Chartered Accountant
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Corporate News *   A Fresh Boost to Revival of SEZs on the Cards *   Hotels VAT use taxation underneath scanner for double taxationnbsp *   Centre approves Wipro SEZ in Visakhapatnam *   Mizoram Excise Department Seizes Heroin, Myanmarese Nabbed *   Rise in use of fake import bills *   Appointment of Principal Chief Commissioners of Customs {See notification no.77/2014-Cus(NT) in what’s new} *   Finance Ministry to decide on removing iron ore import duty: Steel Ministry  *   Govt not to abolish 80:20 gold import scheme *   Excise duty slab extended for auto sector *   Lenders, tax sleuths vie for first right of recovery from Vijay Mallya  *   Taxman questions Amazon India’s fulfilment centre  *   Private equity firm Blackstone keen on acquiring Noida SEZ *   Pharmaceutical raw material: Customs department detects misdeclaration of import value. *   Single tax GST is real simplification of tax structure *   New Excise Policy to Hit State's Growth: BKRG *   Government looking at extending excise duty concessions to automobile sector beyond December  *   Gujarat suggests innovative way out of GST deadlock *   Gold smuggling gets murkier *   Customs officer evades arrest on medical grounds *   Next on Modi Sarkar's Agenda: Implementing GST *   Meghalaya against GST on alcohol, tobacco, petroleum products *   GMR Infra expedites SEZ land acquisition *   Yanamala wants Centre to compensate GST loss *   Tardy Chennai Customs hamper Chennai Port’s growth: Trade *   GST Implementation Likely by Mid-2015 *   Study on ease of doing business not in line with reality: Government *   Govt to come up with policy measures to boost SEZs *   Government targets $340 bn exports this fiscal *   GST could be rolled out by next year: Shivraj Singh Chouhan *   Modification of MAT, DDT likely to boost SEZ, says Sitharaman   *   TS to demand 50% share in Centre’s tax receipts *   Telangana State for Centre to bear loss on GST account *   Govt May Cancel SEZ Licenses of Essar, Adani, Seven Others *   GST logjam: Centre to take middle path on compensation, oil *   Attempt to smuggle gold thwarted at Dabolim *   Ozone-depleting fridge gas new favourite of smugglers *   Informer demands Rs. 200 crore for taxtip-off, moves SC *   Making laws for 'glocal' economy *   Manufacturing units in SEZs may get tax sops *   Myanmar to develop SEZ in Rakhine state
Subject News *   How to do Audit of Excise Duty *   Renews Customs cooperation pact *   Additional duty of Excise is leviable on an imported article only if Excise duty is levied on a like article manufactured in India  *   Fixation of SION{see public notice 69(RE-2013)/2009-2014in what’s new} *   Rate of exchange notified w.e.f. 18.9.2014 {See notification no. 87/2014-Cus(NT) in what’s new} *   Modinagar notified as ICD {See notification no. 86/2014-Cus(NT) in what’s new} *   Appointment of officers in various Directorates{see notification no. 22/2014-ST in what’s new} *   Delegation of powers of CBEC under rule 3 of Service Tax Rules, 1994{See notification no. 21/2014-ST in what’s new} *   Jurisdiction of Service Tax Commissionerates{See notification no. 20/2014-ST in what’s new} *   Instructions on Sales Tax Incentive Scheme{See instruction no. F. No. 6/8/2014-CX. 1 in what’s new}  *   Delegation of powers of CBEC under rule 3 of Central Excise Rules, 2002{See notification no.29/2014-CE (NT) in what’s new}  *   Appointment of officers in various Directorates {See notification no. 28/2014-CE (NT) in what’s new} *   Jurisdiction of Central Excise Commissionerates{See notification no. 27/2014-CE (NT) in what’s new} *   ADD on electrical insulators of glass or ceramics/porcelain{See notification no. 40/2014-Cus (ADD) in what’s new} *   Knowing about goods and service tax *   Double taxation in Service Tax & VAT under HC scanner *   Will GST compensation for producing states work? *   Clarifications issued regarding amendments to the Appeal provisions{See circular no. 984/08/2014in what’s new} *   Change in Notification No.83/2004-Customs (N.T.) {See notification no. 85/2014-Cus(NT) in what’s new} *   Appointment of Officers in Commissionerate of CE (Audit) or ST (Audit){See notification no. 84/2014-Cus(NT) in what’s new} *   Appointment of Directorate General of Audit{See notification no. 83/2014 Cus(NT) in what’s new} *   Change in notification No. 17/2002-CUS (N.T.){See notification no. 82/2014-Cus(NT) in what’s new} *   Appointment Officers of  Directorate General of Vigilance{see notification no. 81/2014-Cus(NT) in what’s new} *   Appointment of Officers of  DGCEI{See notification no. 80/2014-Cus(NT) in what’s new} *   Appointment of Commissioner of Customs (Appeals){See notification no. 79/2014-Cus(NT) in what’s new} *   Appointment of officers.{See notification no. 78/2014-Cus(NT)  in what’s new} *   Excise, customs receipts lift indirect tax collection growth to 9% in August *   Service tax might push school fees up *   Central Excise and Customs Superintendents to protest on Promotion *   Service tax on online order for eatables is illegal *   PM Modi takes stock of GST, Bill likely in winter session *  Change in tariff value of certain commodities {see Notification no. 76/2014-Cus(NT),dt. 15-09-2014 in what’s new} *   Central excise & service tax dept plans revamp *   Diamond units face Rs 150 crore duty on imported tools *   Indirect tax collections up 4.6% in Apr-Aug *   Service Tax & Compliance Services Provider in India – Delhi *   40-L Service Tax evasion unearthed *   Whether time limit of section 11B applicable for refund claim under Rule 5?{see PJ/CASE LAW/2014-15/2311 in what’s new} *   No penalty imposable under section 78 if there was bonafide belief for non payment of service tax.{see PJ/CASE LAW/2014-15/2310 in what’s new} *   Whether proprietor’s accident is reasonable cause for waiving penalties?{see PJ/CASE LAW/2014-15/2308 in what’s new}  

Comments

  • Dear Sir, Service recipient and Service provider both are in taxable area , because we are providing services through Service receiver to the customers residing the J&K, hence our service is intermediately services. On the basis of this fact we are liable to pay service Tax on the services in the aforesaid mentioned services. On the other hand if we treat this service as an exempted service so, we are not liable to take the credit of the inputs proportionately used in providing the exempted services. After taking this into consideration I request you that please share your opinion as to whether there is any ST liability on us? Kamalesh Sanghani

    We are unable to understand your query. Please elaborate in detail.
  • Suppose, I have received an order of X value. The contract is FOR. We despatched the final product by paying excise duty at the time of despatch. Now my question is with related to service tax credit. Situation 1- I have no separate contract for transportation cost. I am paying service tax on transportation service under RCM . shall I eligible for cenvat credit ? Situation -2 If there is a separate line for transportation in contract then - shall I raise extra excise invoice for excess amount received from buyer then actual expenses ? Shall I eligible for service tax credit for service tax paid under RCM ? Please reply with appropriate provision in law and put some case law in support.... Quick reply is highly appreciable..... - Chandra sekhar

    The credit of service tax paid on outward freight is available, subject to satisfaction of following conditions as laid down in CBEC circular number C.B.E. & C. Circular No. 97/6/2007-S.T., dated 23-8-2007:- i) the ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step; ii) the seller bore the risk of loss or damage to the goods during transit to the destination; and iii) the freight charges were an integral part of the price of goods. Thus, if your arrangement is such that the freight is part of the assessable value and excise duty is being paid on the assessable value inclusive of freight and the other two conditions are being satisfied, then you shall be eligible for Cenvat credit of service tax paid on outward freight. This is supported by decision of Karnataka High Court in the case of CCE , Bangalore Vs ABB Limited [2011 (23) STR 97 (Kar)] as well as P & H High Court in the case of Ambuja Cements Ltd. Vs UOI [2009 (236) E.L.T. 431 (P&H)] . However, this stand has been changed by Calcutta High Court in recent case of CCE Vs Vesuvious India Ltd. [2014 (34) S.T.R. 26 (Cal)]. {Query replied by: CA Neetu Sukhwani & Ranu Dhoot}
  • Respected Sir, I have query related to Rent a Cab Service 1. we received a monthly bill from bus service provider for pick up & drop facility from company to station and he is charging 40% of 12.36% ST in the bill. is this correct? or we paid 40% Directly to Govt. under RCM. 2.how to show in the return as a service receiver or not to show in the return. a. if pay to service provider b. if pay to Govt. 3. what about 60% of service tax part. Thanx & regards Deepak Deepak Dalvi

    For rent a cab service, there is abatement notification which prescribes that only 40% of the taxable value is leviable to service tax provided no cenvat credit is taken. However, the provision of reverse charge mechanism is applicable if rent a cab service is provided by individual/HUF/partnership firm to business entity registered as body corporate. Further, in case the benefit of abatement notification is availed, the liability to pay service tax to the government is on service recipient under full reverse charge. However, if the benefit of notification is not availed by the service provider, then 50% liability is to be paid by service provider and 50% by the service recipient. Before budget 2014-15, it was 60% for service provider and 40% for service recipient. Now, assuming that you are a business entity registered as body corporate and you have received services of rent a cab from individual/HUF /partnership firm, the service tax liability will be 100% on you if the benefit of abatement is availed. Consequently, the practice of service provider charging 40% of 12.36% ST in the bill is wrong. The revenue department may raise service tax demand on your company as if the benefit of abatement is availed, service recipient is liable to pay 100% service tax. If the service tax is paid to the service provider, then it will not have mention in ST-3 return because the credit of service tax paid is not admissible in case of rent a cab service. Moreover, it will lead to double taxation as department will insist you to pay service tax under reverse charge. If you pay service tax under reverse charge mechanism, the same will be reflected in the ST-3 return filed by you in the capacity of service receiver. {Query replied by:- CA Neetu Sukhwani & Ranu Dhoot}
  • Respected Sir, We are engaged in Real Estate Business.We have commercial building where we provide car parking spaces to the public visited to our various offices. On such car parking we charged some amount on hrs basis. Whether this amount is taxable or not under Service Tax? If there is notification or Case law which cleared the same. nidhi bhoir

    The Services by way of vehicle parking to general public excluding leasing of space to an entity for providing such parking facility were initially exempted vide Serial No. 24 of Mega Exemption Notification. However, vide Notification No. 3/2013 dated 1st March 2013 {w.e.f. 1.4.2013} the serial number 24 of Mega exemption Notification stood omitted. Thus at present, service tax needs to be charged on amount collected as parking charges. {Query replied by:- Ranu Dhoot}
  • We are a Ltd. company, we have a depot at different location to supply the goods to nearby distributors. Company sends the goods to depot and depot supply goods to Distributor. I want to know that whether er are require service tax registration for each separate depot as the depot pay freight for delivery the goods and service tax under GTA on sch freight. BUt all payments are made form HO only. Thanks & regards Mahendra Modi MAHENDRA MODI

    Yes, separate service tax registration for each depot is required to be taken for discharging service tax liability under reverse charge mechanism under the category of “GTA service” as far as centralised registration is not taken. {Query replied by:- Ranu Dhoot}
  • Hi I am new in imports and want to the actual duty on pet bottles HS code is 39159042. Sanjeev Ahluwalia

    The customs duty mentioned in the Customs Tariff Act, 1975 is 10% for HS Code 39159042. However, notification no. 12/2012-Customs dated 17.03.2012 provides exemption to the products of chapter 3915 vide serial no. 236 wherein the rate of customs duty is 7.5%. The CVD rate for the product is 12%. However, the product is being exempted from the levy of SAD vide notification no. 21/2012-Cus dated 17.03.2012. Therefore, the effective rate of customs duty is 21.012% (inclusive of cess). {Query replied by CA Neetu Sukhwani}
  • We have applied for UT-1 in the month of July and we received the UT-1 acceptance letter in the month of August. Please confirm what will be the expiry date of UT-1 ajay mundra

    An LUT shall be valid for 12 calendar months from the date of acceptance provided the exporter complies with the conditions of the LUT, especially the procedure for acceptance of proof of export. Thus, LUT in your case shall be valid upto August of next year. {Query replied by:- Ranu Dhoot}
  • Dear Sir, We have input services in the nature of Car Hire i.e Car hired via Tab cab, meru cab,etc. On the bill no Service tax amount is mentioned nor Service tax number is mentioned.As Service receiver being a company, are we liable to make payment under Reverse Charge mechanism after availing abatement of 60%(Renting of motor car)? Or we are not liable for any service tax payment? Payal Chauhan

