5 february 2011 st_ coop s… · · 2011-02-07are in the natureof public service and are of a...
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Study Course on Co-operative Societies
CA Pritam Mahure5th February 2011
Indirect tax – Generics
Excise duty
• Club or Association Service• Banking and other Financial services
Service tax
GST
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Economic Activities
Goods
Services
Works Contracts
Immoveable Properties
Others
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¡ Excise duty§ Manufacturing activity
¡ Service tax§ Provision of services
Goods Services
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Particulars Brief
Levy At the time of manufacture• Manufacture• Deemed manufacture
• Section / chapter Notes• MRP Goods
Exemption Upto value of clearances of Rs 1.50 crores (if value of clearances in the preceding year is less than 4 crores)
Payment At the time of removal – Monthly
Input tax credit Availability of Cenvat credit on ‘inputs’, ‘capital goods’ and ‘input services’
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� Tax on provision of taxable services� Two separate persons� Consideration
� Governed by Finance Act, 1994
� The term ‘Service’ not defined however ‘taxable service’ defined� Selective Approach� 115 taxable services under the net
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¡ Trigger§ As a ‘provider’ of taxable service
§ As a ‘recipient’ of taxable service▪ GTA service
▪ Import of service
Provider
Recipient
} When to get registered?§ Any basic exemption?§ Rs 10 lakhs
} Registration§ Single Registration§ Centralised Registration� Accounting� Billing
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¡ Service Provider should be covered
¡ Service Recipient should be covered
¡ Service should be covered (ie it should be a ‘taxable service’)
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Taxable Service “taxable service” means any service provided or to be provided to its members, by any club or associationin relation to provision of services, facilities or advantages for a subscription or any other amount andthe term “service provider” shall be construed accordingly.
Section 65 (121) Explanation - For the purposes of this section, taxable service includes any taxable service provided orto be provided by any unincorporated association or body of persons to a member thereof, for cash, deferred payment or any other valuable consideration.
Taxable Service means any service provided or to be provided to <Scope of Service Receiver is defined here> by <Scope of Service Provider is defined here> in relation to <Scope of Service is defined here>
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Means but does not include
means any person or body of persons providing services, facilities or advantages,for a subscription or any other amount, to its members
(i) any body established or constituted by or under any law for the time being in force; or
(ii) any person or body of persons engaged in the activities of trade unions, promotion of agriculture, horticulture or animal husbandry; or
(iii) any person or body of persons engaged in any activity having objectives which are in the nature of public service and are of a charitable, religious or political nature; or
(iv) any person or body of persons associated with press or media.
¡ Exemption to services provided by Resident Welfare Association§ Sole criteria for membership should be the
residential status in locality
§ Total consideration received for providing said services does not exceed 3,000/- pm
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¡ Ideal Co-operative Housing Society is a registered Housing Co-op. Society.
¡ It manages, maintains and administers the land and buildings. It incurs following expenses:¡ Security charges¡ Taxes, Water charges¡ Property and lift maintenance and repairs¡ Various other miscellaneous expense such as sweeping, garbage
collection etc
¡ It recovers the expenses incurred. Is it liable for service tax?
¡ Relevant points:¡ Is there a service?
¡ Is there a facility or advantage?
¡ Is housing society covered under the definition?¡ Excludes any body established or
constituted by or under any law ¡ ‘Reimbursements’ as a pure agent
Expenses incurred
Society pays it
Members contribute
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¡ Services liable under BFS :Financial leasing including equipment leasing and hire purchase
Banker to an issue, Merchant banking services, Provision and transfer of information and data processing
Securities and foreign exchange (forex) broking, and purchase or sale of foreign currency, including money changing
Advisory and other auxiliary financial services including investment and portfolio research and advice, advice on mergers and acquisitions and advice on corporate restructuring and strategy
Asset management including portfolio management, all forms of fund management, pension fund management, custodial, depository and trust services
Other financial services, namely, lending, issue of pay order, demand draft, cheque, letter of credit and bill of exchange, transfer of money including telegraphic transfer, mail transfer and electronic transfer, providing bank guarantee, overdraft facility discounting facility, safe deposit locker, safe vaults; operation of bank accounts
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Particulars Value
Issue of pay order, demand draft, cheque, letter of credit etc
Charges for PO, DD, cheque book charges
Transfer of money including telegraphic transfer, mail transfer and electronic transfer,
Charges for transfer
Providing bank guarantee, safe deposit locker, safe vaults;
Charges for bank guarantee, locker/vaults charges
Operation of bank accounts Charges for operation of account
Lending - Processing charges, pre-closure charges- Interest excluded from value
Financial Leasing - Lease management, processing and other charges
- 10% of interest (exemption
} Cenvat credit} On payment of IPS} Furnish details in ST-3} Provision of taxable and exempt services } Pay 6% on the value of exempted services} Avail proportionate credit
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} Payment} Monthly payment} Normal payment - 5th of the following month } E-payment - 6th of the following month } E-payment if ST payment more than 10 lakhs in
preceding FY
} Returns} Half yearly before 25th
} E-filling of returns if the ST payment more than 10 lakhs in preceding FY
1. Whether ST paid on all service incomes?
2. Whether service tax paid as a recipient ?
3. Whether Cenvat credit availed? If yes, whether it is in accordance with CCR?
4. Whether other procedures (such as registration, payment, returns, invoicing etc) followed?
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Past Future
Particulars Excise Service taxExemption Upto Rs. 1.50 crores Upto Rs. 10 lacs
Registration Factory registration Single / centralised registration
Excisable / taxable CETA, 1985 Finance Act, 1994
Levy ‘Manufacture’ ‘Provision of service’
Payment ‘Removal of goods’ ‘Receipt of consideration’
Cenvat credit Physical receipt of goods/ payment
Physical receipt of goods/ payment
Invoicing At the time of removal Withing14 days from the date of completion/ receipt
Returns Monthly Half yearly
Administration Central Excise Dept. Central Excise Dept. (ST)
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¡ Union of States§ GST - ‘Dual Structure’
¡ Who benefits§ Centre – Gets power to tax the ‘distribution level’§ States – Get the power to tax services
Raw material manufacturer Manufacturer Whole sale dealer Retailer Consumer
WhatTax on
Legislation
Administration by
CGSTSupply of goods and
services for a consideration
CGST Act
Central Authorities
SGSTSupply of goods and
services for a consideration
29 SGST Acts
State Authorities
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¡01.10.2011
¡01.04.2012
¡01.04.????
