself has been changed as ‘Obligation of a manufacturer or producer of final products and a provider of taxable service’. Earlier the heading was ‘Obligation of manufacturer of dutiable and exempted goods and provider of taxable and exempted services. 

°  Sub Rule 1 has also been changed to state that the Cenvat credit benefit would not be allowed on inputs or input services which are used in or in relation to manufacture of exempted goods or for provision of exempted service. Earlier the rule has the wordings that the credit would not be allowed on ‘input or input service which is used in the manufacture of exempted goods or for provision of exempted service’. Due to this change, now the assessee cannot take the contention that the Cenvat credit would not be allowed only on input/input services which are directly used in exempted activity would be disallowed.

°  The sub rule 2 now provides for maintenance of separate records in more detailed manner in respect of receipt, consumption an inventory of inputs and the receipt and use of input services used

i) in or in relation to manufacture of exempted goods;

ii) in or in relation to the manufacture of dutiable final products excluding exempted goods;

iii) for the provision of exempted services;

iv) for the provision of output services excluding exempted services.

°  Earlier sub rule 3 required that the provider of output service providing exempted service to pay 6% on the value of exempted service and avail the Cenvat credit fully (unless any input/input service is exclusively used for exempted service). Now this rate of 6% has been reduced to 5%. The rate of 5% is applicable for exempted value in case of taxable services which are partially taxable. For example, if only 33% of construction service is taxable then 5% should be paid on 67% value.

°  In Sub rule 3 in addition to option of paying 5% amount on exempted goods/exempted services or claiming the Cenvat credit proportionately as provided in Rule 6 (3A), a new option has been provided. The new third option would be to maintain separate accounts for the receipt, consumption and inventory of inputs as provided in the new rule and pay an amount as determined under sub-rule (3A) in respect of only input services.   

°  In addition to the above changes, a new explanation has been added to state that the payment of amount of 5% as discussed above would be deemed to be Cenvat credit not taken for the purpose of an exemption wherein exemption is granted on condition that no Cenvat credit of inputs and input services shall be taken.

°  As even trading activity would be considered as ‘exempted service’ as per the amendments, the value of trading activity should also be considered for availment of credit proportionately. The value of such trading would be difference between the sale price and the purchase price of the goods trade or a deemed value of 10% of cost of goods sold. [ (OB + Pur – CB) + Freight, Storage, Insurance, Packing if any]

°  A substantial part of the income of a bank or a life insurance company is from investments or by way of interest in which a number of inputs and input services are used. There have been difficulties in ascertaining the amount of credit flowing into earning these amounts. Thus a banking company or a financial institution, including NBFC, providing banking and financial services are being obligated to pay an amount equal to 50% of the credit availed. In case of services relating to life insurance or management of ULIPs such amount will be equal to 20% of credit availed. Other options of payment of amount under Rule 6 shall not be available for these taxpayers.

°  A major hit in this budget has been the omission of rule 6 (5). Earlier as per this rule, on as many as 16 common services such as security services, banking or financial services etc. the assessee could have claimed the credit of service tax paid to the extent of 100% even if they are partially used for taxable activity. Now, even these services would be subject to proportionate formula as specified in Rule 6 (3A).

°  A new rule 6 (6A) has been introduced with effect from 1^st March 2011 to state that the provisions of Rule 6 shall not be applicable in case of taxable services provided, without payment of service tax to SEZ unit or developers for their authorized operations.

Clarifications in Issues in cenvat credits: CIRCULAR NO. 943/04/2011-CX, DATED 29-4-2011

Can credit of capital goods be availed of when used in manufacture of dutiable goods cleared at 1% excise duty or in provision of a service whose part of value is exempted on the condition that no credit of inputs and input services is taken?

Is the credit of only specified goods and services listed in the definition of inputs and input services not allowed only illustrative?

The list is only illustrative. The principle is that cenvat credit is not allowed when any goods and services are used primarily for personal use or consumption of employees.

How is the "no relationship whatsoever with the manufacture of a final product" to be determined?

Credit of all goods used in the factory is allowed except in so far as it is specifically denied. The expression "no relationship whatsoever with the manufacture of a final product" must be interpreted and applied strictly and not loosely. Only credit of goods used in the factory but having absolutely no relationship with the manufacture of final product is not allowed. Goods such as furniture and stationary used in an office within the factory are goods used in the factory and are used in relation to the manufacturing business and hence the credit of same is allowed.

Is the credit of input services used for repair or renovation of factory or office available?

Credit of input services used for repair or renovation of factory or office is allowed. Services used in relation to renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, are specifically provided for in the inclusive part of the definition of input services.

Is the credit of Business Auxiliary Service (BAS) on account of sales commission now disallowed after the deletion of expression "activities related to business"?

The definition of input services allows all credit on services used for clearance of final products upto the place of removal. Moreover activity of sale promotion is specifically allowed and on many occasions the remuneration for same is linked to actual sale. Reading the provisions harmoniously it is clarified that credit is admissible on the services of sale of dutiable goods on commission basis.

Can the credit of input or input services used exclusively in trading, be availed?

Trading is an exempted service. Hence the credit of any inputs or input services used exclusively in trading cannot be availed.

Are the taxes and year end discounts to be included in the sale price and cost of goods sold while calculating the value of trading?

Generally accepted accounting principles need to be followed in this regard. All taxes for which set off or credit is available or are refundable/ refunded may not be included. Discounts are to be included.