    As per section 66D (o)(vi) “Metered cabs, radio taxis or auto rickshaws” were exempt from levy of service tax. However, with the Budget 2014-15, the exemption with respect to radio taxis has been withdrawn from a date to be notified, after the Finance Bill receives the assent of the President. The Finance Bill, 2014 received the assent of President on 6th August, 2014 and no date has been notified for levy of service tax on radio cabs till date. It is worth mentioning that the abatement available to rent a cab service would also be available to radio taxi service. As your query is for the service tax liability for the prior period, the same is governed by the negative list and is exempted from payment of service tax. {Query replied by:- CA Neetu Sukhwani & Ranu Dhoot}
  • Respected sir, our partnership firm.one transport supply truck on hire which fright one time is 55000/- at one time .transporter having pan,service tax no.please clearify TDS position vasudeo patil

    We do not deal in TDS matters. Hence we will not be able to reply. We deal in Central Excise, customs, DGFT and service tax. (Query replied by: Ranu Dhoot}
  • Sir, We are under taking contracts for supply and erection & commissioning of Plant and Machinery in Maharashtra as well as Out of Maharashtra state , we do not enter into works contract and the orders are taken for supply and erection & commissioning separately in this case f form for erection & commissioning is require to be taken under cst act from oms customer ? is there any notification and case law .please guide us and send the notification & case law details my mail address at the earliest ( pravinshelke55@gmail.com) with best Regard's Pravin Shelke PRAVIN SHELKE

    We do not deal in CST matters. Hence we will not be able to reply. We deal in Central Excise, customs, DGFT and service tax. {Query replied by: Ranu Dhoot}
  • Sir production of RMC under job-work arrangement at site of construction with total material supplied by Builder EXCISE DUTY is exempt.What is the liability of JOB worker under Service Tax krishna goel

    As per clause (f) of section 66D pertaining to negative list, “Any process amounting to manufacture or production of goods” is exempt from the levy of service tax. It is submitted that as the job work of production of RMC amounts to manufacture in terms of Central Excise Act, 1944, the same is exempt from the levy of service tax. Therefore, there is no service tax liability of the job worker. {Query replied by:- CA Neetu Sukhwani & Ranu Dhoot}
  • If cancel of an order with an overseas supplier for a component. Now the buyer liable to pay some compensation for cost incurred by our supplier. When Buyer remit foreign currency to such overseas supplier, shall the buyer need to consider the applicability of Service tax under reverse charge mechanism? I request you to share your views about the applicability of service tax with appropiate case law and provision of the law.... Chandra sekhar

    ANS. The above mentioned transaction is of sale of property and does not in any way belong to provision of service, hence no service tax is applicable on this transaction. Since the transaction in question is incidental to sale of property, no service tax is leviable on the same. {Query replied by:- Ranu Dhoot}
  • "Sir, Our firm is in US staffing services provided to US clients and receive payment in Foriegn currency in Indian Account and at the same time receive commission from foreign universities in Foreign currency. My query is Whether we have to apply IEC code? Applicability of Service Tax on Both the receipts? Raghavender Upadhyay As regards applicability of service tax on the services of staffing provided to US clients and commission received from foreign universities in foreign currency is concerned, the said services are covered by Rule 9 of the Place of Provision of Service would apply, that says that in case of the intermediary services, the place of provision of service would be the location of the service provider. As in the present case, the location of the service provider is in India, being the taxable territory, service tax would be leviable on the commission received. However, for a service to be export, it is essential that the following conditions are satisfied, i.e., the service provider is in taxable territory, service recipient is in non-taxable territory, consideration is received in foreign convertible currency and the place of provision of service is outside India. However, as the place of provision of service is in India, the above transaction cannot be considered as export as per Rule 6A of the Service Tax Rules, 1994. It is submitted that only exporter or importer is required to take IEC code. As explained, that the transaction is not covered under export so the firm is not exporter and cannot take IEC code. {Query replied by CA Neetu Sukhwani & Hushen Ganodwala}" In reply to your answer i herewith submit that our client is providing services on behalf of US Staffing Company. US company raising the invoices to clients and receiving payments for Staffing work. Client Company is receiving their share from US staffing company in US dollars? my point is whether the services provided to US staffing company is covered under Rule 9 of place of provisions of service and intermediary services? Raghavender Upadhyay

    We have already explained in our earlier reply to your query that in case of intermediary service, the place of provision of service would be the place of service provider as per Rule 9 and so in the present case, in India and hence, the service would be leviable to service tax. Further, there is no requirement to obtain IEC code. The answer to your counter query is that the Education guide released by CBEC explains the meaning of “intermediary services” as generally, an “intermediary” is a person who arranges or facilitates a supply of goods, or a provision of service, or both, between two persons, without material alteration or further processing. Thus, an intermediary is involved with two supplies at any one time: i) the supply between the principal and the third party; and ii) the supply of his own service (agency service) to his principal, for which a fee or commission is usually charged. The above cited case is covered by situation no. (ii) wherein client is providing services on behalf of US staffing company. Therefore, the situation would be covered by meaning of intermediary service and so consequently would be governed by the provisions of Rule 9 of the POPS Rules. {Query replied by: CA Neetu Sukhwani & Hushen Ganodwala}
  • Dear Sir, We are manufacturer of Copper Flat & Rod. We Import Raw materials like Copper Cathode & Scrap. We release raw materials with payment of customduty or under advance licence. We want to know if we use FMS or FPS or VKYU for making of Custom duty, for VAT received are creditable or not ? Mayur Rami

    We are unable to understand your query. Please elaborate in detail. {Query replied by:- Ranu Dhoot}
  • An audit objection raised to our company as Non Payment of Service Tax on Director's Remuneration under reverse charge as with effect from 01.07.2012 vide notification no. 30/2012-Service Tax Dated 20-06-2012 as amended by notification No. 45/2012-Service Tax Dated 07-08.2012 has inserted Clause (A) at Serial 5 of the table to Notification. My query is our director is whole time director. is service tax applicable? Ajay Bansal

    Reply: - Service is not leviable when there is a employer-employee relationship between the director and company. Generally Whole time director is treated as employee of the company since there is contract of service hence we are not liable to pay service tax on the same under reverse charge mechanism. The department is not accepting this contention hence litigation is going on this issue. {Query replied by:-Manish Bhati}
  • Due to wrong advice....We applied for Central Excise Registration even though we are only job-work manufacturer..working/processing on inputs/semi-finished goods supplied by another manufacturer who is finally clearing the goods on payment of appropriate excise duty...Now we wish to surrender the registration certificate..what is the procedure to be followed for surrendering the certificate.... mohan sehgal

    ANS. Vide Notification No.35/2001-Central Excise(N. T.) dated 26th June, 2001, Every registered person, who ceases to carry on the operation for which he is registered, shall de-register himself by making a declaration in the form specified in Annexure-III and depositing his registration certificate with the Superintendent of Central Excise. {Query replied by:- Ranu Dhoot}
  • Sir, We are a society regd under the TN society registration act and we are 100% funded by the CG. If we provide a sponsorship service to a) Non- body corporate b)Foreign Company, are we liable to pay service tax??? Vinod Rajan

    As per notification no. 30/2012 service tax is payable by recipient of service only when sponsorship service is provided to body corporate or partnership firm, no matter who provides the service. But in the above mentioned case services are provided to non body corporate or foreign company, thus the service tax shall be paid by service provider and not the service receiver in this case. {Query replied by:- Ranu Dhoot}
  • Dear sir we are registered under central excise and we have received material for job work under 83/94 , 84/94 and 214/86 challans please guide us where we should charge excise duty and service tax plz cooperate Umesh Bora

    We submit that if the process undertaken by you under job work amounts to manufacture, then no excise duty is required to be paid under the job worked goods because for job-work done under notification no. 214/86, principal manufacturer is liable to pay excise duty on the final products cleared by him after using the job-worked goods. Moreover, notification no. 83/94 and 84/94 also provides exemption from the levy of excise duty on the specified goods manufactured by job worker with the difference that the principal manufacturer avails the benefit of small scale exemption notification. Therefore, no excise duty is required to be charged on the goods manufactured on job work basis under the said notifications. As regards levy of service tax is concerned, if the job work process does not amounts to manufacture but the intermediate process that is undertaken by the job worker is ultimately used in the manufacture of final products on which duty is paid, then such processes are exempted from levy of service tax by virtue of clause (f) of section 66D of the Finance Act pertaining to negative list. Hence, neither excise duty nor service tax is chargeable on the goods that are being processed on job work basis and are ultimately used in manufacture of final products cleared on payment of duty. {Query replied by: CA Neetu Sukhwani}
  • DEAR SIR OUR OF THE CLIENT AVAILING DUTY DRAWN BACK AS WELL AS REBATE CLAIM PLEASE LET ME KNOWN IT CORRECT HE FALLING UNDER CHAPTER HEADING 73 AND IT WOULD BE BETTER IF YOU SHOW FROM WHERE AND HOW TO FIND REBATE AND DUTY DRAWBACK AVAILABILITY TO DIFFERENT CHN Umesh Bora

    ANS. There are two type of rebate claims under Rule 18. One is input stage rebate and second is finished good stage rebate. Also there are two type of rates in drawback. One is with Cenvat credit and other is without cenvat credit. If we claim input stage rebate then only lower drawback rate with cenvat credit can be claimed. But if we claim finished goods stage rebate then complete drawback can be claimed. But this will depend on the fact whether we have availed cenvat credit on input and input service. If the same is availed then drawback with cenvat credit can be claimed. All information regarding Duty Drawback can be found in Duty Drawback Rules and rates are available on CBEC website in custom section. The information regarding rebate claim can be found in Notification No. 19/2004-Central Excise (N.T.) dated 6th September 2004 read with Rule 18 of Central Excise Rules. {Query replied by:- Ranu Dhoot}
  • DEAR SIR WE ARE REGISTERED UNDER CENTRAL EXCISE FROM LAST 25 YEAR FROM THAT DAY WE JUST CLEARED OUR EXPORTS UNDER LUT ONLY HENCE THE HUG CENVAT CREDIT BALANCE LYING AT RG23A PART II NOW WE MANAGEMENT HAS DECIDED TO SURRENDER CENTRAL EXCISE SO PLEASE GUIDE ME HOW WE SHOULD GET REFUND OF THIS BALANCE CREDIT IS THERE ANY PROVISION TO GET CASH FROM GOVERNMENT ( FEW GOV OFFICERS TOLD US TO APPLY RULE 10A BUT WE DONT HAVE OTHER UNIT TO TRANSFER CENVAT CREDIT SO PLEASE LET US KNOWN PROCEDURE TO GET CASH REFUND FROM CENTRAL EXCISE DEPARTMENT Umesh Bora

    The only way to claim refund of accumulated credit balance arising due to exports made under Letter of undertaking is by resorting to the provisions of Rule 5 of the Cenvat Credit Rules, 2004 read with notification no. 27/2012-CE (NT) dated 18.06.2012. However, the refund claim filed by you may be rejected as time barred because the department contends that the refund is to be filed within a period of one year from the date of let export order as per the provisions of section 11B of the Central Excise Act, 1944. But, there are decisions of High Court of Gujrat that there is no time limit to file refund under Rule 5 of the Cenvat Credit Rules, 2004. Accordingly, as the matter is controversial, you may file the refund claim under Rule 5 of the Cenvat Credit Rules, 2004 by placing reliance on the decision given by the Gujarat High Court in the case of CCE Vs Swagat Synthetics [2008 (232) E.L.T. 413 (Guj)]. {Query replied: CA Neetu Sukhwani}
  • Dear Sir, A Pvt Ltd Co. as an event manager receiving service for Rent-a-Cab from Proprietor firm. Under Reverse Charge Mechanism we are paying Service Tax on abated value i.e.40% on Bill amount (40% means 100%) . Now As per Union Budget 2014-15 Service Tax Notification No.08/2014 Service Tax i.e.w.e.f 1st Oct 2014 In the said Notification at 1. (iii) b-(ii) Cenvat Credit on input service of renting of motorcar has been taken under the provision of the Cenvat Credit Rule 2004 in the following manner:- Full Cenvat Credit of such input service received from a person who is paying service tax on forty percent of the value. Or Up to fourty percent Cenvat Credit of such input service received from a person who is paying service tax on full value. Can we take Cenvat Credit for Rent-a-Cab Service w.e.f 1st Oct 2014. Please confirm. Pratap Seth

    The benefit of Notification no. 08/2014 is available only to service provider who provides the service of renting of motor cab. The expression “motorcab” means any motor vehicle constructed or adapted to carry not more than six passengers excluding the driver for hire or reward. If motor cab service provider avails the benefit of abatement then only 40% cenvat credit, of input service of renting of motorcab received from a person paying service tax on 100% of value i.e. without claiming abatement, shall be allowed or 100% input service of renting of motor cab shall be allowed if input service of renting of motor cab received from a person paying service tax on 40 % of value i.e. after claiming abatement. Ultimately if rent a cab(only motorcab) service provider avails abatement then only 40% credit shall be allowed. As you are paying service tax under reverse charge mechanism, cenvat credit in respect of renting of any motor vehicle (be it motor cab or other than motor cab) will not be allowed since definition of Input service exclusively excludes the same. {Query replied by:-Manish Bhati}
  • Dear Sir, I had sent u a query of rate of excise duty on cetsh no.68042220 according to the budget 10-07-2014 as it was before 12.36% now after 10-07-2014 is it 12.36% or else.Please reply. hitesh

