service tax basics - hmv
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LAKSHMI
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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??Wednesday, December 18,2013
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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.
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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
Registration shall beissued within 7 days inform ST-2
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REGISTRATION REQUIREMENTS
Any provider of taxable services whose aggregatevalue of taxable service in a financial year exceeds
Rs. 9 lacs, has to get themselves registered.
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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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Online registration process
For New Assesses
For Existing Assesses
For LTU Assesses
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DocumentS to be Submitted with ST-1
I am
confused
what documents
to be filed
with ST-1
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(a) Proof of address of the premisesoffice sought to be registered
(b) PAN number of the assessee
(c) List of Branches offices or
premises of the assessee(d) Constitution of applicant
(e) Power of attorney
(f) Bank account numbers of theBranches and Central Officethrough which the receipts aredeposited, transacted.
DocumentS to be Submitted with ST-1
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Contd
Service Tax Code number is a 15 digit alphanumeric no.based on the PAN
Ex : AJQPN8358P SD001
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Payment of Service Tax through G.A.R. 7
Quarterly Payment
Other than Individual/FirmIndividual/Firm
Monthly Payment
Quarter Endingon 31stMarch
Other Quarters Month of March Other Months
Upto 31stMarch5thof the Month
following QuarterUpto 31stMarch
5thof 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 1stOctober 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
700000 800000
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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Some of major changes in service tax law to the extentrelevant to us are as under:
Section / Notification Description of
Section
Brief Description
Section 66B Charging Section This section says that all
services will be taxed at
12% except those
services as specified in
the Negative List
Section 66D Negative List Services that would not
be considered for
service tax
Section 66E Declared Services This section deems
certain types of contract
to be deemed servicesWednesday, December 18,2013
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Notification No30/2012 andNotification 36/2012
Reverse Charge
Mechanism
A list of services notified in
which the Service Recipient
is required to discharge theservice tax liability in full,
or both the service
recipient and service
provider has to discharge
the tax liability as per the
prescribed ratio.
Notification No.25/2012and NotificationNo. 34/2012
Exempted Services A Single consolidated
notification issued for
exemptions. Called as the
Mega Exemption
Notification.
Notification No. 26/ 2012 Abatement of Service tax For the following notified
services the levy of service
tax. i.e. Service tax will be
charged on the balance value
after abatement.Wednesday, December 18,2013
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Reverse Charge
5.SPECIFIED
CONSIGNOR ORCONSIGNEEin 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.INDIANRESIDENTin case of import of
service
1.INSURERin case of service
provided byinsurance agent
Persons Liableto Pay ServiceTax in Certain
Cases
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Abatement
In 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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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 cessWednesday, December 18,2013
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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 30thday till date of
furnishing return (max Rs2,000)
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SERVICE TAX
CENVAT CREDIT
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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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Whats happening: Recently a team of Bollywood producers visited
Finance Minister to get exemption for service tax. Butthe request was denied.
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I hope this information was helpful. If you need
any further help you can get in touch with me viamy email id [email protected]
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mailto:[email protected]?subject=Information%20about%20TAX%20-%20Via%20SQUAMBLE.COMmailto:[email protected]?subject=Information%20about%20TAX%20-%20Via%20SQUAMBLE.COM -
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