Service Tax is an indirect levy imposed under Chapter V of the Finance Act, 1994 as amended. The tax is applicable to services specified in the section 65 & 66

At present the rate of Service Tax is eight percent to be levied on the "value of taxable service".Generallly specking "value of taxable service" means the gross amount received by the service provider for the taxable service rendered by him.

The person who provides the taxable service on receipt of charges is responsible for paying the Service Tax to the Government.

In this case the services receiver in India is liable to pay service tax

Generally, all Commissionerates of Central Excise, have a Service Tax Cell, headed by Assistant Commissioner / Deputy Commissioner. However, in certain Commissionerates, separate Service Tax Divisions have been constituted. The work is also delegated to Central Excise Divisions in many Commissionerates. A prospective assessee of Service Tax can approach the Assistant Commissioner / Deputy Commissioner in charge of Service Tax cell of the Jurisdictional Commissionerates or Central Excise Division for registration depending upon the arrangements made in the Commissionerate.

A prospective taxable service provider seeking registration should file an application in form ST-1 ( in duplicate) before the jurisdictional Central Excise officer / Service Tax officer within thirty days from the date of notification of the taxable service. Department is required to issue the registration certificate within 7 days of the receipt of application. In case of failure to issue registration certificate within 7 days, the registration applied for is deemed to have been granted and the assessee can carry on with his activities.

All persons providing taxable services are required to register with the Central Excise Department. They would have to take only one registration even if they operate from more than one premise but have centralised billing at one place. However, if such persons do not have Centralised billing at one place, then they will have to register at each place separately. Besides, only one registration is required to be taken even if an individual provides more than one service but from the same premises.

a) When a registered assessee transfers his business to another person the transferee should obtain a fresh certificate of registration.
b) When a registered assessee ceases to carry on the service activity for which he is registered, he should surrender his registration certificate to the Central Excise authorities.

Every person liable to pay the service tax should make an application to the concerned Central Excise Officer for registration within a period of 30 days of the Service Tax having come into force. In cases where a person commences the business of providing a taxable service after such service has been notified, he is required to make an application for registration within a period of 30 days from the date of commencement of his activities.

Yes. A service provider can pay service tax and file returns immediately after applying for registration.

Yes. Any offence of failure for non-registration will attract a mandatory penalty of rupees five hundred

It is not mandatory to have a PAN for obtaining registration in Service Tax. However, it is advisable for Service Tax assessee to have a PAN No. as Service Tax Code (STC) Number based on PAN allotted by Income Tax Deptt. has been introduced in Service Tax also. The main objective of allocating a number is to identify the concerned person where he is located and registered.

The Service Tax amount is required is required to be paid in Form TR-6 challan (yellow in colour) in the specified branches of designated banks. The list of such Banks and Branches is available in every Commissionerate of Central Excise. Different heads of accounts have been specified for different taxable service by the Govt. under which payment has to be made. While making the payment of Service Tax to the credit of Central Govt., head of account should be correctly and properly indicated under major and minor heads and sub-heads to avoid misclassification.

If the assessee is an individual or a proprietary or partnership firm, the Service Tax is to be paid on quarterly basis. The payment is to be made by the 25th day of the month following the quarter. For example, Service Tax for the quarter ending 30th June is to be paid by 25th July .In respect of other categories, the tax is payable on monthly basis and is to paid by 25th day of the succeeding month.

The Service Tax for a particular period is payable on the value of taxable service received in that period and not on the gross amount billed to the client.

Yes. For payment of Service Tax, specific Bank has been nominated for every Central Excise Commissionerate. If Service Tax amount is deposited in a branch of Bank other than nominated Bank, it amounts to non-payment of Service Tax.

The date of deposit of cheque is the date of payment of Service Tax. The Service Tax Rules as amended provide that it would suffice if the cheque is presented to the Bank by the 25th of the month. However, if the cheque bounces, it would mean as if the tax has not been paid and the necessary penal consequences would follow.

The expression refers to a "legal person" and would include any individual, proprietary firm or partnership firm, company, trust, institution and society etc.

Yes, the service tax is payable on all taxable services rendered in India whether Indian or foreign client.

No, the services rendered abroad shall not attract service tax as the levy covers only the services provided in India.

The Service Tax is to be paid on the value of taxable services which is charged by an assessee. Any income tax deducted at source is included in the charged amount. Therefore, Service Tax is to be paid on the amount of income tax deducted at source also.

Every person, liable to pay the 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 at the rate of fifteen per cent per annum for the period by which such crediting of the tax or any part thereof is delayed.

