Service tax on escort charges: police-provided escort services to banks are taxable as Security Agency service.
Service tax is leviable on escort charges collected by State Police from banks for cash escort services as taxable Security Agency service, because such compensated escort services are not statutory or sovereign functions and may be treated as services provided to external persons under the Finance Act; formations are directed to safeguard revenue accordingly.

Service tax refund for SEZ supplies: refund route and limited upfront exemption require UAC approval and documentation.
Refund is the default mechanism for service tax on services to SEZ Units/Developers under Notification 17/2011-ST, with upfront exemption limited to services wholly consumed in authorised SEZ operations. Refund claims use Table-A of Form A-2; exclusive-use services require invoice designation, UAC approval, and accounting evidence. Shared services attract proportionate refund calculated by reference to total turnover (including DTA), and unrecovered proportions may be availed as cenvat credit by DTA units. Declaration in Form A-1, original invoices, and separate accounts for consolidated claims are required.

Used outside India requirement clarified: effective use and accrual of benefit must occur outside India to qualify as export.
The circular explains that, for the period when the rule required services to be used outside India, that phrase means the benefit or effective use and enjoyment of the service must accrue outside India; mere payment from abroad or the payer's location is not decisive. The place of effective use depends on the service's nature, and all conjunctive conditions in Rule 3(1) and Rule 3(2) must also be satisfied to qualify as export of services.

Prosecution for material service tax offences targets non issuance of invoices, fake credit claims and failure to remit collected tax.
Prosecution under section 89(1) of the Finance Act, 1994 targets material service tax offences: failure to issue prescribed invoices within the statutory period (including rules for reverse charge recipients), availment and utilization of credit without receipt of services (including fake or altered invoices), maintenance or supply of false books or materially false information affecting tax liability, and collection of tax followed by non remittance. Corporate officers may be prosecuted with a due diligence defence; mens rea is presumed and the accused bears the burden to disprove it. Sanctioning and procedural safeguards, a monetary threshold for prosecution, and recording of reasons by sanctioning authorities are mandated.

Commercial training or coaching service: flying and maintenance institutes taxable as courses are not statutorily recognized.
Commercial training or coaching service applied to flying training schools and aircraft maintenance engineering institutes is taxable because their courses and certificates are not "recognized by law" in the statutory sense; DGCA approval or reliance on training for licensing does not amount to statutory recognition, and amendments and notifications narrowing exemptions exclude these institutes from relief.

Service tax scope for short-term accommodation and specified restaurants clarified; taxable value rules and applicability outlined.
Clarifies valuation and scope for service tax on Short Term Accommodation Service and Restaurant Service: declared tariff (including amenities but excluding discounts) determines liability while tax is charged on the actual amount collected after discounts; separate tariffs permitted for intelligible customer classes; declared tariff including food is taxable unless food is billed separately; seasonal tariff revisions must be uniform and declared; state luxury tax and VAT excluded from taxable value. For restaurants, tax applies only where premises are air-conditioned and licensed to serve alcohol; clearly demarcated outlets not meeting both criteria are not taxable; extensions of the restaurant are taxable; room service billed separately is not taxable under either head.

Classification of subcontractor services: specifically described services prevail and remain taxable even when used as input to works contracts.
Classification of subcontractor services to a works contract provider must follow the statutory rule that a specifically described service takes precedence over a generic works contract description; subcontractor services such as architect, consulting engineer, construction of complex, design, erection and commissioning, management, maintenance or repair are classifiable under their respective descriptive heads and remain chargeable to service tax even when used as input services by an exempt works contract provider.

Service tax on SIM cards: field formations instructed to raise protective demands to safeguard revenue.
The High Court allowed the department's appeal holding that service tax is chargeable on the value of SIM cards despite payment of sales tax; because field practice varies and the matter is sub judice, field formations are directed to raise protective demands to safeguard Government revenue.

Cenvat credit eligibility clarified: credit allowed unless inputs or services are used exclusively for exempted goods, services, or trading.
Clarification affirms that CENVAT credit is allowable for inputs and input services used in manufacture or in relation to taxable services except where expressly denied, notably when used exclusively for exempted goods or services (including items exempt under the cited notification) or exclusively for trading; capital goods used exclusively for exempted activity are likewise ineligible. Repair and renovation services for factory/offices and Business Auxiliary Services tied to sale (including commission) remain admissible. Special allocation and reversal rules for banking, financial and life insurance services apply per registration. Pre-amendment completed services retain credit eligibility.

