FAQ- Service Tax

-
Central Board of Excise & Customs
Foreword
I am happy to note that the Central Board
of Excise & Customs, in association with the
Directorate General of Service Tax is publishing a
booklet on Frequently Asked Questions on Service
Tax. This booklet will provide, in easy question–
answer format, information about tax payers’
rights and obligations under Service Tax. I hope
this small, yet significant, step will help in
securing greater voluntary tax compliance.
P.C. Jha
Member
C. Excise & Service Tax
New Delhi
November, 2007
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PREFACE
“Knowledge will forever govern ignorance; and people who mean to be their own
governors, must arm themselves with the power which knowledge gives.”
– James Madison
It is my pleasure to present the Third Edition of the Frequently Asked Questions’ booklet,
being published at the behest of the Central Board of Excise and Customs.
The tenet of voluntary tax compliance is the corner stone of service tax administration. It is
our endeavour to place as much information about service tax procedures as possible in the public
domain to preclude a non-compliance owing to lack of information and guidance. Dissemination of
information and public awareness has been accorded high priority by the service tax administration.
Information in the booklet is purely as a measure of public facilitation.
The Directorate has made a conscious effort to keep the language of the answers simple and
crisp. The questions are truly frequently asked, as experienced by the Board, Directorate and the field
formations. However, the booklet is not aimed to discuss the legal issues and exceptions.
The provisions of the relevant Finance Act, notifications and circulars or instructions of the
Board shall prevail over the answers provided in this booklet in case of any contradiction. While every
effort has been made to ensure that the information contained in this booklet is up-to-date, the
Central Board of Excise and Customs and Directorate General of Service Tax, Mumbai do not hold
themselves liable for any consequences, legal or otherwise, arising out of the use of any such
information.
I sincerely acknowledge the remarkable efforts made by Shri Pawan Kumar Sinha, Additional
Director and Shri Shirish Gogate, Inspector of this Directorate in bringing out this edition of the
booklet. I would also like to express my appreciation and thanks to the officers of Central Excise
Zone, Coimbatore, for publishing earlier a similar booklet, the contents of which were found to be very
useful and have been appropriately made use of in preparing this booklet. Last but not the least, I
acknowledge the contribution of the Central Board of Excise & Customs for providing their valuable
inputs and guidance.
I hope that this booklet will be useful in providing basic knowledge about service tax laws and
procedures. These FAQs and answers will also be available on the official website of the Central
Board of Excise and Customs: www.cbec.gov.in.
This Directorate will welcome your suggestions to make this booklet more useful.
G.V.NAIK
Mumbai Director General
November, 2007 Directorate General of Service Tax
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DISCLAIMER
Information is being made available in this booklet purely as a measure of public facilitation. The
provisions of the Finance Act 1994, rules made thereunder, notifications and circulars or instructions
of the Board shall prevail over the answers provided in this booklet in case of any contradiction. While
every effort has been made to ensure that the information contained in this booklet is up-to-date, the
Central Board of Excise and Customs and Directorate General of Service Tax, Mumbai does not hold
themselves liable for any consequences, legal or otherwise, arising out of the use of any such
information.
For complete Information please refer to the Finance Act,1994, rules made thereunder and
notifications and circulars. For further information you may contact jurisdictional Service Tax office.
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CONTENTS
Sl. No. Topic Page No.
1 General ……………………………………………….
2 Registration……………………………………………
3 Payment of Service Tax………………………........
4 Filing of Returns…………………………………........
5 Records………………………………………………..
6 Refunds………………………………………………..
7 Exemptions………………………………………........
8 Penal Provisions……………………………………….
9 Adjudication & Determination of Tax……………
10 Appellate Remedies………………………………...
11 CENVAT Credit Scheme…………………………….
12 Export of Services & taxable service used in
relation to export of goods………………………...
13 Service Tax on Receipt of Services from
outside (Import of Services)……………………….
14 Advance Ruling………………………………………
15 Where can the Department can be contacted
16 Appendix 1
17 Appendix 2
18 Appendix 3
19 Appendix 4
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SERVICE TAX
FREQUENTELY ASKED QUESTIONS
1. General
1.1. What is Service Tax?
It is a tax levied on the transaction of certain specified services by the Central Government under the
Finance Act, 1994.
It is an indirect tax, which means that normally the service provider pays the tax and recovers the
amount from the recipient of taxable service.
1.2. Can recipient of service be also asked to pay service tax?
In certain cases Government may shift the liability of payment of service tax to the receiver of service
as a measure of administrative convenience. It is often referred to as ‘reverse charge’ in common
language. [Refer Question 1.8]
1.3. Under which authority service tax is levied?
Vide Entry 97 of Schedule VII of the Constitution of India, the Central Government levies service tax
through Chapter V of the Finance Act, 1994. The taxable services are defined in Section 65 of the
Finance Act, 1994. Section 66 is the charging section of the said Act.
1.4. What are the taxable services?
The list of the services is furnished as Appendix-1. The Accounting Heads are also mentioned in the
list, which need to be mentioned on the tax payment documents (GAR-7 or TR-6), while depositing
the Service Tax and other related dues in the banks.
1.5. How to decide whether Service Tax is payable by a person?
A. If you are engaged in providing service to your customer, please check:-
(i) Whether the service rendered by you is falling under the scope of any of the taxable
services listed in the Appendix-1.
(ii) Whether there is a general or specific exemption available for the category of service
provided under any notification.
(iii) Whether you are entitled to the value based exemption available for small service
providers as explained in Para 7.1 of this Booklet.
(iv) Whether the service charges were received for the services provided or to be provided.
In case the service provided by a person falls within the scope of the taxable services and if such
service is not fully exempted, the service tax is payable on the value of the taxable service
received subject to the eligible abatements, if any (please also refer Q. No. 1.7)
B. If you are availing the services of the service provider, please check:-
a. Whether the service received by you is falling under the scope of any of the services where
the recipient of the service is liable to pay Service Tax in terms of Section 68(2) of the Act
read with Rule 2(d) of the Service Tax Rules, 1994 (Refer Question No.: 1.8).
b. In case the service received by recipients of such service is falling under the scope of any of
the taxable services defined under section 65 of the Finance Act, 1994, the recipients of the
service shall pay Service Tax having regard to the exemptions / abatements admissible, if
any.
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c. Please note that the value based exemption for small scale service providers under
Notification No.6/2005 ST dated 01.03.2005 effective from 01.04.2005 is not admissible to
such recipients of taxable services. (For further details, please see the answer to Question
No.7.1).
If you have any doubts, please contact your nearest Help Centre or Central Excise
Commissionerate/ Service Tax Commissionerate – visit www.cbec.gov.in to find the
addresses and telephone numbers for further clarification.
1.6. What is the rate of Service Tax?
At present, the rate of Service Tax is 12%, payable on the "gross value of taxable service". In addition
to this, Education Cess is payable at the rate of 3% on the Service Tax amount.
(Total: 12.36% on the value of the taxable service). –Refer section 66 of the Finance Act, 1994 (12%
Service Tax), Section 85 of the Finance Act, 2004 (2% Education Cess) and Section 126 of the
Finance Act, 2007(1% Secondary and Higher Education Cess).
The rate of tax may change during Annual Budget by a Finance Act.
History of rates:
Sl. No. Period Rate of Service Tax Rate of Education Cess
1. 1994 to 13.05.2003 5% Nil
2. 14.05.2003 to 09.09.2004 8% Nil
3. 10.09.2004 to 17.04.2006 10% 2% of the S.T.
4. 18.04.2006 to 10.05.2007 12% 2% of the S.T.
5. 11.05.2007 till date 12% 2% of S.T. + 1% (Secondary &
Higher Education Cess) of the S.T.
1.7. What is meant by “value of taxable service"?
i. Normally, the "value of taxable service" means, the gross amount received by the service
provider for the taxable service provided or to be provided by him. Section 67 of the
Finance Act, 1994 read with Service Tax (Determination of Value) Rules, 2006, has to
be followed to arrive at the taxable value.
ii. For certain services, a specified percentage of abatement is allowed from the gross amount
collected for rendering the services, subject to the conditions, inter alia, that CENVAT
Credit has not been availed by the service provider and cost of goods sold in the process
of providing the subject service is not deducted in terms of Notification No. 12/2003-ST
dated 20.6.2003.
iii. There is also a composition scheme for ‘works contract service’, where the person
liable to pay service tax in relation to works contract service shall have the option to
discharge his service tax liability on the works contract service provided or to be
provided, instead of paying service tax at the rate specified in section 66 of the Act, by
paying an amount equivalent to 2% of the gross amount charged for the works contract.
The gross amount charged for the works contract shall not include Value Added Tax
(VAT) or sales tax, paid on transfer of property in goods involved in the execution of the
said works contract.
For abatement admissible for various services, please see Appendix-2.
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1.8. Who is liable to pay Service Tax?
Generally, the ‘person’ who provides the taxable service on receipt of service charges is responsible
for paying the Service Tax to the Government (Sec.68 (1) of the Act), except the following:
(i) the recipient of such services in India is liable to pay Service Tax, where taxable services
are provided by foreign service providers with no establishment in India;
(ii) the Service Tax is to be paid by the Insurance Company for the services in relation to
Insurance Auxiliary Service by an Insurance Agent.
(iii) the person who pays or is liable to pay freight for the taxable services provided by a
Goods Transport Agency for transport of goods by road, is liable to pay Service Tax , if
the consignor or consignee falls under any of the seven categories viz. (a) a factory (b) a
company (c) a corporation (d) a society (e) a co-operative society (f) a registered dealer
of excisable goods (g) a body corporate or a partnership firm
(iv) the taxable services provided by Mutual Fund Distributors in relation to distribution of
Mutual Fund. In this regard, Service Tax is to be paid by the Mutual Fund or the Asset
Management Company receiving such service.
Refer: Sec. 68(2) of the Act read with Rule 2(d) of the Service Tax Rules, 1994.
1.9. What are the statutes governing the taxation relating to Service Tax?
The Statutes governing the levy of Service Tax are as follows:
(i) The Finance Act, 1994 - Chapter V - Section 64 to 96 I. (referred to as ‘Act’ in this book)
This chapter extends to the whole of India except the State of Jammu and Kashmir.
(ii) The Finance Act, 2004 Chapter VI - for levy of Education Cess @ 2% on the Service
Tax.
(iii) The Service Tax Rules, 1994. (referred to as ‘Rules’ or STR, 1994 in this book)
(iv) The CENVAT Credit Rules, 2004.
(v) The Export of Service Rules, 2005.
(vi) The Service Tax (Registration of Special categories of persons) Rules, 2005.
(vii) The Taxation of Services (Provided from Outside India and Received in India) Rules,
2006 (with effect from 19th April, 2006) – Notification No. 11/2006-ST dated 19.4.2006.
(viii) The Service Tax (Determination of Value) Rules, 2006 (with effect from 19th April, 2006)
– Notification No. 12/2006-ST dated 19.4.2006.
(ix) Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007-
Notification No. 32/2007-Service Tax dated 22nd May, 2007.