Is the credit available on services received before 1-4-2011 on which credit is not allowed now? e.g. rent-a-cab service

The credit on such service shall be available if its provision had been completed before 1-4-2011

Tariff Amendment

°   Chapter note is inserted for Chapter 72 provided that in relation to goods of this chapter, the process of galvanization shall amount to manufacture.

°  The First Schedule to the Central Excise Tariff Act (contained in the Tenth Schedule to the Finance Bill, 2011 read with clause 70(a)

(i) is being amended with immediate effect to, inter-alia, carry out the following changes -

1. To prescribe that the process of repacking from bulk to retail packs, labeling or relabeling of containers or adoption of any other process to render the product marketable shall be a process amounting to manufacture through the insertion of a Chapter Note in Chapter 22.
2. To prescribe that the process of conversion of ores into concentrates shall be a process amounting to manufacture through the insertion of a Chapter Note in Chapter 26.
3. To prescribe that the process of refining of gold bars shall be a process amounting to manufacture through the insertion of a Chapter Note in Chapter 71.
4. To prescribe that the process of galvanisation shall be a process amounting to manufacture through the insertion of a Chapter Note in Chapter 72.

°  Parts, components and assemblies of vehicles falling under chapter 87 excluding vehicles of headings 8712, 8713, 8715 and 8716 were notified under section 4A of the Central Excise Act with effect from 27.02.2010. Subsequently, parts, components and assemblies of certain vehicles falling under chapter 84 were also notified under these provisions with effect from 29.04.2010. However, these goods were not simultaneously included in the Third Schedule to the CETA. These are now being included in the Third Schedule retrospectively w.e.f. 27.02.2010 and 29.04.2010 respectively.

Impact of budget on garment industry

°  Excise duty at the rate of 10% shall now apply to ready-made garments and made-up articles of textiles falling under Chapters 61, 62 and 63 (heading nos.63.01 to 63.08) of the Central Excise Tariff except those falling under heading nos.63.09 and 63.10 when they bear or are sold under a brand name.

°  Earlier, ready-made garments and made-up articles were exempt from Central Excise duty on the condition that no Cenvat credit is taken by the manufacturer in terms of notification no.30/2004-CE dated 9th July, 2004. If credit were taken, the applicable rate was 4% for goods of cotton, not containing any other textile material and 10% for others under notification no.29/2004-CE also dated 9th July, 2004. These notifications are being amended so that they apply only to those goods of Chapters 61, 62 and 63 not bearing a brand name or not sold under a brand name. For such goods, therefore, the optional duty regime would continue.30/2011-CE dated 24.3.2011.

°  In the case of ready-made garments and made-up articles bearing a brand name or sold under a brand name, no such option would be available and a duty of 10% would be payable regardless of the composition of the item.

°  Note 12 of Chapter 61 and Note 11 of Chapter 62 already prescribe that certain processes such as affixing a brand name on a product, labeling or re-labeling of containers etc. shall be processes amounting to manufacture. A similar note (Note 5) is being added to Chapter 63. As for the valuation of these goods, tariff value has already been fixed at the rate of 60% of the retail sale price in terms of notification No.20/2001-CE (NT) dated 30th April, 2004. This provision is being extended to goods of Chapter 63 as well. It may be noted that SSI exemption is being extended to the goods attracting this levy. This is being implemented through a suitable amendment in item (xxvi) of the Annexure to notification No.8/2003-CE dated 1.3.2003. Although this should take care of small manufacturers, it may be made abundantly clear to the field formations that the levy does not apply to retail tailoring establishments that stitch garments in a customized manner to the size and style specifications of individual customers, whether out of fabric purchased by the customer from the same establishment or fabric supplied by the customer.

°  It is the practice in the garment and made up industry for brand owners to have goods manufactured from several job-workers. The brand owners may or may not, themselves, possess any manufacturing facility. Central Excise Rules are being amended to incorporate sub-rule (1A) in rule 4 to prescribe that in such a situation the liability to pay duty and comply with Central Excise procedure shall be on the person on whose behalf the goods are manufactured by job-workers. For this purpose, he would be required to register his private store-room or warehouse in which inputs are received for distribution to job-workers and finished goods are received from the job-workers. He would also be required to comply with all the other provisions of Central Excise law. The job-worker is exempt from payment of duty if the merchant manufacturer pays the duty.

°  The merchant manufacturer may also has the option of authorizing the job worker to obtain registration and comply with all formalities of Central Excise including payment of duty. Cenvat Credit Rules, 2004 are being amended to enable merchant manufacturers to avail of credit of duty paid on inputs, input services and capital goods.

°  As per note to chapter 63, ‘brand name’ means the brand name, whether registered or not, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented words or any writing which is used in relation to product, for the purpose of indicating, or so as to indicate, a connection in the course of trade between the product and some person using such name or mark with or without any indication of the identity of that person.

°  An amendment is made in notification no.20/2001-CE(NT) by notification no.12/2011-CE(NT) dated 24.3.2011 to increase abatement for tariff value in respect of articles of apparel, not knitted or crocheted, all sorts, falling under sub-heading No. 6201.00 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), from 40% to 55% of the retail sale price that is declared or required to be declared on the retail packages.

°  Where goods bearing the brand name of another person are cleared in the course of sale by a manufacturer to such person and the retail sale price is not affixed on the goods, the transaction value of such goods shall be deemed to be the tariff value.