    The tariff head 68042220 pertains to “grinding wheels of other materials”. The excise duty specified in the Central Excise Tariff Act, 1985 continues to be 12.36% on the same. {Query replied by: Ranu Dhoot}
  • Sir, We are the manufacturer of Pig Iron from Iron Ore (Non Excisable) and Coke (Excisable) as the principal raw material. Prior to April-12, we are disclosing Iron Ore & Coke in ER-6. But then onwards we drop Iron Ore as no excise duty is there. In a query letter to Range we had clarified that ER-6 talks about "inputs" & ER-4 talks about "raw material". Therefore in ER-4 we are disclosing both Iron Ore & Coke. But still department issue SCN? Sir, Please resolve our following queries? 1. Whether our practice is as per law? 2. On what ground we should prepare our reply to the SCN? RAJIV JAIN

    Ans.: In ER-6, we have to disclose the Major Input which is used for manufacture of final product. If Iron Ore is used more than 10% for making of Pig Iron, in that case we should disclose the same in return. It is immaterial whether it is dutiable or not. Hence, your practice is not as per law if it is major input. Secondly, you should write simply in your reply that we have not disclosed the same in ER-6 return as it is not dutiable and hence our intentions are not malafide. {Query replied by:- Hushen Ganodwala}
  • Sir, Our firm is in US staffing services provided to US clients and receive payment in Foriegn currency in Indian Account and at the same time receive commission from foreign universities in Foreign currency. My query is Whether we have to apply IEC code? Applicability of Service Tax on Both the receipts? Raghavender Upadhyay

    As regards applicability of service tax on the services of staffing provided to US clients and commission received from foreign universities in foreign currency is concerned, the said services are covered by Rule 9 of the Place of Provision of Service would apply, that says that in case of the intermediary services, the place of provision of service would be the location of the service provider. As in the present case, the location of the service provider is in India, being the taxable territory, service tax would be leviable on the commission received. However, for a service to be export, it is essential that the following conditions are satisfied, i.e., the service provider is in taxable territory, service recipient is in non-taxable territory, consideration is received in foreign convertible currency and the place of provision of service is outside India. However, as the place of provision of service is in India, the above transaction cannot be considered as export as per Rule 6A of the Service Tax Rules, 1994. It is submitted that only exporter or importer is required to take IEC code. As explained, that the transaction is not covered under export so the firm is not exporter and cannot take IEC code. {Query replied by CA Neetu Sukhwani & Hushen Ganodwala}
  • We wish to change our premises for removal of finished goods,due to space problems,to a better spacious premises..both the units have been registered with the central excise deptt.Can we transfer the finished goods to the new premises on a Challan after paying full excise duty..we do not want to raise a invoice because we want to have a continuity for vat purposes...whether excise duty paid on a transfer challan to oen unit is acceptable for taking credit of the excise duty paid in the other unit.. mohan sehgal

    Ans.: In case of Intra-transfer of finished goods from one unit to other unit, there are following possibility and consequences: (a) if you plan to transfer the FG to your other unit, than you have to pay excise duty from your existence plan & no cenvat credit is available to your another unit because lack of manufacturing activity. (b) But if you transfer the semi-finished goods to your other unit for the further manufacturing activity, in such situation, you can take the cenvat credit. The point should be noted that you cannot transfer FG from one unit to another without making any invoice. Preparation of invoice is mandatory. In the above (a) situation, if you want to transfer FG to other unit then you should need to get registration of “Dealer” under Central Excise so that other unit can transfer Cenvat proportionately on the basis of invoice of one unit.
  • Dear sir one of my client providing services to BMC relates to solid waste management which observed from tender copy submitted initially to BMC, can we take the benefit of exemption notification no-25/2012 ILIAS PATHAN

    In absence of agreement/tender copy, we are unable to examine the eligibility of exemption to you. However, in the mega exemption notification, serial no. 38 provides exemption to services by way of public conveniences such as provision of facilities of bathroom, washrooms etc. and not to services of management of waste. As such, prima facie, you are not eligible to avail the exemption of the said entry. {Query replied by: CA Neetu Sukhwani & Ranu Dhoot}
  • D/Sir, One of my client is manufacturing of small paper roll(fax roll) vide ce tariff 49019900 and paying central excise duty 6% with availing facility of cenvat so please advise that duty and tariff is ok for the same. Kindly give your valuable advise ............... Thanks & Regrads, Kalpana Singh advocate kalpana Singh

    The thermal paper for fax machines falls under the tariff head 48119093 and the amount of duty levied on it is 12%. Alternatively, it can also be classified under chapter 4802 6950 that pertains to Automatic data processing machine paper that is leviable to duty at the rate of 6%. Your view of taking it under tariff head 49019900 is incorrect as this tariff head is meant for printed books, brochures, leaflets and alike items. Query replied by:- Ranu Dhoot
  • for a job worker whether his job work rate/assessible rate is considered to calculate exemption limit of 150Lacs krishna goel

    It is assumed that the job worker is not liable to pay excise duty in terms of notification no. 214/86. As per the SSI exemption notification no. 08/2003-CE dt. 1st March, 2003, it has been mentioned that clearances which are exempt from the whole of the excise duty leviable thereon (other than an exemption based on quantity or value of clearances) under any other notification or on which no excise duty is payable for any other reason, shall not be taken into account while determining the aggregate value of Rs. 1.5 crore. Further, the Notification no. 214/86 exempts the job worker from paying excise duty on job work done by them as the principal manufacturer undertakes to pay the duty on clearance of final products. Hence, job work rate/assessable rate shall not be considered while determining the exemption limit of Rs. 1.5 crore. However, if you are not availing benefit of notification no 214/86 and paying duty on final product then the provision of Section 10A of Valuation Rules will come into play and job worker has to pay duty on sale price of principal manufacturer. In determining the value of aggregate value of clearances of Rs. 150 Lakhs, the clause 5(c) of notification defines the term "value". It says that the value shall be determined under Section 4 or Section 4A or tariff value fixed under Section3. Hence, the value will be transaction value only and not job charges. {Query replied by Manish Bhati}
  • Whether Finished Goods fully manufactured and accounted in 'Daily Stock Account' can be taken back on shop floor for remade / repair purpose. How to remove such goods from RG-1 stock. Is there any provision in Rule 10 Cen Ex. Rules 2002 Sudhakar Sawant

    Yes, finished Goods fully manufactured and accounted in 'Daily STOCK Account' can be taken back on shop floor for remade / repair purpose. You’ll be required to show such finished goods in the column of “Issued for other purposes” in the Daily stock Account. {Query replied by: Ranu Dhoot}
  • how to transfer finished goods stock from one regd.premises to another own regd.premises under central excise mohan sehgal

    The transfer of finished goods stock from one registered premises to another own registered premises is possible only on payment of central excise duty by the transferring premises. One more precaution that is required to be taken is that if the unit to whom the finished goods are being transferred is a factory registered under the Central Excise Laws and the said unit also manufactures the same goods, then the transferee unit is required to take permission from the Central Excise Authorities for trading such finished goods. {Query replied by: CA Neetu Sukhwani & Ranu Dhoot}
  • Respected Sir. I am working in Pvt. Ltd. Company. Our Security Service Agency has paid Full Service Tax. Now, Excise Department raised demand of 75% Service Tax under REVERSE CHARGE MECHANISAM it has to be demanded. Pl. Provide me JUDGMENT DETAILS or CASE LAW regarding this matter. PLEASE. IT'S VERY URGENT. Pratik A Patel

    Service provider cannot pay tax when service receiver is liable, but if paid, service receiver cannot be compelled to pay the service tax again. If service provider (security agency service) had collected tax from service receiver and has paid the same then service receiver need not to pay service tax again under reverse charge mechanism because it will amount to double taxation. This view has been held in the case of Navyug Alloys Pvt. Ltd. VS CCE & CUS, Vadodara-II [2009 (13) S.T.R. 421 (Tri.-Ahmd.)] wherein it was concluded that once tax has been paid by the provider of service, the service tax cannot be confirmed in respect of the same services against the service recipient on the ground that the liability to pay service tax was on the service recipient. The same view was upheld in the case of Angiplast Pvt. Ltd Vs Commissioner of Service Tax, Ahmedabad [2013 (32) S.T.R. 628 (Tri.-Ahm)]. {Query replied by CA Neetu Sukhwani & Manish Bhati}
  • We have got three different premises registerd under central excise for manufacturing activities due to working place bottlenecks....however, we are removing final finished goods after paying full appropriate excise duty....whwther we have to mention the R.C.No.of all the the regd.units on the Sale-Invoice.... mohan sehgal

    You are required to mention registration number of the unit from which the final finished goods are being removed on the sales invoice. Registration number of other units need not be mentioned. Query replied by:- Ranu Dhoot
  • Dear Sir, We are into trading business of velcro. And we want to import velcro from China. Is there any way of exempting anti-dumping duty on import of velcro or hook and loop tape from China? NITI PATHAK

    Once anti dumping duty is imposed on a product there is no way out for getting exemption from the same. Since anti dumping duty has been levied on Velcro imported from china, there lies no way by which the same can be exempted. Query replied by:- Ranu Dhoot
  • I have small doubt for clarify that we have availed all the cenvat credit of dutiable inputs which will clear to stock trasfer to own co.(tariff:8701) without payment of duty , is it liable to pay or reverse the duty?. Pls clarify. Subramani.P

    Yes, you are required to reverse the credit taken on dutiable inputs which will be cleared to your other company because it is as good as clearance of duty paid inputs “as such” and the provisions of Rule 3(5) of the Cenvat Credit Rules, 2004 would be applicable. {Query replied by: CA Neetu Sukhwani & Ranu Dhoot}
  • Dear Sir, As u know that on 10-07-2014 at present FM has announced the budget as i saw that no change has been made in the excise rate,then as my client is manufacturing goods under the cetsh no.68042220 then from 11-07-2014 he has to charge 12.36% or else.Please reply hitesh

    The tariff head 68042220 pertains to “grinding wheels of other materials”. The excise duty specified in the Central Excise Tariff Act, 1985 continues to be 12.36% on the same. {Query replied by: Ranu Dhoot}
  • i would like to know complete procedure for trading activity from manufacturing activity N.S.Vinayagam

    In the absence of any prohibitory provisions in the Central Excise Rules 2002 and also the procedure laid down in the supplementary instructions, a manufacturer may bring duty paid goods in the registered manufacturing premises for trading purposes and no permission in this regard is warranted from the Central Excise Department. However, a factory cannot be allowed to receive goods from outside, which are identical to those manufactured by them without proper permission from the Commissioner. Hence, for bringing the duty paid goods for trading purposes which are identical to those manufactured in the factory the permission should be obtained by following the procedure as mentioned in the trade notice no. 553 / 63 / 2001 technical dated 29/11/2001} {Query replied by: CA Neetu Sukhwani & Ranu Dhoot}
  • Dear Sir, My one merchant exporter want to export ceramic tiles, cth no. 69089090. he want to take benefit of Packing box. for example, A is merchant exporter, he purched the box for packing the tiles from B (Excise registered unit) and send to tile manufacturer C. Now he want to make ARE - 1 for Packing box. It is possible.. ? Sunil Bhila

    It appears that ARE-1 for packing box is desired to be made so as to claim exemption from excise duty on the packing materials. However, the method as stated above is not possible because ARE-1 for packing box cannot be filed separately as ARE-1 is filed for finished goods only. It is however suggested that the manufacturer C, exporting tiles may follow the procedure as prescribed in notification no. 43/2001 -C.E. Dated-26/06/2001 and bring the packing material at nil rate of duty for use in the manufacture of final product, i.e., tiles which will be exported by ARE-2. It is also worth mentioning that the said ARE-2 should be signed both by the merchant exporter and the manufacturer of tiles. {Query replied by: Ranu Dhoot}
  • Dear Sir, we are rice exporter and make payment to CHA for rail freight incurred by him on our behalf, now on presenting his bill whether TDS will be liable on rail freight paid to him by us ? Second if payment made to CHA for ocean freight and CHA paid it to indian shipper then TDS under sec 194c will be attracted it or not? Arun

    We deal exclusively in excise, customs and service tax laws. Kindly consult a TDS consultant for the same. {Query replied by : Ranu Dhoot}
  • manufacturer having turn over above ssi limit 400Lacs. 100% sales is exported. but firm is not registered under excise. is it compulsory to registered for excise for 100% export firm.goods is under excise but all goods are exported there is no excise evasion still there will be any penalty or consequences for not having registration if registration compulsory. or excise is payable on exported goods as we are not registered Bharat Mange