(x) In addition to the above, certain provisions of the Central Excise Act, 1944 are also
made applicable for Service Tax matters (Section 83 of the Finance Act, 1994).
1.10. What are the provisions of Central Excise which are made applicable for Service Tax
matters?
The provisions of Central Excise which are made applicable to Service Tax matters, as they are
applicable in relation to the duty of Excise are listed in Appendix-3.
1.11. Is there any exemption from payment of service tax to Diplomatic Missions for official
use and individuals and their family members posted in a Diplomatic Mission?
Yes, exemption from payment of service tax relating to all taxable services is available to Diplomatic
Missions for official use of services as well as for the personal use or for the use of the family
members of diplomatic agents or career consular officers posted in a foreign diplomatic mission or
consular post in India, by notifications 33/2007-ST dated 23rd May, 2007 and 34/2007-ST dated 23rd
May, 2007 respectively, but subject to procedures specified under those notifications.
1.12. If yes, what procedure is required to be followed for exemption from payment of
service tax to Diplomatic Missions for official use of services?
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The following procedure is specified:
(i) the foreign diplomatic mission or consular post in India, is issued with a certificate by the
Protocol Division of the Ministry of External Affairs that it is entitled to exemption from
service tax, as stipulated in the certificate, based on the principle of reciprocity;
(ii) the head of such foreign diplomatic mission or consular post, or any person of such
mission or post authorized by him, shall furnish to the provider of taxable service, a copy
of such certificate duly authenticated by him or such authorized person, along with an
undertaking in original, signed by him or such authorized person, bearing running serial
number commencing from a financial year and stating that the services received are for
official purpose of the said foreign diplomatic mission or consular post;
(iii) the head of such foreign diplomatic mission or consular post or such authorized person
shall maintain an account of such undertakings issued during a financial year and such
account shall contain:-
(a) the serial number and date of issue of such undertakings;
(b) the name and the registration number of the provider of taxable service; and
(c) the description of taxable service and invoice number.
(iv) the invoice or bill or as the case may be, the challan issued under the provision contained
in rule 4A of the Service Tax Rules, 1994 shall, in addition to the information required to
be furnished under the said rule, contain the serial number and the date of the
undertaking furnished by the said head of foreign diplomatic mission or consular post;
and
(v) the provider of taxable service shall retain the documents referred to in point number (i)
above along with a duplicate copy of invoice issued, for the purposes of verification.
Note: In case the Protocol Division of the Ministry of External Affairs, after having issued a certificate
to any foreign diplomatic mission or consular post in India decides to withdraw it subsequently, it shall
communicate the withdrawal of such certification to the foreign diplomatic mission or consular post.
The exemption from the whole of the service tax granted to the foreign diplomatic mission or consular
post in India for official purpose shall not be available from the date of withdrawal of such certification
given to them.
1.13. What procedure is required to be followed for exemption from payment of service tax
to individuals and their family members posted in a Diplomatic Mission?
The following procedure is specified:
(i) the Protocol Division of the Ministry of External Affairs issues a certificate that the
diplomatic agents or career consular officers posted in such foreign diplomatic mission or
consular post in India, are entitled to exemption from service tax, as stipulated in the
certificate based on the principle of reciprocity;
(ii) the Protocol Division of the Ministry of External Affairs or the Protocol Department of the
State concerned issues to each of such diplomatic agent or career consular officer an
identification card bearing unique identification number and containing a photograph and
name of such diplomatic agent or career consular officer and the name of the foreign
diplomatic mission or consular post in India where he is posted;
(iii) the head of such foreign diplomatic mission or consular post or any person of such
mission or post authorized by him, shall furnish to the provider of taxable service, a copy
of such certificate duly authenticated by him along with an undertaking in original, signed
by him, bearing running serial number commencing from a financial year and the unique
identification number as appearing in the identification card issued to the diplomatic agent
or career consular officer and stating that the services received are for personal use of
the said diplomatic agent or career consular officer of members of his/her family;
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(iv) the head of such foreign diplomatic or consular post or such authorized person shall
maintain an account of such undertakings issued during a financial year and such
account shall contain:-
(a) the serial number and date of issue of such undertakings;
(b) the name, designation and unique identification number of the diplomatic agent or
career consular officer in favour of whom such undertaking has been issued;
(c) the name and the registration number of the provider of taxable service; and
(d) the description of taxable service and invoice.
(v) the invoice or bill or as the case may be, the challan issued under the provision contained
in rule 4A of the Service Tax Rules, 1994 shall, in addition to the information required to
be furnished under the said rule, contain the serial number and the date of such
undertaking and the unique identification number of the diplomatic agent or career
consular officer; and
(vi) the provider of taxable service shall retain the documents referred to in point numbers (ii)
and (iii) above along with a duplicate copy of invoice issued for the purposes of
verification.
Note: In case the Protocol Division of the Ministry of External Affairs, after having issued a certificate
to any foreign diplomatic mission or consular post in India or as the case may be the identification
card issued to a diplomatic agent or career consular officer, decides to withdraw any one or both of
them subsequently, it shall communicate the withdrawal of such certificate or identification card, as
the case may be, to the foreign diplomatic mission or consular post. The exemption from the whole of
the service tax granted to the foreign diplomatic mission or consular post in India for the personal use
or use of their family members shall not be available from the date of withdrawal of such certification
or identification card or as the case may be.
2. Registration
2.1. What is meant by registration? Who should apply for registration under Service Tax
law?
· Every person providing a taxable service of value exceeding Rs. 7 lakhs, is required to
register with the central excise or service tax office having jurisdiction over the office of
such service provider.
· In case a recipient is liable to pay service tax, registration is required by him.
· There is also provision for centralised registration – Refer Question 2.8.
· The ‘Input Service Distributors’ also require registering themselves.
2.2. Why registration is necessary?
Registration is identification of an assessee. Identification is necessary to deposit service tax, file
returns and undertake various processes ordained by law relating to service tax.
2.3. What is the meaning of an ‘assessee’ in relation to Service Tax?
‘Assessee’ means a person liable to pay Service Tax and includes his agent.
2.4. When can a prospective assessee obtain registration?
i. When a person commences business of providing an existing taxable service, he is
required to register himself within 30 days of such commencement.
ii. In case a new taxable service is introduced, an existing service provider must register
himself, unless he is eligible for exemption under any notification, within a period of 30
days from the date of new levy.
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2.5. What does the word “person” appearing in the definition of taxable service mean?
The word "Person" shall include any company or association or body of individuals, whether
incorporated or not. Thus this expression includes any individual, HUF, proprietary firm or partnership
firm, company, trust, institution, society etc.
2.6. What is the procedure for Registration? Who should be approached for Service Tax
Registration?
An application in Form ST-1 (in duplicate) has to be filed before the jurisdictional Central
Excise/Service Tax officer. Certain documents to verify the correctness of declaration in the said form
as may be required by the registering authority, such as copy of PAN card, proof of address of
business premise(s), constitution of the business [proprietorship, firm, company, trust, institute etc.]
etc. The copies may be self-certified by the applicant. In case of doubts in select cases, original
documents may have to be presented for across the counter verification and return.
2.7. When would the Registration Certificate be issued?
The Registration certificate would be issued within a period of seven days from the date of
submission of application ST-1 along with all relevant details/documents.
In case the registration certificate is not issued within seven days, the registration applied for is
deemed to have been granted. (Rule 4(5) of the STR, 1994)
2.8. Is there any provision for centralized registration?
Service providers having centralised accounting or centralised billing system, at their option, can have
Centralised registration at one or more places.
Commissioner of Central Excise/Service Tax in whose jurisdiction centralised account or billing office
of the assessees exists, is empowered to grant centralised registration.
2.9. Does one require registration certificates for each service separately?
Only one Registration certificate is to be taken even if the person provides more than one service
from the same premises for which registration is sought.
If there is centralised registration, only one registration certificate is required for services provided
from different premises, declared in the application for centralised registration.
2.10. What is to be done when the existing assessee commences providing of a service not
mentioned in the registration certificate?
An application has to be made in ST-1 for amendment (endorsement) in the Registration certificate
indicating only the amendment/rectification required to be made in the registration certificate, along
with a copy of the original registration certificate. No fresh documents are required for verification by
the officer unless there is change in the details given in original or earlier application(s).
2.11. Is PAN allotted by the Income Tax Department a must for obtaining Service Tax
Registration?
Having PAN is essential because the Service Tax Registration number is generated based on the
PAN issued by the Income Tax Department.
However, in the absence of PAN, a temporary Service Tax registration number would be issued for
assessees who are not having PAN at the time of filing the application (ST-1) for Service Tax
registration till such time they obtain PAN. Once the PAN is obtained, the Service Tax assessee
should obtain the PAN - based Service Tax Registration number.
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2.12. Cessation of business of providing taxable service -what is to be done with the Service
Tax Registration ?
The Service Tax Registration certificate (ST-2) should be surrendered to the concerned Central
Excise / Service Tax authorities.
2.13. A taxpayer transfers his business to another person - what is to be done with the
Registration?
In the event of transfer of the business, the transferee should obtain a fresh certificate of Service Tax
registration. The transferee will have his own PAN.
2.14. Whether a service provider can make payment of Service Tax and file returns before
the grant of registration by the proper officer?
No. However, service provider should apply well in advance to obtain registration, which is normally
granted within 7 days of filing of application. Since service tax is payable once in a month or quarter,
an assessee gets sufficient time for registration.
2.15. Is there any penal provision for non-registration?
Failure of registration may attract a penalty upto Rs.1000/ - under Section 77 of the Finance Act,
1994.
However, such penalty could be waived in case the assessee proves that there was reasonable
cause for such delay (Section 80 of the Act). Please also see the answer to Q.No.8.2.
2.16. If a registration certificate issued by the Department is lost, can duplicate be issued?
What is the procedure in this regard?
The assessee is required to make written request for ‘duplicate’ registration certificate. The same will
be issued by the Department after suitable entry in the registers/records of the Office.
3. Payment of Service Tax
3.1. How to pay Service Tax?
You may pay service tax by G.A.R.7 (previously known as TR6 Challan which was yellow in colour) in
the specified branches of the designated banks. The details of such Banks and branches may be
obtained from the nearest Central Excise Office/Service Tax Office.
Service Tax can also be paid electronically, called e-payment facility. Refer Para 3.16 to 3.25.
3.2. When is Service Tax required to be paid ?
For individual or a proprietary or partnership firm – Quarterly -by the 5th day of the month
following each quarter and by the 6th day of the month following each quarter if the duty is deposited
electronically through internet banking. For example, Service Tax for the quarter ending 30th of June
is to be paid by 5th or 6th of July as the case may be.
For all other categories (Company, Society, Trust etc.) - Monthly - by the 5th day of the
succeeding month and by the 6th day of the succeeding month if the duty is deposited electronically
through internet banking;
Exception: For the month of March or quarter ending March, all assessees have to pay by 31st of
March of the Calendar year (Rule 6(1) of the STR, 1994).
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3.3. If full details are not available to assess correct service tax, how can service be paid
by due date?