°  notification no.30/20011-CE dated 24.3.2011 exempts all goods bearing a brand name or sold under a brand name and falling under chapter 61,62 or 63( except 6309 and 6310) of the First Schedule to the Central Excise Tariff Act, 1985(5 of 1986), from the whole of the duty of excise leviable thereon, when goods, on which appropriate duties of excise have been paid, are returned or brought back to the same premises or factory and cleared therefrom after being re-made, re-conditioned, re-packed or

subjected to any other process subject to conditions that

(i) no Cenvat credit of the duty paid on such returned goods is taken under the provisions of rule 16 of the Central Excise Rules,2002;

(ii) an intimation containing the details of the document under which goods are returned and their value, is submitted to the jurisdictional Central Excise authority, within 48 hours of the receipt of the returned goods in the factory or premises ; and

(iii) a proper account of receipt and disposal of such goods is maintained and accounted for in the monthly return.

(iv) the aggregate value of goods cleared from a factory or premises under this exemption in a financial year does not exceed 10% of the aggregate value of clearances for home consumption from the same factory or premises in the preceding financial year.

New Services:

Restaurant Service:

The service provided by a restaurant in relation serving of food and beverages (including alcohol) to any person has been bought into the tax net. The service tax would be applicable only on satisfaction of cumulative criteria as under

a.    Having the facility of Air Conditioning.

b.    Having License to serve alcohol.

However by virtue of amendment to Notification No. 1/2006-ST dated 01.03.2006, vide notification no.34/2011-ST dated 25.4.2011, the abatement of 70% of the gross amount charged for the value of taxable services is given. But how and in what manner the said gross amount charged to be ascertained is not clear in the law as on date.

Issues:

1.   Whether AC restaurants without liquor license would be liable for service tax?

No, Service tax is applicable for AC restaurant having liquor license, both conditions have to be cumulatively satisfied. 

2.   Whether the service provided in Non-Air Conditioned section also would be taxed?

Usually the restaurants would be having both AC and Non-AC section, although the levy in this case is only for air conditioned restaurant, the definition states that AC can be installed in any portion of the establishment to attract the levy and hence the same would be taxable for Non-AC section also.

3.   In case AC facility is provided by restaurant only in case of summer, then would the service provided by restaurant in winter attract service tax?

The Definition states that AC facility provided by restaurant for any part of the year is liable, therefore service tax would be payable even for the service provided in winter, when AC may not be switched on.

4.   Whether the AC restaurants allowing the consumption of liquor at the risk of the customer would be liable for service tax.

No, to attract service tax under this category license is mandatory. Such arrangement would not be liable for service tax. 

5.   Whether AC restaurant with liquor license serving a particular customer food and/or drinks other than alcohol would be liable for service tax.

Yes, the definition covers serving of food or beverages including alcoholic beverages and hence the same would be liable. Once the restaurant has a liquor license and has an AC facility available, irrespective of the nature of service provided, it would be liable for service tax.

6.   In case restaurant is applying/allowing the consumption of liquor by taking license in the name of the customer for one day/event, whether it would be liable for service tax.

No, In case the customer wants to have liquor and applies permission for one such event in his name and consumes the liquor in the AC restaurant, such AC restaurant would not be liable for service tax since the definition requires the restaurant to have the license to serve alcohol.

7.   What would be the value for the charging service tax?

The finance minister speech states that there would be an abatement of 70% for this service. In such a case, service tax would be chargeable only on 30%. However the conditions for such deduction would be known only after the issue of notification.

8.   Whether VAT would be exempted on the value on which service tax is paid?

Supreme Court in two instances has clearly held that service tax and VAT would be mutually exclusive, however in the instant case both Service Tax law and VAT laws are deeming this serving of food and beverages as deemed service and deemed sale respectively. Therefore a strong representation has to be made to the State Government for exempting the value on which the service tax is paid.

9.   In case service charge is explicitly indicated in the Invoice, can service tax be paid on such amount alone?

Notification 12/2003-ST as amended provides exemption for the goods sold in the course of execution of the service. There is a divergent view as to the applicability of this notification, The Bangalore Tribunal decision in case of Daspalla Hotels Ltd. vs Commissioner of C. Ex., Visakhapatnam 2010 (018) STR 0075 Tri.-Bang supports this view, however recently Delhi Tribunal has taken a contrary view in case of M/s Sayaji Hotels Ltd Vs CCE, Indore 2011-TIOL-226-CESTAT-DEL that the benefit of notification 12/2003-ST as amended is not allowed as the notification is not meant for the deemed sale but actual sale. Therefore this view has to be judicially tested/confirmed.

10.        Whether self service at airports would be liable for service tax?

No. Since the element of service is absent in such case there would be no service tax under this service.  But it could be covered under airport service.

11.        Whether the restaurant would be eligible for CENVAT credit?

Yes, CENVAT credit would be available in a regular scheme; however there may be restrictions where the abatement is claimed.  The CENVAT credit may be availed on the following

a.       Excise Duty/CVD paid on Air Condition, Furniture, cutlery, crockery, beverages (other than alcohol) etc

b.      Service Tax paid on the rent of the premises and other service used for providing the taxable service

12.          Whether the restaurants offering merely pick-up and delivery or take away food could be levied to tax?

No, The levy is intended to be confined to the value of services contained in the composite contract and shall not cover either the meal portion in the composite contract or mere sale of food by way of pick-up or delivery, as also goods sold at MRP.

