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CERTIFICATE COURSE ON INDIRECT TAXES – SERVICE TAX

CERTIFICATE COURSE ON INDIRECT TAXES – SERVICE TAX. by g. natarajan advocate, swamy associates. MODES OF EXEMPTIONS. Exemption Notifications under Section 93 of the Finance Act, 1994. Exclusion in the coverage of the levy itself.

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CERTIFICATE COURSE ON INDIRECT TAXES – SERVICE TAX

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  1. CERTIFICATE COURSE ON INDIRECT TAXES – SERVICE TAX by g. natarajan advocate, swamy associates

  2. MODES OF EXEMPTIONS • Exemption Notifications under Section 93 of the Finance Act, 1994. • Exclusion in the coverage of the levy itself. • Eg. Commercial or industrial construction service. • Works Contract Service. • (roads, railways, port, airport, transport terminal, bridges, tunnels & dam) • Construction of residential complex service (personal use). • Renting of immovable property service. • (vacant land, residential, parking, sports, circus, etc.) • BAS / Packaging Services (manufacture) • Abatements.

  3. SOME IMPORTANTEXEMPTION NOTIFICATIONS

  4. Notification No. 06/05-ST dated 01.03.2005 • Intended to exempt small service providers. • Present limit- aggregate value not exceeding Rs.10 lakhs in any financial year. • Not applicable to – services provided under brand name & value of services under reverse charge. • Conditions • Option once exercise cannot be withdrawn in a financial year. • No credit on inputs, input services and capital goods. • Previous year turnover to be less than Rs. 10 lakhs.

  5. Notification No. 12/03-ST dated 20-06-03 • Scope • Exemption to value of goods and materials sold by service provider to recipient during the course of provision of service; ( Eg- authorised service station service). • Conditions • Documentary proof indicating value of goods and materials. • Not to avail credit of excise duty paid on such goods and materials . • in case of availment of credit, reversal of same before sale to service recipient. • Contra : Decision of LB in Aggarwal Colour Advance Photo System vs. CCE 2011 23 STR 608 (Tri-LB).

  6. Notification No. 17/2011-ST dated 01.03.2011 • Exemption to taxable services received by unit/developer of SEZ. • (Earlier governed by 17/2002, 4/2004 & 9/2009) • Conditions • Exemption for ST paid on input services (U/S.66 & 66A) used for authorised operations. • Ab inito exemption for services wholly consumed inside SEZ. Provisions of Export of Service Rules, 2005 to be referred to. • Exemption vide refund for services not wholly consumed in SEZ. • Time limit – one year from date of payment to service provider. • No credit on input services.

  7. Notification No. 8/2005 -ST dated 01-03-2005 • BAS -Exemption to goods produced on jobwork. • Conditions • Raw materials /semi finished goods to be supplied by client. • Goods to be returned to client for use in or in relation to manufacture of excisable goods. • Such final products are liable for appropriate duty of excise. • If production of goods by job worker amounts to manufacture u/s 2 (f) of Central Excise Act, 1944, there is no levy at all.

  8. Notification No. 13/2003 - ST dated 20-06-2003 • BAS -Exemption to commission agents. • Effective from 01.07.2003. • Scope restricted to “agricultural produce” from 09.07.2004.

  9. Notification No. 24/2007 -ST dated 22.05.2007 • Exemption to component of property tax while paying service tax on renting of immovable property service . • Conditions • Interest, penalty etc paid to local bodies on account of delayed payment of property tax not eligible for deduction. • When period for which property tax paid is different from period for which service tax is payable , proportionate property tax to be calculated for deduction. • Rule 6 (4c) - Bonanza for landlords.

  10. Notification No. 34/2004 - ST dated 03.12.2004 • GTA - Exemption for freight upto Rs.1,500 / Rs.750.

  11. Notification 52/11 dated 30.12.11 ST Exemption for exporters. • Earlier Notification 41/2007, Notification 17/2009. • Now replaced by Notification 52/2011. • EDI Refund as per scheduled rate or actual refund. • Time limit for filing refund – one year from date of export. • Notification 18/2009 for commission agent services / GTA services.

  12. Notification No. 30/2011 - ST dated 25.04.2011. • Health Services – Limited taxability from 01.07.2010. • Proposed expansion in 2011. • Volte facie due to “misery tax” campaign.

  13. Notification No. 53/2010 - ST dated 21.12.2010. • Information Technology Services – Packaged Software. • Subject to payment of ED / CVD. • Parallel exemption under ED / CVD, if ST is payable.

  14. Miscellaneous Exemptions. • Services provided to United Nations or an international organisation – Notification No. 16/02-ST dated 02-08-02. • Services provided or to be provided by Technology business incubator (TBI) Science & Technology Entrepreneurship Park (NSTEDB) – Notification No. 09/07-ST dated 01.03.07. • Services provided for official use of foreign diplomatic mission or consular post in India - Notification No. 33/07-ST dated 23.05.07. • Services provided for personal use or for use of family members of diplomatic agents or career consular offices posted in foreign diplomatic missions or consular post in India - Notification No. 34/07-ST dated 23.05.07.

  15. ABATEMENTS

  16. Notification No. 01/2006-ST dated 01.03.2006. • Scope • Abatement to various taxable services; • Intention to exclude value of goods transferred in course of provision of service. • Conditions • No credit of duty paid on inputs and capital goods and service tax paid on input services used for providing taxable service; • Not to avail benefit of Notification No. 12/03-ST dated 20-06-2003. • Inclusion of value of materials – construction / ECI. • Implication under Rule 6 of CCR, 2004.

  17. EXPORT OF SERVICES

  18. Export benefits under Service tax – background

  19. Export of Service Rules 2005

  20. Export of Service Rules 2005

  21. Export of Service Rules, 2005.

  22. Additional conditions – Confusions and Clarifications • “ provided from India and used outside India “ • Circular 111/5/2009- ST dated 24.02.09 – • meaning of expression to be understood in context of characteristic of particular category of service ; • accrual of benefit outside is sufficient. • Circular 141/10/2011 –TRU dated 13.05. 2011 – • accrual of benefit further clarified.

  23. Case laws • “used outside India “ • TNT India Private Ltd vs. CST 2007 (7) STR 142 (Tri-Bang) – Courier agency delivering consignments outside India. • Blue Star Ltd vs. CCE 2008 (11) STR 23 (Tri-Bang) – Commission for procuring orders in India for foreign principal. • CST vs. BA Research India Ltd 2009 TIOL 1981 CESTAT Ahm- Testing in India, reports sent outside India. • Consideration in Foreign exchange • ETA Travel Agency Pvt Ltd vs CCE 2007 (7) STR 454 (Tri-Bang) - Commission received in INR from foreign airlines. • Suprasesh GIS & Brokers P. Ltd vs. CST 2009 (13) STR 641 (Tri-Che)- Reinsurance brokerage in INR. • Nipuna Services Ltd vs. CCE 2009 (14) STR 706 (Tri-Bang) – Agent receiving commission on forex and paying appellant in INR.

  24. IMPORT OF SERVICES

  25. Import of services – Brief history .

  26. Thank you g. natarajan 93400 54477 mail@swamyassociates.com

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