EXEMPTION OF SERVICE TAX

[SURYAKANT MITHBAVKAR]

We have rendered services to our customer at jammu now we have to raise the service tax invoice whether service tax is applicable for Jammu.

[Sucheta Agrawal]

Service Tax is not applicable in Jammu & Kashmeer. Thus if you are providing the services in Jammu then no service tax applicability on your services.

i am also referring the relevant case law plz see 

ECIL RAPICSCAN LTD. Versus COMMR. OF SERVICE TAX, HYDERABAD2010 -TMI - 75545 - CESTAT, BANGALORE

[DEV KUMAR KOTHARI]

Dear SURYAKANT MITHBAVKAR

Please see the following provision (you can find on tmi):                                    SERVICE TAX       Chapter V of Finance Act, 1994 64.  Extent, commencement and application

(1) This Chapter extends to the whole of India except the State of Jammu and Kashmir.

(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

(3) It shall apply to taxable services provided on or after the commencement this Chapter."

Thus it is clear that provisions of Chapter IV of the FA 1994 do not extend to the state of J & K. I agree with views of  CS  Sucheta.

Personal request:

Please do some study on your own problem, come with your results of study and then discuss with others so that purpose of discussion forum is fulfilled in a meaningful manner. Raising very preliminary query without own feed back is very harmful because , people in the world  (through www) can have wrong impressions about our professions and professional capabilities.  I hope you take it in right spirit and perspective.

[rishi mohan]

Sir,

Service tax provisions apply to whole of India except Jammu and Kashmir. Therefore services rendered in Jammu and Kashmir are fully exempt from the service tax.

Applicability of Provision of Service Tax in the State of Jammu and Kashmir

In such case, services provided by that person in the other part of India would be liable to service tax as he will fall under the preview of section 64.

However, if such person does not have any office or establishment outside Jammu & Kashmir, and services, are provided from Jammu & Kashmir to the other part of India, the practical problem is how and in what manner the amount of service tax shall be collected from such person.

It means that provisions of the section 66 (charging section) are not applicable but the provisions of other section (i.e. collection and recovery of tax) are applicable in the state of Jammu & Kashmir.

AI Summary

Service tax exemption: services performed in Jammu and Kashmir fall outside the service tax chapter, raising cross border collection issues.
Services provided within Jammu and Kashmir are outside the territorial operation of the Finance Act chapter on service tax and therefore do not attract service tax; supplies to other parts of India are taxable, creating practical collection and recovery issues where the supplier has no establishment outside Jammu and Kashmir.