Taxable service by stock brokers clarified: principal-to-principal trades not taxable, investor-facing transactions are taxable under service tax.
Clarification that taxable service by stock brokers depends on provision of service to an investor: principal-to-principal trades between member brokers are not taxable; broker transactions on own account with a non-member investor are taxable; arbitrage between brokers of different exchanges is taxable as service to an investor.

Service tax registration and centralised assessment: prescribed registration form and designated officers to ensure timely compliance.
Registration requires filing the prescribed registration form with the Deputy Commissioner at Ludhiana or the Assistant Commissioner in other divisions, who must issue a registration certificate within seven days if the application conforms with the Finance Act and Service Tax Rules. Assessment and collection are centralised under the Deputy Commissioner, Ludhiana, and divisional Assistant Commissioners, with Superintendents designated as assessing officers and an additional Inspector (Service Tax) to be posted to support divisional workload; these officers must ensure timely compliance.

Service Tax accounting codes for advertising, courier and paging require specified TR-6 challan entries and authorised bank deposit.
Service Tax on advertising, courier and paging services must be deposited via TR-6 challan under Major Head 0044 with the allocated Accounting Code Nos. entered, the Division name and code (STC, code 71) and the appropriate Range name and code; collection is through authorised bank branches and designated focal point branches listed for the Commissionerate of Central Excise, Mumbai-II.

Service tax account allocation requires advertisers, couriers and paging agencies to deposit collected tax under prescribed accounting heads.
Deposit of service tax for advertising, courier and radio paging services must be made on the Yellow TR 6 Challan under Major Head 0044 - Service Tax. Authorised collecting agencies and departments are directed to use the newly allocated minor heads and corresponding sub heads specified for Advertising Services, Courier Services and Radio Paging Services for all tax collections henceforth.

Service tax on advertising, courier and pager services requires registration, valuation, deposit, returns and specified penalties.
Service tax at five percent was extended from 1 November 1996 to pagers, advertising agencies and courier agencies; responsible persons must register for each premises, collect tax, deposit it monthly using prescribed challans (with provisional assessment possible), maintain records, and file quarterly returns with supporting documents. The notice prescribes valuation rules for various taxable services, details interest on delayed payment, civil penalties for failure to collect or remit, penalties for suppression or misstatement, criminal sanctions for willful evasion or false statements, and appeal routes to Commissioner (Appeals) and the Appellate Tribunal.

Registration requirement: members and dealers must register with Central Excise for the place of their exchange trading operations.
Members and dealers of OTCEI must register their premises with the Central Excise Commissionerate having jurisdiction over the place from which they operate; the same obligation applies to members trading through computers from other centres, and prior registration as a broker on a conventional exchange does not relieve the separate duty to register as a member/dealer of OTCEI or other listed exchanges.

Service tax valuation rules on advertising and courier services clarify taxable inclusions and remittance obligations.
Advertising agencies must include gross amounts charged to clients-commissions, market research, travel, production expenses and other related expenditures-in the taxable value, excluding media space/time paid directly. Agencies remain legally liable for tax even if not collected. Courier operators must include co-loader charges, door to door and integrated logistics charges and exports in taxable value, while inbound deliveries are not taxable. Paging is taxable on gross subscriber charges. Collected tax must be deposited to the Central Government by the 15th of the following month and interest and penalties apply for late or non remittance.

Crediting date for service tax governs interest and penalty; first book transfer in SSA cash section determines liability.
For telecommunication service tax paid by book transfer, the operative date of crediting for calculating interest and penalty is the first date on which a book transfer is made in the cash section of the Secondary Switching Area. Revised proformas ST 3 and ST 3A under Rule 7 are prescribed and must be used by Secondary Switching Areas filing returns.

Rectification visits under Section 74 require prior commissioner approval; annual targeted audits apply to telecom, insurance, stock brokers.
Visits for rectification of mistake under Section 74 of Finance Act, 1994 may be conducted by the Service Tax Cell with prior approval of the Commissioner (Central Excise) once in every two years; audits of accounts/records for telephones, insurance and stock brokers shall be conducted annually, and stock broker audits must follow prescribed tiered selection and selective document-check norms according to their scale of service tax payments.

Service Tax challan colour change: Yellow TR-6 required to ensure correct account classification and proper bank scrolling of receipts.
Effective 1-12-1996, all agencies and departments authorised to collect Service Tax must use Yellow-coloured TR-6 challans for depositing Service Tax under the Major Head Service Tax. The change is intended to prevent confusion with white TR-6 forms used for Union Excise Duties and to ensure proper segregation of challans and scrolling of receipts by banks.

