A perfect slide for freshers who want to have a general overview of the present structure of Service Tax Mechanism. A further session on advanced understanding of service tax covering remaining aspects will be uploaded soon!

1. BASIC CONCEPTUAL
UNDERSTANDING
SAURABH MEHTA
M.NO. 9920626587

2. CONTENTS
1. Definition of Service (Sec. 65B)
2. Major Change
3. Declared Services (Sec. 66E)
4. Valuation Rules (Sec. 67)
5. Registration & Return Procedures
6. SSP Exemption Provisions
7. Payment Provisions
8. Negative List (Sec. 66D)
9. Exemptions
10. Scheme of Abatement

3. MAJOR CHANGE
The most important change is that the Effective rate of Service
Tax has been increased from 12.36% to an all inclusive rate of
14%.
The effective rate of Service Tax will go up by another 2% if
and when the Central Government exercises its power to
introduce a “Swachh Bharat Cess” of 2% on all or any of the
taxable service.
The above changes to be effective from a date to be notified
by the Government.

4. What is SERVICE?
• Definition of service u/s 65B(44) of Finance Act, 1994
Any activity
Carried out by a person for another
For consideration, and
Includes “declared services”
• Exclusions
Transfer of title in goods or immovable property in any manner including deemed
sales
Transaction only in money or actionable claim
Service provided by an employee to an employer in the course of the employment
Fees payable to court or tribunal

5. DECLARED SERVICES
The phrase has been specified in section 66E of the Act. The following
nine activities have been specified in section 66E:
1. renting of immovable property;
2. construction of a 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;

6. 4. development, design, programming, customization, up
gradation, enhancement, implementation 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. activities in relation to delivery of goods on hire
purchase or any system of payment by instalments;
8. service portion in execution of a works contract;
9. service portion in an activity wherein goods, being food
or any other article of human consumption or any drink
(whether or not intoxicating) is supplied in any manner
as part of the activity.

7. Services liable to Service
Tax
All services are liable to service tax except –
a) Activities specifically excluded in definition of service.
b) Services covered under the negative list
c) Services covered under Mega Exemption notification.
d) Services provided outside the taxable territory (incl. Jammu
& Kashmir)
e) Services received by a unit located in SEZ/STPI (subject to
conditions).

8. VALUATION RULES
• Valuation Rules have been prescribed under Rule 67 of
Finance Act, 1994 as follows:
• Service Tax will be applicable on the Gross Amount Charged or
to be charged by the Service provider.
• Tax is payable as soon as advance is received without waiting
for the commencement of actual provision of service.

9. DETERMINING VALUE
• CONSIDERATION
Entirely in
monetary
terms
Rule
67(1)(i)
Partly in
money and
partly in
kind
Rule
67(1)(ii)
Value
inclusive of
service tax
Not
Ascertainable
FMV or Cost
whichever is
ascertainable
Rule
67(1)(iii)

10. REGISTRATION &
RETURNS
• FORMS
ST‐1 ST‐2 ST‐3
Application for
registration
Service tax registration
certificate
Filing of returns
Within 30 days on
crossing threshold
limit of 9 lakhs
Half Yearly
Single or centralized
registration

11. RETURNS
• DUE DATES FOR FILING
• PENALTY FOR LATE FILING
Upto 15 days = Rs. 500/‐
Above 15 upto 30 days = Rs. 1000/‐
More than 30 days = 1000+ Rs. 100/day Maximum
upto Rs. 20000/‐
ORIGINAL RETURN REVISED RETURN NIL RETURN
H.Y. 1 = 25th October
H.Y. 2 = 25th April
Within 90 days of
filing original return
Mandatory for
assesses not
providing any
services during F.Y.

