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Service Tax
Service Tax is levied on the notified services. It is a union levy administered by the Central Excise Department and governed by Chapter V of Finance Act, 1994 (the Act) as amended from time to time. Service tax is charged on the gross value of services and is generally payable on receipt basis. It is an indirect tax - it is payable by the service provider but it is ordinarily recovered from the recipient of services. Any person who provides taxable service to get himself registered within 30 days from the date of commencement of providing of taxable service.

 

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Service Tax

Service Tax has now become one of the major sources of yielding revenue to the exchequer. It has been extended to several items with enhanced rates in recent budgets. It's scope is very much likely to be widened and rates to be raised further. The rules and regulations and various procedures laid down under service Tax are very cumbersome, tedious and best with the problem of interpretation , disputes and litigation all its provisions have to be completed with very strictly . Even minor lathes can land you in soup. The tax has to be deposited in treasury with in the stipulated period and various returns are to be filed on prescribed forms with in specified dates failing which return penal action in called for.
We have specially trained staff to handle the entire Service Tax work you may entrust this burden on us and feel free to focus your attention to enhance your business or profession.

 

 

Applicability of Act

Service Tax is a form of indirect tax imposed only on services provided. From the point of view of a layman, providing services means assistance in any work, taking up of any work on behalf of others, any professional assignment or rendering intangible benefits to others. Service tax is a tax levied on services rendered by a person and the responsibility of payment of the tax is cast on the service provider. It is an indirect tax as it can be recovered from the service receiver by the service provider in course of his business transactions. Service Tax was introduced in India in 1994 by Chapter V of the Finance Act, 1994. It was imposed on a initial set of three services in 1994 and the scope of the service tax has since been expanded continuously by subsequent Finance Acts. The Finance Act, extends the levy of service tax to the whole of India, except the State of Jammu & Kashmir.

 

 

Chargeability

It is leviable on taxable services ‘provided’ or ‘to be provided’ by a service provider. The services ‘to be provided’ in future are taxed only if payment in its respect is received in advance. For charge of service tax, it is necessary that the service provider and service recipient should be two separate persons acting on ‘principal to principal basis’. Services provided by an employee to his employer are not covered service tax and, therefore, salaries or allowances paid to them cannot be charged to service tax.

 

 

 

 

 

 

 

 

Registration under Act:

Service Tax registration is a function of gross turnover. Once the turnover of the assessee crosses a threshold limit of Rs 9 lacs, the service provider is required to get itself registered under the law, and compulsorily required to charge service tax on services provided once the turnover crosses Rs 10 lacs.

 

 

Rate of Charge:

It is leviable @ 12% of the value of taxable services. Education Cess @ 2% and Secondary and Higher Education Cess @ 1 % are chargeable on the amount of service tax, thus, making the effective rate of service tax at 12.36% of the value of taxable service. It is leviable on all services except those captured in Negative List(the list comprising of 17 specific services which are exempt from service tax).

 

 

Value of Taxable Service

The valuation under service tax is governed by the provisions made under section 67 of the Finance Act, 1994 read with Service Tax (Determination of Value) Rules, 2006. Value of taxable service shall be determined on the basis of consideration in money for providing the service or consideration in any form other than money, The consideration in any form other than money shall be determined in a manner as prescribed in Act.

 

 

 

 

 

 

 

 

Procedure for Registration

Fill the Form ST-1 online on the departmental website www.aces.gov.in. take printout of filed form and Enclose photocopy of PAN card, proof of address to be registered and copy of constitution /partner ship deed etc. of the firm, if any.

  • Printout of ST-1 Application filled online, signed by service provider or Authorised Signatory within 15 days of Online submission of service tax registration application

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

  • Proof of residence / Address of the premises to be registered/copy of telephone bill. Electricity bill. Rent agreement in the name of the company or in the name of proprietor/ partner/firm in the case of proprietary or document accepted by any of Central/ State Government Department e.g. i.e. Income Tax. Sales Tax. Registrar of Companies DGFT or passport in the case of address.

  • Constituent of the applicant for partnership firm: Copy of Partnership Deed and for Companies copy of Certificate of Incorporation, AOA and Memorandum of Association.

  • Power of attorney in respect of authorized Person and Undertaking on Letter head of Assessee

  • The form required to be submitted to the jurisdictional Central Excise office along with supporting documents.

  • 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.

  • 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.

