Chartered Accountant Delhi

Service Tax

Tax Rate Registration Requirement Categories of Services on Which Service Tax is Applicable. Specific Exemptions - Lower Rates / Abatments How to make payment of Service Tax Service Tax Returns Service Tax Compliance

Tax Rate
At Present the effective rate is 12.36%

Registration Requirement
Any person who provides taxable service to get himself registered with the central excise department within 30 days from the date of commencement of providing of taxable service. Each premises from where taxable service or services is provided to be registered but common registration may be permissible for all premises from where taxable services are provided. Taxable service provider should apply for registration to superintendent of central excise in the application form ST-1 along with follow documents

» Address proof of premises (Election I- card, Ration card, Telephone bill, Permanent Account Number)
» Incase of company memorandum and articles of association also required to be attached.

Categories of Services on which service tax is applicable.
Till date as many as 100 services have been covered under the act effectively. For ready reference details of the services in chronological order of their introduction is given below:

Specific Exemptions - Lower Rates / Abatments
Some important exemptions are as follows for lower rates/ abatments are:

Mandap keeper providing full catering services has to pay service tax on 70% gross amount charged. This is also applicable to hotels providing 'mandap keeper' service Outdoor caterer has to pay service tax on 50% amount if he provides full and substantial meal Goods Transport Agency (GTA) has to charge service tax only on 25% amount in his invoice [Payment will be made by consignor/consignee who is actually paying freight] Tax on Construction Service is payable on 33% of gross amount charged for taxable services if gross amount included value of material Pandal and shamiana contractor providing full catering service is required to pay service tax on 70% of gross amount charged for the service. Rent-a-cab operator is required to pay service tax on 40% of gross amount charged for providing taxable services In case of package tours, i.e. where charges include provisions for transportation and accommodation, service tax is payable only on 40% of gross amount charged. This exemption is also available to tour operator providing service other than package tour If tour operator provides services only relating to arranging booking accommodation, service tax is payable on only 10% of gross amount charged for service provided in relation to tour Tax on ererction, commissioning or installation of plant & machinery service tax is payable on 33% of gross amount charged

The above exemptions are subject to following two conditions :-

The assessee has not availed CENVAT Credit. The assessee has not availed benefit of notification 12/2003 which exempts so much of the value of all the taxable services, as is equal to the value of goods and materials sold by the service provider to the recipient of service.

Small service providers -:Small units whose turnover is less than Rs 4 lakhs per annum are exempt from service tax. Provisions are discussed a little later.

Services to UN Agencies/SEZ - : Services provided to UN and International Agencies and supplies to SEZ or developer are exempt.

How to make payment of service tax

Every person, who is the provider of taxable service, is liable to pay service tax. Incase of any person who is use service of non-resident service provider then the user of service is liable to pay service tax instead of service provider. Any payments received in advance also liable to pay service tax. The service tax should be deposited in the specified bank through challan Form TR-6.

Due date for payment of Service Tax to the A/c of Government can be summarized as under :-
For Company :- Monthly liability. Deposit tax so collected by 5th of next month. For month of march deposit by 31st March.
For other than Company :- Quarterly liability. Deposit by 5th of month next to the end of quarter. For month of quarter ended 31st March deposit by 31st March.

Service Tax Returns
Every taxable service provider has to file return within prescribed Form ST-3. If a person provides more than one services use separate ST-3 for each of services.

Every taxable service provider has to file half yearly return in Form ST-3 to the Jurisdictional superintendent of central excise on or before 25th of the month following the respective half-year. Therefore, due date for filing service tax returns are :-

Service Tax Compliance
Service Tax has now become one of the major sources of yielding revenue to the exchequer. It has been extended to several items with enhanced rates in recent budgets. It's scope is very much likely to be widened and rates to be raised further.

The rules and regulations and various procedures laid down under service Tax are very cumbersome, tedious and best with the problem of interpretation , disputes and litigation all its provisions have to be completed with very strictly . Even a minor lathes can land you in soup . The tax has to be deposited in treasury with in the stipulated period and various returns are to be filed on prescribed forms with in specified dates failing which return penal action in called for.

We have specially trained staff to handle the entire Service Tax work you may entrust this burden on us and feel free to focus your attention to enhance your business or profession.

Compliance Services Offer