12. 300000
400000
600000
800000
1000000
0
200000
400000
600000
800000
1000000
X 01/04/04 01/04/06 01/04/07 01/04/08
Turnover
Have to pay Service tax on
crossing the aggregate
value of taxable service
exceeding the threshold
limit of Rs. 10 Lacks as per
Notification No. 33/2012-ST
Have to get himself
registered on crossing the
aggregate value of taxable
service exceeding the
threshold limit of Rs. 9 Lack
Aggregate value of taxable service means the sum of first consecutive
payments received during a financial year towards taxable service
provided or to be provided.
9,00,000
SSP EXEMPTION LIMIT

13. PAYMENT PROVISIONS
ASSESSEE PERIODICITY DUE DATE
Individual, Partnership
Firm (incl. LLP)
Quarterly 6th of next month of relevant
quarter/31st March for Q‐4
Others Monthly 6th of next month/ Upto 31st March
INTEREST FOR LATE PAYMENT OF LIABILITY
Upto 6 months = 18% p.a. (upto 30.09.2014 = 15%p.a.)
Above 6 months upto 1 year = 24% p.a.
Above 1 year = 30% p.a.
OPTION FOR INDIVIDUAL AND PARTNERSHIP FIRM
IF VOTS in P.Y. THEN in C.Y. ON
=< 50 Lakh VOTS upto 50 Lakh
> 50 Lakh
Receipt Basis
Accrual Basis
> 50 Lakh Whole VOTS Accrual Basis

14. Negative List of Services
The services specified in the negative list go out of the ambit of
chargeability of service tax. (Section 66D )
1. G‐ Services by Government or a local authority excluding the
following services to the extent they are not covered elsewhere‐
• (i) services by the Department of Posts by way of speed post, express
parcel post, life insurance and agency services provided to a person
other than Government;
• (ii) services in relation to an aircraft or a vessel, inside or outside the
precincts of a port or an airport;
• (iii) transport of goods or passengers; or
• (iv) any services provided to business entities;
2. R‐ Services provided by Reserve Bank of India
3. D‐Services by a foreign diplomatic mission located in India
(Hint : GREAT MADE Facebook)

15. 4. A‐ Services relating to agriculture or agricultural produce by way
of‐
• (i) agricultural operations directly related to production of any
agricultural produce
• (ii) supply of farm labour;
• (iii) processes carried out at an agricultural farm which do not alter
the essential characteristics of agricultural produce but make it only
marketable for the primary market;
• (iv) renting or leasing of agro machinery or vacant land
• (v) loading, unloading, packing, storage or warehousing of
agricultural produce;
• (vi) agricultural extension services;
5. T‐ Trading of goods
6. M‐ Processes amounting to manufacture or production of goods
(excl. production of alcoholic liquor for human consumption)
7. A‐ Selling of space or time slots for advertisements other than
advertisements broadcast by radio or television

16. 8. T‐ Access to a road or a bridge on payment of toll charges
9. E‐ Entry to Entertainment Events and Access to Amusement Facilities not
more than Rs. 500/‐ per person. (upto 01.04.2015 no such limit)
10. E‐ Transmission or distribution of electricity by an electricity transmission or
distribution utility
11. E‐ Specified services relating to education by way of‐
(i) pre‐school education and education up to higher secondary school or equivalent;
(ii) education as a part of a curriculum for obtaining a qualification recognised by
any law for the time being in force;
(iii) education as a part of an approved vocational education course;
12. R‐ Services by way of renting of residential dwelling for use as residence
13. F‐ Financial sector‐ services by way of‐
(i) extending deposits, loans or advances in so far as the consideration is
represented by way of interest or discount;
(ii) inter se sale or purchase of foreign currency amongst banks or authorised
dealers of foreign exchange or amongst banks and such dealers;

17. 14. T‐ Service of transportation of passengers, with or without accompanied
belongings, by‐
(i) a stage carriage;
(ii) railways in a class other than‐
(A) first class; or
(B) an air‐conditioned coach;
(iii) metro, monorail or tramway;
(iv) inland waterways;
(v) public transport, other than predominantly for tourism purpose, in a vessel
between places located in India; and
(vi) metered cabs , auto rickshaws;
15. T‐ Services by way of transportation of goods‐
(i) by road except the services of‐
(A) a goods transportation agency; or
(B) a courier agency;
(ii) by inland waterways;
16. F‐ Funeral, burial, crematorium or mortuary services including
transportation of the deceased

18. EXEMPTION
Mega exemption Notification 25/2012‐ST dated 20/6/12 and other
exemptions‐
1. Services to United Nation and international organisations
2. Health care services by a clinical establishment,
an authorised medical practitioner
3. Services by a veterinary clinic in relation to health care of animals
or birds
4. Services by Charitable Organisations in respect of specified
charitable activities only and construction of building for religious
purposes for Charitable Organisation registered under section
12AA of Income Tax Act. Services imported by Charitable
Organisations are also exempt from service tax