    There is no need of taking Central Excise Registration by a 100% Exporter because the SSI limit of 4 crores does not include export sales. You have option to avail of the “Simplified Export Procedure For Exempted Units” as given in Part-III of the Chapter 6 of CBEC’s Central Excise Manual. However, declaration is required to be filed in terms of para 2 of the Notification no. 36/2001-CE (NT) dated 26.06.2001 and obtain declarant code number. Moreover, the proof of export is mandatorily required to be submitted within a period of 6 months from the date of clearance of goods from the factory of production. In case of clearances of such manufacturers where proof of export were not furnished within 6 months, exceed the exemption limit, they should take the central excise registration and follow the regular A.R.E.-1 procedure. {Query replied by: CA Neetu Sukhwani}
  • Dear Sir, One of my clients is a maufacturer of goods falling under cetsh no.85389000 as u know that the govt. had announced excise rate-cut on 17-02-2014 on above cetsh on account of relief as it was valid upto 30-06-2014, but few days before I read in papers that FM has extended the relief then do my client has to charge 12% or 10% from 01-07-2014.Please reply hitesh

    The excise duty cut announced vide notification no. 04/2014-CE dated 17.02.2014 has been extended upto 31.12.2014 vide notification no. 06/2014-CE dated 25.06.2014. Therefore, the reduced excise rates would be applicable till 31.12.2014. {Query replied by: CA Neetu Sukhwani}
  • Sir, our firm is a partnership firm and we avail security service who is a partnership firm. Are we under reverse charge mechanism and will deposit service tax under reverse charge mechanism. because as per notification if service receiver is body corporate then will be liable to pay service tax under this. please clarify Ajay Bansal

    As per notification no. 45/2012-ST dated 7.8.2012, security services provided by individual, HUF, proprietor, or partnership firm, AOP located in taxable territory provided to business entity registered as body corporate in taxable territory is leviable to service tax under reverse charge mechanism. As you being service receiver are a partnership firm and the service provider is also a partnership firm, reverse charge is not applicable and the service tax liability is to be discharged by the service provider.
  • Hello Sir, my query is that, We are manufacturers of turned components and we use lots of tools like Cutting tools, tools for turning and milling, carbide tip tools, which comes under Chapter 82, I believe and is considered as capital goods. These tools have a very short life and will be consumed within a week, after which they are considered as scrap, invoiced and cleared in the same financial year. Since according to rule 4 sub 2 A of cenvat credit rules, "The CENVAT credit in respect of capital goods received in a factory or in the premises of the provider of output service at any point of time in a given financial year shall be taken only for an amount not exceeding fifty per cent. of the duty paid on such capital goods in the same financial year: Provided that the CENVAT credit in respect of capital goods shall be allowed for the whole amount of the duty paid on such capital goods in the same financial year if such capital goods are cleared as such in the same financial year". Please clarify, what "cleared" means in the above rule. These tools are cleared as scrap, so can we claim the cenvat credit for whole amount (100%) for these tools or do we have to take only 50% this year and 50% in subsequent years. Please reply, Thanks, Ramachandra Aditya

    As per provision of CCR, 2004 only 50% credit can be taken in same financial year on receipt of capital goods and balance 50% in subsequent to the financial year in which capital goods received in the factory subject to possession of capital goods. 100% Cenvat credit can only be taken in same financial year if such capital goods are removed/cleared “as such”. Expression “as such clearance” means without any use but in your case you are clearing the capital goods as scrap after being used so 100% cenvat credit cannot be taken in same financial year. Therefore, you are required to take balance 50% credit in the subsequent financial year by placing reliance on the provision of Rule 4(2)(b) of the Cenvat Credit Rules, 2004 which provides exception to the condition of possession of capital goods in subsequent years for components, spares, accessories, refractories and refractory materials, moulds and dies and goods falling under heading 6805, grinding wheels and the like. It can be pleaded that the cutting tools, grinding tools etc. are accessories of the capital goods. {Query replied by CA Neetu Sukhwani & Manish Bhati}
  • Hello Sir, my query is, For Tools, such as cutting tools, grinding tools, tools for turning and milling and carbide tip tools falling under chapter 82 on central excise, are considered as capital goods. These tools are used for manufacturing purpose and they are consumed within a week and then cleared and invoiced as scrap and sold. However, when claiming the CENVAT credit for these goods, should we claim 50% this year and rest subsequent years or can the whole CENVAT credit be claimed in the same financial year?, since according to rule 4, quote :"Rule 4,(2) (a) The CENVAT credit in respect of capital goods received in a factory or in the premises of the provider of output service at any point of time in a given financial year shall be taken only for an amount not exceeding fifty per cent. of the duty paid on such capital goods in the same financial year: Provided that the CENVAT credit in respect of capital goods shall be allowed for the whole amount of the duty paid on such capital goods in the same financial year if such capital goods are cleared as such in the same financial year." Please clarify, as to what cleared in the above rule means and whether we should claim 100% credit or only 50%. Thanks Ramachandra E N

    As per provision of CCR, 2004 only 50% credit can be taken in same financial year on receipt of capital goods and balance 50% in subsequent to the financial year in which capital goods received in the factory subject to possession of capital goods. 100% Cenvat credit can only be taken in same financial year if such capital goods are removed/cleared “as such”. Expression “as such clearance” means without any use but in your case you are clearing the capital goods as scrap after being used so 100% cenvat credit cannot be taken in same financial year. Therefore, you are required to take balance 50% credit in the subsequent financial year by placing reliance on the provision of Rule 4(2)(b) of the Cenvat Credit Rules, 2004 which provides exception to the condition of possession of capital goods in subsequent years for components, spares, accessories, refractories and refractory materials, moulds and dies and goods falling under heading 6805, grinding wheels and the like. It can be pleaded that the cutting tools, grinding tools etc. are accessories of the capital goods. {Query replied by CA Neetu Sukhwani & Manish Bhati}
  • I got information from someone as parts of harvester ( machinery of farming)cab be sold without payment of excise duty. is it correct? if yes then can you give me reference notification / circular no.? Yogesh Pawar

    The harvesting & threshing machinery fall under the tariff head 8433 of the Central Excise Tariff Act, 1985 wherein Nil rate of excise duty is being specified against all the items of this tariff heading. Consequently, all items under this tariff head are to be sold without payment of excise duty. Since nil rate of duty has been mentioned in central excise tariff itself, there lies no need of any exemption notification for the same. Query replied by:- Ranu Dhoot
  • My company is having two branches. One is located in Gurgaon-Haryana and another is located in Bhiwadi-Rajasthan. Both the branches are registered with excise department. Gurgaon branch is manufacturing Cushion cover exempt from excise under Notification No. 30/2004-C.E dated 9th July 2004.Gurgaon branch is transferring the cushion to Bhiwadi branch as stock transfer against F-form. Bhiwadi branch is carrying out the further processes of filling and stitching and complete cushion are sold as excisable goods. My query is that whether the procedure followed by us is correct by paying the duty on complete cushion at bhiwadi location when it get covered under excisable goods category. Whether the Bhiwadi branch is required to get registered under depot sale or we can prepare the invoice with our exisiting excise registration no. CA Santosh jangra

    We submit that as your Gurgaon Branch is manufacturing Cushion cover that are exempt under notification no. 30/2004-CE, there was no need to take central excise registration for the said unit because it manufactures exempted goods. Moreover, registration for “depot sale” cannot be taken for your Bhiwadi unit because registration under depot sale is taken when the excisable goods are merely traded. Since certain manufacturing activity is being carried out at Bhiwadi unit, registration cannot be taken as depot for the said unit. The Bhiwadi unit has been correctly registered as manufacturing unit and the unit should clear the excisable goods on payment of excise duty. {Query Replied by Hushen Ganodwala and CA Neetu Sukhwani}
  • Dear Sir, My company is having two branches in two different states-Haryana-gurgaon and Rajasthan -Bhiwadi. Both branches are regsitered under excise Act. My gurgaon Branch is manufacturing the Cushion cover which are exempt under notification No. 30/2004-C.E Dt 09.07.2004. These cushion cover are transferred from gurgaon to Bhiwadi location. In bhiwadi process for filing the fibre and stitching is carried out and final product"cushion" is sold to the Customer with excise duty applicable as cushion is covered under chapter 9404. Kindly let me know whether my bhiwadi branch should get registerd for "depot sale" or we can transfer the cushion cover from Gurgaon as exempted goods and sold them after processing as excisable goods without any registration as manufacturing process is completed at bhiwadi location. kindly advise. CA Santosh jangra

    We submit that as your Gurgaon Branch is manufacturing Cushion cover that are exempt under notification no. 30/2004-CE, there was no need to take central excise registration for the said unit because it manufactures exempted goods. Moreover, registration for “depot sale” cannot be taken for your Bhiwadi unit because registration under depot sale is taken when the excisable goods are merely traded. Since certain manufacturing activity is being carried out at Bhiwadi unit, registration cannot be taken as depot for the said unit. The Bhiwadi unit has been correctly registered as manufacturing unit and the unit should clear the excisable goods on payment of excise duty. {Query Replied by Hushen Ganodwala and CA Neetu Sukhwani}
  • Dear Sir I am having some doubt on following in service atx 1)Whether Cenvat available on service tax mentioned in Air/Railway Ticket 2)Whether Cenvat available on Service Tax element onBank Charges say bank Guarantee Charges, Processing Fee,RTGS chargesw etc. available 3)whether ST liability is there on Reimbursement of Expenses 4)Whether Service Tax on reverse charge is appliable on Membership Fee paid abroad 5)Whether CENVAT on Guest house related expenses are available 6)Whether CENVAT available if the name of employee mentioned in Hotel bill instead of company Name 7)If we undertake the activity of Repair then CENVAT Avaialble or not. Thank You Sir akash gupta

    Definition of input service as given in Rule 2(l) is wide enough to incorporate numerous activities within its gamut. 1) Yes, Cenvat is available on service tax mentioned in Air/Railway Ticket if such expenditure is business expenditure. 2) Yes, Cenvat is available on Service Tax element on Bank Charges (bank Guarantee Charges, Processing Fee, RTGS charges etc.) because it is directly a business expenditure. 3) Recently, Delhi High Court has held that in the case of Intercontinental Consultants and Technocrafts Ltd. [ 2012-TIOL-966-HC-DEL-ST] that inclusion of reimbursable expenses in the taxable value of service is ultra vires and so as of now, service tax may not be paid on reimbursement of expenses by placing reliance on the above cited decision. However, if the same is paid then the credit will be available subject to condition that it is used in manufacture of final product or for providing output service. 4) Since the nature of the membership fees is not clear we are unable to advise you in this regard. Kindly provide us with more details regarding the same so that we are able to make a correct opinion on it. 5) CENVAT on Guest house related expenses are available only if expenses are directly related to business purposes. 6) If the name of employee mentioned in Hotel bill instead of company name, the department will contend that cenvat credit cannot be taken by company. However, the credit may be allowed in litigation if we are able to prove that it is expenditure related to business and only bill has been raised in the name of employee. 7) We are not able to understand the query. Please elaborate. {Query Replied by: Ranu Dhoot}
  • Sir, let "A" is a manufacturing company & sold their finish goods in different states.and provide "Bahati" as required on behalf of transporter for clearing the vehicle at check post and take charges from transporter against Bahat"charges & the charges will show in account books as ohther income.in this condition company"A"required to deposit service tax on received amount from transporter as a"Bahti charges? P.S.Butola

    We are unable to understand your query properly because the meaning of “Bahati” is not clear to us. However, on the assumption that the sale of finished goods by Company A has nothing to do with providing services to the transporter, the reply to your query is as follows. We submit that it appears that you are providing certain services to the transporter for which consideration is being received by you and the same is also shown in your books of accounts as income. We submit that as the services of clearing the vehicle at check post is not exempted in the negative list or the mega exemption notification, the same would be leviable to service tax. {Query replied by CA Neetu Sukhwani & Hushen Ganodwala}
  • Hi, Banking industry is paying service tax on different services chargeable to service tax. Can this be utilised for payment of service tax as an input credit. If yes in what Proportion? Is there any thumb rule governing the same? Prashant

