TaxTMI 
TaxTMI 
FREQUENTLY ASKED QUESTIONS ON SERVICE TAX AND THEIR ANSWERS
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.... pay Service Tax. 2) REGISTRATION :- Q.2.1) Whom & where should one approach for registration? Ans:- Generally, all Commissionerates of Central Excise, have a Service Tax Cell, headed by Assistant Commissioner/Deputy Commissioner. However, in certain Commissionerates, separate Service Tax Divisions have been constituted. The work is also delegated to Central Excise Divisions in many Commissionerates. A prospective assessee of Service Tax can approach the Assistant Commissioner/Deputy Commissioner in charge of Service Tax cell of the jurisdictional Commissionerates or Central Excise Division for registration depending upon the arrangements made in the Commissionerates. Q2.2.) What is the procedure for registration? Ans:- A prospective taxable service provider seeking registration should file an application in Form ST-1(in duplicate) before the jurisdictional Central Excise officer/Service Tax officer within thirty days from the date of notification of the taxable service. Department is required to issue the registration certificate within 7 days of the receipt of the application. In case of failure to issue registration certificate within 7 days, the registratio....
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....e of non-registration will attract a mandatory penalty of rupees five hundred. Q2.8) Is obtaining a PAN No. from Income Tax Department a must for obtaining Service Tax Registration? Ans:- It is not mandatory to have a PAN for obtaining registration in Service Tax. However, it is advisable for Service tax assessees to have a PAN No. as Service Tax Code (STC) Number based on PAN allotted by Income tax department has been introduced in Service Tax also. The main objective of allocating a number is to identify the concerned person where he is located and registered. 3) PAYMENT OF SERVICE TAX :- Q.3.1) How and where to pay Service Tax. Ans:- The Service Tax amount is required to be paid in Form TR-6 Challan (yellow in colour) in the specified branches of designated banks. The list of such Banks and Branches is available in every Commissionerate of Central Excise. Different heads of accounts have been specified for different taxable service by the Govt. under which payment has to be made. While making the payment of service tax to the credit of Central Govt., head of account should be correctly and properly indicated under major and minor heads....
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....ervice tax as the levy covers only the services provided within India. Q.3.9) When payment is made by a client or customer to an assessee after deducting his Income tax liability under "Tax Deducted at source" provision, whether the service tax liability of the assessees is only towards the amount actually received from his client or customer or tax is to be paid on the amount of income tax deducted at source also? Ans:- The Service tax is to be paid on the value of taxable services which is charged by an assessee. Any income tax deduced at source is included in the charged amount. Therefore, Service tax is to be paid on the amount of income tax deducted at source also. Q.3.10) What is the interest rate applicable on delayed payment of Service Tax? Ans:- Every person, liable to pay the tax in accordance with the provisions of Section 68 or rules made thereunder, who fails to credit the tax or any part thereof to the account of the Central Government within the period prescribed, shall pay simple interest at the rate of fifteen percent per annum for the period by which such crediting of the tax or any part thereof is delayed. Q.3.11)....
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....him either wholly or partially for any reason, the assessee may adjust the excess service tax so paid by him(calculated on a pro-rata basis) against his service tax liability for the subsequent period, if the assessee has refunded the value of taxable service and the service tax thereon to the person from whom it was received". In all other cases of excess payment, the refund claims have to be filed with the department. 4. FILING OF RETURNS:- Q.4.1) How to file Service Tax Returns on what interval and with whom? Ans:- The Service Tax assessees are required to file a half yearly return in Form ST-3 or ST-3A as applicable in duplicate, to the Superintendent, Central Excise, dealing with Service Tax work. The return is to be filed within 25 days from the last day of the half year it relates to and should be accompanied by copies of all TR-6 Challans issued in the relevant period. Thus, returns for half year ending 30^th September and 31st March are required to be filed by 25^th October and 25^th April, respectively. Q.4.2.) What is e-filing of Service Tax returns? Ans:- E-filing is a facility for the electronic filin....
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....e or separate return is to be filed for each service? Ans: A single return would suffice. However, details in each of the column in Service Tax the Forms ST-3 has to be furnished separately for each of the taxable service rendered by the assessee. 5. RECORDS :- Q.5.1) Is there any statutory documents prescribed by the Govt. such as specified invoice proforma, specified registers etc. for use by the Service Providers. Ans:- No specific records have been prescribed to be maintained by a Service Tax assessee. The records including computerised data if any being maintained by an assessee as required under any other law in force. (e.g. Income Tax, Sales Tax) is acceptable to the Central Excise Department for the purpose of Service tax. Q5.2.) From where do the Service Tax assessee get the forms viz. ST-1, Service Tax-2 etc.? Ans:- The Forms are available on the websites as well as with the jurisdictional Central Excise Commissionerates. Q.5.3) Can be Department ask for more information than what assessee is submitting to it in the Form ST-1 and ST-3? Ans:- Yes, if required the Department can always ask for additi....
