Documente Academic
Documente Profesional
Documente Cultură
History of Service Tax :Dr.Raja chelliah committee on tax reforms recommend the introduction of service tax.
Service tax had been first levied at a rate of five per cent flat from 15 July 1994 till 13
May 2003, at the rate of eight percent flat w.e.f 1 plus an education cess of 2% thereon
w.e.f 10 September 2004 le services provided by service providers. The rate of service
tax was enhanced to 12% by Finance Act, 2006 w.e.f 18.4.2006. Finance Act, 2007 has
imposed a new secondary and higher education cess of one percent on the service tax
w.e.f 11.5.2007, increasing the total education cess to three percent and a total levy of
12.36 percent. The revenue form the service tax to the Government of India have
shown a steady rise since its inception in 1994. The tax collections have grown
substantially since 1994-95 i.e. from Rs. 410 crores in 1994-95 to Rs.132518 crores in
2012-13. The total number of Taxable services also increased from 3 in 1994 to 119 in
2012. However, from 1 July 2012 the concept of taxation on services was changed from
a 'Selected service approach' to a 'Negative List regime'. This changed the taxation
system of services from tax on some Selected services to tax being levied on the
every service other than services mentioned in Negative list.
Collections :The collections under the Service tax from the year of original levying year of 1994 are
constantly growing. The collections are shown as in the following table
Financial
Revenue Rupees(in
Number of
Number of
Year
crores)
services
Assessees
1994-1995
407
3943
1995-1996
862
4866
1996-1997
1059
13982
1997-1998
1586
18
45991
1998-1999
1957
26
107479
1999-2000
2128
26
115495
2000-2001
2613
26
122326
2001-2002
3302
41
187577
2002-2003
4122
52
232048
2003-2004
7891
62
403856
2004-2005
14200
75
774988
2005-2006
23055
84
846155
2006-2007
37598
99
940641
2007-2008
51301
100
1073075
2008-2009
60941
106
1204570
2009-2010
58422
109
1307286
2010-2011
71016
117
1372274
2011-2012
97509
119
1535570
2012-2013
132518
Negative List
Regime
1712617
APPLICABILITY OF SERVICE TAX :1) Territorial Application State of Jammu & Kashmir excluded
The provisions related to Service Tax are applicable to the whole of India except to the
State of Jammu & Kashmir. As a result, the services provided within the territorial limits
of the State of Jammu & Kashmir are excluded from the ambit of the levy ofservice tax.
In other words as clarified by the Department that any service provider who has his
place of business in the State of Jammu & Kashmir but provides taxable services to the
clients in other parts of the country are liable for payment of service tax. Further any
service provider who has his place of business in any of the Indian States other
than the State of Jammu & Kashmir who provides the services to the persons in the
State of Jammu & Kashmir , is not liable to pay service tax. Accordingly when the
recipient of the taxable service is in the State of Jammu & Kashmir , the service is
outside the service tax net.
1. No CENVAT Credit is availed on the service tax paid on input services used to
render the subject taxable service.
2. Similarly no CENVAT Credit is availed in respect of capital goods and inputs till
the date of exhausting threshold exemption.
3. Only capital goods and inputs received after the completion of availing exemption
limit can alone qualify for input credit.
4. Input Credit in respect of goods lying in stock or unutilized input credit lying in
the books to the credit of the serviceprovider should not be utilized and shall also
be reversed to the extent to service tax payable.
5. The aggregate value taxable services rendered by the service provider shall not
exceed Rs. 9 lakhs in the preceding Financial Year.
6. With effect from 1-4-2008, i.e. from the Financial Year 2008-2009, the threshold
exemption is raised upto Rs.10 lakhs vide Notification No. 8/2008-ST,dt. 1-32008.
Value of goods and materials sold by the service provider subject to the condition
that they should be quantified and shown separately in the invoice.
Taxable service provided free of charge without any consideration thought the
service is otherwise taxable.
to
obtain
registration
will
be
Rs.10,000/-
only.
A new section is also being introduced to impose penalty on directors and officials of the
company for specified offences in cases of willful actions.who is in any manner
knowingly concerned with specified contraventions; And further, punishment of
imprisonment for minimum 6 months to 7 years have been proposed in Finance Act
2013 for specified offences. So, our timely and proper advice to our client, save them
from interest, penalties and prosecutions. FURTHER from 01.10.2014 variable rate of
interest will be applicable on delay in tax payments.
S.No.
Period of Delay
Interest Rate
Upto 6 months
18%
upto 1 year
5) Trading of Goods
Transfer of title of goods is one of the essential conditions for a transaction to come
under the ambit of trading of goods. However, the services supporting or ancillary to
the trading of goods would not come under the above item of Negative List.
under section 3 of the Central Excise Act, 1944 (1 of 1944) or any process amounting
to manufacture of alcoholic liquors for human consumption, opium, Indian hemp and
other narcotic drugs and narcotics on which duties of excise are leviable under any
State Act.
This entry, therefore, covers manufacturing activity carried out on contract or job work
basis provided duties of excise are leviable on such processes under the Central Excise
Act, 1944 or any of the State Acts.
public transport, other than predominantly for tourism purpose, in a vessel between
places located in India ; and
metered cabs, radio taxis or auto rickshaws.
The various other equivalent modes of transport not specified herein could be cause of
dispute as the above list is not complete within each segment.
The charging section of the Finance Act, 1994, Section 66B provides that service tax
should be levied on all services except the services which are specified in Section
66D of the said Act.
As per Section 66D of the Financial Act, 1994, Negative list of Service Tax are
introduced (by Finance Act 2012) and further amended (by Union Interim 2014Interim). There are currently 17 heads of Services which are given in the negative
list.
Two more services have been included in the negative list for service tax
through the amendment.
This can also be called as the comprehensive approach. Since there was a
considerable increase in the list of services being brought under service tax, it added
gravity to the administrative challenge. As a result of the comprehensive approach,
now, all the services would be taxable except those that are specifically excluded or
exempt.
This Negative list of service tax is very important because every activity not covered
under this list is chargeable to Service Tax. This is basically an exclusive tendency
towards the amendment being brought to the law, whereby the tax is imposed based
upon the exclusions approach.
Two more services have been included in the negative list services in
interim Budget 2014, as mentioned below:a)
b)