    There is a special provision prescribed in Rule 6(3B) of the Cenvat Credit Rules, 2004 for banks wherein it has been stated as follows-“Notwithstanding anything contained in sub rules (1), (2), and (3) of the Rule 6 of CCR, 2004, a banking company and a financial institution including a non-banking financial company [engaged in providing services by way of extending deposits, loans or advances] shall pay for every month an amount equal to fifty per cent of the Cenvat Credit availed on inputs and input services in that month.” As the above provision is specific to banking company and overrides the general provisions of Rule 6, it appears that a banking company is eligible to avail service tax credit on all the services and in compliance of provision of Rule 6 is required to reverse fifty per cent of the amount of credit availed in a particular month. Accordingly, except the credit reversed under Rule 6(3B), all the credit availed by a banking company may be utilised by them. However, the utilisation is subject to the provisions of Cenvat Credit Rules, 2004 like for reverse charge, payment cannot be made through cenvat credit. {Query Replied by Hushen Ganodwala and CA Neetu Sukhwani}
  • Dear Sir, Pl tell me , Form I or H is required against sales of CT-3 in lieu of sales tax or not. Regards A singh Abhimanyu Singh

    We do not deal in Sales tax law. Please ask queries relating to Excise, service tax and custom. {Query Replied by: Hushen Ganodwala}
  • Sir, I am doing crushing of stone and making it in form bajri used in making road by extracting it from hills by paying royalty to government and sale in the market whether it amounts to manufacture. Please revert on these email id -shahmanish47@gmail.com SSAS

    Section 2(f) of the Central Excise Act, 1944 states that “Manufacture” includes any process,- i. Incidental or ancillary to the completion of a manufactured product. ii. Which is specified in relation to any goods in the Section or Chapter notes of [the First Schedule] to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to [manufacture; or] iii. Which in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labeling or re-labeling of containers including the declaration or alteration of ret5ail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer,] Moreover, the Hon’ble Supreme Court has held in Hawkins Cookers Ltd. Vs Collector [1997 (96) E.L.T. 507 (S.C.)] that to levy central excise duty, a new article should come into existence as a manufacturing activity. Thus, crushing of stone and making gravel (bajari) from it shall amount to manufacture as crushing amounts to activity for making manufactured product ‘gravel’ falling under the chapter head 251710. However, it is to be noted that Gravel is an excisable good with NIL rate of duty. {Query replied by Ranu Dhoot}
  • Sir, whether cenvat credit on courier BOE is allowed? please guide. Sachin

    The Cenvat credit can be availed on the courier BOE as under Rule 9 (c) of the Cenvat Credit Rules, 2004 specifying the documents on the basis of which cenvat credit may be taken also specifies bill of entry as the eligible document for availing credit. As it is mentioned bill of entry, courier bill of entry would also be eligible provided it is original. Query replied by CA Neetu Sukhwani
  • A private limited company is running a pre-university college. I would like to know whether it is exempt from service tax Ravindra

    As per clause (l) of section 66D specifying the negative list of services, pre-school education and education upto higher secondary school or equivalent and education as a part of a curriculum for obtaining qualification recognised by any law for the time being in force is exempted from service tax levy. Therefore, services provided by a pre-university college are exempt from service tax. Query replied by Pooja Mehta
  • I would like to know whether education institution (Pre-university college) run by a private limited company is exempt from service tax. Ravindra

    As per clause (l) of section 66D specifying the negative list of services, pre-school education and education upto higher secondary school or equivalent and education as a part of a curriculum for obtaining qualification recognised by any law for the time being in force is exempted from service tax levy. Therefore, services provided by a pre-university college are exempt from service tax. Query replied by Pooja Mehta
  • Dear Sir, we have registers as dealer under central excise deprt earlier we doing ( buying material in india as well as import from out side india ) but now department asking to take separate ECC no as importer please let me known as per department we have to maintain two invoice book as dealer and importer in one premises and different ecc no is it possible is there any new law introduced by gov please we waiting for your advice on above matter Umesh Bora

    Vide Circular No. F.No. IV/16-24/CCO-II/MCX/2014 clarification had been issued to the President of ‘The Chemical& Alkali Merchants Association', Mumbai, the Chief Commissioner, Mumbai-II Zone in which it had been clarified that “Since importer and dealer have different registration number, separate accounts and sets of invoice book are required to be maintained for each category of business.“ {Query replied by:-Ranu Dhoot}
  • dear sir, we take service of GTA for sending goods to port. this service is taken against export sales of goods. then is service tax is applicable on GTA service or not. JITENDRA CHOPRA

    Service tax is applicable on GTA service under reverse charge if the conditions as stated are satisfied. However, in case of GTA service being availed for sending goods from the factory to the place of export, there are three options available with the exporter. The first option may be to avail the credit of the service tax paid on GTA service. The second option may be to pay service tax and then claim refund of the same under notification no. 41/2012-ST dated 29.06.2012. The third option may be to claim exemption from payment of service tax on GTA service availed in relation to export of goods under notification no. 31/2012-ST dated 20.06.2012 but in such a case the exporter shall have to produce consignment note issued in his name and file return in EXP-2 every six months. Query replied by CA Neetu Sukhwani
  • dear sir, we take service of GTA for sending goods to port. this service is taken against export sales of goods. then is service tax is applicable on GTA service or not. JITENDRA CHOPRA

    Service tax is applicable on GTA service under reverse charge if the conditions as stated are satisfied. However, in case of GTA service being availed for sending goods from the factory to the place of export, there are three options available with the exporter. The first option may be to avail the credit of the service tax paid on GTA service. The second option may be to pay service tax and then claim refund of the same under notification no. 41/2012-ST dated 29.06.2012. The third option may be to claim exemption from payment of service tax on GTA service availed in relation to export of goods under notification no. 31/2012-ST dated 20.06.2012 but in such a case the exporter shall have to produce consignment note issued in his name and file return in EXP-2 every six months. Query replied by CA Neetu Sukhwani
  • Dear Sir, My query is that one of my clients wants the extension in the jobwork challan of which the limit of 180 days is about to be come to an end then what is the procedure I have to follow with the department. hitesh

    There is no procedure to extend the time limit of 180 days for the job work challan. As per Rule 4 (5)(a), the manufacturer getting the job work done should reverse the credit attributable to the inputs sent on the job work and should avail the credit again on the receipt of the goods after job work in his premises. This is the only procedure prescribed in the Cenvat Credit Rules that is required to be followed by the manufacturer getting the job work done by job worker. {Replied by CA Neetu Sukhwani}
  • Good Morning Sir, We are coversion agent of tata steel.We convert GP coil into corrogated sheet. Issue- We dispatch sheet to third party as per tata shedule and charge excise duty on the invoive. This excise duty we get reimbuse from tata. We raise service tax bill to tata for conversion charge. My question is whether we can get credit of input excise duty on input against output service tax. ANKUR AGARWAL

    Respected sir, Your query holds a bit of ambiguity. You are doing job work for Tata steel but liable to pay Excise Duty as you are manufacturer. Secondly, you are also charging service tax on the conversion charges. Firstly, when you are paying Excise Duty on your final product which implies that the process undertaken by you amounts to manufacture. If this is the case, then you need not to pay service tax on conversion charges. Secondly, it is not clear that you intend to take credit on which goods/ service? The inputs which are used in manufacture of dutiable final product, the credit will be available to you. If these inputs are those which have been used by you for converting the GP coil in corrugated sheet than the credit of the same is admissible. But if you are talking about the credit on the excise duty charged on the invoice than such credit is not admissible as it is being reimbursed by Tata. Hence the same is not borne by you and credit for same is not admissible. {Query replied by:-Prayushi Jain}
  • Dear Sir, we are providing hiring of Boom Lifts, JCB,Plant & Machinery services,we are registered with service tax we have imported the Boom Lift which is used in our business for 3 years and we have availed CENVAT Credit at the time of Import ,we have exported the same machine What will be the service tax & Mvat liability Raman Kankaria

    We clarify that the activity of exporting machine would not attract service tax. However, as you have availed Cenvat Credit at the time of Import, thus Rule 3(5A) of Cenvat Credit Rules 2004 shall become applicable. As per Rule 3(5A) of Cenvat Credit Rules 2004,” If the capital goods on which Cenvat Credit has been taken, are removed after being used, whether as capital goods or as scrap or waste, the manufacturer or provider of output services shall pay an amount equal to CENVAT Credit taken on the said capital goods reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of taking the CENVAT Credit, namely:- (a) For computers and computer peripherals: • For each quarter in the first year @ 10% • For each quarter in the second year @ 8% • For each quarter in third year @ 5% • For each quarter in the fourth and fifth year @ 1% (b) For capital goods, other than computers and computer peripherals @ 2.5% for each quarter: Provided that if the amount so calculated is less than the amount equal to the duty leviable on transaction value, the amount to be paid shall be equal to the duty leviable on transaction value. Therefore, there will be liability of credit reversal as stated above. {Query replied by Ranu Dhoot}
  • IS REALTY SHOW TAXABLE UNDER SERVICE TAX, IF YES THAN IN WHICH SERVICE PLEASE REPLY Yogesh Verma

    After the applicability of Negative List under Section 66D of Finance Act, all services have become taxable except the services as mentioned in the list. Since, reality show is not covered under negative list, hence it is taxable. The reality show will be classifiable under the category of “EVENT MANAGEMENT SERVICE”. {Query replied by Ranu Dhoot}
  • A PurchaseTicket from B and earns certain commission from B.A then sell ticket to Customer C.Both A and B are Air Travel Agents.A pays st on basic fare of ticket by collecting from C.B pays st calculated on commission received from airlines.Now,A is charging i.e collecting st from B i.e100*12.36/100 .Can A can follow both basic fare and comm model for same service?Can A can charge st to B if he is already collecting st from C on basic fare for same service?Can B take cenvat Of st paid to A? Chandani

    Chandani (chandani.gadhia@rediffmail.com) Respected maam, In respect to your query submit that an air travel agent once chooses between commission model and basic fare he has to apply same model uniformly till the completion of one financial year. Further yes a same service can be chargeable to tax twice as in indirect tax laws there is mechanism of credit which sets off the tax paid. Therefore if the same service is being charged twice to service tax than he can avail credit as it is input service for his output service. Yes as already stated above, Cenvat credit can be availed. {Query replied by:-Prayushi Jain}
  • Respected Sir, If under Reverse Charge Mechanism a company paid for the transport ageny and for advocate as a service receipent, can this payment be taken as input for other service tax payment Surbhi

    It is understood that you are asking whether credit of service tax paid under reverse charge mechanism can be availed and utilised for discharging other service tax liabilities. In this respect, we submit that there is only restriction as regards payment of service tax in cash for services covered under the reverse charge mechanism. However, the service tax paid under reverse charge mechanism would be available as credit on the basis of challan through which payment was made and the credit can be utilised for discharging all service tax liabilities except those under reverse charge. {Query replied by Ranu Dhoot}
  • Is a firm liable for service tax on visa consultancy provided to students. source of revenue: 1) fee from students 2) commission from foreign universities. Manish Singhal

    The service tax would be leviable on the commission received from the foreign universities because the education services provided by foreign universities are taxable to service tax and are not covered by the entry no. 9 of the mega exemption notification no. 25/2012-ST dated 20.06.2012 read with clause (l) of section 66D pertaining to the negative list. It is submitted that the mega exemption notification provides exemption to auxiliary education services provided to educational institution that provides exempted education services. Further, negative list states that education services that are provided as a part of curriculum for obtaining qualification recognised by law in India is exempted from service tax. As the education services provided by foreign universities are recognised by foreign laws, they are not covered by the negative list and consequently also not covered by the mega exemption notification. Further, as per Place of Provision of Service Rule 9, in case of intermediary services, the place of provision of service shall be the location of service provider. In the present case, as the firm providing visa consultancy services is located in India, the place of provision of service is in taxable territory. Therefore, when the service is taxable and is also provided in taxable territory, i.e., in India, service tax will be leviable on the same. Query replied by CA Neetu Sukhwani
  • Respected Sir, I have query related to rent a cab service under RCM. I have received a bill against bus hire charges for carrying employee from station to company and he is charging service tax @4.944% in his bill,so my query is service tax charge in the bill is correct or not? 1.Service provider is individual , as per his PAN number provided in the bill. 2. service receiver is company. 