You may seek in writing, provisional assessment, giving reasons, from the jurisdictional Asst./Deputy
Commissioner of Central Excise/Service Tax under rule 6 (4) of the STR, 1994.
He may allow payment of Service Tax on provisional basis, on such value of taxable service as may
be specified by him.
3.4. Can excess payment be adjusted while paying tax for the next month or quarter?
Yes. Please refer to Para 6.1 for details.
3.5. What is the head of account into which the Service Tax amount is to be paid in respect
of various services?
Separate “Head of account ” has been specified for each taxable service. This must be mentioned on
G.A.R. 7 (previously known as TR-6) challans for proper accounting. See Appendix-1.
3.6. What is TR-6 or GAR-7 challan? Where is it available?
GAR-7 or TR-6 challan is the document for payment of service tax.
GAR-7 or TR-6 challan is also available in any stationary shop selling government forms. The format
is also given on web-site www.cbec.gov.in
3.7. Can the Service Tax be deposited in Non-designated banks?
No. For payment of Service Tax, specific bank has been nominated for every Central Excise/Service
Tax Commissionerate. If Service Tax is deposited in a Branch /Bank other than the nominated Bank /
Branch, it amounts to non-payment of Service Tax (Rule 6(2) of the STR, 1994). In any case, a nondesignated
bank will not accept service tax challans.
3.8. Whether the payment of Service Tax is to be made for the billed amount or for the
value received?
The Service Tax for a particular period is payable on the amount / value of taxable service received
during that period and not on the gross amount billed to the client.
If the charges for the taxable service have been received in advance prior to rendering of the
services, the Service Tax is payable even if the services are yet to be provided by them (Section 67
and Rule 6(1) of the STR, 1994).
Please also refer to the Service Tax (Determination of Value) Rules, 2006.
3.9. Can service tax be paid by cheque?
Yes, you can pay service tax be paid by cheque.
3.10. When paid by cheque, which date will be treated as date of payment?
The date of deposit of cheque is the date of payment of Service Tax. If the cheque is dishonoured, it
would mean as if the Service Tax has not been paid and the relevant penal consequences would
follow. (Rule 6(2) of the STR, 1994).
3.11. When payment is made by a client to an assessee after deducting his Income Tax
liability under the Tax deduction at source (TDS) provision, whether the Service Tax liability of
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the assessee is only towards the amount actually received from that client or tax is to be paid
on the amount including the Income Tax deducted at source also?
Service Tax is to be paid on the gross value of taxable service which is charged by a Service Tax
assessee for providing a taxable service. Income tax deducted at source is includible in the charged
amount. Therefore, service Tax is payable on the gross amount including the amount of Income Tax
deducted at source also.
3.12. What is the interest rate applicable on delayed payment of Service Tax?
Every person, liable to pay the service tax in accordance with the provisions of section 68 or rules
made thereunder, who fails to credit the tax or any part thereof to the account of the Central
Government within the period prescribed, shall pay simple interest @13% per annum. Interest is
payable for the period from the first day after the due date till the date of payment of any defaulted
service Tax amount. Refer to Section 75 of the Finance Act, 1994.
3.13. Can interest be waived, and by whom?
Interest payments are mandatory in nature and cannot be waived in ordinary jurisdiction.
3.14. What are the penal consequences if the Service Tax is not paid or paid late?
A mandatory penalty, not less than Rs.200/- per day or @2% of such tax per month, whichever is
higher, shall be imposed by the adjudicating authority. However, the penalty amount payable shall not
exceed the amount of service tax payable. - (Refer to section 76 of the Finance Act, 1994).
3.15. Whether Service Tax is payable after providing the service or after the receipt of the
service charges?
Service Tax is payable on the amount received towards provision of a taxable service including
any amount received in advance.
3.16. What is e-Payment of Central Excise and Service Tax?
e-Payment is a payment mode through which a Taxpayer can remit his tax dues to CBEC using
Internet Banking Service. It is an additional facility being offered by the banks besides conventional
procedure.
3.17. Which banks provide the facility of e-payment of Service Tax?
The following banks provide e-payment facility.
Sl. No. Name of Bank Name of Central Excise/Service
Tax Commissionerate for which
the Bank is authorised to collect
Revenue through e-Payment
1. Union Bank of India All Commissionerates
2. State Bank of India All Commissionerates
3. Punjab National Bank All Commissionerates
4. Indian Overseas Bank All Commissionerates
5. State Bank of Travancore All Commissionerates
6. Bank of India All Commissionerates
7. Corporation Bank All Commissionerates
8. State Bank of Saurashtra All Commissionerates
9. Indian Bank All Commissionerates
10. State Bank of Patiala All Commissionerates
11. State Bank of Hyderabad All Commissionerates
12. Syndicate Bank All Commissionerates
13. State Bank of Bikaner & Jaipur All Commissionerates
14. Vijaya Bank All Commissionerates
15. State Bank of Indore All Commissionerates
16. Bank of Maharashtra All Commissionerates
17. Canara Bank All Commissionerates
18. State Bank of Mysore All Commissionerates
19. United Bank of India All Commissionerates
20. Bank of Baroda All Commissionerates
21. Axis Bank Delhi, Bangalore, Hyderabad, Mumbai
22. ICICI Bank Delhi, Chennai, Hyderabad, Mumbai
23. HDFC Bank Delhi, Bangalore, Kolkata, Mumbai
24. IDBI Bank Delhi, Chennai, Kolkata, Mumbai
More banks will be added over time. You may find out the latest position on the web site of Principal
Controller of Accounts http//:pccacbec.nic.in
3.18. Who can opt for e-Payment?
Any customer of the Bank, who is an assessee of Central Excise or Service Tax, can pay Indirect Taxes
online using Internet banking service of Bank.
3.19. How to get Internet banking facility of Bank?
The customers of Bank can request this facility on prescribed application forms to any bank having
internet banking facility.
3.20. Are there any geographical restrictions on Banks?
No. Customer can effect payment from anywhere for the Commissionerate in which he is registered
with, provided that particular bank is authorized to collect revenue for that Commissionerate.
3.21. Are there any charges for availing e-Payment facility?
No, there are no charges for these services by any Bank.
3.22. Up to what time in a day the e-Payments can be made?
e-Payment can be made 24 hours a day using Internet banking service of Bank. Payment made up to 8
pm will be accounted on the same day. However payments effected after 8 pm will only be included in
next working day's scroll by the Focal point Branch.
3.23. Does the Internet banking service give any receipt/confirmation for the e-Payment?
Yes, on successful payment the Internet banking user gets a Cyber Receipt for the Tax payment, which
he can save or print for his record.
3.24. How does the taxpayer get the regular Challan stamped and receipted by Bank?
The concerned Focal Point Bank on the next working day will send the Challan copies duly receipted and
stamped to the taxpayer by courier at the mailing address provided by the taxpayer.
3.25. Will all the Banks launching the e-Payment solutions have uniformity in the procedure?
Yes, all the banks follow the same process flow with uniformity.
4. Filing of Returns
4.1. What are the Returns a service tax assessee has to file?
ST-3 Return – For all the registered assessee, including Input Service Distributors,
ST-3A Return – The assessee who is making provisional assessment under rule 6(4) of the
Service Tax Rules, 1994.
4.2. When to file returns?
ST-3 Return is required to be filed twice in a financial year – half yearly.
Return for half year ending 30th September and 31st March are required to be filed by 25th October and
25th April, respectively.
4.3. How to file Service Tax Returns?
16
The details in respect of each month of the period for which the return is filed, should be furnished in the
Form ST-3, separately. The instructions for filing return are mentioned in the Form itself. It should be
accompanied by copies of all the GAR-7 (TR-6) Challans for payment of Service Tax during the relevant
period.
4.4. Where to file return?
ST-3 or ST-3A is filed in triplicate to the Superintendent of Central Excise/Service Tax with whom the
assessee has registered himself.
4.5. What is e-filing of returns of Service Tax Returns?
The e-filing is a facility for electronic filing of Service Tax Returns through the Internet.
4.6. Who can file their Returns through Electronic medium?
Any Service Tax assessee having a 15-digit Service Tax payer code can file return electronically.
4.7. What is the procedure for e-filing?
(i) File of an application to the jurisdictional Asst./Deputy Commissioner of Service Tax,
specifying –
- 15-digit PAN based registration number (STP Code)
- Valid e-mail address - so that the Department can send them their User ID and
password to help them file their Return.
(ii) Log on to the Service Tax e-filing home page by typing the address
http://servicetaxefiling.nic.in in the address bar of the browser.
(iii) Upon entering the Service Tax code, user ID and password, you will be permitted to
access the e-filing facility.
(iv) Follow the instructions given therein for filing the Returns electronically.
4.8. Is filing of return compulsory even if no taxable service provided or received or no
payments received during a period (a particular half year)?
Filing of return is compulsory, even if it may be a nil return, within the prescribed time limit, failing which
penal action is attracted.
4.9. Whether a single Return is sufficient when an assessee provides more than one service?
A single return is sufficient because the ST-3 Return is designed to capture details of each service.
4.10. Is there any penalty for non-filing or delayed filing of the Returns?
If a person fails to furnish the ST-3 Return within the due date [25th October and 25th April every year]
he shall be liable to penalty which may extend to an amount not exceeding one thousand rupees
(Section 77 of the Act)
Mandatory Penalty for Late filing of ST-3 Return under Rule 7C of Service Tax Rules, 1994
Sl. No. Period of Delay from the prescribed
date
Penalty
1 15 days Rs.500/-
2 Beyond 15 days but not later than 30
days
Rs.1000/-
3
Beyond 30 days
Rs.1000/- plus Rs. 100/- for every day from
the thirty first day till the date of furnishing the
said return
17
5. Records
5.1. Is there any statutory documents prescribed by the Government such as specified invoice
proforma, specified registers etc. for use by the service providers?
There are no specific records which have to be maintained by a Service Tax assessee. The records
including computerized data, if any, which are being maintained by an assessee on his own or as
required under any other law in force, such as Income Tax, Sales Tax etc. are acceptable for the purpose
of Service Tax - (Rule 5(1) of the STR, 1994). However, it is important to note that a list of all such
accounts maintained by an assessee including the memorandum received from the branch offices shall
be furnished to the Superintendent of Central Excise at the time of filing the Return (ST-3) for the first
time (Rule 5(2) of the STR, 1994).
5.2. Where from the Service Tax assessee can get the Forms such as ST-1, ST-3 etc?
The Forms are available on the CBEC website and also at the Central Excise Range /
Division/Commissionerate Hqrs. offices. The forms are also available in the market sold by private
publishers.
5.3. Can the Department ask for more information than what assessee is submitting to it in the
Form ST-1 and ST-3?
Yes. If it is felt necessary, the Department can ask for additional information/ documents for scrutiny, as
per Rule 6(6) of the STR, 1994 and Sec. 14 of the Central Excise Act, 1944 which is made applicable to
Service Tax matters as per Sec. 83 of the Finance Act, 1994.
5.4. Whether issue of Invoice/Bill/Challan is mandatory? When should the same be issued?
Issue of Invoice/Bill/Challan by a Service Tax assessee is mandatory as per Rule 4A of the STR, 1994.
