-By Ch.Kapil
Article Assistant at Gella & Co

kapilchidurala93@gmail.com

3/5/2014

1
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Genesis of Service Tax Levy
Authority of Levy
Administration of Service Tax
Service [Section 65 B (44) of C...
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1.
2.
3.

Base of Service Tax is Report of Chelliah
Committee
Budget Speech for the year 1994-95 by Dr.
Man Mohan ...
Indian Constitution vide article 265 says “ No
tax shall be levied or collected except by
authority of law”
 Schedule VII...
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Entry 82 to Entry 92 C of List I enumerates
the Central Government's power for collection
of taxes
Entry 45 to...
Ministry Of Finance
Department of Revenue
CBEC
Central Excise Zones-Chief
Commissioner
Central Excise Commissionerate Comm...
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According to the Section 66 B of Chapter V of
Finance Act,1994 says the rate of service tax
is 12% on the value of...
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1.
2.
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1.
2.
3.
4.

Two Parties are involved in Contract of
service
Service Provider
Service Receiver
To find the natur...
Section 65 B (44) of Chapter V of Finance
Act,1994 defines service as “ Means any activity
carried out for consideration a...
List of Nine Declared Services are:
1. Renting of immovable property
2.
Construction of complex, building, civil
structure...
4.Development,design,programming,customizatio
n,adaption,upgradation,enhancement,impleme
ntation of information technology...
8. Activities in relation to delivery of goods on
hire purchase or any system of payment by
instalments
9. Service portion...
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Section 68 of Chapter V of Finance Act,1994
says service tax to be paid on the service
provided or to be provid...
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The territory of the union as referred to in clauses (2)
and (3) of article 1 of Indian Constitution
Its terri...
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There shall be levied a tax (hereinafter referred to
as the service tax) at the rate of twelve per cent
on the value...
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An Individual
A HUF
A Company
A Society
A Limited Liability Partnership
An AOP,BOI whether incorporated...
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As discussed earlier the liability of payment
of service tax is on both Service Provider and
Receiver on nature o...
1.

2.
3.
4.
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6.
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10.

Insurance
Goods Transport Agency
Sponsorship
Arbitral Tribunal
Advocate Services
Suppor...
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Is Printing of Books a service? And under what
tax he has to register?
Beauty saloon, P.G.’S in Bangalore are cov...
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Raja has rented a building to the government
for organising technical seminar. Is his
business a service? Under W...
Advisory services
 Procedural compliance
 Personal Representation
 Certification and Audit
 Onerous Task to Keep Pace
...
Contact Me:
Mob : 8892879593
Mail :
kapilchidurala93@gmail.com

