Service Tax_Shivpreet Singh Sandhu

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  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu


    Presented ByShivpreet Singh SandhuInfrastructure Management

  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu



    A fee charged ("levied") by a government ona product, corporate it is a direct tax. If tax is levied onthe price of a good or service, then it is called anindirect tax. The purpose of taxation is to finance

    government expenditure. One of the most importantuses of taxes is to finance public goods and services,such as street lighting and street cleaning. Since publicgoods and services do not allow a non-payer to beexcluded, or allow exclusion by a consumer, therecannot be a market in the good or service, and so theyneed to be provided by the government or a quasi-government agency which tend to finance themselveslargely through taxes.
  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu



    Direct Tax

    Capital gain tax

    Personal income tax

    Corporate income tax

    Property Tax

    Indirect tax

    Excise tax

    Stamp duty tax

    Service tax

    Expenditure tax

  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu



    Services constitute a very heterogeneous spectrum ofeconomic activities. It occupies the centre stage of theeconomy.

    The share of the service sector in the real GDP rose from28% (1950) to 41%(2001) and presently contributing56% which is more than half of the total GDP

    Thus tremendous growth of the service sector led govt.

    to levy tax on services

    And hence it made a humble beginning on July1, 1994

  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu


    Service tax is the tax on service. Service meansvalue addition to a product that is intangible

    It was imposed by amending chapter V of FinanceAct, 1994

    Was commenced with 3 organized services of

    telecom, general insurance and stock broking andpresently taxing 106 services

  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu



    Indirect Tax : Source of revenue for govt. in form ofindirect tax

    No Separate : No separate act only central govt. haspower to Act make rules

    CBEC : It is administered by Central Board of

    Excise and customs Uniform rate : Current 10.3% [ 2%(EC) + 1% (SHEC) ]

    No Double : Service under two or more subclausescannot taxation be taxed twice if provided onlyonce

    Non : Extended to whole India except for stateJ&K


  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu


    Small Service : Threshold limit of up to 10 lakh by service

    excluded provider fully exempted from tax Payable by : Service provider is liable to pay service tax

    Service provider except the situation under 2(1)(d) whereperson receiving the service is liable to pay Service tax

    Self Assessment :Provisions made for self assessment, rectification,revision, appeals, penalties, as well as forregistration of persons liable to pay

    Exemption by : Power to central govt. to grant exemption under

    notification appropriate cases, by means of notification

  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu



    Governed by Section 67 of the Finance Act, 1994 readwith Service Tax (Determination of Value) Rules, 2006.

    If the consideration is received wholly in money, thevalue shall be the gross amount charged by theservice provider.

    The term consideration includes any amount payablefor the services.

  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu



    any amount received towards the service before,during and after provision of such service

    payment by cheque, credit card, deduction formaccount and any form of payment such as creditnotes, debit notes, book adjustment etc.

    All expenditure or costs.

    The gross receipt would be treated as cum-taxvalue, if Service Tax amount is not separatelycharged

  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu



    = Gross amount 100

    100 + Rate of service tax


    = Gross amount charged Rate of tax

    100 + Rate of tax

  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu


  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu


    Category of person mandatoryto obtain Registration

    Every Person liable : Every person providing taxable service

    to pay service tax is himself liable to pay the service tax sec 68(1)

    Input Service : An office of the manufacturer or the provider of

    Distributor the output service who receives invoice for the

    procurement for input services and issues invoicefor the purpose of distributing the credit of servicetax paid to such manufacturer and provider of

    output service is an Input Service Distributor

    Any provider of taxable service whose aggregate value for FY exceeds 9lakh

  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu



    There is no specific stipulation relating to the maintenance ofrecords. Records maintained for other statutory purposesacceptable for Service Tax purposes.

    List of Records to be furnished to the jurisdictional

    Superintendent of Service tax at the time of filing of the ST-3return for the first time.

    Records are to be preserved atleast for a period of 5 years.

    Records should be made available in the registered premisedfor examination by the Service tax Officers and Audit team.

  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu



    The assessees are required to file the statutoryReturn in Form ST-3, in triplicate as per Section70 of the Act and Rule 7 of the Service tax Rules,1994.

    Return is to be filed by 25th October for the Halfyear ending 30th September and by 25th April forthe Half year ending 31st March.

    Late fee for delayed submission of returns underRule 7C:Up to 15 days Rs. 500/-

    15-30 days Rs. 1000/-

    Beyond 30 days Rs. 1000/-+ Rs.100/- per daybeyond 30 days subject to amaximum of Rs. 2000/-

  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu


  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu


  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu


    Months Due DateIf depositedelectronically

    Due DateOther cases

    July 6 August 5 August

    August 6 September 5 September

    September 6 October 5 OctoberOctober 6 November 5 November

    November 6 December 5 December

    December 6 January 5 January

    January 6 Feburary 5 Feburary

    Feburary 6 March 5 March

    March 31 March 31 March

  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu


    General Exemptions

    1. Services provided to United Nations or an Internationalorganization

    Central government exempts all taxable services under sec(65)from payment of whole of service tax

    2. Services provided to developer or units of SEZ

    Full exemption to service provider who provided taxable servicesto the developer of SEZ or SEZ for consumption of services withinSEZ

    3. Goods and material sold by service provider to reciptent ofservice

    It exempts all taxable services from service tax , which are equalto value of goods and material sold by service provider to therecipient of the services (documentary proof required)

    4. Exemption from small service providers

    Turnover less than 10 lakh are exempted

  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu


    Exemptions Cont.5. Services provided by Reserve bank of India

    Exemption from service tax on all taxable services provided by RBI

    6. Exemption to Technology Business Incubator (TBI), Science andtechnology Entrepreneurship Park (STEP)

    All taxable services provided or to be provided after April 1,2007 by TBIor STEP recognized by National science and Technology EntrepreneurshipBoard subject to information in prescribed format 1 and 2 in notification

    7. Services provided by digital cinema service providers

    Exemption to taxable services provided or to be provided in relation todelivery of content of cinema in digital form after encryption , electronically

    8. Services provided by the Resident welfare association

    Exemption to services provided by Resident welfare association to itsmembers when montly contribution does not exceed Rs 3000

    9. Technical testing and analysis services

    Exemption granted to testing of newly developed drugs by clinical

    research organization


  • 8/9/2019 Service Tax_Shivpreet Singh Sandhu



    2010-11 Air Travel All air travel to be come under service tax irrespective of the

    class of travel and the destination, however effective date to benotified by govt.

    Service tax on the tax by the govt.(including foreign govt.) onpassenger traveling by air is exempted w.e.f 27.02.10

    Transfer of goods

    Transfer of goods by rail (except some essential goods) issubject to service tax w.e.f 01.04.2010

    Presently transfer of fruits, vegetables, eggs or milk by road

    by a goods transport agency is exempted . The scope ofexemption is being expanded by including food grains andpulses in the list of exempted goods from service t

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