Service Tax

Indirect Tax

Definition of Service‘Service’ has been defined in clause (44) of the new section

65B and means any activity for consideration carried out by a person for another.

“ Consideration” means everything received or recoverable in return for a provision of service which includes monetary payment and any consideration of non-monetary nature or deferred consideration. Therefore consideration will include both monetary and non-monetary consideration.

Service Tax Service tax is a tax which is payable on services provided by the service provider.

Just like excise duty is payable on goods manufactured, in the same way service tax is payable on service provided.

Service tax is payable by the provider of the service to the Government of India, but the service provider can also collect this tax from the consumer of service i.e. the recipient of service and deposit it with the Government.

The provisions relating to Service Tax were brought into force with effect from 1st July 1994. It extends to the whole of India except the state of Jammu & Kashmir. The services, brought under the tax net in the year 1994-95 were:

(1) Telephone

(2) Stockbroker

(3) General Insurance Thereafter the Finance Acts of the forthcoming years extended the scope of service

tax and covered a large number of services. By 2012, there were about 128 taxable services.

Negative List

Service Tax over the YearsPeriod Basic Rate

1/4/1994 to 13/5/2003 5%

14/5/2003 to 9/9/2004 8%

10/09/2004 to 17/04/2006 10%

18/04/2006 to 23/2/2009 12%

24/2/2009 to 31/3/2012 10%

01/04/2012 to date 12%

Service Tax Calculation Service Tax rate 12%( +) Education Cess @ 2% 0.24%( + ) Senior & Higher Education Cess @ 1% 0.12%

Total 12.36%

ExceptionService provider Service Receiver Applicability of Service

Tax

Inside Jammu & Kashmir Inside Jammu & Kashmir Not Applicable

Inside Jammu & Kashmir Outside Jammu & Kashmir Applicable

Outside Jammu & Kashmir Inside Jammu & Kashmir Not Applicable

Payment of Service TaxPayment on amounts received during the Quarter

Payable on or before

1st April to 30th June 5th July

1st July to 30th September 5th October

1st October to 31st December 5th January

1st January to31st March 31st March

Penalty in Case of Delay in Payment of Service TaxPeriod of Delay Penalty

15 days from the Due date Rs. 500

Between 16 days to 30 days from the due date

Rs. 1000

Beyond 3o Days from the due date Rs. 1000 + 100 rs per day till the day the filing of the return has taken place

ExemptionInvoice Issued for Previous Year Current Year

Aggregate Value of Taxable Service Provided

Upto Rs. 10 lakhs Exemption Available

Aggregate Value of Taxable Service Provided

Above Rs. 10 Lakhs Exemption Not Available

Registration of Service Tax Fill the Form ST-1 in duplicate. (Form ST-1 is available on the departmental

website ( www.cbec.gov.in ) Enclose photocopy of PAN card and proof of address to be registered.

Copy of PAN card is necessary as a PAN based code (Service Tax Code) is allotted to every assessee.

These forms are required to be submitted to the jurisdictional Central Excise office

A person liable to pay service tax should file an application for registration within thirty days from the date on which the service tax on particular taxable service comes into effect or within thirty days from the commencement of his activity.

 

  Where a person, liable for paying service tax on a taxable service, (i)  provides such service from more than one premises or offices; or

(ii) receives such service in more than one premises or offices; or,

iii)is having more than one premises or offices, which are engaged in relation to such service in any other manner, making such person liable for paying service tax,

3.5.1       The registration under sub-rule (2), shall be granted by the Commissioner of Central Excise in whose jurisdiction the premises or offices, from where centralised billing or accounting is done, are located: 

Provided that nothing contained in this sub-rule shall have any effect on the registration granted to the premises or offices having such centralised billing or centralised accounting systems, prior to the 2nd day of November, 2006.

3.6  A single registration is sufficient even  when an assessee is providing more than one taxable services. However, he has to mention all the services being provided by him in the application for registration and the field office shall make suitable entries/endorsements in the registration certificate.

3.7     An assessee should  get the registration certificate (registration number) within 7 days from the date of submission of form S.T.1, under normal circumstances.

3.8     A fresh registration is required to be obtained in case of transfer of business to another person.

3.9     Any registered assessee when ceases to provide the taxable service shall surrender the  registration certificate immediately.

3.10    In case a registered assessee starts providing any new service from the same premises, he need not apply for a fresh registration. He can simply fill in the Form S.T.1 for necessary amendments he desires to make in his existing information. The new form may be submitted to the jurisdictional Superintendent for necessary endorsement of the new service category in his Registration certificate.

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