Service Tax In India A Handbook - Deloitte
Service Tax in IndiaA HandbookFor private circulation onlyDecember 2013www.deloitte.com/in
Contents2Service Tax Referencer4Finance Act, 199419Service Tax Rules, 199452Point of Taxation Rules, 201166Place of Provision of Services Rules, 201270Service Tax (Determination of Value) Rules, 200674Service Tax (Settlement of Cases) Rules, 201280Service Tax (Compounding of Offences) Rules, 201282Service Tax Voluntary Compliance Encouragement Scheme85CENVAT Credit Rules, 200489Relevant Provisions of Central Excise Act, 1944119Negative List of Services145Exempted List of Services147Abatement Notification156Reverse Charge Notification159
PrefaceService Tax HandbookService tax has assumed significance in recentyears as one of the major contributors to theGovernment exchequer. The law has expanded itsreach to cover most transactions of services andnow pervades all sectors of the economy.Various reforms have been carried out in the pastfew years in the prevailing Indirect tax regime,which will pave the path to the eventual transitionto Goods and Services Tax. Reforms in the areasof service tax in the last couple of years aredefinitely an indicator in that direction. It maybe said that service tax has just come of age in2012 with the introduction of Negative list basedservice tax regime and new set of rules introducedfor determining place of provisions of service,determination of point of taxation etc.As the law has matured over the years, theenforcement has become stricter. Several provisionsrelating to offences and penalties have recentlybeen introduced in the law which warrants a higherdegree of attention towards compliance.The large number of changes in the law andintroduction of new rules for taxation of servicesnecessitate a guide that gives a bird’s eye viewof all relevant provisions of service tax law. Thispublication is an attempt to be facilitator and areference guide to the current law. The provisionsreproduced in this publication are current as on30th November 2013.We do hope that you find this publication useful.We welcome your inputs and feedback.Prashant DeshpandeLeader – Indirect taxDeloitte IndiaService Tax in India A Handbook3
Service Tax ReferencerAccounting Codes for payment of Service TaxNo.14Finance Act,1994erstwhile Section65(105)Descriptions of TaxableServicesAccounting CodesTax CollectionOther Receipts(interest)Penalties(a)Stockbroker service004400080044000900441298(b)Telegraph authority-telephoneconnection [(b) was omittedw.e.f.01.06.2007 and clubbedunder (zzzx)]004400030044011900441296(c)Telegraph authority-pager[(c ) wasomitted w.e.f.01.06.2007 andclubbed under (zzzx)]0044001500440020004413012(d)General insurance service0044000500440006004412973(e)Advertising agency services0044001300440016004412994(f)Courier agency service0044001400440018004413005(g)Consulting engineer services0044005700440058004413106(h)Custom House Agent service0044002600440027004413027(i)Steamer agent services0044002900440030004413038(j)Clearing and forwarding agentservices0044004500440046004413069(k)Manpower recruitment/supplyagency service004400600044006100441311(ka)Goods Transport Operator [Thisdescription is not to be used sinceomitted and clubbed under (zzp)Transport of goods by road - goodstransport agency service-(zzp)]00440067004400680044131310(l)Air travel agent services00440032004400330044130411(m)Mandap keeper service00440035004400360044130512(n)Tour operator services00440063004400640044131213(o)Rent-a-cab scheme tect services00440072004400730044131415(q)Interior decoration/ ement or businessconsultant service00440116004401170044132517(s)Chartered accountant services004400920044009300441319
No.Finance Act,1994erstwhile Section65(105)Descriptions of TaxableServicesAccounting CodesTax CollectionOther Receipts(interest)Penalties18(t)Cost accountant service00440096004400970044132019(u)Company secretary service00440100004401010044132120(v)Real estate agent service00440104004401050044132221(w)Security/ detective agency service00440108004401090044132322(x)Credit rating agency service00440088004400890044131823(y)Market research agency service00440112004401130044132424(z)Underwriter service004400840044008500441317(za)Mechanised slaughterhouse service[omitted vide Finance Act, 2001]00440080004400810044131625(za)Scientific & technical hotography service004401290044013000441327(zc)Convention service004401330044013400441328(zd)Telegraph authority- leased circuit[omitted w.e.f.01.06.2007 andclubbed under (zzzx)]004401370044013800441329(ze)Telegraph authority- telegraphservice [omitted w.e.f.01.06.2007and clubbed under (zzzx)]004401410044014200441330(zf)Telegraph authority- telex service[omitted w.e.f.01.06.2007 andclubbed under (zzzx)]004401450044014600441331(zg)Telegraph authority- facsimileservice [omitted w.e.f.01.06.2007and clubbed under (zzzx)]00440149004401500044133228(zh)Online information and databaseaccess service and/ or retrievalservice through computer network00440153004401540044133329(zi)Video production agency/ videotape production service00440157004401580044133430(zj)Sound recording studio or asting service00440165004401660044133632(zl)Insurance auxiliary service inrelation to general insurance00440169004401700044133827Service Tax in India A Handbook5