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

 

Payment of Service Tax

The Service Tax collected by the Service Provider shall be paid to the credit of the Central Govt. on a regular basis before the Due date for Payment of Service Tax and in case of Late Payment of Service Tax – Interest shall also be payable on the Late Payment as prescribed. 

For Individual/Partnership Firms: The Due Date for Payment of Service Tax in case of Individual/Partnership Firm is 5th of the Following Quarter in which the Payment is received. However, in case the Service Tax Provider opts for online payments, he is given a grace period of 1 day and thus the Due Date for Payment of Service Tax if the Payment is made online is 6th of the following Quarter.

For Others: For Others Service Tax Payers, the Due Date for payment of Service Tax is 5th of the Following Month in which the Service Tax is collected. However, if the payment is made online – the due date for payment of service tax becomes 6th of the following month.

 

 

 

 

 

 

 

 

 

 

 

Periodic Basic Exemption Limit

Period

limit

01-07-1994 to 31-03-2005

No limit

01-04-2005 to 31-03-2007

4 Lakhs

01-04-2007 to 31-03-2008

8 Lakhs

01-04-2008 onwards

10 lakhs

 
Penalty for late filing of Service Tax Return

Period of Delay

late fees

0 to 15 Days

Rs. 500

15 to 30 Days

Rs.1000

Beyond 30 Days

Rs. 1000 + Rs 100 per day up maximum amount Rs. 20000

 

Periodic Rates of Interest

Period

Rate of Tax

01-07-1994 to 15-07-2001

1.5% p.m.

16-07-2001 to 15-08-2002

24% p.a.

16-08-2002 to 09-09-2004

15% p.a.

10-09-2004 to 31-03-2011

13% p.a.

01-04-2011 onwards:

For assessee’s having T.O. upto 60 lakhs

15% p.a.

For other assessee’s

18% p.a.

 

 

 

 

 

  

  

 

  

Due Date for Return Filing

For the Half Year

To be Filed by

1st April to 30th September

25th October

1st October to 31st March

25th April

 

Due Date for Return Filing for(ISD)

For the Half Year

To be Filed by

1st April to 30th September

31st October

1st October to 31st March

30th April

 

 

 

 

 

  

 

  

 

Maintenance of Registers and Records Under Service Tax.

Maintenance of records under the service tax is dealt with the provisions of Rule 5 of Service Tax Rules, 1994. According to the said rule records shall be preserved at least for a period of five years. There were no specific records to be maintained for the purpose of service tax.On the basis of services provided by the assessee, the following are the records to be maintained under service tax

 
Service tax related documents CENVAT Credit Register Document related with Department
  1. Bill register
  2. Receipt register
  3. Service Tax Master File
  4. Debit / credit Notes Register
  5. Reimbursement of expenses Record
  6. Agreements entered with the clients
  7. Copies of bills raised on clients
  8. GAR-7 Challans relating to service tax
  1. Availment,
  2. Utilization
  3. Opening and Closing Balances of the Cenvat Credit.

 

 

 
  1. Correspondences with the Department and
  2. Other documents as organization requires from time to time
  3. Acknowledgment of documents submitted to the Departmen

 

 

 

 

 

 

 

 

 

 

 Negative List of Service Tax
  • Services by Government or a local authority excluding the following services to the extent they are not covered elsewhere.
  • Services provided by Reserve Bank of India
  • Services by a Foreign Diplomatic Mission Located in India
  • Services relating to agriculture
  • Trading of Goods
  • Processes amounting to Manufacture or Production of Goods
  • Selling of Space or Time Slots for Advertisements other than Advertisements Broadcast by Radio or Television
  • Access to a Road or a Bridge on Payment of Toll Charges
  • Betting, Gambling or Lottery
  • Entry to Entertainment Events and access to Amusement Facilities
  • Transmission or Distribution of Electricity
  • Specified services relating to Education
  • Financial Sector
  • Services by way of Renting of residential dwelling for use as residence
  • Service relating to Transportation of Passengers
  • Service relating to Transportation of Goods
  • Funeral, Burial, Crematorium or Mortuary services including transportation of the deceased
  • loading, unloading, packing, storage and warehousing of rice
  • Services provided by cord blood banks

 

 

 

 

 

 

 

 


Service Tax Outsourcing Compliance Services

 

Getting yourself registered with Service Tax Authorities.

E-Filing of Service Tax Returns and Payment of Service Tax

Consultancy on Service Tax Matters.

Liaison with Service Tax Authorities.

Maintenance of Service Tax Records.

Compilation of Service tax details for

audit and

support to the auditors.