Talk:Service tax in India
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[edit] Registration with the service tax authorities becomes necessary
This must have chhanged after the limit has gone up to 8 lacs Sanjiv swarup 00:57, 6 April 2007 (UTC)
Registration with the service tax authorities becomes necessary ( NOT On the 1st April ) but only when turnover crosses the the exemption limit of Rs 3 lac . noti no. 26/2005 st dt 7. jun 2005 .
[edit] The exemption limit
The exemption limit is NOT on a "per service" basis : it is upon the value of the company's total turnover. Real Estates Agents/Consultants.... Management Consultants both the above services comes under service tax .
[edit] person who shall make an application for registration
Notification No. 26/2005-Service Tax
In exercise of the powers conferred by sub-section (2) of section 69 of the Finance Act, 1994 (32 of 1994), the Central Government hereby specifies the following person or class of persons who shall make an application for registration under the provisions of the said sub-section, namely:-
(i) an input service distributor; and (ii) any provider of taxable service whose aggregate value of taxable service in a financial year exceeds three lakh rupees. Explanation 1.- For the purposes of this clause, where a provider of taxable service provides one or more taxable services from one or more premises, the aggregate value of all such taxable services and from all such premises and not separately for each services or each premises shall be taken into account for computation of aggregate value of taxable service. Explanation 2.- For the purposes of this notification,- (a) “input service distributor” has the meaning assigned to it in clause (m) of rule 2 of the CENVAT Credit Rules, 2004; (b) “aggregate value of taxable service” means the sum total of first consecutive payments received during a financial year towards the gross amount, as prescribed under section 67 of the said Finance Act, charged by the service provider towards taxable services but does not include payments received towards such gross amount which are exempt from the whole of service tax leviable thereon under section 66 of the said Finance Act under any notification other than Notification No. 6/2005-Service Tax, dated the 1st March, 2005 [G.S.R. 140 (E), dated the 1st March, 2005]. 2.This notification shall come into force on the 16th day of June, 2005. F. No. B1/6/2005-TRU
[edit] see also
Sanjiv swarup 00:39, 6 April 2007 (UTC)
[edit] Service Categories
The provisions relating to Service Tax were brought into force with effect from 1st July 1994. It extends to whole of India except the state of Jammu & Kashmir. The services, brought under the tax net in the year 1994-95 ,are as below:
(1) Telephone (2) Stockbroker (3) General Insurance
The Finance Act (2) 1996 enlarged the scope of levy of Service Tax covering three more services, viz.,
(4) Advertising agencies, (5) Courier agencies (6) Radio pager services.
But tax on these services was made applicable from 1st November, 1996.
The Finance Acts of 1997 and 1998 further extended the scope of service tax to cover a larger number of services rendered by the following service providers, from the dates indicated against each of them.
(7) Consulting engineers (7th July, 1997) (8) Custom house agents (15th June, 1997) (9) Steamer agents (15th June, 1997) (10) Clearing & forwarding agents (16th July, 1997) (11) Air travel agents --- (1st July, 1997) (12) Tour operators (exempted upto 31.3.2000 Notification No.52/98, 8th July, 1998, reintroduced w.e.f. 1.4.2000) (13) Rent-a-Cab Operators (exempted upto 31.3.2000 Vide Notification No.3/99 Dt.28.2.99, reintroduced w.e.f. 1.4.2000) (14) Manpower recruitment Agency (1st July, 1997) (15) Mandap Keepers (1st July, 1997)
The services provided by goods transport operators, out door caterers and pandal shamiana contractors were brought under the tax net in the budget 1997-98, but abolished vide Notification No.49/98, 2nd June,1998.
Government of India has notified imposition of service Tax on twelve new services in 1998-99 union Budget. These services listed below were notified on 7th October, 1998 and were subjected to levy of Service Tax w.e.f. 16th October, 1998.
(16) Architects (17) Interior Decorators (18) Management Consultants (19) Practicing Chartered Accountants (20) Practicing Company Secretaries (21) Practicing Cost Accountants (22) Real Estates Agents/Consultants (23) Credit Rating Agencies (24) Private Security Agencies (25) Market Research Agencies (26) Underwriters Agencies
In case of mechanized slaughter houses, since exempted, vide Notification No.58/98 dtd. 07.10.1998, the rate of Service Tax was used to be a specific rate based on per animal slaughtered. In the Finance Act’2001, the levy of service tax has been extended to 14 more services, which are listed below. This levy is effective from 16.07.2001.