No.Descriptions of TaxableServicesAccounting CodesTax CollectionOther Receipts(interest)Penalties33(zm)Banking and other Financial services 00440173004401740044133934(zn)Port service (major ports)00440177004401780044134135(zo)Service for repair, reconditioning,restoration, or decoration or anyother similar services, of any motorvehicle[(zzj) omitted w.e.f 16.6.05]00440181004401820044134336(zq)Beauty parlours /beauty treatment00440209004402100044136137(zr)Cargo handling service00440189004401900044134838(zs)Cable operators00440217004402180044136639(zt)Dry cleaning service00440221004402220044136940(zu)Event management00440197004401980044135341(zv)Fashion design00440213004402140044136342(zw)Health club and fitness centreservice00440205004402060044135843(zx)Life insurance service00440185004401860044134644(zy)Insurance auxiliary serviceconcerning life insurance business00440185004401860044134645(zz)Rail travel agent's service00440201004402020044135646(zza)Storage and warehousing services00440193004401940044135047(zzb)Business auxiliary service00440225004402260044137148(zzc)Commercial training or coaching00440229004402300044137449(zzd)Erection, commissioning chise service00440237004402380044138451(zzf)Internet cafe00440241004402420044138652(zzg)Maintenance or repair service00440245004402460044138853(zzh)Technical testing and cal inspection andcertification agency service004402490044025000441389(zzj)Authorised service station [omittedw.e.f 16.6.05 and clubbed ce Act,1994erstwhile Section65(105)
No.Finance Act,1994erstwhile Section65(105)Descriptions of TaxableServicesAccounting CodesTax CollectionOther Receipts(interest)Penalties55(zzk)Foreign exchange broker service00440173004401740044133956(zzl)Other port (minor port) service00440177004401780044134157(zzm)Airport services by airport authority00440258004402590044139158(zzn)Transport of goods by air00440266004402670044139359(zzo)Business exhibition service00440254004402550044139060(zzp)Transport of goods by road/goodstransport agency service00440262004402630044139261(zzq)Construction services other thanresidential complex, includingcommercial/industrial buildings orcivil structures00440290004402910044139962(zzr)Services by holder of intellectualproperty right providing intellectualproperty services other n poll agency service00440274004402750044139564(zzt)Outdoor catering00440051004400520044130865(zzu)Services by a programme producer00440286004402870044139866(zzv)Survey and exploration of mineral00440270004402710044139467(zzw)Pandal or shamiana service00440054004400550044130968(zzx)Travel agent for booking ofpassage(other than air/rail es provided by recognised/registered associations in relation toforward contracts00440282004402830044139770(zzz)Transport of goods through pipeline 00440302or other conduit004403030044143071(zzza)Site formation and clearance,excavation, earth moving anddemolition services00440306004403070044143172(zzzb)Dredging of rivers, ports harbours,backwaters, estuaries, etc.00440310004403110044143273(zzzc)Survey and map making service00440314004403150044143374(zzzd)Cleaning services004403180044031900441434Service Tax in India A Handbook7
No.8Finance Act,1994erstwhile Section65(105)Descriptions of TaxableServicesAccounting CodesTax CollectionOther Receipts(interest)Penalties75(zzze)Club or association service00440322004403230044143576(zzzf)Packaging service00440326004403270044143677(zzzg)Mailing list compilation and truction of residential ice provided by a registrar toan issue00440338004403390044143980(zzzj)Service provided by a share ated Teller Machineoperations, maintenance ormanagement service00440346004403470044144182(zzzl)Service provided by a ng of space or time slots ponsorship service provided tobody-corporate or firm includingsports ort of passengers embarkingon domestic/international journeyby air00440362004403630044144586(zzzp)Transport of goods by rail including 00440390transport of goods in containers byrail (for the present, transport ofpassengers by rail in air-conditionedclass/first class also may be paidunder this )Business support service00440367004414470044036688(zzzr)Auction service00440370004403710044144889(zzzs)Public relation management service00440374004403750044144990(zzzt)Ship management service004403780044037900441450