13.          What would be the total tax burden on the restaurants by the Centre and States after the present levy?

The new category seeks to levy tax on services element provided by the restaurant. This levy will result in double taxation as all the State Governments are changing VAT on the sale value of meal and beverages in a restaurant. The VAT rate on food in most of the States is 12.5% and on alcoholic beverages is 20%. Now, on the same amount, service tax at 3% (i.e where abatement is availed) would be levied.

Hotel/Lodge service

The service of proving accommodation for a continuous period for a period less than 3 months has been bought into the tax net. The service provider in this case is a hotel, inn, guest house, club or campsite by whatever name called.  The terms continuous period has not been defined but in common parlance it may be understood as more than a day.  The Budget speech and the TRU circular states that the levy would be made applicable to only those hotels, which have the declared tariff value more than Rs. 1000/- per day. That means hotels having tariff less than Rs. 1000/- per day would be exempted by a notification to be issued. 

There is an exemption vide notification no.31/2011-ST dated 25.4.2011 in cases where the declared tariff value is less Rs. 1,000/- per day. It is said in the notification that while determining the value of this Rs. 1,000/- it includes charges for all amenities provided in the unit of accommodation like furniture, air conditioner, refrigerators etc., Further the discount offered would not get excluded.

However for the purpose of determining the value of services on which the service tax is payable is not defined specifically in the rules. Therefore general valuation mechanism would apply.

Further there is an abatement of 50% of the gross amount charged for the value of taxable services provided vide notification no.34/2011-ST dated 25.4.2011. Here again what is the said gross amount charged is not defined and is a matter of interpretation.

Issues:

1.   Whether there would be double taxation between the Luxury tax and service tax for this service?

The Luxury tax is a state levy for taxing the luxury provided in the hotel room. The new service intends to tax provision of the accommodation, therefore the aspect of taxation of both the levies are different. However this may be constitutionally challenged.

2.   Whether single day accommodation would be liable to pay service tax?

The definition requires provision of accommodation for a continuous period. The term continuous period has not been defined under the statute. Therefore the same has to be understood in common parlance. The dictionary meaning of continuous is “un broken, un interrupted” and that period is “portion of time, a phase or stage”.  In general understanding one day is not understood as a period. Therefore may not be liable for service tax

3.   Whether Hostels facility provided by an education institution would be liable for service tax?

The service providers as defined in the definition are hotel, inn, guest house, club or campsite by whatever name called, that means service provider is restricted to only these specified service provider and Hostel is not in the nature of the defined service provider hence the same may not be liable for service tax.

4.   Whether the Paying Guest accommodation is covered under this service?

Yes, the paying guest facility resembles guest house and hence the same would be liable for service tax.

5.   Whether the holiday homes/ home stay facilities are covered?

Yes, the holiday homes are very much covered under this service.

6.   Whether the service apartments are covered?

Yes, Residential apartments are covered under this service, however in case the period of stay exceeds a period of 3 months then it would be out of the tax net.

7.   Whether the Hospital providing the accommodation to patients would be covered under this service?

The service providers as defined in the definition are hotel, inn, guest house, club or campsite by whatever name called, that means service provider is restricted to only these specified service provider and Hospitals is not in the nature of the defined service provider hence the same may not be liable for service tax under this category.

8.   Would hotel accommodation taken by companies for more than three months be levied under this category?

There are situations wherein the Companies take hotel accommodation for a period of more than 3 months. Such long-term accommodations which are for a period of more than 3 months, have been specifically excluded from the tax net. 

9.   Would this levy apply to the accommodation in a hotel, inn, guest house, camp site which is having a declared tariff of more than Rs 1000/- but the actual amount collected could be Rs 900/- for off season?

The levy would be applicable to accommodation with declared tariff of Rs 1,000/- per day or higher. Once this requirement is met, tax will be chargeable irrespective of the fact that actually the amount charged from a particular customer is less than Rs 1,000/-.

Expansion of Scope of Existing Service:

Authorised Service Station:

Presently the repair and service of the light motor vehicle service, two wheeler service by the authorized service station was covered under the tax net. The scope of this service has been enhanced to cover any service of repair, reconditioning, restoration, or decoration or any other similar services, of any motor vehicle. The exceptions have been given to three wheeled scooter, auto rickshaw and goods carrier. The authorization would be irrelevant as of now and every garage doing the repair or servicing of the vehicle whose turnover exceeds Rs. 10 lakhs would be liable for service tax. Further the car decorators service such as interior seat covering, glass tent, etc are also bought into the tax net.

1.   Would any service provider that does service of repair, reconditioning, restoration or decoration or any other similar services, of any motor vehicles other than three wheeler scooter auto-rickshaw and motor vehicle meant for goods carriage be liable?

Yes, these services will become taxable regardless of the status of service provider.

2.   Would servicing of crane and tractor be liable?

Since crane and Tractor are also considered as motor vehicle under Motor Vehicle Act 1988, and are not used as goods carrier, the servicing thereof could be liable to service tax.

Health Service:

 In previous year’s budget, service tax was levied on the health service provided by a Hospital, Nursing Home and Multi-specialty clinic to the insured patient and consideration received directly from the Insurance Company. In this budget the service tax base has been enhanced to include clinic, individual doctor etc. There is an exemption to the health services by notification no.30/2011-ST dated 25.4.2011.

In effect all health services rendered by service providers such as hospital, nursing home, multi speciality clinic are exempted from service tax liability.

