Post on 10-Apr-2016
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LEARNING OUTCOME
Introduction to Service Tax:1) Assessment Procedure2) Point of Taxation3) Taxable Territory4) Gross Amount
Negative List (Section 66 D)
Services provided by:Category 1: Govt./ Local authorityCategory 2: RBICategory 3: foreign diplomatic mission located in
IndiaCategory 4: agricultural/ agricultural produceCategory 5: trading of goodsCategory 6: any process – manufacturing/ production
of goodsCategory 7: selling of space or time slots for
advertisement – TV or Radio
Negative List (Section 66 D)
Services:Category 8: by way of access to a road/ bridge- payment of
toll chargesCategory 9: betting/ gambling or lotteryCategory 10: admission to entertainment eventCategory 11: transmission/ distribution – electricityCategory 12: EducationCategory 13: residential dwellings – residence useCategory 14: financial sectorCategory 15: transportation of passengerCategory 16: Transportation of goodsCategory 17: funeral services
Assessment Procedure
Value of services: declared Basis of charge: 12.36%Service – not in negative list/ exemption notificationProvided in taxable territoryComputation of tax liabilityPoint of taxationReverse charge mechanismThreshold limit
Assessment Procedure
Point of taxation:date of completion of service
OrReceipt of payment – towards service
Whichever is earlier
Assessment Procedure
Gross Amount:Value of service:
Cum-tax gross amount charged ____________________________X 100 (100 + Rate of Service Tax)
Service Tax:Cum-tax gross amount charged
____________________________X Rate of Tax (100 + Rate of Service Tax)
Assessment Procedure
1. Expenses - not part of – services – but incurred – as per business practice/ administrative convenience
And recovered – Customer – not includible – Value of Service
Example: Taxes, transport, loading charges, paid on behalf of the customer
Assessment Procedure
2. If Value of services – not ascertainable (Rule 3 of Service Tax Valuation Rules)
Value of similar services Equivalent money value(Rule 3a) of consideration
(Rule 3b)
EXEMPTED SERVICES
1. Services to UN2. Medical and Health Care3. Charitable activities4. Religious services5. Legal services – by Arbitral Tribunal6. Classical or Folk artists7. Sponsorship of certain sports event8. Technical testing or analysis of newly develpoed
drugs.Etc.
ABATEMENT SERVICES
1. Accommodation booking service by tour operator10% of the gross amount charged.
2. Air travel agent: Option to pay flat rate tax: • 0.6% - domestic booking• 1.2% - international booking
3. Mandap keepers, hotels, convention services: providing full catering services:
60% of the gross amount charged.
NOTE: Refer page No. 103-104 for more services (29th edition)
REVERSE CHARGE MECHANISM
Service Receiver Pays taxExceptions:1. Services provided by non- resident2. Insurance agents3. Consignor/ consignee paying freight – GTA services4. Agents of mutual fund
Registration
Less than 9 Lacs Even if more than one premises Electronic filing No registration – all services being exported Penalty for non-registration: Rs.10,000 or Rs.200 per
day (which ever is higher) Interest of 18%: for late payment of tax Returns: ST3 – Half yearly (25th day) Rs.20,000 for late filing of returns
Registration
Less than 9 Lacs Even if more than one premises Electronic filing No registration – all services being exported Penalty for non-registration: Rs.10,000 or Rs.200 per
day (which ever is higher) Interest of 18%: for late payment of tax