The same should be issued within 14 days from the date of completion of taxable service or receipt of
payment towards the service, whichever is earlier. However, if the service is provided continuously for
successive periods of time and the value of such taxable service is determined or payable periodically,
the Invoice/Bill/Challan shall be issued within 14 days from the last day of the said period (Proviso to
Rule 4A (1) of the STR 1994).
5.5. Is there any prescribed format for the Invoice/Bill?
There is no prescribed format for issue of Invoice. However, the invoice/bill/challan should contain the
following information (Rule 4A of the STR, 1994):
i. Serial number.
ii. Name, address and registration no. of the service provider.
iii. Name and address of the service receiver.
iv. Description, classification and value of taxable service being rendered.
v. The amount of Service Tax payable (Service Tax and Education cess should be shown
separately)
Note: If the service provider is a Banking company, the details at Sl. No (i) and (iii) are not necessary.
In respect of the taxable services relating to the transport of goods by road, provided by the Goods
Transport Agency, the service provider should issue a consignment note containing the following
information (Rule 4B of the STR, 1994): -
i. Serial Number
ii. Name of the consignor and consignee
iii. Registration no. of the vehicle
iv. Details of the goods transported
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v. Details of the place of origin & destination
vi. Person liable for payment of Service Tax (consignor /consignee / GTA)
5.6. Is the amount of Service Tax charged from the client compulsorily to be indicated
separately in the Bills / Invoices / Challans raised on him?
Yes. It is mandatory to separately indicate the amount of Service Tax charged in the
Bills/Invoices/Challans raised on the clients. as per Section 12A of the Central Excise Act, 1944 which is
made applicable to Service Tax, under Sec.83 of the Finance Act, 1994. Such mention of the Service
Tax amount in the Invoice / Bill / Challans, would also facilitate the service receiver to avail the CENVAT
credit of the Service Tax paid on the input services.
5.7. What is the preservation period for service tax records and documents?
All records and documents concerning any taxable service, CENVAT, transactions etc. must be
preserved for a minimum period of 5 preceding financial years.
6. Refunds
6.1. Can any adjustment of tax liability be made by an assessee on his own, in cases when
Service Tax has been paid in excess?
i. Yes. Where an assessee has paid to the credit of the Government in respect of a taxable
service, which is not so provided by him, either wholly or partially for any reason, the
assessee may adjust the excess Service Tax so paid by him (calculated on a pro-rata
basis) against his Service Tax liability for the subsequent period, if the assessee has
refunded the value of taxable service and the Service Tax thereon to the person from
whom it was received (Rule 6(3) of the STR, 1994).
ii. Further, assesses having centralised registration who paid excess amount of Service Tax,
on account of non-receipt of details regarding the receipt of gross amount for the services
at his other premises or offices, may adjust such excess amount against the Service Tax
liability for the subsequent period and furnish the details of such adjustment to the
Jurisdictional Superintendent of Central Excise/ Service Tax within 15 days from the date
of such adjustment (Rule 6(4A) of the STR, 1994).
iii. In all other cases of excess payment, refund claims have to be filed with the Department.
The refund claims would be dealt as per the provisions of Section 11B of the Central
Excise Act, 1944, which is made applicable to Service Tax under Section 83 of the
Finance Act 1994.
iv. It is important to note that any amount of Service Tax paid in excess of the actual liability,
is refundable, only if it is proved that the claimant of refund had already refunded such
amount to the person from whom it was received or had not collected at all (Section 11 B
of the Central Excise Act, 1944 which is applicable to Service Tax matters under Section
83 of the Act).
6.2. Is the Service Tax payable by the assessee even in cases where his clients [recipient of
service] do not pay for the service(s) rendered or when the client pays only a part of the bill
raised in this regard?
Service Tax is required to be paid at the rate in force (at present 12.36%) only on the value/amount of
taxable service received in a particular month or quarter as the case may be, and not on the gross
amount billed to the client.
6.3. What is the procedure for claiming refund?
i. Application in the prescribed form (Form - R) is to be filed in triplicate with the jurisdictional
Asst./Deputy Commissioner of Central Excise/Service Tax.
19
ii. The application should be filed within one year from the relevant date as prescribed in Section
11B of the Central Excise Act, 1944 which has been made applicable to Service Tax refund
matters also.
iii. Application should be accompanied by documentary evidence to the effect that the amount
claimed as refund is the amount actually paid by him in excess of the Service Tax due and the
incidence of such tax claimed as refund has not been passed on to any other person.
6.4. What is relevant date for calculation of limitation period in respect of filing refund claims relating
to Service Tax?
The “relevant date” for the purpose of refund as per Section 11B of the Central Excise Act, 1944 which is
applicable to Service Tax also, is the date of payment of Service Tax. Thus, the limitation period of one
year is to be calculated from the date of payment of the Service Tax.
6.5. How does one work out the Service Tax liability and pay the same to the Government, in
case the customer or a client pays only the value of the service amount, but not the Service Tax
amount mentioned in the bill?
Service Tax is payable on amount realized. In given situation, the amount so realized from the client
would be treated as gross amount inclusive of Service Tax and accordingly the value of taxable service
and the Service Tax liability are worked out as follows: For example :
Value of taxable service (AV) = Rs. 1000
Amount Billed = Rs. 1000 + Service Tax Rs. 123.60 = Rs. 1123.60
Amount paid = Rs. 1000. Treat Rs. 1000 as gross amount inclusive of service tax.
In case the gross amount, including service tax, received is, say, Rs 1000. In such cases
the service tax liability may be arrived at by reverse calculation in the following manner.
1000
AV = ---------------- X 100 = Rs. 889.996 (Rs. 890)
112.36
Amount of Service Tax + Education Cess Payable = Rs. 110
Note: If the recipient of service pays full billed amount later, the differential service tax must be
paid forthwith.
7. Exemptions
7.1. What are the exemptions available for small service providers?
Service Tax is fully exempted in respect of the taxable services of aggregate value not exceeding eight
lakh rupees in any financial year.
The above mentioned exemption based on the turnover is not available to the persons who are liable to
pay Service Tax but are not the service providers. For example: (1) The recipient of services from an
overseas service provider who has no registered office in India (2) A company incurring the
Transportation charges for availing the services from Goods Transport Agencies, for transportation of
goods by Road.
This exemption was introduced with effect from 01.04.2005. (Notifn.No.6/2005-ST dated 01.03.2005).
20
7.2. What does ‘aggregate value not exceeding eight lakh rupees’ mean?
“Aggregate value not exceeding eight lakhs rupees” means the sum total of first consecutive payments
received during a financial year towards the gross amount, as prescribed under section 67 of the said
Finance Act, charged by the service provider towards taxable services till the aggregate amount of such
payments is equal to eight lakhs rupees but does not include payments received towards such gross
amount which are exempt from whole of service tax leviable thereon under section 66 of the said Finance
Act under any other notification.
7.3. What are the conditions for availment of the exemption from Service Tax by the small
scale service providers?
Some of the important conditions for availment of the exemption are as follows:
· If the aggregate value of taxable services rendered by the service provider from one or more
premises exceeds rupees eight lakhs in the preceding financial year, the service provider is
not eligible for the exemption for the current year.
· The exemption shall apply to the aggregate value of all taxable services and from all
premises and not separately for each premise or each service.
· The benefit of the exemption shall not apply to taxable services rendered by a person under
a brand name or trade name whether registered or not, of another person.
· The exemption shall not apply to persons who are other than the service providers, but liable
to pay Service Tax under Sec.68 (2) of the Act.
· The provider of the taxable service shall avail the CENVAT credit only on such inputs or
input services received, on or after the date on which the service provider starts paying
Service Tax, and used for the provision of taxable services for which Service Tax is payable.
· CENVAT Credit of Service Tax paid on any input services, under Rule (3) or Rule (13) of the
CENVAT Credit Rules 2004, used for providing the services under the above exemption, is
not admissible for persons availing the above exemption.
· CENVAT Credit under Rule (3) of the said Rules, is not admissible on the capital goods
which are received in the premises of the service provider during the exemption period.
· An amount equivalent to the CENVAT Credit taken, if any, in respect of the inputs lying in
stock or in process as on the date on which the provider of taxable service starts availing the
exemption should be paid; the balance credit amount, if any, shall lapse.
7.4. Is the exemption for small scale service providers compulsory?
Service Tax assessees have the option not to avail the above exemption and pay Service Tax on the
taxable services. However, such option once exercised in a financial year shall not be withdrawn
during the remaining part of such financial year.
7.5. Are there any other General exemptions?
The following general exemptions from payment of whole of the amount of Service Tax are available
for the Service Providers:
· Services provided to the United Nations or International Organisations (Notification
No.16/2002-ST dated 02.08.2002).
· Services provided to a developer of Special Economic Zone or a unit of Special Economic
Zone (Notifn. No.04/2004-ST dated 31.03.2004).
· The value of the goods and materials sold by the service provider to the recipient of the
service is exempted from payment of the Service Tax, if there is a documentary proof
specifically indicating the value of the goods and materials and , -
o no credit of duty paid on such goods and material sold, has been taken under the
provisions of CENVAT Credit rules, OR
o where such credit has been taken by the service provider on such goods and materials,
but such service provider has paid the amount equal to such credit availed before the
sale of such good and materials. (Notifn.12/2003-ST dated 20.06.2003).
· Exemptions to Diplomatic Missions for official use of taxable services and also to the
officers and their families of a Diplomatic Mission for personal use of taxable services-Refer
21
Notification Nos. 33/2007-ST and 34/2007-ST, both dated 23.5.2007-See Question No. 1.13,
1.14 and 1.15, ante.
· Spefied taxable services, namely, port service, other port service, goods transport service and
containerised transport service, received by an exporter and used for export of goods (Notifn.
40/2007-ST dated 17.9.2007). Under this notifcation, the service tax paid by an exporter on
these services is refunded to the exporter on complinace of conditions mentioned in the
notification.
7.6. Is there any exemption from payment of Service Tax if the receiver/provider of the
service is the Central/State Government organization and Public Sector Undertakings?
· No. There is no such exemption. All service providers, including the Central/State
Government Organisations and the Public sector undertakings rendering the specified
taxable service, are liable to pay Service Tax.
· If a Government Department (sovereign)/public authorities performs any mandatory or
statutory function under the provisions of any law and collect any fees, such activity shall be
treated as activity purely in public interest and will not be taxable.
· If such authority performs a service, which is not in the nature of statutory activity, for a
consideration, the same shall be taxable.
· However, the taxable services provided by a Banking company or a financial institution
including a non banking financial company, or any other body corporate or any other person,
to the Government of India or the Government of a State, in relation to collection of any
duties or taxes levied by the Government of India or the Government of a State, are
exempted from the payment of Service Tax. (Notifn.No.13/2004-ST dated 10.09.2004).