Clubs or Association Service:

Service provided to the members of the club or association in relation to provision of any services, facilities or advantages for a subscription or any other amount was taxable. Now this definition has been extended to service provided to other also. Further exemption has been provided for the membership fee collected by the association formed for representing the industry or commerce during the period from 16.06.2005 to 31.03.2008. Further the refund is also permitted within the time limit of 6 months from the date of enactment of the Finance Bill.

1.   Would the services availed by a guest of the member of club be liable?

Yes, it is taxable because non-members will fall within the scope of the term “any other person”.

2.   Whether such services are provided to members of another club is liable?

Yes as the affiliated clubs are covered within any other person, who is provided any services, facilities, advantages for an amount, by the club or association.

Commercial Coaching & Training:

The scope of this service has been enhanced to include the

a.    preschool coaching and training centre or

b.    any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognized by law for the time being in force

An exemption has been provided vide notification no.33/2011-ST dated 25.4.2011 to:

(i) any preschool coaching and training;

(ii) any coaching or training leading to grant of a certificate or diploma or degree or any educational qualification which is recognised by any law for the time being in force;

when provided by any commercial coaching or training centre from the whole of the service tax leviable thereon

1.   Would the kindergarten be liable to service tax?

No, as this category would be applicable to the preschool coaching and training centre. It would not cover the educational institution providing formal pre-schooling.

2.   Would the educational institutions offering a degree, diploma, certificate recognized by law, be liable to service tax?

No, this would be applicable only to the institutes or establishments providing commercial training or coaching. Education activities only are excluded.

Business Support Service:

The scope of this service has been enhanced to include the operational and administrative assistance as well.

1.   Would the outsourced services of collecting fees from students, depositing in bank, security services, catering for students of a deemed university done by a single vendor, be covered  under Business Auxiliary Services?

No, such services are not provided on behalf of university to students, by vendor. It is not an obligation of the university, by any stretch, which is passed on to vendor. It is merely support services provided to university by vendor. This could be covered under operational assistance provided to support the university. This could be liable only from a date to be notified after date of enactment of Finance Bill, 2011.

Life Insurance Business:

The scope of the service has been enhanced to only any service in relation to life insurance business, which is presently restricted to service in relation to risk cover in life insurance.

An insurer carrying on life insurance business shall have the  option to pay tax:

(i) on the gross premium charged from a policy holder reduced by the amount allocated for investment, or savings on behalf of policy holder, if such amount is intimated to the policy holder at the time of providing of service;

(ii) 1.5 per cent of the gross amount of premium charged from a policy holder in all other cases;

towards the discharge of his service tax liability instead of paying service tax at the rate specified in section 66 of Chapter V of the said Act:

This option shall not be available in cases where the entire premium paid by the policy holder is only towards risk cover in life insurance.”.(vide notification no 35/2011-ST dated 25.4.2011)

1.   Would services in relation to Managing Investment for the Policyholders be held liable to service tax?

Yes, services in relation to the risk cover as well as services in relation to Managing Investment for the Policyholders are proposed to be included within the purview of taxable service clause

Legal Service:

Presently the service provided by a business entity to business entity was taxable. The scope has been enhanced as under

Note: The representational services per se have been stayed by the Delhi High Court in April 2011 for advocates as well as CAs in response to different writs filed.

1.   Would all the advise, consultancy, assistance services provided to business entity/individual are leviable to service tax?

No, merely all the advise, consultancy, assistance services provided to business entity/individual by business entity would be leviable.

2.   Would the representational services provided to individual be liable?

No, the representational services provided by an individual/business entity to individual would not be liable to service tax. Such services provided to a business entity would be liable to service tax.

Reduction of exemption for air travel

(Refer Notification: 04/2011-ST dated 28.02.2011 made effect from 01.04.2011)

Change Of The Rate For Forex Booking:

Forex Brokers or Banking & Other Financial services can continue to make payment of ST on Gross Amount received but ST liability shall be computed at the rate of 0.1% instead of 0.25% of the gross amount received.

(Refer Notification No: 03/2011- ST dated 28.02.2011 made effect from 01.04.2011).

The exemption to Forex Brokers or Banking & Other Financial services in relation to inter-bank transactions of purchase and sale of foreign currency to a Scheduled bank, by any other Scheduled bank”, is now extended to “any bank, including a bank located outside India, or money changer, by any other bank or money changer” shall be substituted. Vide notification no.27/2011-ST dated 25.4.2011.

Business Exhibition Service:

Exemption has been extended to service provided by an organiser of business exhibition for holding a business exhibition outside India.

(Refer Notification No: 05/2011-ST dated 28.02.2011)

1.   Where an exhibition is organized outside India would it be liable to service tax, when consideration is not received in foreign exchange?

No, as a specific exemption has been provided [vide above mentioned notification which is effective from. 01.03.2011] to services which are taxable under section 65(105)(zzo) of Finance Act, 1994under the heading “Business Exhibition Services” when provided by an organizer of business exhibitions in relation to business exhibitions held outside India. By virtue of this exemption, when aforementioned services are provided out of India, Export of Services Rules, 2005 become inconsequential.

