1. SERVICE TAX APPLICABILITY & PROCEDURES

2. INTRODUCTION
In this Financial Year, our country has experienced a major change ever in the indirect tax regime. There has been a total shift in the way services are taxed. The previous system, which taxed services particularly specified in the legislature, is replaced by a comprehensive system which is widely accepted in developed economies.
This change in the system paves the way for introduction of our country's most sought, GOODS AND SERVICES TAX.
With the service sector now accounting for 60 per cent of the GDP, the Ministry has set a target of Rs.1.24 lakh crores for service tax collection during The intention behind this increase can be the broadening of tax base in the new system, which is the essential and wanted feature of an indirect tax as it brings revenue without hindrance to the economic development.

3. WHAT IS SERVICE TAX
Service Tax is a tax which is payable on services provided by the service provider. Just like excise duty is payable on goods which are manufactured, similarly service tax is payable on service provided.
This tax is payable by the provider of services to the Government of India. However the service provider can collect the service tax from the consumer of service (recipient of service) and deposit the same with Government of India.

4. DEFINITION OF SERVICE – SEC 65B
Any activity, meeting the characteristics of 'Service' is taxable unless specified in the negative list/otherwise exempted by a notification. The term Service has been defined “to cover any activity, carried out by a person for another for consideration and includes a declared service.”
Anyhow, the following are not considered as a service,
* any activity constituting only to transfer of title to goods and
immovable property by sale,
* a transaction only in money/actionable claim,
* services provided by an employee to an employer in the course
of employment,
* fees payable to court/tribunal and deemed sales

5. DECLARED SERVICES
Declared Services means any activity carried out by a person for another person for consideration and declared as such under section 66E of the Finance Act, The need for declared service arose in order to clarify any ambiguity about the validity of transactions.
The following are activities declared to be a service;
Renting of immovable property;
Construction of a complex, building, civil structure/a part thereof, including a complex/building intended for sale to a buyer, wholly/partly, except where the entire consideration is received after issuance of certificate of completion;
* Temporary transfer/permitting the use or enjoyment of intellectual property right;

6. DECLARED SERVICES…
Development, design, programming, customization, adaptation, up gradation, enhancement, implementation of information technology software;
Agreeing to the obligation to refrain from an act,/to tolerate an act/a situation,/to do an act;
Transfer of goods by way of hiring, leasing, licensing /any such manner without transfer of right to use such goods;
Activities in relation to delivery of goods on hire purchase/any system of payment by installments;
Service portion in execution of a works contract;
* Service portion in an activity wherein goods, being food/any other article of human consumption/any drink, is supplied as part of the activity.

7. RATE OF SERVICE TAX
No separate Act is present for services in India; it is forming part of "Chapter V of Finance Act 1994" hence Considering India's overall economic scenario, battle against inflation and the increasing fiscal deficit, the contribution of Service Tax was significantly expanded by increasing the rate of tax to make it equitable and progressive.
Thus, the Basic Rate of Service Tax is increased from 10% to 12% w.e.f
And , Service tax is simply tax qua services not qua person.

8. WHAT IS NEGATIVE LIST: SEC 66D
services by Government or a local authority excluding the following services to the extent they are not covered elsewhere—
(i) services by the Department of Posts by way of speed post,
express parcel post, life insurance and agency services provided
to a person other than Government;
(ii) services in relation to an aircraft or a vessel, inside or
outside the precincts of a port or an airport;
(iii) transport of goods or passengers; or
(iv) support services, other than services covered under clauses
(i) to (iii) above, provided to business entities;

9. NEGATIVE LIST… (b) services by the Reserve Bank of India;
(c) services by a foreign diplomatic mission located in India;
(d) services relating to agriculture by way of—
agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or seed testing;
supply of farm labour;
(iii) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market;

10. NEGATIVE LIST…
(iv) renting or leasing of agro machinery or vacant land with or without a
structure incidental to its use;
(v) loading, unloading, packing, storage or warehousing of agricultural
produce;
(vi) agricultural extension services;
(vii) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce;
(e) trading of goods;
(f) any process amounting to manufacture or production of goods;
(g) selling of space or time slots for advertisements other than advertisements broadcast by radio or television;

11. NEGATIVE LIST…
(h) service by way of access to a road or a bridge on payment of toll charges;
betting, gambling or lottery;
(j) admission to entertainment events or access to amusement facilities;
(k) transmission or distribution of electricity by an electricity transmission or distribution utility;
(l) services by way of—
(i) pre-school education and education up to higher secondary school or equivalent;
ii) education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force;
(iii) education as a part of an approved vocational education course;

