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Query on service tax-urgent

Divya Venugopal (student) (207 Points)

21 January 2011

Whether a private limited company located in technopark need to take service tax registration? The head office of the same company is in another state.

Its 100% export oriented unit providing information technology software service and having a total turnover more than 10 lacs. Also please clarify me the impact of other tax laws like vat, income tax, fema etc on the same.

Waiting for your earnest reply.

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10 Replies

Pradip Narsingani (Income Tax & GST Consultant/ CA-Final) (572 Points)
Replied 21 January 2011

hey divya./././

you have ask important question./././

i also wait for any reply...

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U S Sharma (glidor@gmail.com) (21056 Points)
Replied 21 January 2011

Originally posted by : Divya Venugopal
	Whether a private limited company located in technopark need to take service tax registration? The head office of the same company is in another state. Its 100% export oriented unit providing information technology software service and having a total turnover more than 10 lacs. Also please clarify me the impact of other tax laws like vat, income tax, fema etc on the same. Waiting for your earnest reply.

EOU itself has the bonded warehousing provision from excise and customs, and all EOU have to maintain the formalities of excise/ service tax / customs for clearence of their products.

reg vat registration, yes its required for EOU also, though they dont have to pay taxes on exports, but for DTA sales they have to pay excise/vat and for DTA services they have to pay service tax also.

10 L exemption is for domestic services, for EOU i personally feel that no such exemption is available,

other members view are welcome

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Divya Venugopal (student) (207 Points)
Replied 22 January 2011

sir, as it is a software developing service whether bonded warehousing provision will attract it or not.?

Divya Venugopal (student) (207 Points)
Replied 22 January 2011

please clarify my doubts..

C.A Manish Arya (C.A, M.B.A) (408 Points)
Replied 22 January 2011

Hi Divya...

i think Thers is no Question of "bonded Warehousing" since they are not manufacturing/developing any Product for storing them....Isn't it?.....

It's just a logic ... i have not read about such before!

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Santhosh Poojary (SIEMPRE AHÍ PARA TI) (15607 Points)
Replied 22 January 2011

Very Important Quetion Asked

i Would like to request experts to clarify the doubt

@ divya- hay u can also post this quetion in EXPERTS Section

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Divya Venugopal (student) (207 Points)
Replied 22 January 2011

Originally posted by : U S Sharma
	*EOU itself has the bonded warehousing provision from excise and customs, and all EOU have to maintain the formalities of excise/ service tax / customs for clearence of their products.* 10 L exemption is for domestic services, for EOU i personally feel that no such exemption is available,

@ manish- i am also agree wit you.. i was asking that doubt coz i got confused by sharma sir's reply..

@ sharma sir- sir please elaborate ur views.. we r waitin for your reply..n thnx in advance

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 23 January 2011

Export Promotion Council for EOUs & SEZ Units
(Ministry of Commerce and Industry, Govt. of India)
705, Bhikaiji Cama Bhawan, Bhikaiji Cama Place, New Delhi-110066
Tel : 011-26167042/ 26165805/26166185 Fax : 011-26165538
Email : epces @ vsnl.net

EPCES CIRCULAR NO. 42 DATED 8.4.04

Sub : I) Revision of procedure for exemption of Service Tax for supplies to SEZ units vide notification No. 4/2004-Service Tax dated 31-3-2004.

II) Request to Department of Revenue for permitting Service Tax exemption for supplies to EOUs as well.

I) Department of Revenue had extended the facility of Service Tax exemption for supplies of services from DTA to SEZ units. Procedure for availing Service Tax exemption was notified vide Notification No. 17/2002-Service Tax dated 21-11-2002. However, this facility had not become operational because of the cumbersome procedure specified in this notification. As per the procedure specified in this notification, the taxable services had to be authorized to be rendered by the service provider by a committee headed by the Chief Commissioner of Central Excise.

In view of this problem, the issue had been discussed with Ministry of Commerce and Department of Revenue for simplifying the procedure. Ministry of Commerce had also taken up the issue with Department of Revenue. EPCES had taken up this issue with Department of Revenue in a meeting held with Member (Customs) on 6-10-2003. EPCES again had taken up the issue with Revenue Secretary in a meeting held on 17-12-2003.

Now, Department of Revenue has issued notification No. 4/2004-Service Tax dated 31-3-2004 wherein the procedure for availing Service Tax has been simplified considerably. As per the procedure, now notified, the Service Tax can be availed subject to the following conditions:-

(i) the developer has been approved by the Board of Approvals to develop, operate and maintain the Special Economic Zone.

(ii) The unit of the Special Economic Zone has been approved by the Development Commissioner or Board of Approvals, as the case may be, to establish the unit in the Special Economic Zone.

(iii) The developer or unit of a Special Economic Zone shall maintain proper account of receipt and utilization of the said taxable services.

This notification has simplified the procedure for Service Tax exemption and the requirement of approval by a committee headed by the Chief Commissioner of Central Excise has also been done away with. Copies of notification No. 17/2002-Service Tax dated 21-11-2002 and notification No. 4/2004-Service Tax dated 31-3-2004 are enclosed along with.

