By: A. Saiprasad B.Com, LL.B, ACA, DISA, AMIMA Advocate Service Tax – Administration, Exemption, Determination of Tax Liability By: A. Saiprasad B.Com, LL.B, ACA, DISA, AMIMA Advocate

Administration of Service Tax Central Board of Excise & Customs, Central Board of Revenue Act, 1963. Power to issue Clarifications in the form of Board Circulars Chief Commissioner of Central Excise Central Excise Zones Supervision, Co-ordination and Control of the various Commissionerates Not an Adjudicating Authority 11/15/2018 9:17 AM11/15/2018 9:17 AM

Administration of Service Tax - I Commissioners Highest Adjudicating Authority Specific Service Tax Commissioners only in: Delhi Mumbai Kolkata Chennai Bangalore Ahmedabad 11/15/2018 9:17 AM11/15/2018 9:17 AM

Administration of Service Tax - II Commissioners Contd.. Rest of the Commissionerates ? Commissioner of Central Excise Commissioner Appeals Appellate Authority Orders passed by adjudicating authority below Commissioner 11/15/2018 9:17 AM11/15/2018 9:17 AM

Administration of Service Tax - III Director General of Service Tax Co-ordinates b/w CBEC & Commissioners Ensure proper establishment and infrastructure for Commissionerates Study staff and field requirements Collate Database regarding collection of service tax Streamline procedures, implement directions of CBEC 11/15/2018 9:17 AM11/15/2018 9:17 AM

Notification No.25/2012 - I Exempted from whole of service tax Services provided to UN or Specified International Organizations Specified International Organisation – 2(zf) UN (Privileges and Immunities) Act, 1947 23 organizations listed thereunder Examples: WHO, ILO, UNESCO, IMF, ADB Previously Notification No.16/2002 ST dt.2.8.02

Notification No.25/2012 - II Health Care Services by: A Clinical Establishment An Authorised Medical Practioner or Paramedics Health care services means any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India and includes services by way of transportation of the patient to and from a clinical establishment,

Notification No.25/2012 - II Recognized System of Medicines Following are recognized systems: Allopathy Yoga Naturopathy Ayurveda Homeopathy Siddha Unani Any other system of medicine that may be recognized by central government

Notification No.25/2012 - IV Service provided by Entity Registration U/s 12AA of IT Act, 1961 By way of Charitable Activities – defined In Para 2(k) Following Activities exempt: 1. Public Health – Care of Counselling of: Terminally ill persons HIV/ AIDS patients Addicted to dependence forming substances Public awareness of family planning/ Prevention of HIV

Notification No.25/2012 - IV Following Activities exempt: 2. Advancement of Religion or Spirituality 3. Educational programmes or skill development to: Abandoned, orphaned or homeless children Physically or mentally abused/ traumatized persons Prisoners Persons > 65 yrs in rural area 4.Preservation of Environment including watershed, forests, wildlife

Notification No.25/2012 – VI Services of Arbitral Tribunal To any person other than business entity To business entity with T/o less than 10 lakhs Services of an Indvl Adv or a PF of advocates by way of legal services to,- an advocate or partnership firm of advocates providing legal services ; any person other than a business entity; or a business entity with a turnover up to rupees ten lakh in the preceding financial year; or A person represented on an arbitral tribunal to an arbitral tribunal;

Notification No.25/2012 - VIII Training or Coaching in Recreational Activities relating to Art Culture Sports Whether training in drawing/ painting/ cricket / singing/ dancing as part of school curriculum is exempt? Whether training provided by training institutes to professional in cricket/ dancing/ painting is exempt?

Notification No.25/2012 - IX Services provided,- (a) by an educational institution to its students, faculty and staff; (b) to an educational institution, by way of,- (i) transportation of students, faculty and staff; (ii) catering, including any mid-day meals scheme sponsored by the Government; (iii) security or cleaning or house-keeping services performed in such educational institution; (iv) services relating to admission to, or conduct of examination by, such institution; “educational institution” means an institution providing services specified in clause (l) of section 66D of the Finance Act,1994 (32 of 1994) Budget Amendment 2014

Notification No.25/2012 - XII Services provided to By way of Government, A local authority or A governmental authority By way of Construction, Erection, Commissioning, Installation, Completion, Fitting out, Repair, Maintenance, Renovation, or Alteration of -

Exemptions – Ntfn 25/12 ST Clause (a) A civil structure or Any other original works Meant predominantly for use other than Commerce, Industry, or Any other business or profession; Building of Government Office, Bus-stand, Complex, Bus- stand with Complex for the Government – Liable to tax? Civil Structures predominantly not for commerce, industry for non governmental purpose