    As per notification no. 30/2012-ST dated 20.6.2012, reverse charge mechanism applies under rent a cab service if service provider is individual, HUF, or partnership firm and the service recipient is business entity registered as body corporate. Hence, the reverse charge mechanism is applicable in the present case. As far as the rate of service tax is concerned, serial no. 9 of the Abatement Notification No. 26/2012-ST dated 20.6.2012 provides that 40% is taxable value for the service of rent a cab. Thus, effective service tax rate is 40% of 12.36% that comes out to 4.944%. Thus the service provider has correctly charged service tax @ 4.944% in the bill. {Query replied by Ranu Dhoot}
  • sir one of my client is a retired employee of AP Genco. post retirement he tookup an engagement with a power plant to maintain its green belt operations i.e plantation and plants maintenance and plantation development across more than 100 acres of green belt sourounding the power plant. now the query is wether these services are taxable in service tax. i want to claim exemption u/s 66D is it valid. please advise. anil kumar

    ANS. Entry (d) of Section 66D of Finance Act, 1994 states “services relating to agriculture or agricultural produce by way of- i. Agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection and seed testing. ii. Supply of farm labour iii. Processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it marketable for the primamry market. iv. Renting or leasing of agro machinery or vacant land with or without a structure incidental to its use v. Loading, unloading , packing, storage and warehousing of agricultural produce vi. Agricultural extension services. vii. Services by any Agricultural Produce Marketing Committee or Board or service provided by a commission agent for sale or purchase of agricultural produce” Maintaining green belt operations neither relate to any of the sub points mentioned above, nor it is covered under any other point of Negative List. Hence the services of your client shall be entirely taxable. {Query replied by:-Ranu Dhoot}
  • I want to know about calculation of SSI limit 10lacs in case of service provider provide service to bodycorporates and comes under reverse charges. say billed 12 lac and 50:50 is applicable. So can i say that i am not liable to pay as i m responsible for 50% i.e. 6lacs ans basic exemption can i claim Bharat Mange

    For the purpose of determining eligibility of small scale exemption in the current year, what is relevant is that “aggregate value of taxable services rendered” in the previous financial year should not exceed Rs 10 lakhs. “Aggregate value” means the sum total of value of the taxable services charged in the first consecutive invoices issued or required to be issued, as the case may be, during a financial year but does not include value charged in invoices issued towards such services which are exempt from whole of service tax leviable thereon under section 66 of the Finance Act under any other notification”. Moreover, small scale exemption is not available to the service recipient for the services on which service tax is payable under reverse charge mechanism. We submit that in case of a service provider providing the works contract services on which service tax is payable only to the extent of 50%, the service provider cannot claim 50% of the value of service as the “taxable value” for the purpose of computing small scale service provider exemption. The reason for the same is that 50% liability is casted on the service recipient and it does not mean that there is 50% exemption to the service provider. Accordingly, the value of taxable services for the purpose of SSI exemption would be Rs. 12 Lakhs in the present case and not Rs. 6 Lakhs. {Query replied by Ranu Dhoot}
  • I regularly read your articles , opinions and views on taxmanagementindia.com and really appreciate your contribution . Sir I need a valuable opinion on service tax issue I would very much grateful for the same. A Real Estate service Provider firm “A” having taxable services less than 10 lacs hence exempted in F.Y 11-12. In following year F.Y 12-13 raised four bills each of 30 lacs approx ( aggregating 120 Lacs) in August-2012 on company “B” , but the bills were disputed by the service receiver “B” and negotiation were done but remain un-settled till 31/03/2013. But the service receiver provided an amount of 110 lacs in his books on which he has done TDS of Rs. 16 lcas approx. Now in order to reconcile for Income purpose and to get credit of Tax the firm “A” also offered the amount for tax during the year 12-13 . Eventually bills were settled in June-13 ( F.Y 13-14) and service tax liability was duly settled on actual gross receipt and tax being paid on receipt basis was shown in St-3 for Period Apr-Sep-2013. But now the issue was raised by the department that liability arises on due basis beyond 50 lacs as per proviso to Rule 6 of service tax as the aggregate amount of taxable services exceeded 50 lacs . The department intend to levy interest and penalty for delayed payment of taxes. Can “A” take stand that we have offered Income for Income tax purpose in order to get benefit of Prepaid tax ( TDS) and bills were settled in June-13 and accordingly taxes were paid hence no question of interest and penalty thereof. Is contention of “A” tenable in law . Pls Guide. CA.Mohammed Lakkadsha

    The fourth proviso to rule 6(1) of the services tax Rules, inserted with effect from 1/4/2012, provides that in case of individuals and partnership firm whose aggregate value of taxable services provided from one or more premises is 50 lakhs rupees or less in the previous financial year, the service provider shall have the option to pay tax on taxable services provided or to be provided by him up to a total of rupees 50 lakhs in the current financial year, by the dates specified in rule 6(1) with respect to the month or quarter, as the case may be, in which payment is received. As per this case, “A” has provided 10 lakhs rupees in F.Y. 11-12 , this is below the limit i.e. 50 lakhs rupees, so benefit will be available.
  • Dear Sir, We are manufacturer and registered with Central Excise. Recently we had supplied one machine to our client who is in SEZ. Our client had sent us Eligibility Certificate of SEZ. Now we supplied the machine with ARE-1 without and bond or LUT. Now Excise department is asking us to pay the excise duty as we have not furnished the LUT or Bond. Kindly help me on the issue. What can we do now. Do we pay excise duty + interest and penelty. Is there any way of getting this duty back. We are newly registered to excise department. Kindly help... Thanks you in anticipation. SUNDEEP RAJPUT

    As per law in case of Export/SEZ either we have to give bond/LUT. But you can plead that it is procedural requirement. The goods have been delivered to SEZ unit and proof of the same should be submitted to the department. Thus, the procedural infraction cannot take away the substantive right of exemption. Hence the export has taken place, no need to pay the duty.
  • Dear Sir, The GOI has reduced Excise Duty on Certain Capital Goods up to 30/06/2014. Now a case has arisen: Principal Supplier sends goods attracting Central Excise duty 12% to Job Worker for fabrication of Intermediate Goods used in the production of Final Product . Job Worker avails Cenvat Credit and sends Intermediate Goods attracting Excise Duty @10% to Principal Manufacturer. The CENVAT Credit does not get set off against Job Worker's Assessable. Cenvat Credit remains in Excsie Records. Please advise how and under which document job worker can return excise duty to the Principal manufacturer. Regards, Vinod Vinod

    Cenvat credit can be passed by paying the Central excise duty under invoice issued under Rule 11 of Central Excise Rules, 2004. The duty is payable as applicable at the time of clearance of goods from factory. Hence, you cannot pay duty more than that. If you have followed the procedure of Rule 4(5)(a) of Cenvat Credit Rules or under Notification 214/86 then the job worker would not have availed the credit as well as paid the duty while clearing the goods.
  • Dear Sir Please explain whether downloading of software in India from outside india liable to service tax on reverse charge akash gupta

    Downloading of software from out of India (whether tailor made or branded) would attract service tax. Because if this software is in nature of packed software than also it will fall under the purview of “Packed Software”. The person who download the software will be treated as Importer and liable to Service Tax under Reverse Charge Mechanism. This view is also published in para 6.4.4 of CBEC’s TAXATION OF SERVICES: AN EDUCTIONAL GUIDE”. This issue is still confusing and department may raise issue in this regards, so it is better to inform to department to avoid charge of suppression.
  • Dear sir, One of my client want to export sale to usa i.e export of software. Whether Service tax and vat is applicable on it. He will sale by sending link for download. Please Reply thankig you jharna saxena

    As the export is being done by sale of software through a link therefore it shall fall under Online information and database access or retrieval services under Rule 9 of Place of provision rules,2012. By applying these provision the place of provision of service shall be location of service provider i.e. in India and not of receiver i.e. USA.
  • Whether Service Tax credit can be availed in the input service wlie providing Construction service as an output service. If yes please state the Notification or any circular number, if any? Sandeep Shah

    ANS. The definition of input service specifically excludes services: “Specified in sub clauses (p), (zn), (zzl), (zzm), (zzq), (zzzh), (zzzza) of clause (105) of section section 65 of the Finance Act (hereinafter referred as specified services) in so far as they are used for - (a) construction or execution of works contract of a building or a civil structure or a part  thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services” Thus, we can conclude that except from the above mentioned (a) & (b) credit can be availed in the input service while providing Construction service as an output service. Also, notification no. 26/2012-ST, dated 20-6-2012 Sl. No. 12 states the conditions for availing Cenvat credit on “construction of a complex, building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly except where entire consideration is received after issuance of completion certificate by the competent authority state as follows (i) CENVAT credit on INPUTS used for providing the taxable service has not been taken under the provisions of the CENVAT Credit Rules, 2004; (ii) The value of land is included in the amount charged from the service receiver.” This notification also in no way disallows availing credit of input services for providing Construction service as an output service. Hence, Service Tax credit can be availed in the input service while providing Construction service as an output service. {Query replied by:-Ranu Dhoot}
  • on which amount service tax to be deducted in case of import of service. e.g. Service provider has charge rs. 100 TDS to be borne by service recipient rs. 20, hence cost for the service recipient is 120 and service provider has charged rs. 100 Now on which amount ST to be charged...? Whether on rs. 100 or rs. 120...! Bhavik Soni

    First of all when the Service provider charges Rs. 100 & TDS of Rs. 20 is deducted, then the cost of the service to the service recipient shall be Rs. 80 instead of Rs. 120. Service tax shall be charged on Complete Rs 100 i.e. the amount charged from the service recipient inclusive of TDS.
  • Dear Sirji, Wishes to you for the excellent services rendered to the readers and netizens. Kindly clarify the following query. A Public limited company is registered with excise dept and paying excise duty and availing only cenvat on goods (inputs. The company is registered with service tax dept with centralised RC mainly for C&F and warehousing operations and avails input services of all the branches including excise unit in discharging output service tax. As limited company, they are paying reverse charge for almost all the services listed in the notification. Now the question is, what are the input services they are eligible to claim from the following reverse charge services paid by them by cash under separate challan. 1) advocate fees 2) manpower supply for production of excisabale and non-excisable 3) rent a cab service 4) works contract service 5) Directors sitting fees etc., 6) GTA inward and outward 7) import services -paid in foreign exchange. Regards, rengaraj

    A manufacturer or service provider is eligible for availing Cenvat credit of service tax paid on his input services, excise duty paid on his inputs and excise duty paid on the capital goods. Thus whether the credit of any service can be availed needs to evaluated by judging whether a service falls under the definition of input services or not. The credit of services covered under Reverse charge mechanism can be claimed in the following manner: 1) Advocate fees: Credit can be claimed provided it is wholly used for providing output service or used in manufacture of final product. 2) Manpower supply: Credit can be claimed only on the manpower supply used for production of EXCISABLE goods or providing taxable output service. 3) Rent a cab: Credit cannot be claimed as it is specifically excluded from the definition input services 4) Works contract service: Credit can be claimed on all works contract except in the following situation: • construction or execution of works contract of a building or a civil structure or a part  • repair and maintenance related to a motor vehicle which is not a capital goods 5) Director’s sitting fees: Credit can be claimed as it is wholly related to business purposes and this service is not excluded from the definition of input services. 6) GTA inward and outward: Credit can be claimed on GTA inward if it is wholly related to business purposes. But there is dispute on GTA outward. The definition says that freight paid upto place or removal is allowed. The CBEC has issued circular that the credit will be allowed if three conditions are satisfied viz. the agreement is FOR delivery, the burden of intransit loss is on consignor and lastly, the excise duty is paid on price which includes freight also. This view was also affirmed by Punjab and Haryana High Court but the latest Kolkatta High Court has given the contrary view. Hence the issue is not settled for credit on outward freight. 7) Import services -paid in foreign exchange: Credit can be claimed as it falls in the definition of "input service" and input service is used for providing output service.
  • assessee has let out premises on rent to Central Excise Dept. Since such letting out was not for use in business or commerce, the same was not liable to service tax till 30/06/2012. The same has become taxable from 01/07/2012. Is this correct? SANJAY BOBRA

    Before introduction of the negative list tax regime, Renting of Immovable property was taxed under Section 65 (105) (zzzz). Renting of immovable property was brought into tax net vide Notification No. 23/2007-ST dated 01.06.2007 but since then the government offices in rented buildings were claiming that service tax is not payable as their activities were not in furtherance of business or commerce but performing statutory functions of public authority . Hence, it was not liable to pay service tax. In the new service tax scheme based on negative list of services, Section 65B (41) of Finance Act, 1994 (introduced w.e.f. 1-7-2012) defines renting “as allowing, permitting or granting access, entry, occupation, usage or any such facility, wholly or partly, in an immovable property, with or without the transfer of possession or control of the said immovable property and includes letting, licensing or other similar arrangements in respect of immovable property”. The words “for use or furtherance of business or commerce” are not available in the current definition under the negative list scheme, and hence the government offices will also have to pay the service tax on rent of the building which is used to perform their regulatory functions. {Query replied by: CA Neetu Sukhwani & Ranu Dhoot}
  • Sir, some transporters viz., SRMT, DATTI, SAFE EXPRESS etc., issue bills duly charging service tax but never issue Consignment Note (LR). In such case, is service receiver is liable to pay tax on the freight amount? Actually, these transport companies are liable to pay tax at all? Does GTA mean who arranges a truck and issues LR/CN and charges no service tax and collects commission from truck owner? In this case, is service recipient liable to pay tax, if otherwise liable by virtue of status? Thank you sir. CA. C V SURYAM