II) EPCES has represented to Ministry of Commerce and Department of Revenue that EOUs and SEZ units basically operate within the same parameters as both are operating within the Customs bonded premises. Hence, EPCES had requested Department of Revenue that EOUs should also be exempted from the payment of Service Tax as EOUs are entitled for exemption from all indirect taxes. This issue has been taken up with the Department of Revenue in a meeting held with Member (Customs) on 6-10-2003 and again in a meeting held with Revenue Secretary on 17-12-2003. Now EPCES is going to have a meeting with Shri A. K. Singh, Chairman, CBEC on 15-4-2004 and with Member (Customs) on 15-4-2004. EPCES will take up this issue in this meeting.

This is for your information please.

31st March, 2004
Notification No. 4 / 2004 - Service Tax

In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 ( 32 of 1994) and in supersession of the notification of the Government of India in the erstwhile Ministry of Finance and Company Affairs ( Department of Revenue), No. 17/2002-ServiceTax, dated the 21st November, 2002, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section ( i ) dated the 21st November, 2002, vide, G.S.R.777(E), dated the 21st November 2002, except as respects things done or omitted to be done before such supersession , the Central Government being satisfied that it is necessary in the public interest so to do, hereby exempts taxable service of any descripttion as defined in clause (90) of sub-section (1) of section 65 of the said Act provided to a developer of Special Economic Zone or a unit (including a unit under construction) of Special Economic Zone by any service provider for consumption of the services within such Special Economic Zone, from the whole of service tax leviable thereon under section 66 of the said Act, subject to the following conditions, namely:-

(i) the developer has been approved by the Board of Approvals to develop, operate and maintain the Special Economic Zone;

(ii) the unit of the Special Economic Zone has been approved by the Development Commissioner or Board of Approvals, as the case may be, to establish the unit in the Special Economic Zone;

(iii) the developer or unit of a Special Economic Zone shall maintain proper account of receipt and utilisation of the said taxable services.

Explanation .- For the purposes of this notification,-

(1) “ Board of Approvals ” means the combined Board of Approvals for export oriented unit and Special Economic Zone units, as notified in the Official Gazette, from time to time by the Government of India in the Ministry of Commerce and Industry;

(2)“ developer ” means a person engaged in development or operation or maintenance of Special Economic Zone, and also includes any person authorised for such purpose by any such developer;

(3)“ Special Economic Zone” means a zone specified as Special Economic Zone by the Central Government in the notification issued under clause (iii) of Explanation 2 to the proviso to sub-section (1) of section 3 of the Central Excise Act, 1944 (1 of 1944).

V. Kezo
Under Secretary to the Government of India

F. No. 305/55/2003-FTT

21st November, 2002

Notification No.17/2002-Service Tax

In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts taxable service of any descripttion as defined in clause (90) of sub-section (1) of section 65 of the said Act provided to a developer or units of Special Economic Zone by any service provider for the purposes of development, operation and maintenance of Special Economic Zone, or for setting up Special Economic Zone unit or for manufacture of goods by the Special Economic Zone unit, from the whole of the service tax leviable thereon under section 66 of the said Act subject to the following conditions, namely:-

(i) the developer or unit of a Special Economic Zone has been granted permission or authorisation by the Development Commissioner to develop, operate and maintain or establish the unit in the Special Economic Zone;

(ii) the said taxable service has been authorised to be rendered by the service provider, by a Committee headed by Chief Commissioner of Central Excise having jurisdiction over the said Special Economic Zone;

(iii) the developer or unit of a Special Economic Zone, shall maintain proper account of receipt and utilisation of said taxable services, and submit quarterly statement to the Commissioner of Central Excise, having jurisdiction over the concerned Special Economic Zone, in such form, as may be specified by him from time to time.

Explanation – For the purposes of this notification "Special Economic Zone" means the Special Economic Zone as notified by the Government of India in the Ministry of Commerce and Industry.

Ajay Kumar Prasad
Director[CX]

F.No.137/19/2002-CX.4

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U S Sharma (glidor@gmail.com) (21056 Points)
Replied 23 January 2011

Customs and Central Excise Notifications of EOU Scheme:

For the support and assistance of EOUs to import / procure domestically their requirement of raw materials, capital goods and office equipment without paying any duty, a number of Customs and Central Excise notifications have been issued by the Ministry of Commerce, Government of India. These notifications specify the different categories of items allowed to be imported / procured duty free as well as the conditions thereof. The notifications are as under:

(i)	General activity of manufacture, production, packaging of products and service activities for export- Notification Nos. 53/97 Cus dated 3.6.97 and 1/95-CE, dated 4-1-1995.
(ii)	Software technology products for export- Notification Nos. 140/91 Cus, dated 22.10.91 and 1/95-CE, dated 4-1-1995.
(iii)	Electronic hardware products for export- Notification Nos. 96/93 Cus, dated 2.3.93 and 1/95-CE, dated 4-1-1995.
(iv)	Floriculture, Pisciculture etc. for export- Notification Nos. 126/94-Cus dated 3.6.94 and 136/94-CE, dated 23-2-1995.
(v)	Aquaculture for export- Notification Nos. 196/94 Cus dated 8.12.94 and 10/95-CE, dated 8-12-1995.
(vi)	Gold, silver and jewellery products for export- Notifications No. 277/90-Cus dated 12.12.90.
(vii)	Granite quarrying for export– Notification No. 58/2000-Cus, dated 8-5-2000 and 37/2000-CE, dated 8-5-2000.

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Abhilasha (Accountant) (24 Points)
Replied 06 August 2011

we are stationery traders and paid freight. whether we have to registered in service tax or not even gross amount of freight is not more than 5 lakh and transporters have not given any GR no.