Yes it is compulsory to separately indicate the amount of Service Tax charged in the Bills / Invoices raised on clients in terms of Section 83 of Finance Act 1994 read with sec 12A of Central Excise Act 1994. It is also advisable for the service providers to separately bill the amount of Service Tax in the invoice/bill on the basis of taxable value of service rendered, especially so if he requires to avail the input credit scheme.

No, there is no such general exemption, exempting the services received/ provided by the Central Government/State Government organiastion or Public Sector Undertakings. No one can claim immunity from payment of service tax until specifically provided in law.

No. At present there is no such general exemption available for small scale service providers.

Any person liable to pay service tax in accordance with the provisions of section 68 or the rules made there under, who fails to pay such tax shall pay in addition to paying such tax, and interest on that tax in accordance with the provisions of section 75, a penalty which shall not be less than one hundred rupees but which may extend to two hundred rupees for every day during which such failure continues, so, however that the penalty under this clause shall not exceed the amount of service tax that he failed to pay.

Yes. As per Rule 6(3) " Where an assessee has paid to the credit of Central Government service tax in respect of the taxable service, which is not so provided by him either wholly or partially for any person, 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." In all other cases of excess payment, the refund claims have to be filed with the department.

The Service Tax assessee are required to file a half yearly return in Form ST-3 or ST-3A as applicable in duplicate, to the Superintendent, Central Excise, dealing with Service Tax work. The return is to be filed within 25 days from the last day of the half year it relates to and should be accompanied by copies of all TR-6 challans issued in the relevant period. Thus, returns of half year ending 30th September and 31st March are required to be filed by 25th October and 25th April, respectively.

E- filing is a facility for the electronic filing of Service Tax returns by the assessee from his office, residence or any other place of choice, through the Internet, by using a computer. The assessee can go to the e-filing site 'Home Page' by typing the address http://servicetaxefiling.nic.in in the address bar of the browser.

Assessee having a 15 digit STP code and falling under the following categories can avail of the facility of electronic filing of their 'Return' for the following services :
a) Telegraph Services (TGH)
b) Telephones (TSU)
c) Life Insurance Services (LIS)
d) Insurance Auxiliary (IAX)
e) General Insurance Business (GIB)
f) Stockbrokers (STB)
g) Advertising Agencies (COU)
h) Courier Services (COU)
i) Banking and Financial (BFN)
j) Custom House Agents (CHA)
This facility will be extended to other services in stages. The assessee should take care to ensure that he has been indicating his 15 digit STP code in the challans used by him from September 2002. An assessee who has not done this may also opt for e-filing but he will have to submit copies of challans manually to the department after e-filing his return, evidencing payment of duties, after indicating his 15 digit STP code on each challan.

Those assessee coming under the above service categories and who have 15 digit Service Tax Payer Code allotted to them, should file an application to their jurisdictional AC/Dc as laid out in Trade Notice issued in this regard. They should mention a trusted e-mail address in their application, so that the department can send them their userword and password to help them file their return. They should log on to the Service Tax E-filing Home Page using the internet. On entering their STP Code, userword and password in place provided on the Home Page they will be permitted access to the E filing facility. They should then follow the instructions given therein.

If no services have been provided during a half year no Service Tax is payable; the assessee may file a Nil Return within the prescribed time limit.

As per Section 77, " If a person fails to furnish in due time the return which he is required to furnish under section 70 or the rules made there under, he shall be liable to a penalty which may extend to an amount not exceeding one thousand rupees."

A single return would suffice. However, details in each of the column in Service Tax the Forms ST-3 has to be furnished separately for each of the taxable service rendered by the assessee.

No specific records have been prescribed to be maintained by a Service Tax assessee. The records including computerized data if any being maintained by an assessee as required under any other law in force. (e.g. Income Tax, Sales Tax) is acceptable to the Central Excise Department for the purpose of Service Tax.

The forms are available on the website as well as with the jurisdictional Central Excise Commissionerates.

Yes, if required the Department can always ask for additional information.

The Service Tax is required to be paid only on the value 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. However, in all such cases where the amount received is less than the gross amount charged/billed to the client, the Service Tax assessee are required to amend the bills either by rectifying the existing bill or by issuing a revised bill and by properly endorsing such charge in the billed amount. In case an assessee fails to do, his liability to pay Service Tax shall be on the amount billed by him to the client for the services rendered.