    GTA is defined in Section 65B(26) as “goods transport agency” means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called. The definition is clear enough to exclude such transporters as they do not issue consignment note. Since these are not GTA, service receiver is not liable to pay tax on the freight amount. These all are falling under courier services and hence they charge 12% service tax.
  • Dear sir , A manufacturer is required to carry out basic sales and marketing activities for selling its product along with sales promotion like dealers meet , field trial etc . the basic sales and marketing activities are meant for selling its products . Therefore it is possible to argue that entire selling and marketing activities are for clearing its goods from the place of removal i e factory or godowns or subsequent sales promotion activities and are fully covered under the definition of input services and eligible for full cenvat credit .Kindly clarify whether this argument hold good in view of the fact sales commission agent services have not been treated part of input service in some of the recent judgement . thanks . ssgaur S S Gaur

    In this regard, we submit that although the definition of input service given in Rule 2(l) specifically includes services in relation to advertisement or sales promotion, still, recently, the Gujarat High Court has held in the case of COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD – II Vs M/s CADILA HEALTHCARE LTD (2013-TIOL-12-HC-AHM-ST) that as regards commission paid to foreign agent, the said service is more directly related to sales rather than sales promotion and so does not comes within the ambit of the definition of ‘input service’. Accordingly, in order to claim credit on activities related to advertisement and marketing, it is necessary to prove that it is covered by the term sales promotion. It is also worth noting that Punjab & Haryana High Court, on the same issue, has opined in the case of COMMISSIONER OF CENTRAL EXCISE, LUDHIANA Vs AMBIKA OVERSEAS 2012 (25) S.T.R. 348 (P & H) that services provided by commission agents are covered under “sales promotion” and are pre-removal activities. Thus there lies an ambiguity in the fact that whether sales commission agent services fall under input services and whether the credit of the same be taken or not because there are two contrary judgments of high courts. This ambiguity shall continue until Supreme Court gives any decision or CBEC provides any clarification on this matter. {Query Replied by Ranu Dhoot}
  • Dear sir , A manufacturer is required to carry out basic sales and marketing activities for selling its product along with sales promotion like dealers meet , field trial etc . the basic sales and marketing activities are meant for selling its products . Therefore it is possible to argue that entire selling and marketing activities are for clearing its goods from the place of removal i e factory or godowns or subsequent sales promotion activities and are fully covered under the definition of input services and eligible for full cenvat credit .Kindly clarify whether this argument hold good in view of the fact sales commission agent services have not been treated part of input service in some of the recent judgement . thanks . ssgaur S S Gaur

    In this regard, we submit that although the definition of input service given in Rule 2(l) specifically includes services in relation to advertisement or sales promotion, still, recently, the Gujarat High Court has held in the case of COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD – II Vs M/s CADILA HEALTHCARE LTD (2013-TIOL-12-HC-AHM-ST) that as regards commission paid to foreign agent, the said service is more directly related to sales rather than sales promotion and so does not comes within the ambit of the definition of ‘input service’. Accordingly, in order to claim credit on activities related to advertisement and marketing, it is necessary to prove that it is covered by the term sales promotion. It is also worth noting that Punjab & Haryana High Court, on the same issue, has opined in the case of COMMISSIONER OF CENTRAL EXCISE, LUDHIANA Vs AMBIKA OVERSEAS 2012 (25) S.T.R. 348 (P & H) that services provided by commission agents are covered under “sales promotion” and are pre-removal activities. Thus there lies an ambiguity in the fact that whether sales commission agent services fall under input services and whether the credit of the same be taken or not because there are two contrary judgments of high courts. This ambiguity shall continue until Supreme Court gives any decision or CBEC provides any clarification on this matter. {Query Replied by Ranu Dhoot}
  • Sir, While filing ER-6, we are disclosing only those raw materials which are excisable as well as contribute more than 10% cost. But previously we disclose all of such raw material which accounts for more than 10% cost. My query is whether dept. can issue notice for such change in practice? Also which concept is correct? RAJIV JAIN

    As per Rule 9A(3) of the Cenvat Credit Rules, 2004, every manufacturer is required to file monthly return giving information of the receipt and consumption of each principal inputs with reference to the quantity of final products manufactured by him. Further, principal input means any input which is used in the manufacture of final products where the cost of such input constitutes not less than 10% of the total cost of raw materials used in the manufacture of unit quantity of a given final product. It is submitted that it is nowhere specified that the raw materials to be disclosed should be excisable. Therefore, to be on safer side, it is better to show the consumption of all the principal inputs irrespective of the fact whether they are excisable or not. The revenue department may issue notice for change in the practise followed by you. Although, the notice will not have any financial implication except for penalty under Rule 27 of the Central Excise Rules, 2002 for contravention of the Rules. {Query replied by: CA Neetu Sukhwani & Ranu Dhoot}
  • change e.mail- how? SAILAPATI BHATTACHARYYA

    It is intimated that as registration on our website is free, therefore, you are simply required to register and create a new login on our website with your new email id. As soon as the new login is created, all the amendments, news, case laws etc. shall be sent to you on your new email id via our weekly newsletter. Further, if you wish not to receive the updates on your previous email id then you can unsubscribe the newsletter by clicking on the option ‘unsubscribe’ present at the end of the weekly newsletter. {Query replied by Prayushi Jain}
  • change e.mail- how? SAILAPATI BHATTACHARYYA

    It is intimated that as registration on our website is free, therefore, you are simply required to register and create a new login on our website with your new email id. As soon as the new login is created, all the amendments, news, case laws etc. shall be sent to you on your new email id via our weekly newsletter. Further, if you wish not to receive the updates on your previous email id then you can unsubscribe the newsletter by clicking on the option ‘unsubscribe’ present at the end of the weekly newsletter. {Query replied by Prayushi Jain}
  • Respected Sir, Hiring of bus for carrying employees from station to company is taxable under rent-a-cab service and if Service provider charges 12.36% service tax in the bill,so my query is 1.can we paid full amount of bill to service provider. 2. or paid only bill without service tax to service provider and take 60% abatement and 40% paid to department. 

    ANS. Vide notification no. 30/2014-ST dated 20th june 2012, in Serial No. 7 of the Table given in the notification, it has been specified that, if: (a) In respect of services provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on abated value to any person who is not engaged in the similar line of business, then 100% of the service tax liability shall be of service recipient. (b) In respect of services provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on non abated value to any person who is not engaged in the similar line of business, service tax liability to the extent of 60% shall be of service provider and remaining 40% of the service recipient. However after the Budget of 2014 service tax liability of the service provider has been reduced to 50% and that of the service recipient has been raised to balance 50% (Vide Notification No. 10/2014-ST dated 11.07.2014). {Query replied by:-Ranu Dhoot}
  • Sir, We require an assembly which we get done from our small job worker. We are buying three types of inputs to make assembly from it and availing cenvat credit on the same. For assembly purpose we are sending these inputs to our job worker on 4(5)(a) chalan. While making assembly job worker utilizes his material i.e. some steel, fabrication material, etc and make the assembly. For this job he is raising two invoices one for service job done and another for material used by them and put in to together to make assembly duly charging excise duty. At the time of excise audit at job worker’s end, auditor has raised query that, excise should be charge on total material value involve plus profit element if any. While our job worker is charging duty on cost of material used by them plus his margin. Whether our jobworker need to pay duty on the value as suggested by excise auditor? Please guide. SACHIN

    It is submitted that under the provisions of Rule 4(5)(a), the job worker need not to pay the duty at all and principal manufacturer will pay the duty on the finished goods. Even if the some material has been used by job worker then also duty is not payable. Even the Mumbai High Court has held in case of Sterlite Industries [2009 (244) ELT A89 (BOM)] that the credit inputs used by job worker will be allowed as the principal is paying duty ultimately on the finished goods. Moreover, if the principal takes permission to clear the goods from premises of job worker on payment of duty under Rule 4(6) then also the liability to pay duty will be of principal only. Even in case of such permission, the normal procedure prescribed by the department is that the principal will prepare the invoice and leave the date and time of removal blank. He will send "original for buyer" and Duplicate for transporter" copy of this invoices to job worker. He will fill the date and time of removal will clearing the goods and tell the same to principal manufacturer. He will also fill the same in "triplicate for assessee" copy of invoice. {Query replied by:- CA Neetu Sukhwani & Prayushi Jain}
  • Dear Sir, I have doubt about camera hiring comes under which service tax head Nisa

    Prima facie, the act of camera hiring would come under the category of “supply of tangible goods service” wherein the taxable service has been defined as any service provided or to be provided to any person in relation to supply of tangible goods including machinery, equipment and appliances for use, without transferring right of possession and effective control of such machinery, equipment and appliances. {Query replied by Prayushi Jain}
  • Respected sir, I have received a bill for car hire charges without charging service tax on it, under rent a cab scheme. so my query is 1. at what rate we have paid the service tax to department. or 2. can we take credit of service tax what we paid to the department. Deepak Dalvi Deepak Dalvi

    The reverse charge mechanism is applicable to rent-a-cab service if the service provider is individual, HUF, partnership firm (registered or not) including AOP and service recipient is a body corporate. Further, the extent of liability of service tax for service provider and service recipient has been specified in the notification no. 30/2012-ST dated 20.06.2012. The present rate of service tax is 12.36% while an abatement of 60% is available for renting of any motor vehicle designed to carry passengers vide notification no. 26/2012-ST dated 20.06.2012 subject to the condition that cenvat credit of inputs, capital goods and input services used for providing the taxable service has not been taken under the Cenvat Credit Rules, 2004. The credit of service tax paid on “rent a cab” is not available in view of specific exclusion clause in the definition of "input service" in Rule 2(l) of Cenvat credit Rules, 2004 which is produced as follows:- “excludes services provided by way of renting of a motor vehicle in so far as they relate to a motor vehicle which is not a capital goods”.
  • Respected Sir, Company is hiring bus for carrying employee from station to company, so is this service covered under rent a cab service. and if yes then what will be the percentage of paying service tax to department or can we take credit of ST after making payment. Deepak Dalvi

    Hiring of buses for employees is taxable under rent-a-cab service. The prevailing rate of service tax is 12.36% but abatement of 60% may be availed in that case, the service tax will be payable @4.944%. The credit of service tax paid on “rent a cab” is not available in view of specific exclusion clause in the definition of "input service" in Rule 2(l) of Cenvat credit Rules, 2004 which is produced as follows:- “excludes services provided by way of renting of a motor vehicle in so far as they relate to a motor vehicle which is not a capital goods”.
  • Respected Sir Our client is taking services of electrical work in relation of installation of New Rice Plant. Kindly guide that will it be covered under the definition of clause of (e) of item no: 14 of notification no: 25-2012. Thanks with due regard CA Praveen Bansal Mathura

    We submit that the service of electrical work in relation of installation of new rice plant shall not be exempted. In the mega exemption notification 25/2012 clause of (e) of item no: 14 provides exemption to mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages. But as said by our finance minister, rice is not considered as agricultural product therefore the exemption to rice plant is not available. Further with the interim budget the finance minster has granted the exemption to loading, unloading, packing, storage or warehousing of rice. Moreover after it a clarification was issued as regards to non leviability of service tax on its transportation also. But as the service in this question is of installation of rice plant, therefore it shall be taxable. We also submit that the definition of the “agricultural produce” is given as any produce of agriculture on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market. Accordingly, it has been held that rice is not an agricultural produce because it is being processed in mills. {Query replied by Prayushi Jain}
  • Dear Sir, I have a query specifically on leviable of Service tax on "Fabrication" work at customer's premises which is an excisable area. 1. A job is awarded to a contractor, where both the customer and the contractor are public limited companies. 2. As per the contract awarded, there are two distinctive service components clearly spelt out in the order awarded to the contractor. 3. The first item being an erection & commissioning work to be done at the customer's site. The second item being a 'FABRICATION" work to be done by the contractor at the customer's plant(which is exciseable). The fabrication work will be done by the contractor on free issue materials to be provided by the customer which are structural items and hence partake that of 'capital' goods. 4. The opinion given as to the "Fabrication" work is that the same is not exigible to Service Tax since the same is deemed "manufacture" under Excise Duty and is to be charged Excise Duty under Section 3 of the Central Excise Act 1944 instead and here as the customer is the licensed unit under Excise Duty will be responsible for payment of Excise Duty after the fabrication work is done and the structurals are handed over to the customer. The matter presumably falls under the mischief of section 66D(f) (negative list) of the Finance Act 1994 and hence NO Service tax is to be charged on "Fabrication" work. This is true even if the excisable good is exempted under the Central Excise Act 1944. 5. However Service Tax will be charged by the contractor on the Erection and Commissioning part. 6. The first query is whether the contractor be allowed NOT to charge Service Tax as per point 4 above ? Please note the contractor is not registered as an excisable unit but is registered under Service Tax. 7. The second query is whether the contractor can avail any Input Credit on Service rendered to it by the contractor's sub-contractor on the same Fabrication job? I shall be grateful if you kindly forward your valued opinion. Regards Pravin PRAVIN SHELKE