kapilchidurala93@gmail.com

3/5/2014

22
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Levy of service tax

  1. 1. -By Ch.Kapil Article Assistant at Gella & Co kapilchidurala93@gmail.com 3/5/2014 1
  2. 2.       Genesis of Service Tax Levy Authority of Levy Administration of Service Tax Service [Section 65 B (44) of Chapter Finance Act,1994] Levy of Service Tax Role of Chartered Accountant kapilchidurala93@gmail.com 3/5/2014 2
  3. 3.    1. 2. 3. Base of Service Tax is Report of Chelliah Committee Budget Speech for the year 1994-95 by Dr. Man Mohan Singh, Union Finance Minister Initially chargeable services are 3; namely Telephones Non Life Insurance Stock Brokers kapilchidurala93@gmail.com 3/5/2014 3
  4. 4. Indian Constitution vide article 265 says “ No tax shall be levied or collected except by authority of law”  Schedule VII of Indian Constitution has 3 list for bifurcation of power.  List I – Union List  List II – State List  List III - Concurrent List  kapilchidurala93@gmail.com 3/5/2014 4
  5. 5.     Entry 82 to Entry 92 C of List I enumerates the Central Government's power for collection of taxes Entry 45 to Entry 63 of List II enumerates the State Government's power for collection of taxes Entry 92 C – Taxes on Services (Not Effective as on date) Collection of Service tax is in accordance with Entry 97- Residuary Entry only kapilchidurala93@gmail.com 3/5/2014 5
  6. 6. Ministry Of Finance Department of Revenue CBEC Central Excise Zones-Chief Commissioner Central Excise Commissionerate Commissioner Additional Commissioner Joint Commissioner Assistant / Deputy Commissioner Super indent Inspector kapilchidurala93@gmail.com 3/5/2014 6
  7. 7.    According to the Section 66 B of Chapter V of Finance Act,1994 says the rate of service tax is 12% on the value of service But how much do we charge? @ 12.36% ? Because Chapter VI of Finance Act (No.2),2004 specify the education Cess to be paid on the service tax paid under Chapter V i.e. @ .36% on 12% of Service Tax kapilchidurala93@gmail.com 3/5/2014 7
  8. 8.  1. 2.  1. 2. 3. 4. Two Parties are involved in Contract of service Service Provider Service Receiver To find the nature of taxability, Majorly 4 things are required What is service? Where is it provided? Who has to pay the tax? When Should I Levy? kapilchidurala93@gmail.com 3/5/2014 8
  9. 9. Section 65 B (44) of Chapter V of Finance Act,1994 defines service as “ Means any activity carried out for consideration and a Declared Service but does not include the following : 1. An activity which constitute merely; a. Transfer of title of goods by way of sale or gift or any other manner b. movement of goods which has the meaning of sale according to clause(29a)of article 366 of constitution c. a transaction in money or actionable claim 2. A provision of service in course of employment 3. Fees taken in any court or tribunal established under any law for the time being in force  kapilchidurala93@gmail.com 3/5/2014 9
  10. 10. List of Nine Declared Services are: 1. Renting of immovable property 2. Construction of complex, building, civil structure or a part thereof including a complex or building intended for sale to a buyer ,wholly or partly except where the entire consideration is received after issuance of certificate of completion by a competent authority 3. Temporary transfer or permitting the use or enjoyment of any intellectual property right kapilchidurala93@gmail.com 3/5/2014 10
  11. 11. 4.Development,design,programming,customizatio n,adaption,upgradation,enhancement,impleme ntation of information technology software 5. Agreeing to the obligation to refrain from an act or to tolerate an act or a situation or to do an act 6. Transfer of goods by way of hiring ,leasing, licensing, or any such manner without transfer of right to use such goods 7. service portion in execution of a works contract kapilchidurala93@gmail.com 3/5/2014 11
  12. 12. 8. Activities in relation to delivery of goods on hire purchase or any system of payment by instalments 9. Service portion in an activity where in goods, being food or any other whole of human consumption or any drink(whether or not intoxicating) is supplied in any manner as art of the activity kapilchidurala93@gmail.com 3/5/2014 12
  13. 13.     Section 68 of Chapter V of Finance Act,1994 says service tax to be paid on the service provided or to be provided in the taxable territory only. What is taxable territory? Taxable territory has been defined as “to the territory to which the chapter apply” It applies to India defined under Section 65B(25) kapilchidurala93@gmail.com 3/5/2014 13
  14. 14.      The territory of the union as referred to in clauses (2) and (3) of article 1 of Indian Constitution Its territorial waters, continental shelf, exclusive economic zone or any other maritime zone as defined in the territorial waters, continental shelf, exclusive economic zones and other maritime zones act,1976 The seabed and the subsoil underlying the territorial waters The air space above its territory and territorial waters and the installations, structures and vessels located in the continental shelf of India and the exclusive economic zone of India for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof kapilchidurala93@gmail.com 3/5/2014 14
  15. 15.   There shall be levied a tax (hereinafter referred to as the service tax) at the rate of twelve per cent on the value of all services, other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another and collected in such manner as may be prescribed [Section 66B] In addition to the services specified in Negative list, services exempted under Mega Notification also not liable to service tax (Notification No 25/ 2012 / 20.06.2012) kapilchidurala93@gmail.com 3/5/2014 15
  16. 16.          An Individual A HUF A Company A Society A Limited Liability Partnership An AOP,BOI whether incorporated or not Government A Local Authority Every Artificial Judicial Person not falling within any of the preceding clauses kapilchidurala93@gmail.com 3/5/2014 16
  17. 17.    As discussed earlier the liability of payment of service tax is on both Service Provider and Receiver on nature of service Service Provider is liable to levy tax under Section 68 Service Receiver is liable to pay tax under Section 68 (2) i.e. Reverse charge Mechanism which is Rule 2(d) of the Service Tax Rules,1994 kapilchidurala93@gmail.com 3/5/2014 17
  18. 18. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Insurance Goods Transport Agency Sponsorship Arbitral Tribunal Advocate Services Support Service Rent or Cab Service Supply of Manpower Works Contract Services Import of Service [Section 68(2)- Chapter V of FA,1994] - [Notification No 30/2012] kapilchidurala93@gmail.com 3/5/2014 18
  19. 19.    Is Printing of Books a service? And under what tax he has to register? Beauty saloon, P.G.’S in Bangalore are covered under Declared services? A Ltd bought technology from the X Company situated in United states which is branch of XYZ Ltd. Now who has to get register and under what? Who has the liability of service tax? kapilchidurala93@gmail.com 3/5/2014 19
  20. 20.    Raja has rented a building to the government for organising technical seminar. Is his business a service? Under What? Me and Mom Company Ltd. has invited tenders vide notice in The Times of India? Is the process covered under service tax liability? A popular Rock star has gone for National Convention to perform the Entertainment schedule. Can he levy service tax on the Bills? kapilchidurala93@gmail.com 3/5/2014 20
  21. 21. Advisory services  Procedural compliance  Personal Representation  Certification and Audit  Onerous Task to Keep Pace  kapilchidurala93@gmail.com 3/5/2014 21
  22. 22. Contact Me: Mob : 8892879593 Mail : kapilchidurala93@gmail.com kapilchidurala93@gmail.com 3/5/2014 22

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