8. Penal Provisions
8.1. What are the penal provisions for various contraventions of the Service Tax Law?
The Penal provisions for various contraventions of the Service Tax Law are as follows:-
i. Non registration or delayed registration: An amount Rs. 1000/- could be imposed as penalty
under sec 77 of the Act.
ii. Non payment or delayed payment of service tax - A mandatory penalty, not less than Rs.200/ -
per day or @2% of such tax per month, whichever is higher, shall be imposed by the
adjudicating authority. However, the penalty amount payable shall not exceed the amount of
service tax payable.
iii. Non-filing / delayed filing of returns: A mandatory penalty has been prescribed under Rule 7C
of the Service Tax Rules, 1994, as well as an amount not exceeding One Thousand Rupees
could be imposed as penalty under sec 77 of the Act.
iv. Contravention of any of the provisions of the Act or the Rules made thereunder for which no
provisions for penalty are available: An amount not exceeding Rs.1000/- is liable to be imposed
as penalty under Sec.77 of the Act.
v. Suppression of the value of taxable services: Penalty to an extent ranging from 100% to 200%
of the Service Tax which was not levied or paid or erroneously refunded, can be imposed on
any person, if such short levy or short payment or erroneous refund is by reason of fraud
collusion, willful mis-statement, suppression of facts; or contravention of the Act or the rules
made thereunder with an intent to evade payment of Service Tax. Such liability towards penalty
would be in addition to the Service Tax amount evaded or erroneously refunded and the
interest thereon (Section 78 of the Act).
vi. Reduced Penalty in respect of Sl. no. (v): If the Service Tax amount as determined by the
competent authority is paid within 30 days from the date of communication of the order, along
with interest, the amount of penalty liable to be paid shall only be 25% of the Service Tax
amount so determined. The benefit of reduced penalty equivalent to 25% of the said Service
Tax is available only if such lesser penalty amount is also paid within the aforesaid period (First
and second proviso to Section 78).
8.2. Is there any provision to waive the penalty under Service Tax law?
The penal provisions under Service Tax are provided under Sections 76, 77 and 78 of Finance Act,
1994. Although the penalty is liable to be imposed for the circumstances covered under the said
23
provisions, the Section 80 of the Finance Act, 1994, provides provisions not to impose penalty, for any
failure referred to in the said provisions, if the Service Tax assessee proves that there was sufficient
cause for such failure. Lack of funds or time is not construed as ‘sufficient cause’.
8.3. Why show cause notices are issued by the Department?
When any amount is demanded as service tax or other dues from any person under the Finance Act,
1994 and rules made thereunder and/or any person is liable to penalty under the said Act/Rules,
notices are issued in the interest of natural justice to enable such person to understand the charges
and defend his case before an adjudicating officer.
8.4. Can show cause notice be waived?
Where any service tax has not been levied or paid or has been short-levied or short-paid or
erroneously refunded, the person chargeable with the service tax, or the person to whom such tax
refund has erroneously been made, may pay the amount of such service tax on the basis of his own
ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of
notice on him and inform the Central Excise Officer of such payment in writing. In such a case show
cause notice will not be issued.
9. Adjudication and determination of tax
9.1. What is meant by adjudication?
i. When show cause notices are issued under provisions of the Finance Act, 1994 charging
any person for contravention of any provisions of the said Act and rules and/or notifications
issued thereunder and penal action is proposed the competent officers of the Department
adjudge the case and issue orders. This process is called adjudication.
ii. Often notices are issued under section 73 of the Finance Act, 1994 for determination of tax,
and the matter is decided by a competent officer. This is also referred to adjudication in
common parlance.
9.2. Who are competent officers for adjudication?
i. The Central Board of Excise and Customs has issued notification no. 30/2005-ST dated 10th
August, 2005 specifying power of adjudication of cases under section 83A of the Finance
Act, 1994 which is as follows:
Sl.
No.
Central Excise Officer Amount of service tax or CENVAT
credit specified in a notice for the
purpose of adjudication under
section 83A
(2) (3)
1. Assistant Commissioner of Central
Excise or Deputy Commissioner of
Central Excise
Not exceeding Rs. 5 lakhs
2. Joint Commissioner of Central
Excise
Above Rs. 5 lakhs but not
exceeding Rs. 20 lakhs
3. Additional Commissioner of
Central Excise
Above Rs. 20 lakhs but not
exceeding Rs. 50 lakhs
4. Commissioner of Central Excise Without limit.
ii. The monetary limits for the purpose of adjudication [determination of tax] under section
73 are as specified in the Table below:
24
Sl.
No.
Central Excise Officer Amount of service tax or CENVAT
credit specified in a notice for the
purpose of adjudication
(2) (3)
1. Assistant Commissioner of Central
Excise or Deputy Commissioner of
Central Excise
Not exceeding Rs. 5 lakhs
2. Joint Commissioner of Central
Excise
Above Rs. 5 lakhs but not
exceeding Rs. 20 lakhs
3. Additional Commissioner of
Central Excise
Above Rs. 20 lakhs but not
exceeding Rs. 50 lakhs
4. Commissioner of Central Excise Without limit.
9.3. Is the presence of a Chartered Accountant or lawyer necessary for adjudication?
No. The noticees can defend their case themselves. They may engage any person, duly authorised to
defend their case before an adjudicating officer.
10. Appellate Remedies
10.1. Who should be approached when an assessee is aggrieved by an order/decision of the
Adjudicating authority subordinate to the Commissioner of Central Excise in respect of Service
Tax? What is the procedure for filing the Appeal?
· An assessee aggrieved by such order / decision may file an Appeal to the Commissioner
(Appeals) in Form ST-4, in duplicate.
· A copy of the order / decision appealed against should be enclosed.
· The Appeal should be filed within 3 months from the date of receipt of the order / decision.
· There is no fee for filing an Appeal before the Commissioner of Central Excise (Appeals)
(Section 85 of the Act and Rule 8 of the STR, 1994).
10.2. Can the time limit of three months for filing the appeal to the Commissioner (Appeals) be
extended? If yes, under what circumstances?
Yes. If the Commissioner (Appeals) is satisfied that the appellant was prevented by sufficient cause
from presenting the Appeal within the statutory period of three months, he may allow the Appeal to be
presented within a further period of three months. The law does not provide for further extension of
time (Proviso to Section 85(3) of the Act).
10.3. Can an Appeal be filed against the order / decision of the Commissioner of Central Excise
or Commissioner (Appeals)? If so, what is the procedure for that?
Yes. The procedure is as follows:-
· The Appeal against the order of the Commissioner of Central Excise or Commissioner
(Appeals) can be filed before the Customs, Excise and Service Tax Appellate Tibunal (In
short, CESTAT). The Appeal should be filed within three months of the date of receipt of the
order sought to be appealed against.
· It should be filed in the prescribed Form (ST-5) in quadruplicate.
· It should be accompanied by a certified copy of the order appealed against.
· The Appeal should be accompanied by the prescribed fee based on the amount of Service
Tax and interest demanded and penalty levied. Rs.1000/- if the amount involved is Rs.5
lakhs or less, Rs.5000/- if the amount involved is more than Rs.5 lakhs but not exceeding
Rs.50 lakhs and Rs.10,000/ - if the amount involved is more than Rs.50 lakhs. (Section 86 of
the Act and Rule 9 of the STR, 1994).
11. CENVAT Credit Scheme
25
11.1. What is CENVAT Credit Scheme with reference to Service Tax assessees?
The CENVAT credit Rules, 2004 which was introduced with effect from 10.9.2004 provides for
availment of the credit of the Service Tax / Central Excise duties paid on the input services / inputs /
capital goods. Such credit amount can be utilized towards payment of Service Tax by an assessee on
their output services.
In fact, such credit availed by a manufacturer can also be utilised for discharging their liability towards
Service Tax and / or Central Excise duties.
11.2. What are the duties / taxes that can be availed as credit?
Duties paid on the inputs, capital goods and the Service Tax paid on the ‘input’ services can be taken
as credit. Education Cess paid on the Excise duty and Service Tax can also be taken as credit.
However, the credit of Education Cess availed can be utilized only for payment of Education cess
relating to output service.
The interest and penalty amounts cannot be taken as credit.
11.3. What is meant by ‘input’, ‘input service’ and ‘capital goods’ for a service provider?
These terms have been defined in the CENVAT Credit Rules, 2004.
11.4. Is it compulsory that the inputs / capital goods are to be purchased only from the
manufacturers for the purpose of availment of credit?
No. The inputs/capital goods can be procured from the First stage and Second stage dealers also.
Those dealers should have registered themselves with the Central Excise Department. The invoices
issued by them should contain proper details about the payment of duty on those goods.
11.5. What are the documents prescribed for availment of the CENVAT Credit?
The documents on which CENVAT credit can be availed are as follows:-
(i) Invoice issued by the manufacturers and his depot/ consignment agents
(ii) Invoice issued by the Importer and his depot/consignment agents
(iii) First stage and Second stage dealer registered with the Central Excise Department
(iv) Bill of Entry
(v) Invoice/Bill/Challan issued by the provider of input Services
(vi) Invoice/Bill/Challan issued by the Input Service distributor.
(vii) Certificate issued by the Appraiser of Customs in respect of the goods imported through
Foreign Post Office.
(viii) A Challan evidencing payment of service tax by a person liable to pay service tax in the
service category of auxiliary insurance, goods transport, recipient of service from a
foreign country and sponsorship [Refer sub-clauses (iii), (iv), (v) and (vii) of rule 2(1)(d)
of STR, 1994].
11.6. Whether it is necessary to avail credit only after making payment against the bill /
invoice / challan in respect of input services?
Credit of Service Tax on the input services can be availed, only after making payment of the amount
indicated in the invoice / bill/challans. This is necessary because, the input service provider will be
paying the Service Tax to the Govt. only after he realizes the payment, as the payment of Service Tax
is only upon realization.
The above requirement is not applicable in respect of credit of duties paid on inputs and capital goods.
11.7. Who is an “Input Service Distributor”?
26
An office of the manufacturer or provider of output service who receives invoices for the procurement of
input services and issues invoices for the purpose of distributing the credit of Service Tax paid to such
manufacturer or provider of output service is an “Input Service Distributor”.
The credit of the tax amount so distributed to various places shall not exceed the total Service Tax
amount contained in the original invoice / bill.
11.8. What is the format of the invoice / bill / challan to be issued by the input service
distributor?
No specific format has been prescribed. However, the same should contain the following information :-
(i) Name, address and Registration No. of the service provider.
(ii) Sl. No and date.
(iii) Name and address of the input service distributor.
(iv) The name and address of the recipient to whom the Service Tax credit is distributed.
(v) The amount of credit being distributed.
11.9. Whether the input service distributors should get themselves registered with the
Department? Whether they have to file any returns with the Department?
Yes. They have to register themselves as per the provisions made under Service Tax (Registration of
Special Category of Persons) Rules, 2005. They have to file half yearly returns by the end of the month
following the half year.
11.10. What are the records to be maintained by the persons availing credit?
There is no specific format of records to be maintained. However, they have to maintain adequate
records showing the details such as receipt, disposal, consumption and inventory of inputs and capital
goods, the amount of credit taken and utilized etc.
