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Submitted By

Ravi kumar Sharma - 51

Raj Yadav - 58
MD Imran - 29
Ankit Dalvi - 10
Ganesh Saroj - 48
Rahul Raje - 43
Amit Madkar - 25

Submitted To
Mr. Vasudevan
Definition- A kind of tax that is not directly paid by a tax
payer to the govt.it must have an intermediary.

an indirect tax such as Value added tax (VAT) goods and

services tax (GST)) is a tax collected by an intermediary
(such as a retail store) from the person who bears the
ultimate economic burden of the tax (such as the customer).
The intermediary later files a tax return and forwards the tax
proceeds to government with the return
Types of Indirect Tax
s Service Tax
s VAT(Value Added Tax)
s Custom Duty
s Excise duty
s Goods & Services Tax
SERVICE TAX

5
 |ntroduction

Service Tax was introduced in 1994 under

Finance Act, 1994 with 3 SERVICES namely,
Brokerage charged by stockbroker, Telephone
services & premium on General Insurance
Services.
Applicable to whole of India except Jammu &
Kashmir.

6
montd«
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.

7
 Who is liable to pay Service Tax?
Generally, the µPerson¶ 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 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. 8
 àssessee

Who is an µàssessee¶ in relation to

Service Tax?
µAssessee¶ means a person liable to pay
Service Tax and includes his agent.

9
?
|ST?àT| ? |? M TS
As per Section 69, every person liable to pay
service tax has to get themselves registered with
service tax department.
An Input Service Distributor and any provider of
taxable services whose aggregate value of
taxable service in a financial year exceeds Rs. 9
lacs, has to get themselves registered.

10
Contd«
Application for registration in Form ST-1 to be
made to concerned Superintendent of Central
Excise.
The application for registration shall be made
within 30 days, from the date on which the levy
of service tax is brought into force in respect of
the relevant services or of the commencement of
business where services has already been
levied.

11
montd«
Registration Certificate is granted in Form ST-2 within
7 days from the date of receipt of intimation, if not, then
deemed to be granted. 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)
CBEC vide Circular no. 35/3/2003 has made it
compulsory for every assessee to obtain the Service
which is a 15 digit alphanumeric no. based on the PAN
Assessee providing more than one taxable service should
mention in single application, all the taxable services
provided by him. Rule 4(4), Service Tax Rule,1994
12
 xemption Scheme for
Small Service Providers
Central Government, provides the basic exemption to
the service providers whose aggregate value of
taxable services provided in last financial year is less
than Rs. 10 Lacs.
Assessee should not charge the Service Tax if
he/she is claiming the benefit of exemption. If
charged by mistake the same should be refunded to
the service receiver.

13
 ther xemptions
m Services provided to United Nations &
International Organizations.
m Services provided to developer of SEZs or
units of SEZs
m Services provided to Diplomatic Missions.
m Services exported in terms of Export
Service Rule 2005
m Services provided by RBI

14
Contd«
Services provided by Incubators (used to
maintain a constant temperature) are exempt
from service tax.
Services provided by digital cinema service
provider to producer/ distributor in relation to
delivery of content of Cinema in Digital Form
are exempt from service tax.
Value of goods and materials
sold by service provider are
exempt.
15
 àbatement
In case of certain services, the benefit of abatement
(rebate) is allowed to the service provides. In such
cases, the service providers charges tax from the
client after taking into account the abatement
available or on net amount (net of abatement).
Example: if invoice for servicing is to be raised for
Rs. 1000/- and abatement of 75% is available (as in
case of Goods Transport Agency), then service tax
will be imposed only on Rs. 250/-
[1000 ± 75% of 1000].

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 Service Tax ?ate
Period ?ate
From 1.7.1994 to 13.05.2003 5%
From 14.5.2003 to 09.09.2004 8%
From 10.9.2004 to 17.04.2006 10%
From 18.4.2006 to 10.05.2007 12.24%××
12.24%
From 11.05.2007 to 24.02.2009 12.36%××
12.36%
From 25.02.2009 10.3%**
10.3%

×Inclusive of cess

17
 Failure to Pay Service Tax
Interest(sec. 75) :- Interest @13% p.a. is
payable on the short-fall or unpaid tax for
delayed period.
Penalty(sec. 76) :-
âRs.200 for every day during which failure
continues, or
â2% of tax per month, whichever is higher.

18
 Service Tax ?eturn

Form o. ST
ST--3, Half-
Half-Yearly

Half--Year
Half Due Date
àpril ± September 25th ctober
ctober ± March 25th àpril

19
How to file Service Tax ?eturns?

m The details in respect of each month of the period for

which the half-yearly 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) Challan for payment of Service
Tax during the relevant period.
m Filing of return is compulsory, even if it may be a nil
return, within the prescribed time limit, failing which
penal action is attracted.