19. 5. Services by a person by way of‐
• (a) renting of precincts of a religious place meant for general
public; or
• (b) conduct of any religious ceremony;
6. Advocate or Advocate firm to non‐business entity or business
entity with turnover up to Rs.10 lakhs in the preceding financial
year.
7. Services by way of training or coaching in recreational activities
relating to arts, culture or sports
8. Services provided to or by an educational institution in respect of
education exempted from service tax, by way of,‐
• (a) auxiliary educational services; or
• (b) renting of immovable property;
9. Services provided to a recognised sports body by‐
• (a) an individual as a player, referee, umpire, coach or team
manager for participation in a sporting event organized by a
recognized sports body;
• (b) another recognised sports body;

20. 10. Services provided by way of construction, erection,
commissioning, installation, completion, fitting out, repair,
maintenance, renovation, or alteration of,‐
• (a) a road, bridge, tunnel, or terminal for road transportation for
use by general public;
• (c) a building owned by a Charitable Trust;
• (d) a pollution control plant
11. Structure meant for funeral, burial or cremation of deceased
12. Services by a performing artist in folk or classical art forms of (i) music, or
(ii) dance, or (iii) theatre, excluding services provided by such artist as a
brand ambassador upto Rs. 1,00,000/‐ for the performance.
13. Services of journalists
14. Hotels, guest houses with less than Rs.1,000 per day tariff
15. Restaurants without AC/central heating
16. Goods transport upto Rs.750 per consignee and Rs.1,500 per vehicle and
specified agricultural commodities

21. 18. Renting of motor vehicle to GTA
19. Specified general insurance schemes exempt.
20. Sub‐brokers on stock exchange
21. Sub‐contractor under works contract providing service to main
contractor (who is also under works contract), when service of main
contractor is exempt
22. Business Exhibition held outside India
23. Services of slaughtering of animals.
24. Services from outside India to Government or Charitable Organisations
25. Public Libraries
26. Slump sale, sale of business, demergers
27. Public conveniences like toilets, bathrooms etc.

22. SCHEME OF ABATEMENT
S.
No
Name of Service Taxa
ble
(%)
CG Input IS
1 Goods Transport Agency (GTA) (25%) 30 X X X
2 Transport of goods by rail 30 X X X
3 Transport of passengers by rail 30 X X X
4 Transport of goods in a vessel from one port in
India to another
50 X X X
5 Transport of passengers by air
a) Economy Class
b) Others (40%)
40
60
X X √
6 Supply of food or any other article of human
consumption or any drink, in a restaurant / other
premises
40 √ X (Chp.
1 to 22)
√(other)
√

23. S.No Name of Service Tax
able
(%)
CG Input IS
7
Supply of food in convention centre, pandal, etc
70 √ X
(Chp.
1 to 22)
√(other
√
8 Accommodation in hotels, inns etc 60 X X √
9 Renting of any motor vehicle designed to carry passengers
(40%)
50 X X X
10 Tour Operating Service
10(a) Package Tour 25 X X X
10(b) Booking accommodation 10 √ √ √
10(c ) Services other than 10(a) and 10(b) provided in relation to
tour
40 X X X
11 Financial leasing services including hire purchase 10 √ √ √
12 Services in relation to chit (Earlier Taxable @ 30%) 100 X X X

24. S.No Name of Service Taxable
(%)
CG Input IS
15 Construction of a complex, building, civil structure or
a part thereof, intended for a sale to a buyer, wholly
or partly, except where entire consideration is
received after issuance of completion certificate by
the competent authority,‐
(a) for a residential unit satisfying both the following
conditions, namely:–
(i) the carpet area of the unit is less than 2000 square
feet; and
(ii) the amount charged for the unit is less than
rupees one crore;
(b) for other than the (a) above
25
30
√ X √
16 Works contracts
16(a) Works contracts entered into for execution of original
works
40 √ X √
16(b) Works contracts entered into for maintenance or
repair or reconditioning or restoration or
70 √ X √
16(c ) For other works contracts, not covered under sr. no. 16
and 17 , including maintenance, repair, completion
and finishing services such as glazing, plastering,
floor and wall tiling, installation of electrical fittings
of an immovable property
60 √ X √

26. THANK YOU