No.Finance Act,1994erstwhile Section65(105)Descriptions of TaxableServices91(zzzu)92Accounting CodesTax CollectionOther Receipts(interest)PenaltiesInternet telecommunication services 00440382(includes internet telephony Servicewhich became taxable from01.05.2006)0044038300441451(zzzv)Transport of persons by cruise ship00440386004403870044145293(zzzw)Credit card, debit card, chargecard or other payment card vices of telegraph authorityin relation to (zzzy)Mining of mineral, oil or gas service00440402004404030044145596(zzzz)Renting of immovable orks contract t and supply ofcontent for use in telecom services,advertising agency, etc.00440414004404150044145899(zzzzc)Asset management includingportfolio management and sign service other than interiordecoration and fashion tion technology ervices provided by an insurer oflife insurance under Unit LinkedInsurance es provided by a recognizedstock exchange in relation totransaction in es provided by recognised/registered associations in relationto clearance or settlement oftransactions in goods or forwardcontracts004404380044043900441464Service Tax in India A Handbook9
No.Finance Act,1994erstwhile Section65(105)Descriptions of TaxableServices106(zzzzj)107Accounting CodesTax CollectionOther Receipts(interest)PenaltiesServices provided by any person inrelation to supply of tangible goods004404450044044700441466(zzzzk)Cosmetic and plastic surgery service004404600044046300441467108(zzzzl)Transport of goods by coastalshipping (services by way oftransportation of goods by inlandwaterways is placed in the al consultancy , marketing, organizingor assisting in organizing games ofchance including lottery, etc.004405950044059600441470111(zzzzo)Health services by a clinicalestablishment, health check-up/diagnosis, etc.004405980044059900441471112(zzzzp)Maintenance of medical records004406010044060200441472113(zzzzq)Service of promotion or marketingof brand of zzzr)Service of permitting commercialuse or exploitation of y exchange service004406100044061100441475116(zzzzt)Copyright service- transfertemporarily/ permit use al services provided by builders 004406160044061700441477118(zzzzv)Restaurant service004410670044106800441478119(zzzzw)Service of providingaccommodation in hotels, inn,guest house, club or campsitewhatever name called.004410700044107100441479Other taxable services [ servicesother than the 119 listed above]00441480004414810044148512010
Education CessSl.noDescriptionTax collectionOther receipts(interest)PenaltiesDeductrefunds1Primary Education Cess004402980044029900441486004403002Secondary and Higher Education Cess00440426004404270044148700440428Tax collectionOther 44109300441094All Taxable ServicesDescriptionAll Taxable Services (registrations obtained under this description 00441089should be amended online by selecting appropriate description/sfrom the list of 120 descriptions given in this Annexure)All Taxable ServicesPeriodRate of Tax01-07-1994 to 13-05-20035%14-05-2003 to 09-09-20048%10-09-2004 to 17-04-200610.20% (ST EC)18-04-2006 to 10-05-200712.24% (ST EC)11-05-2007 to 23-02-200912.36% (ST EC SHEC)24-02-2009 to 31-03-201210.30% (ST EC SHEC)01-04-2012 onwards12.36% (ST EC SHEC)Periodic Rates of InterestPeriodRate of Tax01-07-1994 to 15-07-20011.5% p.m. and part thereof16-07-2001 to 15-08-200224% p.a.16-08-2002 to 09-09-200415% p.a.10-09-2004 to 31-03-201113% p.a.01-04-2011 onwards: For assessee’s having turnover upto INR 60 lakhs For other assessee’s15% p.a.18% p.a.Service Tax in India A Handbook11
Periodic Basic Exemption LimitPeriodBasic Exemption Limit (in INR)01-07-1994 to 31-03-2005No limit01-04-2005 to 31-03-20074 Lakhs01-04-2007 to 31-03-20088 Lakhs01-04-2008 onwards10 LakhsDue Date for Return FilingFor the Half YearTo be Filed by1st April to 30th September25th October1st October to 31st March25th AprilDue Date for Return Filing for Input Service Distributor (ISD)For the Half YearTo be Filed by1st April to 30th September31st October1st October to 31st March30th AprilService Tax Payment Dates (other than body corporates)Payable on amounts received during the quarter1st April to 30th JuneDue DateManuale-Payment5th July6th July1st July to 30th September5th October6th October1st October to 31st December5th January6th January1st January to 31st March31st March31st March12
Service Tax Payment Dates (body corporates)Payable on amounts received during the monthDue DateManuale-PaymentApril5th May6th MayMay5th June6th JuneJune5th July6th JulyJuly5th August6th AugustAugust5th September6th SeptemberSeptember5th October6th OctoberOctober5th November6th NovemberNovember5th December6th DecemberDecember5th January6th JanuaryJanuary5th February6th FebruaryFebruary5th March6th MarchMarch31st March31st MarchNote: e-payment of service tax is mandatory for the assessee’s who has paid service tax in excess of INR 10 lakhs (INR 1 lakhs with effect from 01-01-2014)including the amount paid by utilization of CENVAT credit in the previous financial year.List of AbatementsSr. no. ofNotification26/2012Name of the ServiceAbatement % Taxable %Conditions1Financial Leasing including hire purchase90%10%None2Transport of goods by rail70%30%None3Transport of passengers by rail70%30%None4Bundled service by way of supply of food or any drink,in a premises (including hotel, convention center, club,pandal, shamiana or any other place, specially arrangedfor organising a function) together with renting of suchpremises.30%70%CENVAT crediton any goodsclassifiableunder Chapters1 to 22 of theCentral ExciseTariff Act, 1985(5 of 1986) usedfor providingthe taxableservice, has notbeen taken.Service Tax in India A Handbook13