20
 Delay in Filing ?eturn

Period Fine/Penalty
p to 15 days ?s.500/--
?s.500/
16 to 30 days ?s.1000/--
?s.1000/
?s1000/-- '
 ?s.100/
?s1000/ ?s.100/-- per
Beyond 30 days day from the 30th day till
date of furnishing return

21
VAT
22
 |ncome Tax (Direct) VàT (|ndirect)

1 IT is levied and collected by Central VAT is levied and collected by state

Government. Government.

2 IT arises on receipt or accrual of VAT arises on sale of goods.

income.

3 IT is charged on taxable income. VAT is charged on taxable turnover.

4 IT may be charged on income arising VAT is charged only on sales

in entire India or even outside India. occurring within the State.

5 Same income is not taxed twice. VAT is levied on each sale/re-sale.

6 IT rates are the same all over India. VAT rate may differ in each State.
7 |ncome earned during a
previous year is taxed in the
assessment year.
8 Income earned during, say year
ending 31-3-2010 will be taxed
as per law as on 1-4-2010. (i.e.
the first day of the assessment
year 2010-2011)
9 IT is Levied on a person
10 IT must be paid by the assessee;
it cannot be recovered from any
other person.
11 A rich person pays more tax.
Sales made in a Financial year are
taxed in the same year. There is no
concept of µprevious year¶ and
àssessment year¶.
Sales on a particular day, say 1-4-2010
will be taxed as per the law/rate
applicable on 1-4-2010.
VAT is levied on µgoods¶
VAT is recovered from the ultimate
consumer.
The same VAT is paid by the rich and
the poor.
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Sales Price Rs.1,500 Total Vat Rs.150

Vat Payable
150-100=50

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Total Vat ?s.180 
Vat Payable R   !
180-150=30 "#$%
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 Introduction
m GST is a broad based and a single
comprehensive tax levied on goods and
services consumed in an economy
m It is basically a tax on final consumption
m Devised by a German economist during the
18th century
m e envisioned a sales tax on goods that did
not affect the cost of manufacture or
distribution but was collected on the final price
charged to the consumer
 Benefits of GST
m Eliminates cascading effect of taxes
across all supply chain
m Eliminates multiplicity of taxes, rates,
exemptions and exceptions
m Eliminates dual taxation of the same
transaction
m Reduces cost of production
m Achieves, uniformity of taxes across the
territory, regardless of place of
manufacture or distribution
 GST in India
m Kelkar Task Force had suggested a
comprehensive Goods and Services Tax
(GST) based on VAT principle
m GST based on principle - liberal in
assessment and ruthless in collection
m
hy GST in India ?
± GST is likely to rationalize multiplicity of taxes
being collected through an inefficient and non
transparent system
± Integration of various Central and State taxes
into a GST system would make it possible to
give full credit for inputs taxes collected
± uniformity of laws across the board,
greater transparency, neutrality in tax
rates on various products; credit
availability on interstate purchases and
reduction in compliance requirements
± Differences in tax bases of different
States and the Central government
greatly increase costs of doing business.
The GST based tax reform provides a
real policy opportunity to do something
about this problem without waiting for
prior and sweeping political economy
changes
 Components of GST
m GST should have two components, a
Central tax and a single uniform i. state tax
across the country
m A tax over and above GST may be levied
by the states ii. on tobacco, petroleum and
liquor
m Petroleum products, including crude, high-
speed diesel and petrol, may remain
outside the ambit of GST
m Central cess like education and oil cess,
octroi, purchase tax, stamp duty, toll tax
may be kept outside the dual GST structure

ST |MPàmT

m Improve the quality of Indirect Tax system.

m India could gain as much as $15billion
annually.
m GST will give more relief to industry, trade
and agriculture.
 |MPàmT  Và?|S
S mT?S

FD |DST?Y

m Food is Exempt from CENVAT and many

Food items attract State VAT at 4%
m GST would Lead to a Doubling of Tax
Burden on Food.
ousing and Construction Industry

m Construction and ousing Sector

needs to be Included in GST tax base
as it is a significant Contributor to the
National Economy.
 FMm
Sector
m FMCG sector has reached a size of
$25billion at Retail sales in 2008.
m Introduction of GST and Opening of FDI
will fuel growth.
m Industry will grow by $47 Billion by 2013
and $95 billion by 2018 according to
new FICCI-Technopak report.
m Implementation will have
Uniform,Simplified and Single Point
Taxation and reduce prices.
T ANK YOU