The procedure for claiming refund for the amount due from the Department is as mentioned below :-
i) Submission of application in prescribed Form-R in triplicate to the jurisdictional Assistant Commissioner.
ii) Application should be filed within the prescribed period, i.e. before the expiry of six months from the relevant date as defined in Section 11 B of the Central Excise Act, 1994 which has been made applicable to service tax refund matters also. Application should be accompanied by documentary evidence to establish that the amount claimed as refund is amount paid by him in excess of service tax due and the incidence of such tax has been passed on to any other person.

The "Relevant Date" for the purpose of refund (under section 11 B of CEA 1944) is date of payment of Service Tax. Thus, the limitation period of six months is to be calculated from the said date.

An assessee aggrieved by the order of Assistant Commissioner/Deputy Commissioner in respect of Service Tax, may file an appeal to the Commissioner of Central Excise (Appeals) in Form ST-4, in duplicate along with a copy of order appealed against. The appeal should be presented within three months from the date of receipt of the decision or order of the Central Excise Officer.

Any person aggrieved by any order passed by any assessing officer or adjudicating authority below the rank of Commissioner may file an appeal before the Commissioner, Central Excise (Appeals).
i) The appeal shall be filed in the prescribed form ST-4.
ii) It shall be presented within three months from the date of receipt of order which is being appealed against.
iii) It should be filed in duplicate.
iv) It should be accompanied by a copy of the order appealed against.

Yes. If the commissioner of Central Excise (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.

Yes, the law provides for filing an appeal against the order of Commissioner of Central Excise or Commissioner (Appeals). Such appeals can be filed with the CESTAT within three months of the date of receipt of the order sought to be appealed against.

i) Any assessee aggrieved by the Commissioner of Central Excise or the Commissioner (Apeals)may file an appeal before the Appellate Tribunal i.e. CESTAT.
ii) The appeal should be filed within three months from the date of receipt of the order appealed against.
iii) It should be filed in the prescribed form ST-5.
iv) It should be filed in quadruplicate.
v) It should be accompanied by a copy of the order appealed against one of which should be certified copy.
vi) The appeal should be accompanied by a fee of Rs. Two Hundred only.

Yes. An output service provider is allowed to avail Service Tax credit of the Service Tax paid on all input services in the following manner, namely :-
a) where the input service falls in the same category of taxable services as that of the output service, Service Tax shall be allowed to be taken on such input service for which invoice or bill or challan is issued on or after the sixteenth day of August,2002;
b) in any other case, Service Tax credit shall be allowed to be taken on such input service for which invoice or bill or challan is issued on or after the fourteenth day of May,2003;
The invoice or bill or challans as the case may be shall contain the following details:
i) Serial Number of the document.
ii) Date of issue.
iii) Description and value of input service.
iv) Amount of Service Tax paid.
v) Service Tax Registration No.
vi) Address of Input service provider.

The Output service provider availing Service Tax credit shall maintain proper records in which the relevant information regarding the Sr.No. and date of document on which Service Tax credit is availed, Service Tax registration No and name of the input service provider, description and value of input service, service tax credit availed, Service Tax credit utilized for payment of Service Tax on output service shall be recorded. The burden of proof regarding the admissibility of Service Tax credit shall lie upon the person taking such credit.

The output service provider to avail Service Tax credit shall submit to the Superintendent of Central Excise, a return in the form annexed to the Service Tax Credit Rules,2003 along with Form ST-3.

Service Tax credit availed on input service may be utilized for payment of Service Tax on output service. Since no refund of any excess credit available is admissible, the assessee has to utilize the same on payment of Service Tax. While paying Service Tax on the output service, the service tax credit shall be utilized only to the extent such credit is available on the last date of the month for payment of Service Tax relating to the month or in case where the assessee is an individual or proprietary or partnership firm to the extent the credit is available on the last day of the quarter for payment of Service Tax relating to the quarter.

Where a service provider avails credit on any input service and renders such output services which are chargeable to service tax as well as exempted services or non taxable services, as the case may be, then the service provider shall maintain separate accounts for receipt and consumption of input service meant for consumption in relation to rendering of output services which are chargeable to service tax and the inputs services meant for consumption in relation to rendering of output services which are exempted services or non-taxable services, as the case may be. The service provider shall take credit only on that portion of input service, which is intended for use in relation to rendering output services, which are chargeable to service tax. In case the service provider, opts not to maintain separate accounts of input service meant for consumption in relation to rendering of such output services which are chargeable to service tax as well as exempted services or non-taxable services, he shall be allowed to utilized service tax credit for payment of service tax on any output service only to the extent of an amount not exceeding thirty-five per cent. of the amount of service tax payable on such output service.

