Service Tax Basics - HMV

8/13/2019 Service Tax Basics - HMV

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LAKSHMI

Wednesday, December 18,2013


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Money has no smell,

ARoman emperor observed when he clapped a tax onpublic toilets.



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Which were the three

services that were taxedwhen the Service tax

was introduced in

1994??Wednesday, December 18,2013


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What is Service Tax?

It is a tax levied on the transaction of certainSpecified Services, by the Central Governmentunder the Finance Act, 1994.

It is an Indirect Tax, which means that normallythe service provider pays the tax and recovers the

amount from the recipient of taxable service.

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Who is liable to pay Service Tax?

(Sec.68 (1) of the Act) says that-the Person whoprovides the taxable service is responsible for payingthe Service Tax to the Government.



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REGISTRATION REQUIREMENTS

Section 69 read with Rule 4 Every Person who is

liable to pay service tax

Application shall be filed

to Superintendent ofCentral Excise

Application is to be inform No. ST-1

Registration shall beissued within 7 days inform ST-2

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REGISTRATION REQUIREMENTS

Any provider of taxable services whose aggregatevalue of taxable service in a financial year exceeds

Rs. 9 lacs, has to get themselves registered.



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Provision for Centralized Registration

Service providers having centralised accounting orcentralised billing system, at their option, canhave Centralised registration at one or more

places. Commissioner of Central Excise / ServiceTax in whose jurisdiction centralised account orbilling office of the assesses exists, is empoweredto grant centralised registration.



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Online registration process

For New Assesses

For Existing Assesses

For LTU Assesses



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DocumentS to be Submitted with ST-1

I am

confused

what documents

to be filed

with ST-1

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(a) Proof of address of the premisesoffice sought to be registered

(b) PAN number of the assessee

(c) List of Branches offices or

premises of the assessee(d) Constitution of applicant

(e) Power of attorney

(f) Bank account numbers of theBranches and Central Officethrough which the receipts aredeposited, transacted.

DocumentS to be Submitted with ST-1


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Contd

Service Tax Code number is a 15 digit alphanumeric no.based on the PAN

Ex : AJQPN8358P SD001



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Payment of Service Tax through G.A.R. 7

Quarterly Payment

Other than Individual/FirmIndividual/Firm

Monthly Payment

Quarter Endingon 31stMarch

Other Quarters Month of March Other Months

Upto 31stMarch5thof the Month

following QuarterUpto 31stMarch

5thof theNext Month

E Payment of Service Tax



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E Payment of Service Tax

Rs. 50 Lakhs or More(Cash+CENVAT)

Optional E - PaymentMandatory E - Payment

Less than Rs. 50 Lakhs(Cash+CENVAT)

In case of LargeTaxpayer Unit

Other than LTU

Check the LimitIndividuallyfor EveryRegisteredPremises

Check CumulativeLimit for EveryRegisteredPremises

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Return of Service Tax

Return of Service Tax to be filedHalf Yearly ST-3

For 1st April to 30th September Due Date - 25th October

For 1stOctober to 31st March

Due Date - 25th April



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E-filing of ST-3 return

Basic Requirement

PAN Based Service Tax Code (STC)

File return on www.servicetaxefiling.nic.inCondo nation of Delay

Only for those using e-filing Facility first time

Assessee has faced technical difficulties

Delay of 1 month shall be condoned as per Circular No.71/2004



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SSP Exemption Limit

500000

700000 800000

1100000

0

500000

1000000

1500000

X 01.04.06 01.04.07 01.04.08

Turnover

Have to pay Service tax on

crossing the aggregate valueof taxable service notexceeding the threshold limitof Rs. 10 lacs

Have to get himselfregistered on crossing theaggregate value of taxableservice not exceeding thethreshold limit of Rs. 9 lacs.

Aggregate value of taxable service means the sum of first consecutivepayments received during a financial year towards taxable serviceprovided or to be provided.