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....n duplicate along with a copy of order appealed against. The appeal should be presented within three months from the date of receipt of the decision or order of the Central Excise Officer. Q.7.2) What is the procedure for filing of appeal against the order of Assistant Commissioner/Deputy Commissioner of Central Excise? Ans:- Any person aggrieved by any order passed by any assessing officer or adjudicating authority below the rank of Commissioner may file an appeal before the Commissioner, Central Excise(Appeals). i) The appeal shall be filed in the prescribed Form ST-4 ii) It shall be presented within three months from the date of receipt of order which is being appeal against. iii) It should be filed in duplicate. iv) It should be accompanied by a copy of the order appealed against. Q.7.3) Can the time limit of three months for filing the appeal to the Commissioner (Appeal) be extended, if yes, under what circumstances? Ans:- Yes, if the Commissioner of Central Excise (Appeals) is satisfied that the appellant was prevented by sufficient cause, from presenting the appeal within the statutory period of three months, he may allow....
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.... provider availing service tax credit shall maintain proper records in which the relevant information regarding the Sr.no. and date of document on which Service Tax credit is availed, Service tax registration no. and name of the input service provider, description and value of input service, service tax credit availed, service tax credit utilised for payment of service tax on output service shall be recorded. The burden of proof regarding the admissibility of Service tax credit shall lie upon the person taking such credit. Q.8.3) How to avail Service Tax credit? Ans:- The output service provider to avail Service Tax credit shall submit to the Superintendent of Central Excise, a return in the form annexed to the Service Tax credit Rules, 2003 along with Form ST-3. Q.8.4) Whether Input credit can be accumulated and adjusted at the time of payment of Service Tax? Ans:- Service tax credit availed on input service may be utilized for payment of Service Tax on output service. Since no refund of any excess credit available is admissible, the assessee has to utilize the same on payment of Service tax. While paying Service Tax on the output service,....
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....x credit on the service provided in relation to the telephone connection is allowed only in respect of such telephone connections which are installed in the business premises from where output services is provided. Mobile phones are not covered. SERVICE SPECIFIC ISSUES WITH REFERENCE TO SERVICES INTRODUCED IN THE TAX NET IN YEAR 2003-04. 1. COMMERCIAL TRAINING AND COACHING CENTERS :- Q.1.1)Whether intensive tuition/coaching institutes/group of individuals for various competitive exams./correspondence and foreign degree courses/spoken language course liable for service tax ? Ans:- Commercial coaching and training services provided by institutes that prepare applicants for Board examinations and competitive exams., like entrance examinations for IIT, Joint Entrance Exams./Premedical Tests, Civil Services Exam., etc. are chargeable to Service tax However, services in relation to Commercial Coaching and training, provided by:- a) Vocational Training Institute b) Computer Training Institute and c) Recreational Training Institute; have been exempted service tax w.e.f. 1st July, 2003 vide Notf.no.9/2003 Service Tax. Therefore, vocational coaching and traini....
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....ts entered into prior to 1st July 2003, exemption has been provided to that part of the value of service for which bill/invoices have been raised and the amount has actually been received prior to the 1st July, 2003. For such contracts, all subsequent payments or payments made against invoice raised subsequent to the 1st July,. 2003 will be chargeable to service tax. Q.2.2) Whether service tax is applicable on maintenance and repair services provided by persons other than authorised service centers of companies? Ans:- "Maintenance or repair" means any service provided by :- (i) any person under a maintenance contract or agreement ; or (ii) a manufacturer or any person authorised by him in relation to maintenance or repair or servicing of any goods or equipment, excluding motor vechile. Therefore, service tax is applicable on maintenance and repair services provided by all such persons. Q.2.3) If there is a total sub-contract of the service, whether sub-contractor is supposed to take out a registration and discharge the tax liability? Ans: The sub-contractor need not take a registration under service tax. In all such cases, s....
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....roviding banking and Financial services and having proprietary/partnership status are liable to service tax? Ans:- The Banking and Financial services provided by a banking company or a financial institution including a non banking financial company or any other body corporate is chargeable to service tax. The term body corporate means a private limited public limited company or a government company. Such companies should be either a banking company or a financial institution or non banking financial company to come under the tax net. In other words individuals proprietorship or partnership firms will not come under the tax net. Q.3.2.) Whether buying and selling of foreign exchange by the authorised dealers and money changers are under service tax net? Ans:- Only the service of "Foreign Exchange Broking" when provided by the foreign exchange brokers, authorized dealers and money changers has been brought under tax net. 4. ARCHITECT/INTERIOR DECORATOR SERVICE:- Q.4.1.)Whether Vaastu/Feng Shui Consultants come under the category of Interior Decorators? Ans:- Interior Decorator means any person engaged whether direc....
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....ection 65(41) of the Finance Act, 1994. The earlier clarification regarding not to consider empty containers as cargo in the context of Cargo Handling services has got no relevance vis-à-vis services. 8. MANDAP KEEPER :- Q.8.1) Whether the services provided by a Mandap keeper from a religious place are liable for service tax? Ans:- The services provided by a Mandap Keeper from the precincts of a religious place are exempted from payment of service tax. 9. BUSINESS AUXILIARY SERVICES :- Q.9.1) Whether services provided by call centers are taxable? Ans:- Business auxiliary services provided by call centers, i.e. Commercial Centers which provide assistance, help or information's, through telephone, on behalf of another person are exempted from service tax. Q.9.2) Whether services provided by medical transcription centers are taxable? Ans:- Business auxiliary services provided by medical transcription centers i.e. commercial concerns which transcribes medical history, treatment, medical observations and like, are exempted from payment of service tax. 10. FRANCHISE SERVICE :- Q.10.1) What is the taxab....