SERVICE TAX IN BRIEF

SERVICE TAX IN BRIEF

1. Overview

1. Introduced on the recommendation of Chelliah Committee

2. No Separate Statute

3. Administrated by Chapter V and Chapter VA (i.e. Section 64 to 96(1) of the Finance Act, 1994

4. Following Rules & Regulations to be kept in mind :

1.    Service Tax Rules,1994

2.    Service Tax (Advance Ruling) Rules, 2003

3.    Cenvat Credit Rules, 2004

4.    Export of Services Rules, 2005

5.    Service Tax (Registration of Special Category of Persons) Rules, 2005

6.    Authority of Advance Rulings (Customs, Central Excise & Service Tax) Procedure Regulations, 2005

7.    Taxation of Services (Provided from outside India and Received in India) Rules, 2006

8.    Service Tax (Determination of Value) Rules, 2006

9.    Work Contract (Composition Scheme for Payment of Service Tax) Rules, 2007

5. The Excise Department of the Central Government administers the Act.

6. Central Board of Excise and Customs (CBEC) issues various notifications, circulars.

7. For meaning of various terms, definitions of various other laws is to be referred.

2. General Exemptions : Various notifications

                  Value of Goods or Materials (supported by documentary evidence) sold to the recipient       of service subject to following conditions :

(i)            Service provider has not availed credit under Cenvat Credit Rules, 2004 for such inputs or capital goods sold; or

(ii)          In case such credit is availed by service provider; the amount equal to such credit is paid before sale of such goods or material.

4. Registration

1.    Application for be made in Form ST-1 within 30 days from the date when service tax is levied.

2.    For Input Service Distributor it is within 30 days from the commencement of business.

3.    When service crosses Rs.9 Lacs, application to be made within 30 days.

4.    Exceptions to Registration :

a.     Insurance Agents

b.     Taxable services provided by any person from a country other than India and received by any person in India. (Service Recipient to get registered in this case)

c.    Taxable services provided by GTA in relation to transport of goods by road in goods carriage where either consignor or consignee of goods is any factory registered, Co., Corporation, Society, Dealer registered with Central Excise, any body corporate or registered partnership firm

d.    Agent of Mutual Fund

e.    Sponsorship services provided to any body corporate or firm (Recipient is to get registered).

2. Separate registration to be obtained in respect of each premises from where services are rendered/received.

3. If centralized billing or accounting system is maintained, application is to be made to CCE.

4. Single registration for all the services rendered.

5. Additional information is asked to be furnished in 30 days.

6. Registration certificate in Form 2 is granted within 7 days. If not granted, deemed to be granted.

7. In case of transfer, fresh certificate to be obtained.

8. Registration certificate to be surrendered immediately when assessee ceases to provide taxable service.

9. Superintendent to cancel for assuring that monies due has been paid to CG. 

5. Payment of Tax

1. Where advance payment in received towards services; proportionate part of services provided during the period is taxable.

2. Service Tax is to be paid in Form GAR-7 into designated banks.

3. W.e.f. 01 10 2006; when assessee has paid service tax of Rs.50 lacs in preceding financial year or has paid in current year, payment to be made electronically.

4. Date of presentation is the date of payment if it not dishonoured.

6. Filing of Returns/e-Returns

1. Half yearly return is to be filed on 25^th  April and 25^th October.

2. Returns to be filed in ST-3 in triplicate indicating month/quarterwise details of each of the taxable service rendered alongwith copies of challans.

3. Input Service Distributor is to filed return on 30^th April, and 31^st October.

4. In first return, list of accounts maintained is to be furnished.

5. Revised return can be filed within 60 days from original return.

6. A NIL return is also required to be filed.

7. In case of provisional assessment for any month/quarter assessee to submit a memorandum in Form ST-3A, giving details of difference between the provisional amount of service tax deposited and the actual amount of service tax payable for each month along with the half-yearly return in Form ST-3.