Service Tax administration reorganised: a dedicated branch and designated technical officers now handle all service tax matters.
A dedicated Service Tax Branch has been established within the Central Excise Commissionerate, Meerut, to which all service tax matters are assigned; the Branch is headed by a Superintendent (Service Tax) and service tax references must be made to the Additional Commissioner (Technical) or Assistant Commissioner (Technical) responsible for the Branch.

Registration requirement: members/dealers of over-the-counter exchange must register premises with appropriate Central Excise jurisdiction for their place of operation.
Members and dealers of the Over The Counter Exchange of India must register their premises with the Central Excise Commissionerate having jurisdiction over their place of operation. The requirement applies similarly to members trading via computers from other centres, who must register at the commissionerate for the place of actual operation. Prior registration as a stockbroker of a conventional exchange does not replace the need for separate registration as a member/dealer of OTCEI, the National Stock Exchange, or similar exchanges for transactions in securities listed on those exchanges.

Service tax on advertising and courier services requires providers to register and remit tax on gross amounts charged.
Service tax applies to advertising agencies, courier agencies and paging services on the gross amount charged to clients or subscribers. For advertising, taxable value includes commissions, travel and market research related to advertisements but excludes amounts paid for media space/time. Film producers are not taxable where the agency recharges clients unless the producer bills the client. Courier agencies are taxable for door-to-door time-sensitive delivery on gross charges; co-loaders are not separately taxable. Collectors must register and remit collected tax to the Government within prescribed timelines.

Service tax assessment scope narrowed by excluding advertising, courier and radio paging services from appointed excise officers' jurisdiction.
The amendment substitutes the words "Any other assessee" against specified serial numbers in the table with "Any other assessee (other than those relating to advertising Services, courier services and radio paging services)", thereby excluding assessees providing advertising, courier and radio paging services from the generic category for appointment of Central Excise officers for assessment and collection of service tax.

Service tax on advertising, courier and paging services applies to gross charges with specific valuation and registration rules.
Service tax from 1-11-1996 applies to advertising agencies, courier agencies and paging services. Advertising agencies are taxed on the gross amount charged to clients for advertisement-related services, including commissions and related expenses, but excluding amounts paid for media space or time that are not agency charges. Courier agencies are taxed on the gross amount charged for door-to-door transportation of time-sensitive items; co-loader charges recovered from customers are includible. Paging services are taxable on gross subscriber charges. Collected tax must be deposited monthly and persons responsible must register, with provisions for centralized billing registration.

Service tax challan colour change: yellow TR-6 challans mandated to ensure correct revenue classification and segregation.
To prevent misclassification between service tax and union excise receipts, yellow TR-6 Challans are to be adopted for deposits under Major Head "0044-Service Tax" effective 1 December 1996, to ensure proper segregation, correct scrolling by banks and conforming to the Manual for Collection of Revenue (paras 4.2.2-4.2.3); trade notices will instruct banks and field formations accordingly.

Service tax collection on telephone services: collect on bills received; treat SSA book-transfer date as date of credit.
Tax on telephone services is to be levied on the value of telephone bills received during the month, with the Department not insisting on reconciliation between service tax billed and service tax collected and relying on Telecom Department financial controls; the date of crediting for payment, interest and penalty purposes is the first book-transfer date in the cash section of the Secondary Switching Area, and a journal-slip document similar to Rule 7 entries is to be prescribed for use with ST-3 and TR-6 payments.

Service tax disclosure: brokers must show tax amount separately on contract notes and bills to ensure transaction transparency.
Requirement that Service Tax be shown separately on brokerage bills and contract notes to promote transparency in securities transactions; stock brokers must prominently indicate the Service Tax amount on bills for sale or purchase of securities, and exchanges/trading bodies were asked to notify members of this directive.

Service tax charge timing: tax arises when commission or brokerage is billed; no tax where no commission is charged.
Service tax on stockbroker commission or brokerage is payable when the broker raises a bill; the taxable value is the aggregate commission or brokerage charged, including sub-broker payments. Bills must show each transaction separately (or separate bills issued) so tax is charged per transaction. If a transaction is incomplete and no commission is charged, the taxable value is nil and no service tax is collectible or payable.

Failure to file service tax returns triggers a show cause notice and possible penalty under Section 77; response required.
The revised notice format consolidates enforcement under Section 70(2) and Section 77 of the Finance Act, 1994 by directing registered holders who failed to furnish quarterly Form ST 3 to submit returns within the time specified in the notice and to show cause why penalty under the penal provision should not be imposed for each day of continued contravention. Recipients must produce evidence for their defence, indicate whether they seek a personal hearing, and be aware that failure to respond or appear permits ex parte adjudication; the notice is issued without prejudice to other actions under applicable law.