Sr. no. ofNotification26/2012Name of the ServiceAbatement % Taxable %Conditions5Transport of passengers by air60%40%CENVAT credit oninputs and capitalgoods, used forproviding the taxableservice, has not beentaken.6Renting of hotels, inns, guest houses, clubs, campsites orother commercial places meant for rsidential or lodgingpurposes40%60%Same as above7Services of goods transport agency in relation totransportation of goods75%25%CENVAT credit oninputs, capital goodsand input services,used for providingthe taxable service,has not been taken.8Services provided in relation to chit30%70%Same as above9Renting of any motor vehicle designed to carry passengers60%40%Same as above10Transport of goods in a vessel50%50%Same as above11Services by a tour operator in relation to:i. Package tour75%25%14 CENVAT crediton inputs, capitalgoods and inputservices, usedfor providing thetaxable service,has not beentaken. The bill issuedfor this purposeindicates thatit is inclusive ofcharges for such atour.
Sr. no. ofNotification26/2012Name of the ServiceAbatement % Taxable %Conditionsii. Only arranging, booking, accomodation90%10% CENVAT credit oninputs, capital goodsand input services,used for providing thetaxable service, hasnot been taken. The invoice, billor challan issuedindicates that itis towards thecharges for suchaccommodation. This exemption shallnot apply in such caseswhere the invoice,bill or challan issuedby the tour operator,in relation to a tour,only includes theservice charges forarranging or bookingaccommodation forany person and doesnot include the cost ofsuch accommodation.iii. Services other than services specified in (i) and (ii)above60%40% CENVAT credit oninputs, capital goodsand input services,used for providing thetaxable service, hasnot been taken. The bill issuedindicates that theamount charged inthe bill is the grossamount charged forsuch a tour.Service Tax in India A Handbook15
Sr. no. ofNotification26/2012Name of the ServiceAbatement % Taxable %Conditions12Construction of a complex, building, civil structureor a part thereof, intended for a sale to a buyer,wholly or partly except where entire consideration isreceived after issuance of completion certificate by thecompetent authority,(a) For a residential unit satisfying both the followingconditions, namely: the carpet area of the unit is less than 2000 squarefeet; and (ii) the amount charged for the unit is less thanrupees one crore;75%25%(b) for other than the (a) above70%30% CENVAT credit oninputs used forproviding the taxableservice has not beentaken under theprovisions of theCENVAT Credit Rules,2004. The value of landis included in theamount charged fromthe service receiver.List of Service Tax FormsSr. no.LiabilityWhen and bywhomTime periodForm1Service Tax RegistrationAt the timeof starting ofbusiness by theassesseeWithin 30 days fromthe date of startingthe business orreaching INR 9 lakhstaxable turnover orcommencement ofnew levyST-1Amendment in the Service Tax registration certificateWithin 30 days of anychange2Service Tax Registration CertificateTo be issuedby Service TaxDepartmentWithin 7 days fromthe date of receipt ofapplicationST-23Service Tax returnHal
Service Tax Handbook. Service tax has assumed significance in recent years as one of the major contributors to the . Government exchequer. The law has expanded its reach to cover most transactions of services and now pervades all sectors of the economy. Various reforms have been carried out in the past . few years in the prevailing Indirect tax .
Stamp Duty 83 Tax Payments and Tax Return Filing 85 Monthly tax obligations, Annual tax obligations, Early tax refunds Accounting for Tax 91 Tax Audits and Tax Assessments 93 Tax Collection Using Distress Warrant 100 Tax Dispute and Resolution 102
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Contents Global Value Added Tax (VAT)/ Goods and Service Tax (GST) Trends 2 Proposed GST Structure for India 6 Key Concepts under Proposed GST structure for India 11 Role of Goods and Services Tax Network (GSTN) 17 Summary of expectations from proposed GST regime in India 20 About Deloitte 23 About ASSOCHAM 24 Goods and Services Tax (GST) in India Taking stock and setting expectations 1
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