CA | Ghanshyam Suresh Gupta & Associates

SERVICE TAX & COMPLIANCE SERVICES

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. 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 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 with us extensive experience in handling the demands of Service Tax Consultancy services that comprise areas like:

Here, our rich experience allows us to successfully handle all matters pertaining to services including handling of departmental audits. Working in close relation with client organizations, we analyze their needs and based on that perform execution of services, thus ensuring best possible service support is offered from our end. Some of the factors that distinguish us from others include:

Background of service tax

Tax is payable on all services excluding those in negative list.
General rate 12% plus education cess of 2%, plus SAH education Cess 1%
making effective tax rate @12.36%.
Service provided or agreed to be provided in the taxable territory.

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Exemption and Negative List

Distinction between exemption and Negative List is that service in negative list is ‘service’ but not taxable at all. Exempted services are taxable but are exempted by Central Government by issue of a notification. Exemption can be changed easily but not Negative List. Activity excluded from definition of ‘service’ under section is not ‘service’ at all.

Reverse Charge (Tax Shift)

Normally, service tax is payable by person providing the service. Section 68(2) makes provision for reverse charge i.e. making person receiving the service liable to pay tax. Provision can be made that part of tax will be paid by service receiver and part by service provider.

Abatements and Composition under service tax

Composition Schemes In some cases, finding of value of service is not easy e.g. sale or purchase of foreign exchange, air travel agent – in such cases, optional composition schemes provided. In case of composite contracts, e.g. construction, finding value of service is difficult. In such cases, optional composition schemes are available.

Abatement schemes In case of some services, abatement is available i.e. part of tax is exempted – e.g. 40% in case of air travel, 25% in case of GTA service, 40% in case of renting or hire of motor vehicle to carry passengers. Restrictions on Cenvat Credit. In some cases, abatement scheme is used as composition scheme.

Registration

The Input Service Distributors are also required to register.
Every person who has provided a taxable service of value exceeding Rs. 9 lakhs.
The preceding financial year, is required to register with the Central Excise
Service Tax office having jurisdiction over the premises or office of such service provider.
In case a recipient of services is liable to pay service tax he also has to obtain registration.
Every person who provides taxable service and is liable to pay service tax.

Payment and Service Tax

Category	Frequency	Due Dates
Payments through Bank : In case of Individuals, Proprietary Firms & Partnership Firms Others (e.g. Companies, Societies, Trusts etc.)	Quarterly as mentioned below - ( i ) For Q.E. 30th June (ii ) For Q.E. 30th Sept. ( iii ) For Q.E. 31St Dec. ( iv ) For Q.E. 31st March Monthly	by 5th July by 5th Oct by 5th Jan. by 31st March By 5th of the month immediately following the month in which payments are received towards the value of taxable services. However, in case of March, the payment should be made by 31st March.
Electronic Payments through Internet : (Mandatory for assesses who have paid service tax of Rs.10 lakhs or more including the amount paid by utilization of CENVAT credit, in the preceding financial year).
In case of Individuals, Proprietary Firms & Partnership Firms Others (e.g. Companies, Societies, Trusts etc.)	Quarterly as mentioned below - ( i ) For Q.E. 30th June (ii ) For Q.E. 30th Sept. ( iii ) For Q.E. 31St Dec. ( iv ) For Q.E. 31st March Monthly	by 6th July by 6th Oct by 6th Jan. by 31st March. By 6th of the month immediately following the month in which payments are received towards the value of taxable services. However, in case of March, the payment should be made by 31st

Return of Service Tax

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.