grp 6 service tax presentation at chinmay tutorials
TRANSCRIPT
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Service Tax
Presented By : Group 6
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This Presentation covers: Concept of service tax and why its needed. Valuation of taxable service. Services under negative list. Point of Taxation Rules, 2011. Payment of service tax. Registration. Classification of services. Reverse Charge.
SERVICE TAX OVERVIEW
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History: At the Recommendations of Raja J. Chelliah Committee.
Finance Act, 1994.
Levied at the rate of 5%
Applicable to Telecommunication,
Stock broker and Non-life insurance.
CONCEPT OF SERVICE TAX
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Extent of service tax law Section 64. Whole of India except State of J&K
includes territorial waters upto 12 nautical miles
extended to the whole of Exclusive Economic Zone &
continental shelf upto 200 miles from the landmass
CONCEPT OF SERVICE TAX
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Why service tax is needed? Need for higher public revenue.
Growth of services.
Shifting of spending preference from commodity to
services.
Declining receipt from Excise and Custom.
Equity in taxation
CONCEPT OF SERVICE TAX
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CONCEPT OF SERVICE TAX
Services
Activity
Two or more per-
sons
Deemed services
Considera-tion
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Exclusions:I. Immovable PropertyM. Money and Actionable Claims.A. Authority.G. Deemed Sale (Goods).E. Employer Employee Relationship.
CONCEPT OF SERVICE TAX
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Deemed Services :R. Renting of Immovable PropertyA. Agreement not to do somethingS. Services related to information technologyC. Construction of Complex and Works Contracts.A. Allotment of Intellectual Property for temporary use.L. Leasing, Licensing and Hiring of Movable Property.S. Services relating to food supply in Hotels and Restaurants .
CONCEPT OF SERVICE TAX
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Effective rate of service tax: Effective rate 12.36%
Small service provider with turnover of taxable services
less then Rs. 10 Lac.
CONCEPT OF SERVICE TAX
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SERVICES NOT CHARGEABLE TO TAX
Negative list 17 Services
Exemption list 42 Services
Other exempted services
8 Services
Excluded services 6 services
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Negative List(Section 66D): Services by government or local authorities.
Services provided by RBI
Service related to agriculture.
Trading of goods.
Manufacture or production of goods.
Toll charges
Betting, Gambling or Lottery
SERVICES UNDER NEGATIVE LIST
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Negative List(Section 66D): Entertainment or amusement facilities
Transmission or distribution of electricity
Services relating to education
Financial services
Transportation of passengers
Transport of goods
Funeral Services
SERVICES UNDER NEGATIVE LIST
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VALUATION OF TAXABLE SERVICE
Whole Consideration in money:
• Value of taxable service will be gross amount charged for ser-
vice.
Whole Consideration is not wholly in
money
Value of taxable service will be :
Money value = XXX
+FMV of kind = +
If quantifiable = XXX
Consideration not ascertained:
As per Rule 3 of Determination of
Value Rules , 2006 i.e. value of other
similar services
If not possible then cost of services
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Rule 3: [Main Rule] This rule is attracted when no
specific rule is prescribed for any situation.
Rule 4: Determination P.O.T. in case of change of rate of
tax. This rule is very significant in case there is change
in effective rate of tax.
POINT OF TAXATION RULES 2011
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PAYMENT OF SERVICE TAX
Mode of PaymentPayment of service tax became mandatory for all assesses who have paid service tax of Rs. 1 Lac or above during last financial year or current financial year.Amendment: W.E.F. 1st October, 2014 payment of service tax shall be made only by the use of internet i.e. online
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A. Any person other than individual/ proprietorship firm/partnership firm including LLP:
Electronically 6th of the following month. However for the month of March service tax has to be
deposited by 31st March. B. Individual/ proprietorship firm/partnership firm: Electronically 6th of the Month following quarter. However the quarter ending in the month of March service
tax has to be deposited in March itself.
PAYMENT OF SERVICE TAX
REGISTRATION
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NON SSP REVERSE CHARGE
SSPINPUT
SERVICE DISTRIBUTOR
SUPERINTENDENT OF CENTRAL EXCISE
FORM NO ST-1
WITHIN 30 DAYS
From commence-ment of business or date on which ser-vice is taxable as the case may be
From the date of receipt of service or
the date of pay-ment for service
whichever is earlier
From the date on which value of taxable ser-vice provided exceed Rs. 9
Lac
From the date of
com-mence-
ment of business
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Rules for classification:Rule 1: The most specific description.Rule 2 : (i) naturally bundled : essential character(ii) not naturally bundled : highest tax rate.Rule 3: In case if service cannot be classified either as per
rule 1 or rule 2: which comes first under the categories of services specified under Section 65(105).
CLASSIFICATION OF SERVICES
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Where service receiver is liable to pay service tax instead of
service provider is termed as reverse charge. In that case service receiver is liable to obtain mandatory registration irrespective of any turn over limit, further limit of 10 Lac in case SSP is also not available it means service tax is payable even on a single penny of Rupee.
REVERSE CHARGE
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Thank you
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