(27) Scientific and technical consultancy services (28) Photography (29) Convention (30) Telegraph (31) Telex (32) Facsimile (fax) (33) Online information and database access or retrieval (34) Video-tape production (35) Sound recording (36) Broadcasting (37) Insurance auxiliary activity (38) Banking and other financial services (39) Port (40) Authorised Service Stations (41) Leased circuits Services
In the Budget 2002-2003, 10 more services have been added to the tax net which are listed below. This levy is effective from 16.08.2002.
(42) Auxiliary services to life insurance (43) Cargo handling (44) Storage and warehousing services (45) Event Management (46) Cable operators (47) Beauty parlours (48) Health and fitness centres (49) Fashion designer (50) Rail travel agents. (51) Dry cleaning services. and these services have been notified on 1-8-2002 and were subject to levy of Service Tax w.e.f. 16-8-2002. It is expected that in view of more & more services brought under the Service Tax net, the service tax revenue would now form a major part in Govt. Revenue earnings. In the Budget 2003-04 seven more services along with extension to three existing services have been added to the tax net which are listed below. The levy of service tax on these services is effective from 1st July, 2003. (52). Commercial vocational institute, coaching centres and private tutorials (53). Technical testing and analysis (excluding health & diagnostic testing) technical inspection and certification service. (54). Maintenance & repair services (55). Commission and Installation Services (56). Business auxiliary services, namely business promotion and Support services (excluding on information technology services) (57). Internet café (58). Franchise Services The rate of Service Tax was increased from 5% to 8% on all the taxable services w.e.f. 14.5.2003.
In the Budget 2004-05, 10 more services have been introduced in the service tax net along with reintroduction of three existing services as follows: (59) Transport of goods by road (earlier Goods Transport Operators service re- introduced).
(60) Out door Caterer’s service (re-introduced)
(61) Pandal or Shamiana service (re-introduced)
(62) Airport Services (63) Transport of Goods by Air Services (64) Business Exhibition Services (65) Construction Services in relation to Commercial or Industrial BuildingConstruction Services in relation to Commercial or Industrial Building The levy of service tax on these services is effective from 10th September, 2004 and the rate of service tax has been enhanced to 10% from 8%. Besides this 2% Education Cess on the amount of service tax has also been introduced. Thus the effective service tax rate is now 10.2% including Education Cess.
In the Budget 2005-06, 9 more services have been introduced in the service tax net as follows with effect from 16.06.2005: (66) Intellectual Property Services (67) Opinion Poll Services (68) TV or Radio Programme Services (69) Survey and Exploration of Minerals Services (70) Travel Agent’s Services other than Rail and Air travel agents (71) Forward Contract Services (72) Transport of goods through pipe line or other conduit Services. (73) Site preparation & clearance Services (74) Dredging Services (75) Survey & Mapmaking Services (76) Cleaning Services (77) Membership of Clubs & Associations (78) Packaging Services (79) Mailing list compilation & Mailing Services (80) Construction Services in relation to Residential Complexes +++++++++++++++++++++++
reference: http://www.servicetax.gov.in/servicetax/st-profiles-idx.htm Sanjiv swarup 00:41, 6 April 2007 (UTC)
[edit] service tax changes in the budget
Service Tax: Marginal Increase
The service tax rate has actually increased from 12.36% from 12.24% on account of the additional cess. It is the declared intent of the government to increase the service tax rate eventually to 16%.
The basic exemption has increased from Rs 400,000 to Rs 800,000.
Making commercial rentals subject to service tax. Sanjiv swarup 00:44, 6 April 2007 (UTC)
[edit] Other headers ..