11.11. What should be done, if an assessee is rendering both taxable services as well as
exempted services, but the inputs and input services are common?
i. Separate accounts are to be maintained for the receipt, consumption and inventory of input
and input service meant for providing taxable output service and for use in the exempted
services. Credit should be taken only on that quantity of input / input services which are
used for the service on which Service Tax is payable.
ii. If separate accounts are not maintained, the provider of output service shall utilize credit
only to extent of an amount not exceeding 20% of the amount of service tax payable on
taxable output service. For example, if Service Tax liability for a specific period is Rs. 1000/ -
and there is a credit of Rs. 500/- available with them, the credit can be utilized only to the
extent of Rs. 200/- and the balance Service Tax liability (i.e. Rs.1000-200=800/ -) has to be
paid in cash / cheque. The remaining credit can be carried forward and used for the
subsequent period in a similar manner.
iii. However, an option is available to general insurance service providers providing taxable as
well as exempted insurance schemes and do not maintain separate input / input services
credit accounts to utilise CENVAT credit proportionate to the inputs and input services used
in providing taxable services. The scheme is optional and is effective from 1st April, 2007.
Refer Rule 6(3) of CENVAT Credit Rules, 2004 for further details.
12. Export of Services and taxable service used in relation to export of goods
12.1. What is Export of Services? Whether export of services is exempted from Service Tax?
What constitute export of service is defined in the Export of Service Rules, 2005. The Export of taxable
services is exempted from Service Tax. (Export of Service Rules, 2005).
27
12.2. What constitutes export of services?
The Export of Services, Rules, 2005 specifies 3 categories of cross border transaction of services and
conditions that will be construed as export of services in cases of:
i. specified services which are provided in relation to immovable properties situated outside
India – [See list of services in Appendix-4]
ii. specified services which are provided partly outside India – [See list of services in
Appendix – 4]
iii. the remaining taxable services, barring a few exceptions, when provided in relation to
business or commerce, to a recipient located outside India, and when such services are
provided not in relation to business or commerce, it should be provided to a recipient
located outside India at the time of provision of such service. However, where such
recipient has commercial establishment or any office relating thereto, in India, such
taxable services provided shall be treated as export of service only when order for
provision of such service is made from any of his commercial establishment or office
located outside India. [See list of services in Appendix – 4]
iv.
Further condition to be met for a service to constitute export are –
i. such service is provided from India and used outside India; and
ii. payment for such service provided outside India is received by the service provider in
convertible foreign exchange.
Thus, each transaction has to be seen individually to ascertain if it constitutes export of services,
fulfilling the requisite parameters.
12.3. If export proceeds are received in Indian currency, will it be denied export benefit?
If export proceeds are received in Indian currency, no export benefits shall be available.
12.4. If a foreign national pays in convertible foreign currency for service received by him in
India, and he returns to foreign country, will it be treated as export?
If services are rendered in India, it shall not be treated as export, even if it is rendered to any foreign
national and he pays in convertible foreign currency.
12.5. What are the incentives for export of services?
i. Taxable services may be exported without payment of service tax, provided the conditions
specified in Export of Service Rules, 2005 are fulfilled.
ii. Where service tax has already been paid on export of services to countries (other than Nepal
and Bhutan), rebate/refund of such service tax, can be availed under notification no. 11/2005-
ST dated 19.4.2005;
iii. Where service tax has already been paid on the inputs and input services used in export
of services to countries (other than Nepal and Bhutan), rebate/refund of such excise duty on
inputs and service tax paid on input services can be availed under notification no. 12/2005-ST
dated 19.4.2005;
iv. Where taxable services are exported without payment of tax, but CENVAT Credit was
availed, the refund of accumulated CENVAT Credit (if cannot be fully used for payment of
service tax), may be claimed as refund under rule 5 of the CENVAT Credit Rules, 2004 read
with notification no. 11/2002-CE (N.T.) dated the 1st March, 2002, as amended.
12.6 Whether service tax paid on taxable services used in relation to export of goods is
refunded?
Service tax paid on the input services used in export of goods is refundable to exporter by way of
rebate/refund in terms of notification No. 41/2001-Central Excise (N.T.), dated the 26th June, 2001.
Further CENVAT Credit accumulated on such input services is also refundable under rule 5 of the
CENVAT Credit Rules, 2004, subject to the observance of procedure prescribed in notification No.
5/2006-CE (NT) dated the 14th March, 2006.
28
Further, in respect of following services, which are not in the nature of input service but are linked to
export of goods, refund of service tax paid on these services is admissible to exporter in terms of
notification No. 40/2007-ST, dated the 17th Sep 2007,-
(i) Port service ;
(ii) Other port service;
(iii) Goods transport by road service;
(iv) Transport in container by rail
12.7 Where can one file the rebate claims or refund of CENVAT Credit?
The rebate claims or refund of CENVAT Credit application has to be filed in the Central Excise or
Service Tax Division/Group where the assessee is registered.
13. Service Tax on receipt of services from outside [Import of services]
13.1. What is the statutory provision regarding taxing of services provided from outside India
and received in India?
Section 66A of the Finance Act, 1994, inserted with effect from 18.4.2006, provides that where any taxable service
is provided or to be provided by a person who has established a business or has a fixed establishment
from which the service is provided or to be provided or has his permanent address or usual place of
residence, in a country other than India, and is received by a person who has his place of business,
fixed establishment, permanent address or usual place of residence, in India, such service shall be
taxable service.
13.2. Is the recipient of service liable to pay tax for the services rendered from abroad?
The recipient of service shall be liable to pay tax if the provider of service do not have any established
business or a fixed establishment in India. However, a person carrying on a business through a branch
or agency in any country shall be treated as having a business establishment in that country (including
India).
13.3. Where provider of the service has his business establishments in more than one
country, which country should be treated as the country from which service is provided?
If the provider of the service (from outside India) has his business establishments in more than one
country, the country, where the establishment of the provider of service directly concerned with the
provision of service is located, shall be treated as the country from which the service is provided or to
be provided.
13.4. What will be ‘usual place of residence’ of a body corporate?
Usual place of residence, in relation to a body corporate, means the place where it is incorporated or
otherwise legally constituted.
13.5. What constitutes import of services?
The Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 specifies 3
categories of cross border transaction of services and conditions that will be construed as import of
services, namely, -
i. specified services which are provided in relation to immovable properties situated in India –
[See list of services in Appendix-4]
ii. specified services which are provided partly in India –
[ See list of services in Appendix -4]
iii. the remaining taxable services, barring a few exceptions, when provided in relation to business
or commerce, to a recipient located in India. [ See list of services in Appendix -4]
Thus, each transaction has to be seen individually to ascertain if it constitutes import of services,
fulfilling the requisite parameters.
13.6. Are individuals receiving service from outside India also liable to pay tax?
29
If the recipient of the service is an individual and such service received by him is otherwise than for the purpose
of use in any business or commerce, service tax will not be payable by him. If the services received are for the
purpose of use in any business or commerce, then service tax will be leviable.
14. Advance Ruling
14.1. What is meant by advance ruling?
Advance ruling means the determination, by the Authority, of a question of law or fact specified in the
application regarding the liability to pay duty/service tax in relation to an activity which is proposed to be
undertaken, by the applicant. Activity means service to be provided.
14.2. What is the scheme of advance rulings?
Authority for Advance Rulings for Excise and Customs is meant to provide binding ruling on important
issues so that intending investors will have a clear-cut indication of their duty/tax liability in advance.
Since advance rulings are not appealable under the Finance Act, 1994, it assures the applicant of the
finality of the tax liability and hence freedom from spending time, energy and money in legal battles
which mostly become long-drawn.
14.3. Who can apply for an advance ruling?
i. A non-resident setting up a joint venture in India in collaboration with a non-resident or a
resident; or
ii. A resident setting up a joint venture in India in collaboration with a non-resident; or
iii. A wholly owned subsidiary Indian company, of which the holding company is a foreign
company, which proposes to undertake any business activity in India;
iv. A joint venture in India,
v. A resident falling within any such class or category of persons, as the Central Government
may, by notification in the official Gazette, specify in this behalf, and which or who, as the case
may be, makes application for advance ruling under sub-section (1) of section 28H.
vi. A resident as an applicant who proposes to import any goods from the Republic of Singapore
under Comprehensive Economic Co-operation Agreement (CECA). –Refer Notification
No.69/2005 dated 29.07.2005
14.4. On which questions can an advance ruling be sought?
Advance rulings, concerning service tax matters, can be sought in respect of –
i. Classification of any service as a taxable service under Chapter V of the Finance Act, 1994;
ii. Principles to be adopted for the purposes of determination of value of taxable service under the
said Act;
iii. Determination of the liability to pay service tax on a taxable service under the said Act;
iv. Valuation of taxable services for charging Service Tax; and
v. Applicability of notifications issued under said Act.
14.5. Where is the Authority located and who can be contacted for information/guidance?
Office of the Authority for Advance Rulings (Central Excise, Customs & Service Tax), 4th Floor (Room
No. 445 to 465, 467 & 469), Hotel Samrat, Kautilya Marg, Chanakyapuri, New Delhi – 110 021, Phone
91-11-26876402/26876406, Fax No. 91-11-26876410, Email : aarcce@hub.nic.in,
Further information, including those relating to the procedure for filing application, fees and formats of
annexure, is available on Website: www.cbec.gov.in/cae/aar.htm
30
15. Where can the department be contacted?
Service tax offices
· In Ahmedabad, Bangalore, Chennai, Delhi, Kolkata & Mumbai there are exclusive
Service Tax Commissionerates which could be contacted at following
addresses/telephone No. and e-mail ids.