Rs. 1000000/-

Rs. 900000/-



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Exemption Scheme for

Small Service Providers

Central Government, provides the basic exemption tothe service providers whose aggregate value of taxable

services provided in last financial year is less than Rs. 10Lacs.

Assessee should not charge the Service Tax if he/she isclaiming the benefit of exemption. If charged by

mistake the same should be refunded to the servicereceiver.



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Taxable services provided by a person under Brand

Name or Trade Name, whether registered or not, of any

other person are not eligible for the threshold limit

exemption of Rs.10 Lacs. [Notification No. 6/2005]

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Exception



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Some of major changes in service tax law to the extentrelevant to us are as under:

Section / Notification Description of

Section

Brief Description

Section 66B Charging Section This section says that all

services will be taxed at

12% except those

services as specified in

the Negative List

Section 66D Negative List Services that would not

be considered for

service tax

Section 66E Declared Services This section deems

certain types of contract

to be deemed servicesWednesday, December 18,2013


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Notification No30/2012 andNotification 36/2012

Reverse Charge

Mechanism

A list of services notified in

which the Service Recipient

is required to discharge theservice tax liability in full,

or both the service

recipient and service

provider has to discharge

the tax liability as per the

prescribed ratio.

Notification No.25/2012and NotificationNo. 34/2012

Exempted Services A Single consolidated

notification issued for

exemptions. Called as the

Mega Exemption

Notification.

Notification No. 26/ 2012 Abatement of Service tax For the following notified

services the levy of service

tax. i.e. Service tax will be

charged on the balance value

after abatement.Wednesday, December 18,2013


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Reverse Charge

5.SPECIFIED

CONSIGNOR ORCONSIGNEEin case of serviceprovided by goodstransport agency

4.ASSETMANAGEMENT

COMPANYin case serviceprovided by a

distributor to them

3.BODYCORPORATE OR

FIRMin case of receipt ofsponsorship service

2.INDIANRESIDENTin case of import of

service

1.INSURERin case of service

provided byinsurance agent

Persons Liableto Pay ServiceTax in Certain

Cases



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Abatement

In case of certain services, the benefit of abatement(rebate) is allowed to the service provides. In suchcases, the portion of revenue is exepmted (abated)while computing the assessable value.

Example: If invoice for servicing is to be raised for Rs.1000/- and abatement of 75% is available(then servicetax will be imposed only on [1000 75% of 1000] Rs.250/-



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Service Tax Rate

Period Rate

From 1.7.1994 to 13.05.2003 5%

From 14.5.2003 to 09.09.2004 8%

From 10.9.2004 to 17.04.2006 10%

From 18.4.2006 to 10.05.2007 12.24%*

From 11.05.2007 to 24.02.2009 12.36%*

From 25.02.2009 10.3%*

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*Inclusive of cessWednesday, December 18,2013


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Delay in Filing Return

Period Fine/Penalty

Up to 15 days Rs.500/-16 to 30 days Rs.1000/-

Beyond 30 days

Rs.1000/- plus Rs.100/- per dayfrom the 30thday till date of

furnishing return (max Rs2,000)



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SERVICE TAX

CENVAT CREDIT



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Duties paid on the inputs, capital goods and the Service Taxpaid on the 'input' services can be taken as credit.

Education Cess paid on the Excise duty and Service Tax canalso be taken as credit only for payment of Education Cessrelating to output service.

The interest and penalty amounts cannot be taken as credit.

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Contd



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Whats happening: Recently a team of Bollywood producers visited

Finance Minister to get exemption for service tax. Butthe request was denied.



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I hope this information was helpful. If you need

any further help you can get in touch with me viamy email id [email protected]

mailto:[email protected]?subject=Information%20about%20TAX%20-%20Via%20SQUAMBLE.COMmailto:[email protected]?subject=Information%20about%20TAX%20-%20Via%20SQUAMBLE.COM


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