The output service provider is allowed to transfer the Service Tax credit lying unutilized in his account to such transferred sold, merged or amalgamated establishment.

Service Tax credit on the service provided in relation to the telephone connection is allowed only in respect of such telephone connections which are installed in the business premises from where output services is provided. Mobile phones are not covered.

Commercial coaching and training services provided by institutes that prepare applicants for Board examinations and competitive exams, like entrance examinations for IIT, Joint Entrance Exams/Premedical Tests, Civil Services Exam etc are chargeable to Service Tax. However, services in relation to Commercial Coaching and Training provided by :-
a) Vocational Training Institute.
b) Computer Training Institute and
c) Recreational Training Institute ;
have been exempted from Service Tax w.e.f. 1st July 2003 vide Notf. No.9/2003 service tax. Therefore vocational coaching and training services provided by typing and shorthand institutes, TV/Vehicle repairs training institutes, tailoring institutes, industrial training, foreign language institutes, computer training centers, hobby classes, institutes teaching martial arts, painting, dancing etc, would not be chargeable to Service Tax. This exemption notification 9/2003-ST is effective only up to 29th February 2004.

Service Tax is livable on any coaching or training provided by an institution on commercial basis. Therefore, the coaching provided by postal means would also be covered under the service tax.

Service Tax is on institutions/establishments. Only those service providers are covered under service tax who have some establishment for providing commercial coaching or training. Thus, individuals providing services at the premises of a service receiver would not be covered under service tax. However if coaching or training center provides commercial coaching by sending individuals to the premises of service receivers, such services would be chargeable to service tax.

Yes. The commercial coaching given to the students to prepare them to prepare for university degree exam is liable for service tax.

There are case where maintenance contract are entered into far a period of more than one year Vide Notification No.11/2003 Service Tax dt.20.06.2003 for maintenance contacts entered into that part of the value of service for which bill/invoices have been received prior to the 1st July 2003. for such contacts, all subsequent payments or payments made against invoice raised subsequent to the 1st July 2003 will be chargeable to service tax.

"Maintenance or repair" means any service provide by :-
i) any person under a maintenance contract or agreement or
ii) a manufacturer or any person authorized by him in relation to maintenance or repair or servicing of any goods or equipments, excluding motor vehicle. Therefore, service tax is applicable on maintenance and repair services provided by all such persons.

The sub-contractor need not to take a registration under Service Tax. In all such case service tax is to be paid by main service provider.

The maintenance or repair service undertaken under a maintenance contract or agreement is only chargeable to Service Tax.

As road are neither goods nor equipment, the AMC for roads would not be covered under Service Tax.

Irrespective of the fact that the receiver of the service is different from the person making payments for such services, the Service Tax is leviable on the service provided towards maintenance and repair. Therefore, for the services provided during the warranty period by the dealer or any other authorized person, Service Tax would also be leviable on any amount received by such dealer or such authorized person from manufacturer of such goods

It is a cardinal principle of taxation that no tax can be levied or collected except by authority of law. Thus, if the levy of Service Tax on a particular service comes into force on a given date, that service will not be taxable if rendered before that date. The levy of Service Tax on "Maintenance or Repair Service" has come into force on 01.07.2003. Accordingly, any maintenance or repair service rendered prior to 01.07.2003 will not be taxable, irrespective of when the bills are raised or payment made. This will apply to other services as well which were rendered prior to the imposition of Service Tax on them.

The Banking and Financial services provided by a banking company or a financial institution including a non banking financial company or any other body corporate is chargeable to Service Tax. The term body corporate means a private limited public limited company or a Government Company. Such companies should be either a banking company or a financial institution or non-banking financial company to come under the tax net. In other words individuals proprietorship or partnership firms will not come under the tax net.

Only the service of " Foreign Exchange Broking" when provided by the foreign exchange brokers, authorized dealers and money changers has been brought under tax net.

Interior Decorator means any person engaged whether directly or indirectly, in the business providing by way of advice,consultancy,technical assistance or in any other manner services related to planning, whether man made or other wise. Since Vaastu/Feng Shui Consultants are offering services by way of advice relating to planning and designing of spaces, they come under the category of Interior Decorators.

The lending/hiring of Video/Sound Recording equipment is in the nature of Sub-contracts and because the Sub-contractors are not providing the services to the customer directly, they are not required to pay the Service Tax.

The Cinema theatres cannot be treated as advertisement agencies as they proj