Service Tax


WHAT IS SERVICE TAX ?

Introduction -
    
     Every time it is not possible to the tax payers to pay the taxes within the prescribed time provided under the wealth Tax act.
    By any reason, The tax payer or here to say the assesses has failed to pay the dues within free prescribed time by any reason which may be relevant or irrelevant. Student should keep in mind that is no emotion considered for recovery of taxes by the government. What is reasonable is the question of fact to be decided by the government authority.
    If the taxpayer failed to pay the taxes within time the penalty will be attracted which would be in addition to the Tax. Interest? It is to be noted that interest and penalty are quite different terms. The penalty is not calculated on the percentage basis.


Related Questions :
Q :  Discuss the provision for the payment of service tax. ( April 2006 October 2006 April 2007 April 2010 March 2011, Oct 2011,April 13)

Q :  Service tax collected from any person to be deposited with central government. explain. (April 2010)

Q :  Explain the the Furnishing of returns of service Tax . ( March 2012, Oct 13,Oct 14)

Q :  Conditions  for obtaining of the exemption from service tax bi small scale service provider. Discuss (April 2009, April 13, October 13)

Q. : Write critical note on "Persons liable to pay service tax". (October 14)

Contents :

1) Payment of service tax
2) Service tax collected to be deposited with central government
3) Condition for obtaining exemption by SSI


1.  Payment of service tax : Under section 68 -

1. Every person providing taxable service to any person shall pay service tax at the rate specified in section 66 in such a manner and within such period period as may be e prescribed.

2. Notwithstanding anything contain in sub - section (1) in respect of of any taxable service notified by the central government in the official Gazette. The service tax there on shall be paid by  such a person and in  such  manner as may be prescribed at the rate specified in section 66 and all the provision of this chapter shall apply to  such person as if he  is the person liable for paying the the service tax in relation to such a service. with effect from 11/05/2007

As per section 66 of of the finance act 1994 (service tax) and section 85 of the the finance act 2004, Education Cess at percent, the rate of service tax is  12% of the value of the taxable service.

Under finance (No 2) Act 2014 (Statutory provision relating to education Cess)
Section 91 provides in addition to service tax, education cess is payable at the rate 2%

Under finance act 2007 ( stationery provision relating a Secondary And Higher Education Cess)
Under section 136 provides in addition to service tax Secondary And Higher Education cess is 1%

( Total 12.36% on the value that taxable service)
Up to 10/05/2007 the rate of service tax 12% of the value of the the taxable service. In addition of this, education cess is payable at the rate 2% on the service tax amount ( total 12.2% on the value of the taxable service).


With effect from 24/02/2009
The rate of service tax is 10% of the value of the taxable service. in addition to this, education cess is payable at the rate 2% and 1% SHED on the service Tax amount (total 10.3% on the value of the taxable service).

With effect from 01/07/2009
Under section 66B  the rate of service tax 12% of the value of the taxable service. In addition to this,  education cess is payable at the rate 2% and 1% SHED on the service Tax amount ( total 12.36% on the value of taxable services).

Due date are as below -

1. Companies : Deposit service tax collected by 5th of next month. for the month March deposit by 31st March.

2. Individual and Proprietorship : The Quarterly Liability as below :
 

Quarter ended

Due date for payment of service tax

30th June

5th July

30th September

5th October

31st December

5th January

31st March

31st March



 It is important to note that from 1st April 2011. The service tax has to be paid as soon as the service is deemed to be provided I.e.

¡) Date on which service is provided or to be provided
¡¡) Date of invoice
¡¡¡) Date of payment
Whichever is earlier.

The Assessee is required to to deposit the service tax with the bank designated for this purpose. The amount payable is to be rounded of the nearest rupee.
The date of presentation of cheque to the bank Shall be  deemed to be the  date on which service tax has been paid subject to realization of this cheque.
From first April 2010 all Service Tax payers who have paid aservice tax of Rs 10 lakh or more in the preceding financial year shall pay the service tax electronically. I.e through internet banking.


2. Service Tax collected from any person to be deposited with central government -

Any amount recovered by a service provider from any other person has to be deposited with the  government even if he has no right to collect service tax. The delay in making payment of service tax will attract the interest at the rate 13%. Master Circular number 97/6/2007 ST date 23/08/2007 itself clarified the itself can clarify the procedure for charging the interest which is as below-
Any amount collected by a person    are service tax from any other person. Even it was not permissible in terms of service tax law. It required to be deposited with the central government.

In other words, no amount collected as service tax shall be retained by the person by the person who has collected such amount.

It is provided under section 75 that every person liable to pay service tax in accordance which is provision of section 68 or rules made there under. falls To  credit the tax to the account of the central government within period  prescribed shall pay simple interest at such a rate not below 10% and not extending 36% par annum.


3. Conditions for abstaining of the exemption from service tax by the small scale service provided :

    Taxable service provided buy the small scale service provider are exempted from whole of service tax leviable  there on up to the aggregate taxable value rupees 10 lakhs vide notification no 8/2008-ST date 01/03/2008 effective from 1st April 2008 the above exemption is available subject to the following conditions.

A) taxable service provide has the option not to avail the said exemption and pay service tax on the taxable service and such option are exercised in a financial year shall not be  withdrawn during the remaining part of the financial year.

B) the provider of taxable service shall not avail CENVAT credit of service tax paid on any input used for providing taxable service on which exemption of small scale is availed.

C) the provider of  taxable service shall not avail CENVAT credit under rule 3 of The CENVAT credit rules 2004. during the period in which the service provider avail small scale exemption.

D)  the provider of taxable service shall not avail CENVAT credit only on such input or input services received on or after the date on which is the service provider start paying service tax and used for provision of taxable services on which service Tax is payable.

E)  The provider of taxable service shall be required to pay an amount equivalent of the CENVAT credit taken by him. If any. In respect of such a input lying in stock or in  process on the date on which start availing exemption under the notification.

F)  the balance CENVAT  credit lying unutilized if any after the adjustment of credit under (e) above. Shall ; as on the day such service provider start availing the exemption under this notification.

G) the notification shall apply to the the aggregate value of one or more taxable service provided from one or more premises and not separately for each premises for each service.

H)  The aggregate value of taxable service rendered by a provider of such service from one or more premises does not exceed exemption limit fixed. I. e Rs 10 lakhs in the proceding financial year.

SERVICE TAX

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