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Scheme ?

Scheme ?. Broad definition for ‘service’. Negative List. Declared Services. Specific Exemptions. Place of Provision of Service Rules. & Existing Rules on Valuation, Point of Taxation and Cenvat credit. “Service” – Sec. 65 B. Means…

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Scheme ?

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  1. Scheme ? • Broad definition for ‘service’. • Negative List. • Declared Services. • Specific Exemptions. • Place of Provision of Service Rules. & • Existing Rules on Valuation, Point of Taxation and Cenvat credit.

  2. “Service” – Sec. 65 B Means… • Any activity carried out by a person for another for consideration and includes declared services.

  3. “Service” – Sec. 65 B Excludes… • Transfer of title in goods or immovable property in any manner. • Deemed sales. • Transaction in money or actionable claims. • Service by employee to employer. • Fees taken in court, tribunal etc. • Duties performed by MPs, MLA and other authorities.

  4. Charge of Service Tax

  5. Negative List – Sec.66D • Services provided by Govt / Local Authority except, speed post, aircraft/vessel related, transport of goods / passengers, support services. • Services by RBI, Foreign Diplomatic missions. • Specified services relating to agriculture. • Trading. • Process amounting to manufacture or production of goods.

  6. Negative List – Sec.66D • Space selling for Advt, except radio / tv. • Access to road / bridge. • Betting, gambling, lottery. • Admission to entertainment events / amusement facilities. • Transmission / distribution of electricity, by transmission or distribution utility.

  7. Negative List – Sec.66D • Education. - Pre school, upto higher secondary. - part of curriculum for recognised qualification. - approved vocational education. • Renting for residential purpose. • Loans, advances, deposits for interest / discount, sale or purchase of forex by banks and authorised dealers.

  8. Negative List – Sec.66D • Transportation of passengers, by - stage carriage. - railways other than I Class / AC. - metro, monorail, tramway, inland waterways. - public transport other than tourism. - autos and metered cabs.

  9. Negative List – Sec.66D • Goods transport, except GTA and courier, by aircraft / vessel from a place outside India to India, inland waterways. • Funeral, burial, crematorium, mortuary. negative list.doc

  10. Declared Services – Sec. 66 E • Renting of immovable property. • Construction of complex, building, etc. • Temporary transfer of IPR. • IT software services. • Agreeing to refrain from an act or tolerate an act or do an act. Declared services.doc

  11. Declared Services – Sec. 66 E • Hiring, Leasing or licensing without transfer of right to use. • Hire purchase transactions. • Service portion in execution of works contract and supply of food and drinks. • Declared services.doc

  12. Bundled Services – Sec. 66 F • Reference to main service does not include a service used for providing the main service. • Specific description to be preferred to general description. • Naturally bundled – essential character. • Not naturally bundled – highest liability.

  13. Important exemptions • Healthcare services. • Charitable activities by Sec. 12 AA entities. • Services provided by individual advocates, firm of advocates, arbitral tribunal to other than business entities, business entities having turnover of less than Rs. 10 lakhs in previous year. • ..\S.Tax\Noti 25 to 40\25 (mega exemption).doc

  14. Important exemptions • Auxiliary education services and renting of immovable property services provided by or to educational institution. • Services provided to a recognised sports body, by players, etc. and by another recognised sports body. • Sponsorship of specified sports. • ..\S.Tax\Noti 25 to 40\25 (mega exemption).doc

  15. Important exemptions • Construction related exemptions. S.Nos. 12 to 14.doc

  16. Important exemptions • Performing artists except brand promotion. • Hotel room accommodation less than Rs.1000 tariff. • Restaurants not having central air conditioning and bar facility. • ..\S.Tax\Noti 25 to 40\25 (mega exemption).doc

  17. Important exemptions • Hiring of passenger vehicles to state transport undertakings and goods transport vehicles to GTAs. • Parking facility. • Outsourced municipal functions. • Housing society upto Rs.5,000 pm. • SIM card distributors. • ..\S.Tax\Noti 25 to 40\25 (mega exemption).doc

  18. Important exemptions • Job workers where “appropriate duty” is paid by principal. • Services provided by persons outside taxable territory and received by Individual / Govt / Local authority / Govt authority. • Transfer of business. • ..\S.Tax\Noti 25 to 40\25 (mega exemption).doc

  19. Reverse charge Existing and continuing • Insurance Agents. • GTA (abatement entitled). • Sponsorship. • Services provided by persons in non taxable territory. ..\S.Tax\Noti 25 to 40\30 (reverse charge).doc

  20. Reverse charge New introductions • Advocates / Arbitral Tribunal to business entity. You have to pay SA’s ST directly under reverse charge. • Support services by Govt. / Local authority to business entity. • Renting of motor vehicle, manpower supply and works contracts services by individuals / partnership firms / AOPs / HUFs to business entity. • ..\S.Tax\Negative Blues\Negative Blues V - Reverse charge.doc

  21. PPS Rules Rule 3: Default Rule – Location of Service recipient. Rule 4: Performance based services – Location of performance. Rule 5: Immovable property related services – Location of the immovable property. Rule 6: Events related services – Location of the event. Rule 7: Services provided in more than one location – Where maximum service is provided.

  22. PPS Rules Rule 8: Where the provider and receiver, both are in taxable territory – Location of Service recipient. Rule 9: Specified services - Location of service provider. Rule 10: Goods transportation – Destination. For GTA - location of the person liable to pay the tax. Rule 11: Passenger transportation – location of embarkation.

  23. PPS Rules Rule 13: Power to notify. Rule 14: Order of application. ..\S.Tax\Noti 25 to 40\28 (PPS Rules).doc

  24. Missing exemptions • Notification 50/2010 – IT Service, where ED / CVD paid – what next?packaged software.doc • Composition scheme for Works Contract Service – no panic. • Exemption for commission agents services received from abroad – Notification 18/2009. • Rebate of ST paid on export of Services - do you know why?

  25. Export of Service • Rule 6A of ST Rules. • Provider in taxable territory. • Receiver is outside India. • Service not in negative list. • PPS is outside India. • Receipt in forex. • Branch transactions would not be exports.

  26. Jammu and Kashmir • Service between establishments in J & K and taxable territory would be service between two persons. • PPS to be determined. • Tax payable if PPS in taxable territory. • If provider is in non taxable territory – service recipient liable to pay ST.

  27. THANKS mail@swamyassociates.com

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