Introduction of the ST
2 Political fallout 3 Economic and Social Effects of the ST 4 Tourist Refund Scheme 5 References 6 External links Sanjiv swarup 00:46, 6 April 2007 (UTC)
[edit] EXPORT OF SERVICES-DRAFT PROPOSALS
It has been recognized that unlike the case of goods, in case of services it is difficult to give a precise definition of ³export of services². Accordingly it has been considered more appropriate to prescribe a set of criteria to decide when a service is deemed to have been exported, keeping in view the nature of the different taxable services. The proposals in this regard are given below. While formulating these proposals, the best international practices have been kept in view. Before taking a final view on this issue, comments and suggestions on the proposals are invited from the trade and industry. These may kindly be sent on or before 25-12-2003 on any of the following e-mail addresses: gtmray@finance.nic.in, geebee_audit@rediffmail.com, arahman@finance.nic.in . Proposals: 1. Taxable services shall be deemed to have been exported if ,- (a) for the following services, the service is physically carried out, partly or wholly, outside India: 1 Clearing & Forwarding agents 11 Dry cleaning services 2 Custom House Agents 12 Event management 3 Steamer Agents 13 Health Club and Fitness Centres 4 Authorised service station for motor vehicles 14 Internet café 5 Beauty Parlours 15 Port services 6 Cable Operators 16 Repair and maintenance 7 Cargo handling service 17 Security/Detective agency 8 Commissioning and installation 18 Storage and warehousing 10 Convention service 19 Tour operator (b) for the following services which relate to some immoveable property, the said immoveable property is located outside India: 1. Real estate consultancy 2. Architect 3. Interior decorators 4. Mandap Keepers (c) for the following services, the recipient of the service is located outside India: 1 Stock brokers 20 Manpower Recruitment agency 2 General Insurance 21 Market research agency 3 Insurance auxiliary service 22 Advertising agency 4 Insurance auxiliary services relating to life insurance 23 Chartered Accountant 5 Banking and other financial services 24 Company Secretary 6 Credit rating agency 25 Cost Accountant 7 Underwriting services 26 Management Consultancy 8 Business auxiliary service 27 Scientific and technical consultancy 9 Franchise service 28 10 Fashion Designers 29 Telephone 11 Rent-a-cab operators 30 Telex service 12 Photography service 31 Leased circuits 13 Sound recording service 32 Pager 14 Video tape production service 33 Facsimile service 15 Technical inspection and certification 34 On-line information and database access and/or retrieval services 16 Technical testing and analysis 35 Broadcasting service 17 Air Travel Agent 36 Commercial training and coaching service 18 Rail travel agent 37 Consulting engineers 19 Telegraph service 38 Courier agency Note 1: However, in case of the 38 services mentioned above, if the service is utilized by an individual in his personal capacity during his stay in India, the same shall not be deemed to be export of service. Note 2: The location of the recipient here means the location of the business establishment to which the service is supplied and in case the recipient is an individual it shall be his permanent address or usual place of residence. Business establishment here shall include branch office/division etc. 2. Service tax shall not be payable on services exported in terms of the criteria mentioned above. 3. The credit of service tax paid on input services used in providing an output service which is exported, will be refunded if it can not be utilized for payment of tax in India.
Sanjiv swarup 00:50, 6 April 2007 (UTC)
[edit] Naming
Other articles on Service tax for other countries have been named as:
- Goods and Services Tax (Australia)
- Goods and Services Tax (Canada)
- Goods and Services Tax (Hong Kong)
- Goods and Services Tax (New Zealand)
- Goods and Services Tax (Singapore)
Since India does not have a Goods and Services Tax as yet, I propose to rename this page as
- Service Tax (India)
Dhshah 05:29, 6 April 2007 (UTC)
[edit] Paying Tax on Google Adsense revenue
Google Adsense publishers need to pay income tax on advertising earnings in India, but there are mixed views about paying service tax in addition to income tax on these revenues.
Some chartered accountants say online advertising or “renting or selling space online” has been included in the service tax ambit since last year and you need to pay service taxes, but are not absolutely sure.
Service tax charged is a huge sum of 12% on your total income and income tax on the rest of income also as per the finance budget taxation guidelines. Many see this as a double taxation on their earnings.
New tax payers need to apply for a service tax number and then pay service tax every quarter along with advance income tax returns. Till last year, if your total income was less than Rs. 4 lakhs (Rs. 4,00,000), then you need not pay service tax. I believe this limit has been raised in this financial year.
Ruzbehraja 06:13, 6 April 2007 (UTC)
- Yes, the limit has been raised to 8 lakhs from FY07-08 -Dhshah 07:00, 6 April 2007 (UTC)
[edit] External links
- [1] A detailed article on paying service tax for online earnings.
[edit] Refernces
I was not able to access this url . Anybody else facing the same problem ? Sanjiv swarup 13:10, 7 April 2007 (UTC)
- I am also facing the same problem. I think the site is temporarily down. But because it is a government site, it should be up again soon. --Dhshah 14:10, 7 April 2007 (UTC)
