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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??

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Introduction:

Service Tax was introduced in 1994 vide Finance Act,1994 with 3 SERVICES namely, Brokerage charged by

stockbroker, Telephone services & premium on GeneralInsurance Services.

Applicable to whole of India except Jammu & Kashmir.

Today there are 109 services under section 65(105),

which are considered taxable.

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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.

However this rule is subject to exceptions:

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Reverse Charge

5.SPECIFIED

CONSIGNOR ORCONSIGNEE

in 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.INDIANRESIDENT

in case of import ofservice

1.INSURERin case of service

provided byinsurance agent

Persons Liableto Pay ServiceTax in Certain

Cases

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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

Within 30 days Registration shall be

issued within 7 days inform ST-2

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REGISTRATION REQUIREMENTS

As per Section 69, every person liable to pay service

tax has to get themselves registered with service taxdepartment.

Any provider of taxable services whose aggregate

value of taxable service in a financial year exceedsRs. 9 lacs, has to get themselves registered.

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Application for registration in Form ST-1 to bemade to concerned Superintendent of Central

Excise.

The application for registration shall be madewithin 30 days, from the date on which the levy of

service tax is brought into force in respect of the

relevant services or of the commencement of

business where services has already been levied .

Contd

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Contd

Registration Certificate is granted in Form ST-2within 7daysfrom the date of receipt of intimation.In case theregistration certificate is not issued within seven days,the registration applied for is deemed to have been

granted. (Rule 4(5) of the STR, 1994) CBEC vide Circular no. 35/3/2003 has made it

compulsory for every assessee to obtain the Service TaxCode number which is a 15 digit alphanumeric no. based

on the PAN

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Assessee providing more than one taxable serviceshould mention in single application, all thetaxable services provided by him. Rule 4(4), Service

Tax Rule,1994.

Contd

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DocumentS to be Submitted with ST-1

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

(b) PAN number of the assessee

(c) List of Branches offices or premises ofthe assessee

(d) Brief note on accounting system

adopted by the assessee

(e) Branch-wise series of invoicesmaintained along with a sample copythereof

(f) Previous years audited balance sheetalong with gross trial balance ofdifferent branches

(g) Details of records accountsmaintained at different branches andCentral Office

(h) Bank account numbers of theBranches and Central Office throughwhich the receipts are deposited,transacted.

I am

confused

what documents

to be filed

with ST-1

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

Quarterly Payment

Other than Individual/FirmIndividual/Firm

Monthly Payment

Quarter Endingon 31st March

Other Quarters Month of March Other Months

Upto 31st March5th of the Month

following QuarterUpto 31st March

5th of 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 1st October 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

700000800000

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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AbatementIn 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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Abatements:

Goods transport agency -75% abated. Construction of residential services-67% abated.

Banking services- 30%

Rent a cab-60%

And so on

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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 cess

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Failure to Pay Service Tax Interest(sec. 75) :- Interest @13% p.a. is payable on

the short-fall or unpaid tax for delayed period.

Penalty(sec. 76) :-

Rs.200 for every day during which failurecontinues, or

2% of tax per month, whichever is higher.

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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 30th day till date of

furnishing return (max Rs2,000)

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SERVICE TAX

CENVAT CREDIT

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What is CENVAT Credit Scheme ?

The CENVAT Credit Rules, 2004, introduced with effect from10.9.2004, provides for availment of the credit of the Service

Tax paid on the input services / Central Excise Duties paid oninputs / capital goods / Additional Customs Duty leviableunder the Customs Tariff Act, equivalent to the duties ofexcise.

Such credit amount can be utilized towards payment ofService Tax by an assessee on their Output Services. (Refer toRule 3 of CENVAT Credit Rules, 2004).

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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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New services taxable (introduced inFinance Act, 2010)

1. Games of chance (zzzzn)

2 Health services (zzzzo)

3 Maintenance of medical records (zzzzp)4 Promotion of a brand of goods, services, events, business entity etc.

(zzzzq)

5 Commercial use or exploitation of any event organized by a person ororganization (zzzzr)

6 Electricity Exchange Service (zzzzs)7 Copyrights on Cinematographic films and sound recording (zzzzt)

8 Providing of preferential location or external / internal development ofcomplexes (zzzzu)

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Whats happening: Total revenue earned through service tax was Rs.38169

Croreswhich will go up to Rs. 1,36,392 Crores.

Recently a team of Bollywood producers visitedFinance Minister to get exemption for service tax. Butthe request was denied.

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High Service Tax Paying Event Indian Premier League pays a large chunk of service

tax every year. The revenue was 64 crores in 2009 and29 crores in 2010.

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Thank YouArchana