Exemptions – Ntfn 25/12 ST A historical monument, Clause (b) A historical monument, Archaeological site or Remains of national importance, Archaeological excavation, or Antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958); Hauz Khas Complex and Lake

Exemptions – Ntfn 25/12 ST Clause (c) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment; Govt Hospital, School V. Private Hospital, School – Liability to Service Tax

Exemptions – Ntfn 25/12 ST (d) canal, dam or other irrigation works; (e) pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal; or (f) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation 1 to clause 44 of section 65B of the said Act; Entry No.12

Exemptions – Ntfn 25/12 ST Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,- (a) a road, bridge, tunnel, or terminal for road transportation for use by general public; (b) a civil structure or any other original works pertaining to a scheme under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana;

Exemptions – Ntfn 25/12 ST (c) a building owned by an entity registered under section 12AA of the Income tax Act, 1961(43 of 1961) and meant predominantly for religious use by general public; What if construction provided to aforesaid entity for educational, health and charitable purposes? (d) a pollution control or effluent treatment plant, except located as a part of a factory; or (e) a structure meant for funeral, burial or cremation of deceased Entry 13

Exemptions – Ntfn 25/12 ST Services by way of construction, Erection, commissioning, or installation of Original works pertaining to,- (a) an airport, port or railways, including monorail or metro; (b) a single residential unit otherwise than as a part of a residential complex;

Exemptions – Ntfn 25/12 ST Sub-contractor providing services by way of works contract to another contractor providing works contract services which are exempt; Entry No.29(h)

Notification No.25/2012 – XVI Services by Artist Performing Folk or Classical Art forms of Music, Dance, Theatre Whether Shabana Azmi liable to pay Service Tax for Ankur movie/ working in theater/ longines watch? Excluding Services performed above as Brand Ambassador

Notification No.25/2012 – XVII & XVIII Services by way of Collecting or Providing News by Independent Journalist Press Trust of India (PTI) United News India (UNI) Services by way of Renting Hotel, Inn, Guest House, club or campsite or other commercial place Meant for residential or lodging purpose Declared Tariff < Rs.1,000/- per day

Notification No.25/2012 – IX & IXA Service provided in relation to serving of food or beverages By a Restaurant, Eating Joint or a Mess No A/c facility/ Central Air Heating In any part of the establishment At any time during the year Services provided in relation to serving of food or beverages By a Canteen maintained in a factory Covered under Factories Act, 1948 having the facility of A/c or Air heating Exemption W.e.f. 22.10.13

Small Service Provider Taxable service whose Aggregate Value < Rs. 10 Lakhs What about services provided under brand name of another person What about cases where service tax has to be paid by service receivers u/s 68(2) Aggregate Value Is it computed on accrual basis or receipt basis Whether exempt services is to be counted for Rs. 10 lakhs?

Determination of Service Tax Liability 1 Am I doing an activity (including, but not limited to, an activity specified in section 66E of the Act) for another person*? Yes 2 Am I doing such activity for a consideration? Yes 3 Does this activity consist only of transfer of title in goods or immovable property by way of sale, gift or in any other manner? No 4. Does this activity constitute only a transfer, delivery or supply of goods which is deemed to be a sale of goods within the meaning of clause (29A) of article 366 of the Constitution? No

Determination of Service Tax Liability 5 Does this activity consist only of a transaction in money or actionable claim? No 6 Is the consideration for the activity in the nature of court fees for a court or a tribunal? No 7 Is such an activity in the nature of a service provided by an employee of such person in the course of employment? No 8 Is the activity covered in any of the categories specified in Explanation 1 or Explanation 2 to clause (44) of section 65B of the Act? No If answers as above – amounts to provision of service

Determination whether service provided is taxable ? 1 Have I provided or agreed to provide the service? Yes 2 Have I provided or agreed to provide the service in the taxable territory? Yes 3 Is this activity entirely covered in any of the services described in the negative list specified in section 66D of the Act? No If answers as above – amounts to provision of taxable service

Practical Problems Mr. X, is providing CA services. During the year 2014-15, his turnover was Rs. 60 Lakhs. In the month of April 2015, 10 Clients joined for Statutory Audit. Statutory Audit conducted in the month of May. Fee per Client is 30,000 (inclusive of Service tax), invoice raised in the month of July paid by all clients in the month of August 2015. Service Tax @12.36% paid on 5th September 2015. Calculate the following: (a) Point of Taxation (b) Due Date (c) Service Tax liability

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