Works Contract Service:

 Construction of New residential complex or part thereof or completion & finishing of services of new residential complex or part thereof under JNNURM (Jawaharlal Nehru National Urban Renewal Mission) and Rajiv Awaas Yojana (RAY) has been exempted

(Refer Notification No: 06/2011-ST dated 28.02.2011)

Amendment in Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007- Notification No. 1/2011-S.T. dated 01.03.2011

Sub-rule (2A) has been inserted in Rule 3 of the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 vide abovementioned Notification w.e.f. 1.3.2011.  In case a person opts to pay tax under Works Contract Composition scheme then as per the new sub-rule, the CENVAT Credit in respect of the service tax paid in respect of any of the following three taxable services is to be restricted to an extent of 40%, if the said input service provider charges service tax on full value of the service after availing CENVAT credit on inputs:

In other words, the aforesaid restriction of 40% will be applicable only where service tax has been paid by input service provider on full value of the service after availing CENVAT credit on inputs. This amendment has been done to ensure that the credit on inputs is not taken indirectly while availing the benefit of the Composition Scheme. The effective input service credits available would be 10.3%*40%=4.12%, which is equal to the composition rate.

Composition scheme puts bar on claiming the CENVAT Credit of duty paid on Inputs only [and not on availing the CENVAT Credit of Service Tax paid on Input Services]. There can be a situation where the Input service provider providing any of abovementioned services has paid service tax at full rate after availing the credit on inputs. In such a case input service receiver indirectly claims the CENVAT Credit of duty paid on Inputs. Thus, in order to ensure that the credit on inputs is not availed indirectly, CENVAT Credit is restricted to 40% of the tax paid on foregoing services.

General Insurance Business:

Service provided by Insurer in General Insurance Business is exempted from ST levy if services are rendered to any person under the Rashtriya Swasthya Bima Yojana.

(Refer Notification No: 07/2011-ST dated 28.02.2011)

Exemption for Transportation Outside India:

Exemption available if the services are provided to any person located in India, when the goods transported from a place located outside India to a final destination which is also outside India in relation to following service

a.    GTA

b.    Transport of goods by Air

c.    Transport of goods by Rail

(Refer Notification No: 08/2011 dated 28.02.2011) (w.e.f 01.04.2011)

Transport of Goods by Air:

Exemption has been granted to the extent of the value as is equal to amount of air freight included in the value determined in accordance with Sec 14 of Customs Act, 1962

(Refer Notification No: 09/2011 –ST dated 28.02.2011) (w.e.f 01.04.2011)

Airport Service/Port & Other Port Service:

a.    Works Contract Service wholly within the Airport and classifiable under the service of Airport Service is wholly exempted

(Refer Notification No: 10/2011 dated 28.02.2011)  (w.e.f 01.04.2011)

b.    Works Contract Services when provided wholly within the port or other port, for construction, repair, alteration and renovation of wharves, quays, docks, stages, jetties, piers and railways is exempted

(Refer Notification No: 11/2011 dated 28.02.2011) (w.e.f 01.04.2011)

 Transport of Coastal Goods Etc

25% Abatement has been given for the service provided services in relation to transport of: 

(i) Coastal goods;

(ii) Goods through national waterway; or

(iii) Goods through inland water.

In other words service tax is payable on 75%

(Refer Notification No: 16/2011 dated 28.02.2011) (w.e.f 01.04.2011)

Telecommunication Service:

An explanation, has been inserted after Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006. The said explanation clarifies that for the purpose of telecommunication services [which are taxable under section 65(105)(zzzx)] the value shall be the gross amount paid by the person to whom the telecom service is provided by the telegraph authority.

Further, it been clarified in the TRU letter bearing D.O.F. No. 334/3/2011-TRU dated 28.2.2011 that in case of service provided by way of recharge coupons or prepaid cards or the like, the value shall be the gross amount charged from the subscriber or the ultimate user of the service and not the amount paid by the distributor or any such intermediary to the telegraph authority. For instance, a recharge coupon of Rs. 100/- is given by Telecommunication company to its distributor @ Rs. 95/-. The said distributor charges Rs. 100/- from the ultimate user. Thus, value of telecommunication service in the case of said recharge coupon shall be Rs. 100/- and not Rs. 95/-.

Categorisation of Services Vide Export of Service Rules as well as Taxation of Services (Provided from Outside India and Received in India) Rules

(Ref: Notification No.12/2011 and Notification 13/2011 both dated 01.03.2011)

& Notification No.36/2011 and Notification 37/2011 both dated 25.04.2011

Other Changes in Provisions:

Interest & Penalty:

a.    Interest for delay payment and interest for delay in remittance of the tax collected in excess has been enhanced from 13% to 18%p a

b.    Interest for the service provider, whose turnover not exceeding Rs. 60lakhs has been enhanced from 13% to 15%

c.    Late filing of returns has been enhanced from Rs. 2,000/- to Rs. 20,000/-

d.    The reduced penalty of 25% of the tax payable under section 78 has been extended only to the true and complete transaction is available in the specified records. The specified records here means any records including computerizes data as are required to be maintained as required by any law being in force. In case the same is not required, even the record of invoice in the books of accounts would be considered. In other words the benefit of 25% of penalty is not available for unaccounted transaction.

e.    The payment period of 30 days from the date of order has been relaxed to 90 day in case of the service provider’s turnover not exceeding 60 lakhs.

f.     The penalty under section 76 has been reduced from “higher of Rs. 200 per day or 2% pm but restricted to 100% of tax payable” to “higher of Rs. 100 per day or 1% pm but restricted to 50% of tax payable”

g.    The penalty under section 78 was presently between 100% and 200%, this has been reduced to 100% for un accounted transaction and 50% for accounted transaction.

h.   Penalty waiver has been restricted to unaccounted transaction, in other words for un accounted transaction there would be mandatory penalty of 100%

Powers For Search & Seizure:

Powers of search has been given to Superintendent of Central Excise upon authorization of Joint Commissioner. Earlier the powers vested with AC/DC upon authorization by Commissioner of Central Excise.