Ahmedabad
5th Floor,
Central Excise Bhavan,
Near Polytechnic, Ambavadi,
Ahmedabad-380015
(Ph: 079-26305087)
cexd2308@excise.nic.in
Delhi
17-B, I. P. Estate, IPEA House,
New Delh-110002
(Ph: 011-23378711)
st.delhi@gmail.com
Bangalore
16/1, S.P. Complex,
Lal Bagh Road,
Bangalore-560027
(Ph: 080-22245739)
adcstaxblr@eth.net
Chennai
MHU Complex, 692, Anna Sala,
Nandanam,
Chennai
(Ph. : 044-24330840-42)
chennaiservicetax@dataone.in
Kolkata
3rd Floor, Rajaji Chambers,
4 K.S. Roy Road,
Kolkota-700001
(Ph: 033-22428922)
Servicetax_kolkata@yahoo.com
Mumbai
5th Floor, New Central Excise Building,
115, M. K. Road, Churchgate,
Mumbai-400020
(Ph: 022-22060619)
commissioner@servicetaxmumbai.gov.in
In other places, we can be contacted at:
Ahmedabad ( Ahmedabad, Rajkot, Bhav Nagar)- ccahmdbd@excise.nic.in (079-26309079)
Bhopal (Madhya Pradesh and Chatishgarh) –cec2006@dataone.in,(0755-2765208) ;
Bhubneswar (Orissa)-ccbbsr@rediffmail.com (0674-2581135) ;
Chandigarh (Punjab, Himanchal and J & K)-ccchandi@msn.com (0172-2704180);
31
Chennai &Pondicherry ccchenai@excise.nic.in (044-28331010);
Kerala: cccochin@excise.nic.in (0484-2394100);
Coimbatore (Tamilnadu other than Chennai & Pondicherry)- ccocbe@vsnl.net (0422-2221981);
(Delhi) Delhi and Haryana: ccdelhi@excise.nic.in (011-23370852);
Hyderabad (Hyderabad& Secundrabad) -ccehyd@excise.nic.in (040-23232028);
Jaipur (Rajasthan)- cexjaipu@excise.nic.in (0141-2385463);
West Benagal-cckolkat@excise.nic.in (033-22306579),
Lucknow (Central and EasternUP)- ccolkwzone@yahoo.co.in (0522-2612606),
Mysore (Mysore, Belgaum, Mangalore)-ccmysore@rediffmail.com (0821-2476912);
Meerut (Western UP and Utrrankhand)- ccmeerut@excise.nic.in(0121-2769785);
Mumbai (Mumbai, Raigarh, Belapur)-ccozone2office@yahoo.com(022-24120598);
Nagpur (Aurangabad, Nagpur, Nasik)-cccexnag_ngp@sacharnet.in (0712-2565375);
Pune (Pune, , Kolhapur Goa)- ccexpune@pn3.vsnl.net.in(020-26051815),
Ranchi(Jharkhand) -cenexranchi@rediffmail.com(0651-2330022),
Shillong( North-Eastern States)-ccshillo@excise.nic.in(0364-2504178);
Vdodara (Vadodara, Daman, Surat, Valsad)-chiefcomgujrat@hotmail.com (0265-2331002),
Vizag (Andhra Pradesh other than Hyderabad & Secuderabad) -ccvizag@excise.nic.in (0891-2568837)
If your query remains unresolved, you may contact -
Directorate General of Service Tax- dgst@sify. Com (022-24102586/89) or
Commissioner (Service Tax), CBEC- servicetax.cbec@gmail.com (011-23092275)
32
Appendix- 1
Accounting Codes Sl. No.
Service Category
Date of
Introduction Tax
Collection
Other
Receipts
Deduct
Refunds
Education
Cess
1 Advertising 01.11.1996 00440013 00440016 00440017 00440298
2 Air Travel Agent 01.07.1997 00440032 00440033 00440034 00440298
3 Airport Services 10.09.2004 00440258 00440259 '00440260 00440298
4 Architect 16.10.1998 00440072 00440073 00440074 00440298
5 Asset management (by
other than Banking
company)
01.06.2007 00440418 00440419 00440420 00440421
6 ATM Operations,
Management or
Maintenance
01.05.2006 00440346 00440347 00440348 00440298
7 Auctioneers' service, other
than auction of property
under directions or orders of
a count of or auction by
Central Govt.
01.05.2006 00440370 00440371 00440372 00440298
8 Authorised Service Station 16.07.2001 00440181 00440182 00440183 00440298
9 Auxiliary to General
Insurance / Life Insurance
16.07.2001 /
16.08.2002
00440169 00440170 00440171 00440298
10 Banking & Other Financial
Services
16.07.2001 00440173 00440174 00440175 00440298
11 Beauty Parlour 16.08.2002 00440209 00440210 00440211 00440298
12 Broadcasting 16.07.2001 00440165 00440166 00440167 00440298
13 Business Auxiliary Service 01.07.2003 00440225 00440226 00440227 00440298
14 Business Exhibition Service 10.09.2004 00440254 00440255 00440256 00440298
15 Business Support Service 01.05.2006 00440366 00440367 00440368 00440298
16 Cable Operator 16.08.2002 00440217 00440218 00440219 00440298
17 Cargo Handling 16.08.2002 00440189 00440190 00440191 00440298
18 Chartered Accountant 16.10.1998 00440092 00440093 00440094 00440298
19 Cleaning Service 16.06.2005 00440318 00440319 00440320 00440298
20 Clearing & Forwarding
Agent
16.07.2001 00440045 00440046 00440047 00440298
21 Clubs and Associations 16.06.2005 00440322 00440323 00440324 00440298
22 Commercial or Industrial
Construction
10.09.2004 00440290 00440291 00440292 00440298
23 Commercial Training or
Coaching
01.07.2003 00440229 00440230 00440231 00440298
24 Company Secretary 16.10.1998 00440100 00440101 00440102 00440298
25 Construction of Complex 16.06.2005 00440334 00440335 00440336 00440298
26 Consulting Engineer 07.07.1997 00440057 00440058 00440059 00440298
27 Convention Centre 16.07.2001 00440133 00440134 00440135 00440298
28 Cost Accountant 16.10.1998 00440096 00440097 00440098 00440298
29 Courier 01.11.1996 00440014 00440018 00440019 00440298
33
30 Credit Card, Debit Card,
Charge Card or other
payment card related
services
01.05.2006 00440394 00440395 00440396 00440298
31 Credit Rating Agency 16.10.1998 00440088 00440089 00440090 00440298
32 Custom House Agent 15.06.1997 00440026 00440027 00440028 00440298
33 Design Services
01.06.2007 00440422 00440423 00440424 00440298
34 Development & Supply of
Content
01.06.2007 00440414 00440415 00440416 00440298
35 Dredging 16.06.2005 00440310 00440311 00440312 00440298
36 Dry Cleaning 16.08.2002 00440221 00440222 00440223 00440298
37 Erection, Commissioning or
Installation
01.07.2003 00440233 00440234 00440235 00440298
38 Event Management 16.08.2002 00440197 00440198 00440199 00440298
39 Fashion Designer 16.08.2002 00440213 00440214 00440215 00440298
40 Forward Contract Services 10.09.2004 00440282 00440283 00440284 00440298
41 Franchise Service 01.07.2003 00440237 00440238 00440239 00440298
42 General Insurance 01.07.1994 00440005 00440006 00440120 00440298
43 Health Club & Fitness
Centre
16.08.2002 00440205 00440206 00440207 00440298
44 Intellectual Property Service 10.09.2004 00440278 00440279 00440280 00440298
45 Interior Decorator 16.10.1998 00440076 00440077 00440078 00440298
46 Internet Café 01.07.2003 00440241 00440242 00440243 00440298
47 Internet Telephony Service 01.05.2006 00440382 00440383 00440384 00440298
48 Life Insurance 10.09.2004 00440185 00440186 00440187 00440298
49 Mailing List Compilation and
Mailing
16.06.2005 00440330 00440331 00440332 00440298
50 Management Consultant 01.07.1997 00440116 00440117 00440118 00440298
51 Management, Maintenance
or Repair Service
01.07.2003 00440245 00440246 00440247 00440298
52 Mandap Keeper 16.10.1998 00440035 00440036 00440037 00440298
53 Manpower Recruitment or
Supply Agency
07.07.1997 00440060 00440061 00440062 00440298
54 Market Research Agency 16.10.1998 00440112 00440113 00440114 00440298
55 Mining of Mineral, Oil or Gas 01.06.2007 00440402 00440403 00440404 00440298
56 On-line Information &
Database Access or
Retrieval Service
16.07.2001 00440153 00440154 00440155 00440298
57 Opinion Poll Service 10.19.2004 00440274 00440275 00440276 00440298
58 Outdoor Caterer 10.09.2004 00440051 00440052 00440053 00440298
59 Packaging Service 16.06.2005 00440326 00440327 00440328 00440298
61 Pandal or Shamiana
Services
10.09.2004 00440054 00440055 00440056 00440298
61 Photography 16.07.2001 00440129 00440130 00440131 00440298
62 Port Service 16.07.2001 00440177 00440178 00440179 00440298
63 Public Relations Service 01.05.2006 00440374 00440375 00440376 00440298
64 Rail Travel Agent 16.08.2002 00440201 00440202 00440203 00440298
65 Real Estate Agent /
Consultant
16.10.1998 00440104 00440105 00440106 00440298
66 Recovery Agent 01.05.2006 00440350 00440351 00440352 00440298
67 Registrar to an Issue 01.05.2006 00440338 00440339 00440340 00440298
68 Rent - a - Cab Operator 16.07.1997 00440048 00440049 00440050 00440298
69 Renting of Immovable
Property
01.06.2007 00440406 00440407 00440408 00440298
70 Sale of space or time for
Advertisement, other than
print media
01.05.2006 00440354 00440355 00440356 00440298
34
71 Scientific or Technical
Consultancy
16.07.2001 00440125 00440126 00440127 00440298
72 Security Agency 16.10.1998 00440108 00440109 00440110 00440298
73 Share Transfer Agent 01.05.2006 00440342 00440343 00440344 00440298
74 Ship Management service 01.05.2006 00440378 00440379 00440380 00440298
75 Site Preparation 16.06.2005 00440306 00440307 00440308 00440298
76 Sound Recording 16.07.2001 00440161 00440162 00440163 00440298
77 Sponsorship service
provided to any body
corporate or firm, other than
sponsorship of sports event
01.05.2006 00440358 00440359 00440360 00440298
78 Steamer Agent 15.06.1997 00440029 00440030 00440031 00440298
79 Stock Broker 01.07.1994 00440008 00440009 00440121 00440298
80 Storage & Warehousing 16.08.2002 00440193 00440194 00440195 00440298
81 Survey & Exploration of
Minerals
10.09.2004 00440270 00440271 00440272 00440298
82 Survey and Map Making 16.06.2005 00440314 00440315 00440316 00440298
83 T.V. & radio Programme
Production Services
10.09.2004 00440286 00440287 00440288 00440298
84 Technical Testing &
Analysis Agency / Technical
Inspection & Certification
Agency
01.07.2003 00440249 00440250 00440251 00440298
85 Telecommunication Service 1.6.07 00440398 00440399 00440400 00440298
86 Tour Operator 01.09.1997 00440063 00440064 00440065 00440298
87 Transport of goods by Air 10.09.2004 00440266 00440267 00440268 00440298
88 Transport of goods by Road 01.01.2005 00440262 00440263 00440264 00440298
89 Transport of goods in
containers by rail by any
person other than
Government railway
01.05.2006 00440390 00440391 00440392 00440298
90 Transport of goods other
than water, through Pipeline
or other conduit
16.06.2005 00440302 00440303 00440304 00440298
91 Transport of passengers
embarking on international
journey by air, other than
economy class passengers
01.05.2006 00440362 00440363 00440364 00440298
92 Transport of persons by
cruise ship
01.05.2006 00440386 00440387 00440388 00440298
93 Travel Agent other than Air
& Rail Travel
10.09.2004 00440294 00440295 00440296 00440298
94 Underwriter 16.10.1998 00440084 00440085 00440086 00440298
95 Video Tape Production 16.07.2001 00440157 00440158 00440159 00440298
96 Works Contract 01.06.2007 00440410 00440411 0440412 00440298
Note: There are 100 services but accounting codes of a few services have been merged.
The sub-head “Other Receipts” is meant for interest, penalty leviable on delayed payment of service tax
The sub-head “Deduct Refunds” is not to be used by the assessees. It is meant for the Central Excise
Department while allowing refund.
