4/10/2015

Contents

SERVICE TAX

O Service Tax
O Need for Service Tax
O Meaning of Service
O Declared Services
O Taxable services

Group members:Pratiksha Karambe{22}

Noopur Koli{24}
Pallavi Dalvi{25}

O Negative List of services

O Liability to pay service tax
O Service Tax Rate
O Example

Concept of Service Tax

Service Tax is a form of indirect tax imposed on

specified services called taxable service.

It is an indirect tax.
First brought into force with effect from 1st July 1994.

Need for Service Tax

The objective behind levying service tax is to reduce

degree of intensity of taxation on manufacturing and trade.

The intension of the govt is to gradually increase the list

of taxable.

Meaning of Service
O SERVICE,First time in the history of this law the term

It is prime responsibility of the govt is

to fulfill the increasing developmental

Service has been defined u/s 65B(44) of theAct

inserted w.e.f. 01-07-2012.

needs of the country and

its people by way of public expenditure.

O Service means any ACTIVITY carried out by a person

for another for CONSIDERATION and includes

declared services.

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Declared Services
O constitutes merely transfer of title in Goods or Immovable

Declared Services
O Agreeing for not doing any act or tolerate any act, or to do an act;

Property
O Section 66E of the Act provides certain activities
O Renting of Immovable Property;

Construction of a Complex, building, civil structure

Temporary transfer or permitting the use or enjoyment of any

intellectual rights;

O Transfer of Goods by way of hiring, licensing without transfer of right to use

such goods;
O Activities in relation to delivery of goods on hire purchase;

O Service portion in Works Contract; and

O Service portion in an activity where food or any article for human

consumption or any drink is supplied in any manner as part of such activity.

O Development, Designing, Programming, Up- gradation,

Customizing, Adaption, Implementation, Enhancement of

Information Technology Software;

Taxable Services

Construction includes additions, alterations, replacements or remodelling of

any existing civil structure.

What services are taxable?

O Prior to July, 2012 Service Tax was charged on specified list of

services.

There are about 116 services covered under the

service tax.
Some of the major services are as follows:
Telephone
Stockbroker
Courier agencies
General Insurance
Commercial Training and coaching
Works contract

NEGATIVE LIST OF SERVICES

O chargeability of service tax has been shifted from Positive List to

Negative List.W.e.f. 01-07-2012,

O Service Tax shall be charged by virtue of Section 66B of the Act

which reads as under:

There shall be levied a tax at the rate of 12% on the value of all
services, other than those services specified in the negative list,
provided or agreed to be provided in the taxable territory by one
person to another and collected in such manner as may be
prescribed

NEGATIVE LIST OF SERVICES

O Section 66D of the Act specifies 17 categories of

services on which no tax shall be levied.

Following are such categories listed in negative list:
Services by RBI,
Foreign Diplomatic Mission in India,
Government or Local Authority;
Trading or Manufacture of Goods;
Betting, gambling or lottery &

Funeral, burial, crematorium or mortuary services including

conveyance of deceased;
Selling of space or time slots for advertisements other than
broadcasted by radio or television;
Admission to entertainment events or amusement facilities;
Services relating to agriculture or agricultural produce like
supply of farm labour, loading, unloading, storage or
warehousing of agricultural produce;

Transmission or distribution of Electricity;

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Who is liable to pay Service Tax?

1.INSURER
in case of
service provided
by insurance
agent

O (Sec.68 (1) of the Act) says thatthat-the Person

who provides the taxable service is

responsible for paying the Service Tax to the
Government.

5.SPECIFIED
CONSIGNOR
OR CONSIGNEE
in case of service
provided by
goods transport
agency

Persons
Liable to Pay
Service Tax
in Certain
Cases

4.ASSET
MANAGEMEN
T COMPANY
in case
service
provided by a
distributor to
them

Service Tax Rate

The current of service tax rate is 12.36%
Service Tax
12%
(+)Education Cess[2%]
0.2%
(+)Senior and Higher Education Cess[1%] 0.1%
Effective Service Tax Rate
12.36

2.INDIAN
RESIDENT
in case of
import of
service

3.BODY
CORPORATE
OR FIRM
in case of
receipt of
sponsorship
service

Example
If a CA, provides services in the capacity of auditor to
ABC Ltd. And the audit fees is Rs.100000 then the
service tax chargeable will be 12.36% on Rs.100000
i.e INR 12360. Hence, the total billing to be done by
CA to ABC Ltd will be Rs.112360.

Thank You