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SERVICE TAX

SERVICE TAX. Basic Features. Statutory provisions. Levy on service provider - Exceptions. . Levy on realisation. . Classification of Service. Specific description than general description. Essential character. Which occurs first in the definition. Valuation…. Gross amount.

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SERVICE TAX

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  1. SERVICE TAX mail@swamyassociates.com www.swamyassociates.com

  2. Basic Features • Statutory provisions. • Levy on service provider - Exceptions. • Levy on realisation. mail@swamyassociates.com www.swamyassociates.com

  3. Classification of Service • Specific description than general description. • Essential character. • Which occurs first in the definition. mail@swamyassociates.com www.swamyassociates.com

  4. Valuation… • Gross amount. • Cum - tax. • Abatements. • Notification 12/2003. mail@swamyassociates.com www.swamyassociates.com

  5. Valuation… • Services rendered free. • Consideration in kind. • Reimbursement of expenses. Upto 18.04.2006 – No liability. Judgements and circulars. From 19.04.2006 – Concept of pure agent. Malabar Management Services VS CCE 2008(9) STR 483 mail@swamyassociates.com www.swamyassociates.com

  6. Proceedings in Service Tax • Issue of show cause notice. • Adjudication. • Appellate remedies. Commissioner (Appeals) CESTAT High Court / Supreme Court mail@swamyassociates.com www.swamyassociates.com

  7. Procedures in Service Tax… • Registration – Centralised Registration. • Issue of invoice. • Maintenance of records. mail@swamyassociates.com www.swamyassociates.com

  8. Procedures in Service Tax. • Payment of service tax. - Due date. - Advance payment. - e payment. - Self adjustment – if service not rendered. - Provisional payment. - Self adjustment of excess payments. • Filing of return – ST 3. - Due date / Half yearly. - Revised return. - Fine for delayed return. mail@swamyassociates.com www.swamyassociates.com

  9. Penalties in Service Tax. • Sec. 76 – Delayed payment of S.Tax. • Sec. 77 – General Penalty. • Sec. 78 – Suppression, etc. • Sec. 80 – Power of waiver. • Rule 7 C – Fine for delayed return. mail@swamyassociates.com www.swamyassociates.com

  10. Certain important services. mail@swamyassociates.com www.swamyassociates.com

  11. Business Auxiliary Service. • Promotional activities. • Customer care services. • Procurement of goods or services. • Production or processing. • Provision of service on behalf of client. • Manufacture – excluded. • Notification 8/2005. mail@swamyassociates.com www.swamyassociates.com

  12. Commercial / Industrial construction Service. • Exclusion for roads, airports, railways transport terminals, bridges, tunnels, dams and ports. • 67 % Abatement. mail@swamyassociates.com www.swamyassociates.com

  13. Construction of Residential Complex Service. • More than 12 units.. • Personal use - exempted. mail@swamyassociates.com www.swamyassociates.com

  14. Consulting Engineering Service. • Foreign Technological transfers. Novinon Ltd. VS CCE 2006 (3) STR 397 • To cover software too. Customs House Agents Service. mail@swamyassociates.com www.swamyassociates.com

  15. Erection, Commissioning and Installation Service. Franchise Service. mail@swamyassociates.com www.swamyassociates.com

  16. Intellectual Property Service. Management Consultant Service. Manpower recruitment / Supply agencies. mail@swamyassociates.com www.swamyassociates.com

  17. Goods Transport Agency Service. • Reverse Charge. • Abatement. • Exemption. • Payment mode. • No SSI exemption. mail@swamyassociates.com www.swamyassociates.com

  18. Renting of immovable property. Support Services for business. mail@swamyassociates.com www.swamyassociates.com

  19. Works Contract Service. • Re-classification. • Composition Scheme. • Vice of Notification 1/2006. • Diebold Systems (P) Ltd Vs CCE 2008 (9) STR 546. Air Liquide Engg. India (P) Ltd. Vs CCE 2008 (9) STR 486. mail@swamyassociates.com www.swamyassociates.com

  20. Sale Vs Service. mail@swamyassociates.com www.swamyassociates.com

  21. Small Scale exemption. • Threshold limit. • Conditions. mail@swamyassociates.com www.swamyassociates.com

  22. Commercial Concern VsAny person. mail@swamyassociates.com www.swamyassociates.com

  23. Export of Service and Import of Service. mail@swamyassociates.com www.swamyassociates.com

  24. CENTRAL EXCISE byg. natarajanadvocate & cost accountant CENTRAL EXCISE AND CENVAT mail@swamyassociates.com www.swamyassociates.com

  25. MANUFACTURE • Section 2 (f) • Deemed manufacture. • Third schedule. mail@swamyassociates.com www.swamyassociates.com

  26. VALUATION Section 4 – Transaction Value mail@swamyassociates.com www.swamyassociates.com

  27. SECTION 4 & Valuation Rules • Rule 4 - Comparable goods. • Rule 5 - Freight and Insurance. • Rule 6 - Additional consideration. • Rule 7 - Depot clearance. • Rule 8 - Captive consumption. • Rule 9 - Related person. • Rule 10 - Interconnected undertaking. • Rule 10A – Jobwork. • Rule 11 - Best judgement mail@swamyassociates.com www.swamyassociates.com