Service tax on restaurant services: gross value exemption and valuation rules; hotel tariff based levy with exemptions.
The circular operationalises new and amended Service Tax entries effective May 1, 2011, setting valuation and exemption rules: restaurants receive a 70% gross value exemption only if no Cenvat credit is claimed and service charges are included in taxable gross value while tips are excluded; short term accommodation is taxed based on a declared tariff definition with exemptions below the threshold and a 50% valuation concession absent Cenvat credit; life insurance taxation allows an option to tax the non investment premium portion or apply a prescribed valuation where no break up is provided.

Service tax on visa assistance: not leviable when individual pays facilitators; leviable if employer engages or pays.
Assistance provided directly by visa facilitators to individuals for obtaining visas, where statutory fees are remitted to authorities and the service charge is paid by the applicant, does not fall under taxable services and is not liable to service tax under section 65(105). Service tax becomes payable where the facilitator acts as agent of recruitment or of a foreign employer (supply of manpower), or where a business entity pays the service charge on behalf of its employees (business support service).

Service tax accounting codes for new restaurant and short-stay accommodation services establish revenue, interest and refund coding.
Allocation of account codes under Major Head "0044-Service Tax" for two taxable services introduced by the Finance Act, 2011: specified three-part codes for tax collection, other receipts (interest/penalty) and deduct refunds (for revenue authorities), with directions to book education cess to designated heads, replace any NSDL dummy codes with the prescribed codes, and issue trade/public notices; table descriptions do not restrict service scope.

Service tax audit manual sets updated audit principles requiring all service tax audits to follow the Manual and extant instructions.
The Service Tax Audit Manual 2011 has been approved and will be circulated by the Directorate General of Audit; all Service Tax audits must henceforth be conducted in accordance with the Manual's principles together with extant instructions, the Manual is for departmental officers only, and suggestions or corrections should be brought to the notice of the Directorate General of Audit.

Education Cess treated as part of service tax; where whole service tax is exempt, cess is also not recoverable.
Education Cess and Secondary and Higher Education Cess are levied and collected as a percentage of service tax and therefore become nil where the whole of service tax is exempt; field formations are directed not to recover education cesses in such cases, and cess refunds made to exporters along with exempted service tax need not be recovered.

Amendment to Point of Taxation Rules corrects reference in rule nine, replacing "this sub-rule" with "these rules".
A corrigendum to the Service Tax notification published in the Gazette substitutes the phrase "this sub-rule" with "these rules" in rule 9, effecting a textual correction to the Point of Taxation Rules without changing substantive tax provisions.

Point of Taxation: tax due on invoice date or payment, with payment-based point for exports and reverse-charge services
The Point of Taxation Rules now make the tax point the earlier of invoice date or payment when invoices are issued within the prescribed period, otherwise the date of completion of service or payment applies; continuous supply is defined by contractually specified completion events and takes primacy; payment-based point applies to exports, reverse-charge supplies and certain professional providers, with special timing and transitional rules and aligned amendments to invoice issuance and input credit conditions.

Service tax refund claims by exporters with local registered offices may be filed with the designated service tax division.
Service Tax refund claims under Notification No.17/2009-ST, other than those in para 2(b), may be filed by persons, entities or merchant exporters whose registered or head office is situated in the specified districts with the Assistant Commissioner or Deputy Commissioner, Central Excise, Service Tax Division in the designated locality; trade associations and chambers are requested to publicize this filing clarification pursuant to the Notification.

Business Exhibition Service: venue and installation abroad not taxable; stall rental to Indian exhibitors not export without convertible currency.
Organising an overseas business exhibition involves hiring foreign premises and arranging stall installation-services performed entirely outside India and not taxable under the Taxation of Services (Provided from Outside India & Received in India) Rules-while renting stalls to Indian exhibitors is a service provided within India and does not qualify as export because consideration is not received in convertible foreign currency; this clarification is limited until 28 February 2011 due to a later exemption notification.

Service tax scope expansion: new services and compliance reforms change liability timing, valuation and credit treatment.
Service tax coverage is widened by adding two new taxable services and expanding many existing service definitions to capture investment management, expanded coaching, club services to non members, business support, legal and specified clinical establishment services, with targeted abatements and tariff thresholds. The compliance regime is reworked to incentivise self correction through reduced penalties when complete records exist and dues are paid, while stiffening sanctions and prosecution for deliberate evasion. Point of Taxation Rules determine the time of supply (earliest of provision, invoice or payment). Cenvat Credit Rules are clarified and restricted, valuation for money changing prescribed, and export/SEZ rules amended with specific exemptions.

Service tax on renting of immovable property: collection authorised pending final adjudication; applications urged to vacate interim stays.
Following a Supreme Court direction that earlier interim protection continue until disposal of writ petitions, the Government is advised that it is empowered to pursue collection of service tax on renting of immovable property pending final High Court adjudication and to file applications in High Courts to vacate interim directions; administrative steps to collect pending tax and seek vacation of stays should be taken expeditiously.