12. NEGATIVE LIST…
(m) services by way of renting of residential dwelling for use as residence;
(n) services by way of
(i) extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount;
(ii) inter se sale or purchase of foreign currency amongst banks or authorized dealers of foreign exchange or amongst banks and such dealers;
(o) service of transportation of passengers, with or without accompanied belongings, by—
(i) a stage carriage;
(ii) railways in a class other than—
(A) first class; or
(B) an air-conditioned coach;
(iii) metro, monorail or tramway;
(iv) inland waterways;

13. NEGATIVE LIST…
(o) (v) public transport, other than predominantly for tourism purpose, in a vessel of less than fifteen tonne net; and
(vi) metered cabs, radio taxis or auto rickshaws;
(p) services by way of transportation of goods—
(i) by road except the services of—
(A) a goods transportation agency; or
(B) a courier agency;
(ii) by an aircraft or a vessel from a place outside India to the
first customs station of landing in India; or
(iii) by inland waterways;
(q) funeral, burial, crematorium or mortuary services including transportation of the deceased.

14. MEGA EXEMPTIONS
(Notification No.25/2012-ST dated )

15. MEGA EXEMPTIONS…

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27. MEGA EXEMPTIONS…

28. MEGA EXEMPTIONS…

29. MEGA EXEMPTIONS…

30. ABATEMENT (in excess of the % shown in column 3)
(Notification No.26/2012 ST dated )

31. ABATEMENT…

32. ABATEMENT…

33. ABATEMENT…

34. ABATEMENT…

35. ABATEMENT…

36. REVERSE CHARGE (Notification No.30/2012 ST dated 20.6.12 as amended by

37. REVERSE CHARGE…

38. REVERSE CHARGE…

39. REVERSE CHARGE…

40. REVERSE CHARGE…

41. PAYMENT Rule 3 : Point of taxation Whichever is earlier of following:
I) Date of issuing the invoice, if issued within 30 days of completion of service, or
II) Date of completion of service, if invoice is not issued within 30 days of completion of service, or
III) Date of receipt of payment
(Restriction of 30 days will alter into 45 days in case of banks)

42. PAYMENT … Rule 5: POT in case of new services: No tax is payable If,
i) invoice has been issued and
Ii) The payment is received Before such service become taxable,
Or If –
i ) Payment has been received before the service become taxable and
II) Invoice has been issued within 14 days of the date when the service is taxed for the first time.

43. PAYMENT … Rule 7 : POT in case specified services or persons.
Service receivable liable to
Pay tax u/s 68 (2)
Date of payment, however, in case the payment is not made within a period of 6 months of the date of invoice, the POT shall be determined under normal rules
"Associated enterprises", the
Service provider is located
Outside India
i) Date of debit in the books of account of the person receiving the service or
Ii) Date of making the payment
Whichever is earlier

44. PAYMENT … Rule 8 : POT on Best Judgment
Where the POT cannot be determine as per previous rules as the date of invoice or the date of payment or both are not available, the Central Excise Officer, may, require the concerned person to produce such accounts, documents or the other evidence as he may deem necessary and after taking into account such material and the effective rate of tax prevalent at different points of time, shall, by an order in writing, after giving an opportunity of being heard, determine the point of taxation to the best of his judgment.

45. PAYMENT …
Section 66C :
Determination of Place of Provision of Service:
This seeks to empower the Central Government to make rules which will contain principles on the basis of which taxing jurisdiction of a service can be determined. These rules would be known as Place of Provision of Service rules, 2012.
Place of Provision of services rules, 2012
Generally, the place of provision of a service shall be the location of the recipient of service. Provided that in case the location of the service receiver is not available in the ordinary course of business, the place of provision shall be the location of the provider of service (RULE 3).

46. PAYMENT …

47. PAYMENT …

48. PAYMENT …

49. FILING OF RETURNS
All Assesses have to file the returns half yearly in Form ST 3
i.e
for the first half year Apr to Sep - on or before 25th of Sep &
for the second half year Oct to Mar - on or before 25th of April

50. CONCLUSIONS
Service Tax is envisaged as the Tax of the Future. Well synchronised taxation on manufacturing, trade (domestic & international) and service without giving rise to cascading effect of taxation would be an ideal worth pursuing in the immediate future.
The GST is aimed at being comprehensive for most goods and services with minimum exemptions. It would create a standard rational tax across the country, further more it paves a concrete road towards any convergence.