Appendix-2
Abatements
Sl.No Sub clause Description of taxable service Conditio ns Percentage
35
of section
65(105)
amount of value
on which ST is
required to be
paid
1
(m)
(1) The use of mandap, including
the facilities provided to the client
in relation to such use and also
for the catering charges.
(2) Taxable service provided by a
hotel as mandap keeper in such
cases where services provided
include catering services, that is,
supply of food alongwith any
service in relation to use of a
mandap.
This exemption shall apply only
in such cases where the mandap
keeper also provides catering
services, that is, supply of food
and the invoice, bill or challan
issued indicates that it is
inclusive of the charges for
catering service.
The invoice, bill or challan
issued indicates that it is
inclusive of charges for catering
services.
Explanation.- The expression
“hotel” means a place that
provides boarding and lodging
facilities to public on
commercial basis.
60
60
23
(n) (i) Services provided or to be
provided to any person, by a tour
operator in relation to a package
tour.
Explanation.- The expression
“package tour” means a tour
wherein transportation,
accommodation for stay, food,
tourist guide, entry to monuments
and other similar services in
relation to tour are provided by
the tour operator as part of the
package tour to the person
undertaking the tour.
(ii) Services provided or to be
provided to any person, by a tour
operator in relation to a tour, if the
tour operator is providing services
solely of arranging or booking
accommodation for any person in
relation to a tour.
(iii) Services, other than
services specified in (i) and (ii)
above, provided or to be provided
to any person, by a tour operator
in relation to a tour.
The bill issued for this purpose
indicates that it is inclusive of
charges for such a tour.
(a) The invoice, bill or challan
issued indicates that it is
towards charges for such
accommodation, and
(b) this exemption shall not
apply in such cases where the
invoice, bill or challan issued by
the tour operator, in relation to
a tour, only includes the service
charges for arranging or
booking accommodation for any
person and does not include
the cost of such ccommodation.
The bill issued indicates that
the amount charged in the bill is
the gross amount charged for
such a tour.
25
10
40
36
3 (o) Renting of a cab --- 40
4 (zc) Holding of a convention, where
service provided includes catering
service.
The gross amount charged from
the client is inclusive of the
charges for the catering service.
60
4A2 (zzb) Business auxiliary service in
relation to production or
processing of parts and
accessories used in the
manufacture of cycles, cycle
rickshaws and hand-operated
sewing machines, for, or on
behalf of, the client.
The gross amount charged
from the client is inclusive of the
cost of inputs and input
services, whether or not
supplied by the client
70
5 (zzd) Erection, commissioning or
installation, under a contract for
supplying a plant, machinery or
equipment and erection,
commissioning or installation of
such plant, machinery or
equipment.
This exemption is optional to
the commissioning and
installation agency.
Explanation.- The gross amount
charged from the customer shall
include the value of the plant,
machinery, equipment, parts
and any other material sold by
the commissioning and
installation agency, during the
course of providing erection,
commissioning or installation
service
33
6 (zzp) Transport of goods by road in a
goods carriage.
--- 25
7 (zzq) Commercial or Industrial
Construction
This exemption shall not apply
in such cases where the taxable
services provided are only
completion and finishing
services in relation to building
or civil structure, referred to in
sub-clause (c) of clause (25b) of
section 65 of the Finance Act.
Explanation.- The gross amount
charged shall include the value
of goods and materials supplied
or provided or used by the
provider of the construction
service for providing such
service.
33
8 (zzt) Catering This exemption shall apply in
cases where,-
(i) the outdoor caterer also
provides food; and
(ii) the invoice, bill or challan
issued indicates that it is
inclusive of charges for supply
of food.
50
9 (zzw) Services in relation to pandal or
shamiana in any manner,
including servic es rendered as a
This exemption shall apply only
in cases where,-
(i) the pandal or shamiana
70
37
caterer. contractor also provides
catering services, that is, supply
of food; and
(ii) the invoice, bill or challan
issued indicates that it is
inclusive of charges for catering
service.
10 (zzzh) Construction of Complex This exemption shall not apply
in cases where the taxable
services provided are only
completion and finishing
services in relation to
residential complex, referred to
in sub-clause (b) of clause (30a)
of section 65 of the Finance
Act.
Explanation.- The gross amount
charged shall include the value
of goods and materials supplied
or provided or used for
providing the taxable service by
the service provider.
33
111 (zzzp) Transport of goods in containers
by rail
--- 30
Provided that this notification shall not apply in cases where, -
(i) the CENVAT credit of duty on inputs or capital goods or the CENVAT credit of service tax on input
services, used for providing such taxable service, has been
taken under the provisions of the CENVAT Credit Rules, 2004; or (ii) the service provide r has availed the
benefit under the notification of the
Government of India in the Ministry of Finance (Department of Revenue), No.12/2003-Service Tax, dated the
20th June, 2003[G.S.R. 503 (E), dated the 20th
June, 2003].
Explanation.- For the purposes of this notification, the expression “food” means a substantial and satisfying
meal and the expression “catering service” shall be construed accordingly.
1 Inserted by Notification No.20/2006 dated 25.04.2006 2 Inserted by Notification No.23/2006 dated 02.06.2006 3
Substituted by Notification No.38/2007 dated 23.08.2007
Appendix - 3
Sections of the Central Excise Act, 1944 applicable to Service Tax
38
Sl.No. Section of Central Excise
Act, 1944
Description
1 9C Presumption of culpable mental state
2 9D Relevancy of statements under certain
circumstances
3 11B Claim for refund of duty
4 11BB Interest on delayed refunds
5 11C Power not to recover duty of excise not levied or
short levied as a result of general practice
6 12 Application of the provisions of Act No.52 of
1962 to Central Excise Duties
7 12A Price of goods to indicate the amount of duty paid
thereon
8 12B Presumption that the incidence of duty has been
passed on to the buyer
9 12C Consumer Welfare Fund
10 12D Utilisation of the Fund
11 12E Powers of Central Excise Officers
12 14 Power to summon persons to give evidence and
produce documents in inquiries under this Act
13 14AA Special audit in cases where credit of duty availed
or utilized is not within the normal limits, etc.
14 15 Officers required to assist Central Excise Officers
15 33A Adjudication procedure
16 35F Deposit, pending appeal, of duty demanded or
penalty levied
17 35G Appeal to High Court
18 35H Application to High Court
19 35I Power to High Court or Supreme Court to require
statement to be amended
20 35J Case before High Court to be heard by not less
than two judges
21 35K Decision of High Court or Supreme Court on the
case stated
22 35L Appeal to the Supreme Court
23 35M Hearing before Supreme Court
24 35N Sums due to be paid notwithstanding reference,
etc.
25 35O Exclusion of time taken for copy
26 35Q Appearance by authorized representative
27 36 Definitions
28 36A Presumption as to documents in certain cases
29 36B Admissibility of micro films, facsimile copies of
documents and computer printouts as documents
and as evidence
39
30 37A Delegation of powers
31 37B Instructions to Central Excise Officers
32 37C Service of decisions, orders, summons, etc.
33 37D Rounding off of duty, etc.
34 38A Effect of amendments, etc. of rules, notifications
or orders
35 40 Protection of action taken under the Act
40
Appendix - 4
Export of Service Rules, 2005 &
Taxation of Services (Provided from Outside India and Received in India) Rules, 2006
List of Service Categories
Rule 3 (i) Category - I
Sr.No. Clause Service Category
1 d General Insurance
2 p Architect
3 q Interior Decorator
4 v Real Estate Agent
5 zzq Commercial or Industrial Construction
6 zzza Site Formation
7 zzzb Dredging
8 zzzc Survey and Map making
9 zzzh Construction of Complex
10 zzzr Auctioneers
11 zzzy Mining of Minerals, Oil or Gas
12 zzzz Renting of Immovable Property
13 zzzza Works Contract
Rule 3(ii) Category - II
Sr.No. Clause Service Category
1 a Stock Broker
2 f Courier
3 h Custom House Agent
4 i Steamer Agent
5 j Clearing & Forwarding
6 l Air Travel Agent
7 m Mandap Keeper
8 n Tour Operator
9 o Rent-a-cab
10 s Chartered Accountant
11 t Cost Accountant
12 u Company Secretary
13 w Security Agency
14 x Credit Rating Agency
15 y Market Research Agency
16 z Underwriter
17 zb Photography
18 zc Convention Centre
19 zi Video Production
20 zj Sound Recording
21 zn Port Service
41
22 zo Authorised Service Station
23 zq Beauty Parlour
24 zr Cargo Handling
25 zt Dry Cleaner
26 zu Event Manager
27 zv Fashion Designer
28 zw Health Club & Fitness Centre
29 zza Storage & Warehousing
30 zzc Commercial Training or Coaching
31 zzd Erection Commissioning & Installation
32 zzf Internet Café
33 zzg Management, Maintenance or Repair
34 zzh Technical testing & Analysis
35 zzi Technical Inspection & Certification
36 zzl Other Port
37 zzm Airport Authority
38 zzn Transport of goods by aircraft
39 zzo Business Exhibition
40 zzp Goods Transport Agency
41 zzs Opinion Poll
42 zzt Outdoor Caterer
43 zzv Survey & Exploration
44 zzw Pandal & Shamiana
45 zzx Travel Agent
46 zzy Forward Contract
47 zzzd Cleaning
48 zzze Club or Association
49 zzzf Packaging
50 zzzp Transport of goods in containers by Rail
Rule 3(iii) (a)
Sr.No. Clause Service Category
1 zzzo Passenger embarking on international flight
2 zzzv Cruise service
Rule 3(iii)b
Sr.No. Clause Service Category
1 d General Insurance
2 zzzc Survey & map making
3 zzzr Auctioneers
42
Rule 3(iii)(c) Category - III
Sr.No. Clause Service Category
1 b Telephone
2 c Pager
3 d General Insurance
4 e Advertising
5 g Consulting Engineer
6 k Manpower Recruitment or Supply
7 r Management Consultant
8 za Scientific or Technical Consultancy
9 zd Leased Circuit
10 ze Telegraph
11 zf Telex
12 zg Fax
13 zh On-line Information
14 zk Broadcasting
15 zl Insurance Auxiliary
16 zm Banking and Other Financial Services
17 zp ----- omitted
18 zs Cable Operator & MSO
19 zx Life Insurance
20 zy Insurance Auxiliary to Life Insurance
21 zz Rail Travel Agent
22 zzb Business Auxiliary Service
23 zze Franchise Service
24 zzj ------ omitted
25 zzk Forex Broker (other than in relation to Banking)
26 zzr Intellectual Property Service
27 zzu Programme Producer
28 zzz Transport through Pipeline
29 zzzc Survey and Map making
30 zzzg Mailing List Compilation & Mailing
31 zzzi Registrar to an issue
32 zzzj Share Transfer Agent
33 zzzk ATM Operation, Maintenance & Management
34 zzzl Recovery Agent
35 zzzm Sale of Space for Advt. other than Print Media
36 zzzn Sponsorship other than for Sports
37 zzzq Business Support Service
38 zzzr Auctioneers
39 zzzs Public Relations Service
40 zzzt Ship Management Service
41 zzzu Internet Telephony
42 zzzw Credit Card, Debit Card & other payment Cards
43