  28. SECTION 4 A • Weights and Measures. • OE Exemption. • Different MRP. mail@swamyassociates.com www.swamyassociates.com

  29. EXPORTS • Exports without payment of duty. • Exports under claim for rebate. • Protection of Cenvat Credit. mail@swamyassociates.com www.swamyassociates.com

  30. APPELLATE / OTHER REMEDIES • Commissioner (Appeals). • CESTAT. • Settlement Commission. • Pre deposit. mail@swamyassociates.com www.swamyassociates.com

  31. PENAL MEASURES • Various penalties. • Provisional attachment of property. • Prosecution. mail@swamyassociates.com www.swamyassociates.com

  32. Basic Features • Concept of Cenvat credit. • Landmarks – 1986, 1994 & 2004. • Cenvat Credit Rules, 2004. mail@swamyassociates.com www.swamyassociates.com

  33. Applicability • Manufacturers. • Service providers. mail@swamyassociates.com www.swamyassociates.com

  34. Certain terms. • Input. • Capital goods. • Input Services. • Input Service Distributor. • First / Second stage dealer. mail@swamyassociates.com www.swamyassociates.com

  35. Cenvatable duties / taxes • Basic Excise Duty. • CVD. • NCCD. • Education CESS. • Addl. Duty of Customs – Sec. 3(5). • Service Tax and CESS thereon. mail@swamyassociates.com www.swamyassociates.com

  36. Utilisation and Restrictions on utilisation • Payment of Excise duty. • Payment of Service tax. • Other payments. • Cross utilisation. mail@swamyassociates.com www.swamyassociates.com

  37. Other conditions. • Capital goods – 50 % restriction. • No to “having the cake and eating it too” - Depreciation / Cenvat Credit. • Removal of inputs / capital goods - the story “as such”. mail@swamyassociates.com www.swamyassociates.com

  38. Other conditions. • Removal for job work. • Write off. • Service Tax Credit - Pay and use. • Documents for availing credit. mail@swamyassociates.com www.swamyassociates.com

  39. Rule 6 Algebra. • Position upto 31.03.2008. • Position from 01.04.2008. mail@swamyassociates.com www.swamyassociates.com

  40. Rule 6. • Protection to certain clearances. • Protected Services. • Chandrapur Magnet Wires (P) Ltd Vs CCE. 1996 (81) ELT 3 SC - Recent developments. mail@swamyassociates.com www.swamyassociates.com

  41. Certain common disputes… • Credit for mobile phone. India Rayon Industries Ltd. Vs CCE 2006 (4) STR 79. • Credit for outdoor catering. Victor Gaskets India Ltd Vs CCE 2008 – TIOL – 409. mail@swamyassociates.com www.swamyassociates.com

  42. Certain common disputes… • Credit for outward transportation. - Gujarat Ambuja Cements Ltd. Vs CCE. 2007 (6) STR 249. - India Cements Limited Vs CCE 2007 (8) STR 43. - Master Circular and recent amendments. mail@swamyassociates.com www.swamyassociates.com

  43. CUSTOMS mail@swamyassociates.com www.swamyassociates.com

  44. Role of customs • Collection of import & export duties • enforcement of customs act • enforcing prohibitions/restrictions • prevention of smuggling mail@swamyassociates.com www.swamyassociates.com

  45. Imports • IGM (by shipping lines) • cargo declaration • Bill of Entry • assessment • duty Payment mail@swamyassociates.com www.swamyassociates.com

  46. Exports • Shipping bill, Invoice, ARE# • assessment • duty Payment (if any) • EGM (by shipping lines) mail@swamyassociates.com www.swamyassociates.com

  47. Customs Valuation Rules, 2007 • The Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - Notfn. No. 94/2007-Cus(NT) dated 13-9-07 • The Customs Valuation (Determination of Value of Exported Goods) Rules, 2007 - Notfn. No. 95/2007-Cus(NT) dated 13-9-07 mail@swamyassociates.com www.swamyassociates.com

  48. Value of imported goods • transaction value – Section 14 (1) of CA, 1962 • deductive value – Rule 7 • computed value – Rule 8 • residual method – Rule 9 • similar goods / identical goods • related person • provisionally assessed value is not transaction value. mail@swamyassociates.com www.swamyassociates.com

  49. Value of exported goods • transaction value – Section 14 (1) of CA, 1962 • computed value – Rule 5 • residual method – Rule 6 mail@swamyassociates.com www.swamyassociates.com

  50. refunds • claim to be filed within six months. • one year for some persons. • no time limit for duty / interest paid under protest • unjust enrichment mail@swamyassociates.com www.swamyassociates.com

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