Provision of Central Excise Made Applicable to Service Tax

a.    Certain offices has been made non-cognizable offence, with a compounding power to Commissioner of Central Excise on payment

b.    Personal penalty of the directors/manages etc has been introduced

c.    Power of Court to publish name, place of business, etc., of persons convicted under service tax has been bough in.

d.    The provision of section 562 of the Code of Criminal Procedure, 1898, and of the Probation of Offenders Act, 1958 is made applicable to service tax

e.    The provision of fixing the monetary limit for department appeal. Notification to this effect would be given after enactment.

Charge on Property:

First charge on the property of the assessee or the service provider 

Imprisonment:

The following offenses are punishable with imprisonment of upto 3 years in case the offence exceeds 50Lakhs and in other case it would be upto 1year

a.    Providing taxable service without issuance of Invoice

b.    Availing the credit without actual receipt of service or goods

c.    Maintenance of false books of account

d.    Collects excess service tax and not remitting to credit of the government for a period beyond 6 months

CHANGES IN POINT OF TAXATION AND CENVAT CREDIT

At the outset, we would be examining the law as it stood prior to the introduction of the Point of Taxation Rules .The service tax levy would be attracted at the time of provision of taxable services and crystallize at the time of receipt of the consideration either in full or in part. However where any advance was received for the service to be provided in future, the point of levy and crystallization of levy happened at a single point of time. This is because the taxable service definition as per Section 65(105) read as under-“taxable service” means any service to be provided or to be provided. The services to be provided were included within scope of taxable service by the Finance Act, 2005 wef 16.6.2005. Thus the levy covered even the services to be provided within its scope.

As a procedural requirement, there was a requirement of preparing a bill or invoice or challan within 14 days from the date of completion of service. However at the time of receipt of such advance itself, bill or invoice or challan had to be raised. There was a legal question of whether the levy on future contingent event could be called a service at all without even the service commencing, which continues even today.

In view of the paper writers, in cases where the receipt of advance took place for the services to be provided and the service was not provided at all, technically speaking the incidence of levy was complete and the tax already became due. In order to nullify the impact of such incidence the service tax paid on the advance would be allowed to adjust for the subsequent payments. However if there were no payments in future, technically claiming refund of the same would have been difficult.

Further the service tax was to be paid in accordance with Rule 6 of Service tax Rules, 1994 which stated that Service tax to be paid when the receipt of gross amount charged took place.

Point of Taxation Rules, 2011:

All of the above were proposed to be changed with the introduction of Point of Taxation Rules, 2001.

The main intention of the new rules appears to ensure transition from cash system to accrual system like Central Excise and Sales Tax/VAT. Point of Taxation Rules, 2011 deals with the following types of transactions, namely service provided or to be provided & continuous supply of service along with treatment in case of change in rate of tax. However prior to analysing the implications of these rules, it would be relevant to understand some of the new terms defined in the said Rules.

Definitions/Meaning

The term “continuous supply of service” is defined to mean any service which is provided, or to be provided,

1. continuously,
2. under a contract,
3. for a period exceeding three months,
4. or where the Central Government, by a notification in the Official Gazette, prescribes provision of a particular service to be a continuous supply of service, whether or not subject to any condition;

The term “point of taxation” means the point in time when a service shall be deemed to have been provided;

Point of Taxation in Single Supply Service/other than continuous Supply Service

Point of Taxation in case of Continuous Supply Service

Service Tax Payment on receipt basis continues in specified cases:

Point of Taxation considered as date of receipt or payment of consideration in case of following :

i.  Services listed in 3(1) of Export of Service Rules, 2005 if the amount are realized within the date prescribed by RBI.  However if it is not realised within that period, then general rule of completion of service or date of issue of invoice would be applicable. If advance was received, to that extent the date of receipt of advance would become taxable.

ii. Person liable to pay service tax under reverse charge mechanism (GTA, Sponsorship and import of service) if the payment has been made before 6 months from the date of Invoice. However if the payment is not made within six months of the date of invoice, the general rule as explained above would be applicable. In case of associated enterprises date of credit in the books of accounts or making payment whichever is earlier.

iii. Individual/proprietor/firms providing the following service

                                i.    Architect

                                ii.    Interior Decorator

                               iii.    Chartered Accountant

                               iv.    Cost Accountants

                                v.    Company Secretary

                               vi.    Scientific or technical consultancy

                               vii.    Legal Consultancy Service

This Rule has been inserted as per the representations made by the Institute of Chartered Accountants of India.

Here it should be noted that the exemption from collecting Service Tax vide notification No. 25/2006 granted to Chartered Accountants for professional representation  before statutory authorities  has been withdrawn from 1st May 2011 vide notification No. 32/2011 dated 25th April 2011.

Corresponding Changes in Service Tax Rules, 2002

a.    The invoice, bill or challan shall be issued within 14 days from the date of completion of service.

b.    In case of continuous supply of service, it requires that an invoice, bill or challan, as the case may be, within fourteen days from the milestone date for payment mentioned in the contract.

c.    If the amount of invoice is renegotiated due to deficient provision or in any other way changed in terms of conditions of the contract (e.g. contingent on the happening or non-happening of a future event), the tax will be payable on the revised amount provided the excess amount is either refunded or a suitable credit note is issued to the service receiver. It is not covering bad debts.

Further Board Clarification clearly says that this concession is not available for bad debts.

Point of taxation where there is a change in rate of Taxes-Rule 4

Rule 4 states that point of taxation as stated in Rule 3 shall not be applicable for determination of date(point of taxation) in cases where there is change of rate of tax in respect of a particular service.

The change of rate means not only the change of rate by amendment in the Act, but also covers change of rate by amendment in exemption notification. Further also it cover a change in abatement rate or value on which the duty needs to be computed.

When there is change of tax rate for a particular service the point of taxation shall be decided in accordance with Rule 4 as under:

Assumptions:

a) The present rate is 10%, changed rate (in the future) is 12%.

b) Words used in table: Before is in relation to the service, invoice or payment     as mentioned in the header.

The rate changes from 10% to 12% as on 14^th May

Transition provision

The point of Taxation Rules would not apply to services provided or invoices raised prior to 01.04.2011.

Further it is said that for the services provided or invoice raised before 30^th June 2011 the assessee may at their option continue to follow the existing system i.e. payment of service tax on receipt basis.

Changes in the time of availment of CENVAT Credit and value of trading service

a.    The Cenvat Credit on input services can be availed on receipt of invoice. However the payment has to be made within three months. This is effective from 01.04.2011 irrespective of the fact that the service provider may be continuing to pay service tax on payment basis.

b.    In case of service tax paid by the recipient of service on reverse charge basis, the credit can be taken on making payment to the service provider and also making payment of service tax to the Government.

c.    If the payment is not made within three months, then the credit availed has to be reversed/paid. However the same can be taken back as credit on making payment.

d.    If subsequent to payment made or invoice received, a amount is received back or credit note is received, when the value of service is renegotiated or altered for any reason the credit availed to that extent requires to be reversed/paid.

e.    Credit on the invoices issued prior to 01.04.2011 by the service provider would continue to be eligible only on payment basis and not on receipt of invoice.

a.    Supplementary invoice, bill or challan issued by a provider of output service, which should be in terms of the Service Tax Rules, 1994 is also added as one of the documents on which credit can be availed. However if such invoice is raised by the service provider in cases where such additional amount of tax became payable by him on account of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Finance Act or of the rules made thereunder with the intent to evade payment of service tax, then it would not be considered as eligible document for credit.

Amendment to Service Tax Rules 2002:

d.    The provision for issuing of an invoice, bill or challan within 14 days from the date of completion is restored.

e.    In case of continuous supply of service, it requires that an invoice, bill or challan, as the case may be, within fourteen days of the date of milestone for payment in the contract is completed.

a.    Adjustment for non-provision of service: In case of assessee who has issued an invoice/ received payment towards a service to be provided and has not provided service (in full or part), he is eligible to take the credit of excess ST paid by him if he:

                                         i.    Refunded the payment along with the ST to the receiver of service or

                                       ii.    Issued a credit note for the value of service not so provided to the person to whom he has issued invoice.

b.    Enhancement of the adjustment limit: In case where the assessee has paid to the credit of Central Government any amount in excess of the amount required to be paid towards service tax liability, can be adjusted in the subsequent period subject to a monetary limit which has enhanced from Rs. 1,00,000/- to Rs. 2,00,000/-.

f.     If the amount of invoice is renegotiated due to deficient provision or in any other way changed in terms of conditions of the contract (e.g. contingent on the happening or non-happening of a future event), the tax will be payable on the revised amount provided the excess amount is either refunded or a suitable credit note is issued to the service receiver. It is not covering bad debts. Further Board Clarification clearly says that this concession is not available for bad debts. This may require to be represented as it was agreed to be examined.

A.   Changes in the time of availment of CENVAT Credit and value of trading service

a.    The Cenvat Credit on input services can be availed on receipt of invoice. However the payment has to be made within three months. This is effective from 01.04.2011 irrespective of the fact that the service provider may be continuing to pay service tax on payment basis. This may result in the reduction in period for payment for the service providers where the input service credit availer does not wish to reverse the credit.

b.    In case of service tax paid by the recipient of service on reverse charge basis, the credit can be taken on making payment to the service provider and also making payment of service tax to the Government.

c.    If the payment is not made within three months, then the credit availed has to be reversed/paid. However the same can be taken back as credit on making payment.

d.    If subsequent to payment made or invoice received, an amount is received back or credit note is received, when the value of service is renegotiated or altered for any reason the credit availed to that extent requires to be reversed/paid.

e.    Credit on the invoices issued prior to 01.04.2011 by the service provider would continue to be eligible only on payment basis and not on receipt of invoice.

b.    Supplementary invoice, bill or challan issued by a provider of output service, which should be in terms of the Service Tax Rules, 1994 is also added as one of the documents on which credit can be availed. However if such invoice is raised by the service provider in cases where such additional amount of tax became payable by him on account of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Finance Act or of the rules made thereunder with the intent to evade payment of service tax, then it would not be considered as eligible document for credit.

c.    As regards to computation of proportionate credit or payment of 5% pertaining to trading goods the rules is amended to say that the value of exempted service will be difference between the sale price and the cost of goods sold (determined as per the generally accepted accounting principles without including the expenses incurred towards their purchase) or ten per cent. of the cost of goods sold, whichever is more.

This article seeks to provide the analysis of the important provisions and could be interpreted differently and the updated view of the revenue and judiciary may be confirmed. 

Books referred:

i.     Central Excise Law & Procedures – 2011- Centax Publications

ii. Practical Guide to Service Tax – 2011 - Bharat Law House.

CA Madhukar N. Hiregange