    As the fabrication work done at customer’s plant is excisable therefore it shall not be charged to service tax by the contractor. The opinion received by you is accurate that the goods as are deemed manufacture than same shall be charged with excise and not with service tax. The process amounting to manufactured are exempted from payment of service tax by virtue of exemption contained in point (f) of Section 66D (negative list) of Finance Act, 1994. Hence the same shall not be taxable to service tax. As the contractor is not registered in excise law, he shall get registered as he is producing an excisable product. As the contractor is not registered in Excise law and not paying Excise duty then he cannot be eligible to take credit for the same. However, if he takes registration for fabrication work and pays duty then he is eligible for taking credit on input services relating to such fabrication work.
  • We are a logistics company providing services of moving materials from one place to another place. For this we need to keep one fork lift permanently at manufacturer place for loading purposes for which we collect service charges based on no. of hours used. The manufacturer says he will provide required diesel for the forklift. Contract is entered with us saying that diesel shall be provided by him. The contract value is exclusive of diesel cost. We would like to know whether ST is chargeable on cost of diesel also although the same was supplied by the recipient of service. Pl clarify R. Sadasivan

    No the service tax is not chargeable on the free supply of material provided by the service recipient as reading section 67 it is ample clear that the tax should be chargeable on the gross amount charged for service provided only. The landmark decision of Bhayana Builders PVT LTD {2013 (32) S.T.R. 49 (Tri. - LB)} clearly states that if the value of material is not included in the gross amount charged than it shall not form part of service provided and shall not be taxable. But the department is not accepting this decision and litigation is going on.
  • Dear sir, I sent u the query but I didn't get the reply that the client crossed the one crore duty in the year 2012-13 as he became liable to file ER-4,5,6 but in the year 2013-14 his total duty is Rs.75 lakhs then he becomes liable to file ER-4,5,6 Please reply. hitesh

    In respect of your query the client is not required to fill the ER-4, 5, 6 as in preceding year the duty was less than one crore rupees so there is no requirement of filling the returns. Notification N0.17/2006-CE(NT) dated 01.08.2006,exempts assessees who paid duty of excise less than Rs.1crore in the preceding financial year, from filing the ER-4 return. Similarly, Notification No.39/2004-CE (NT) dated 25.11.2004, exempts the specified class of manufactures who paid duty of excise less than Rs.1 crore in the preceding financial year, from filing ER-5 declaration and ER-6 return. Hence by readiing the notifications its ample clear that only return is to be submitted when the duty is more than one crore rupees in preceding financial year. Following the same, you have to file returns in 2013-14 but need not to file the same in next year if the duty payable in preceding financial year is Rs. 75 Lakhs.
  • Sir, Whether service tax is applicable on export of service to Nepal The payment will be received in Indain Rupees. Sudhakar Sawant

    Rule 6A of Service Tax Rules clearly says in clause (e) that the payment should be received in convertible foreign currency. Since this condition is not satisfied then it cannot be said as export of service. Hence the service tax will be applicable.
  • One of the NGO providing its premises for functions , marriage or for holding any events etc on rent basis . Its liability of service tax arises on rent since this is falling taxable service in the nature of renting premises other than leasing . Apart from rent for the premises it also charges for uses of electricity on actual consumption basis . Units are charged on actual usage as per the meter and rates as charged by electricity board rounded of to the nearest rupee . Service tax department is insisting that electricity recovery should also be subject to the service tax .Kindly advise whether electricity recovery on actual usage basis will also be subject to the service tax .In my view Electricity being goods and billed on actual usage basis should not be subject to service tax .thanks s S Gaur S S Gaur

    Looking on the facts Main service provided by us is provision of premises on rent and not provision of electricity therefore provision of electricity is reimbursement of expensese and not provision of service or cost incurred for provision of such services. In support of this the benefits of latest decision of INTERCONTINENTAL CONSULTANTS & TECHNOCRATS PVT. LTD. Versus UNION OF INDIA(2013 (29) S.T.R. 9 (Del.)) in which rule 5 of Service Tax (Determination of Value) Rules, 2006 has been quashed can be requested. This decision clearly states that for charging service tax provision of service has to be seen and not the costs taken by service provider from service receiver. However, the CBEC has clarified in its education guide on service tax that the distribution of electricity is exempt for electricity companies only. Even builders distributing electricity will be liable for service tax. But many of learned authors are of the view that the electricity is "goods" and not liable to service tax. One more point in your defence can be that we are not "distributing" electricity.
  • Sir we are telecom PSU we have to cancel or revise some port charges bills issued to pvt operators by reason of court orders.such cancellation/revision results in 1 crore of st excess paid. Can we adjust this amount under rule 6(3).Is there any time limit or monetary limit exists for such adjustment. NITIN SHARMA

    W.e.f. 1st April, 2011 Service tax Rule 6(3) is substituted, which reads as under: “Where an assessee has issued an invoice or received any payment, against a service to be provided which is not so provided by him either wholly or partially for any reason, or where the amount of invoice is renegotiated due to deficient provision of service, or any terms contained in a contract, the assessee may take the credit of such excess service tax paid by him, if the assessee:- (a) Has refunded the payment or part thereof, so received for the service provided to the person from whom it was received; or (b) Has issued a credit note for the value of the service not so provided to the person to whom such an invoice has been issued.” In your case cancellation or revision shall amount to renegotiation of invoice, thus you can adjust the excess service tax paid on the basis of Rule 6(3). Also, the rule nowhere mentions any time limit or monetary limit. Thus it is at your discretion when you take credit of the same provided you fulfill the conditions of rule.
  • Sir Wheather we can take credit of service tax charged by the laliit hotel, the amount shown as service tax on car rental @4.94% Ankit mittal

    The credit of service tax paid on “rent a cab” is not available in view of specific exclusion clause in the definition of "input service" in Rule 2(l) of Cenvat credit Rules, 2004 which is produced as follows:- “excludes services provided by way of renting of a motor vehicle in so far as they relate to a motor vehicle which is not a capital goods”.
  • Under which rule the valuation of goods (Central Excise Rules,2000) will be made if assessee sold goods but are used for consumption not by him or on his behalf in the production of other articles? Sandeep Shah

    The valuation is to be done as per section 4 of the Central Excise Act, 1944 and if it is not possible to value the excisable goods as per the transaction value as prescribed under the section 4 of the Central Excise Act, 1944, then only the valuation rules are to be resorted to. Rule 8 of the Valuation Rules is applicable where the excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of other articles, the value shall be 110% of the cost of production or manufacture of such goods. As you say that the goods are being sold by you, first value should be determined as transaction value. If the transaction value cannot be determined then, the valuation Rules are to be resorted to.
  • i have a photocopier machine rented to DSP . I collect hire charges including 12.36% Service tax . I also appoint a person who handle the machine..can i pay 12.36% service tax to the deparment INDRANIL BISWAS

    According to section 73A of the Finance Act, once you collect any amount in the name of service tax, you are mandatorily required to pay it to the government.
  • Can You Please Provide the details Procedure & Eligibilty for the Refund of the Excise duty Paid on Vehicle registered as Taxi. Arpit

    Your query is not clear, please give in detailed manner so can we understand your query.
  • Sir, WE are reversing duty under rule 6 for exempted goods and service. But for this FY we fails to submit the intimation letter on 01.04.14. Can we submit the intimation letter now? Will department accept the intimation? RAJIV JAIN

    There is no time limit for intimating to department as per Rule 6(3A). However, normally, intimation should be given in the beginning of the year. You may now intimate the department.
  • Sir we are dealing in news paper as a dealer and take commission from our vendor for sale material on behalf of them.We just doing paper change activity.Sir as per our practice we have made the payment to vendor immediately against purchase but same payment has received from customer after some day.Due to the late payment we charged interest on them.but not charged service tax on that interest amount.As per department view its related to banking and financial service and its liable for serviceo tax.Please let me know whether stand taken by department is right. Rinkesh Motilal Jogad

    The stand of the department is wrong. As per negative list given under section 66D, clause (n) states that services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount is not leviable to service tax. Moreover, the view that the banking and financial services are being provided by you is also totally misplaced because you are not bank or financial institution. Hence, no service tax is payable by you on the interest charged for delayed payment. {Query replied by CA Neetu Sukhwani}
  • Sir, Do we need to disclose the payment against Spot Memo in our monthly excise return ER-1. If yes, under which column? What if we do not disclose the said payment in the monthly return? RAJIV JAIN

    It is nowhere prescribed that the payment made against the spot memo is to be mandatorily disclosed in the ER-1 return. However, the assessee may show such payments under the category of “other payments” in the return if so desired.
  • Sir, While conducting Service tax audit, the dept. has issued spot memo on the basis of expenditure shown in the balance sheet book under accrual basis. But we discharge service tax liability under Reverse Charge Mechanism when actual payment is made to the provider. Pls advise how to deal. In reply we have submitted party wise ledger but still they issue SCN. RAJIV JAIN

    As per Rule 7(b) of Point of Taxation Rules, 2011 the service receiver is allowed to make payment under reverse charge mechanism on payment basis. But the proviso to rule 7 says that in case where such payment is not made within the six months of the date of invoice, the point of taxation shall be determined as per rule 3 of Point of Taxation Rules. If we are paying the service tax within six months then the practice followed is correct and tenable in law. We should submit the Reply to SCN and plead for the same in hearing. But if the payment of service tax under RCM has not been made for more than six months than we will be liable to pay service tax along with interest from the due date of payment determined as per rule 3 of Point of Taxation Rules, 2011. The date shall be 5th of the next month in which invoice is issued.
  • Dear Sir, We are manufacture of Beverages Product. We have sent some material (Resin i.e preform of preform) directly from supplier premises to Job worker premises, Job worker after processing (pet preform )that material, will send directly to us. On this material supplied by job worker we will do some further process and used it in packing (As a plastic bottle) of dutiable final product. I want to know that how job worker will raise his Invoice i.e. whether he will charge excise on total value of material or will charge excise on job work amount or he will charge service tax on the same. At the same what will be the treatment of excise charged by our supplier on his invoice which is named on us. Thanks in advance for your kind consideration. Reagrds Mahendra Modi mahendra modi

    On reading your query we came to a conclusion that the job work that is being done on resins which is an intermediate process that facilitates in the manufacture of your final product. If your final product is dutiable then you can send the goods under Rule 4(5)(a) of Cenvat Credit Rules, 2004 or under Notification no. 214/86-C.E. dated 25.3.86 as amended. If you follow this procedure then there is no need to pay excise duty by job worker. But if your final product is not dutiable then the leviability of excise duty on such intermediate process depends on the fact that whether goods produced by the job worker amounts to manufacture in terms of the provisions of Central Excise Act, 1944 or not. If the process undertaken by the job worker amounts to manufacture, then excise duty is payable by the job worker as per the provisions of Rule 10A of the Central Excise Valuation Rules otherwise the service tax will be applicable. It is also subject to exemption contained in serial number 30 of Mega exemption notification no. 25/2012-ST dated 20.06.2012 which is to be checked at your end.
  • Dear Sir, We are manufacture of Beverages Product. We have sent some material (Resin i.e preform of preform) directly from supplier premises to Job worker premises, Job worker after processing (pet preform )that material, will send directly to us. On this material supplied by job worker we will do some further process and used it in packing (As a plastic bottle) of dutiable final product. I want to know that how job worker will raise his Invoice i.e. whether he will charge excise on total value of material or will charge excise on job work amount or he will charge service tax on the same. At the same what will be the treatment of excise charged by our supplier on his invoice which is named on us. Thanks in advance for your kind consideration. Reagrds Mahendra Modi MAHENDRA MODI

    On reading your query we came to a conclusion that the job work that is being done on resins which is an intermediate process that facilitates in the manufacture of your final product. If your final product is dutiable then you can send the goods under Rule 4(5)(a) of Cenvat Credit Rules, 2004 or under Notification no. 214/86-C.E. dated 25.3.86 as amended. If you follow this procedure then there is no need to pay excise duty by job worker. But if your final product is not dutiable then the leviability of excise duty on such intermediate process depends on the fact that whether goods produced by the job worker amounts to manufacture in terms of the provisions of Central Excise Act, 1944 or not. If the process undertaken by the job worker amounts to manufacture, then excise duty is payable by the job worker as per the provisions of Rule 10A of the Central Excise Valuation Rules otherwise the service tax will be applicable. It is also subject to exemption contained in serial number 30 of Mega exemption notification no. 25/2012-ST dated 20.06.2012 which is to be checked at your end.
  • Dear Sir, We are manufacture of Beverages Product. We have sent some material (Resin i.e preform of preform) directly from supplier premises to Job worker premises, Job worker after processing (pet preform )that material, will send directly to us. On this material supplied by job worker we will do some further process and used it in packing (As a plastic bottle) of dutiable final product. I want to know that how job worker will raise his Invoice i.e. whether he will charge excise on total value of material or will charge excise on job work amount or he will charge service tax on the same. At the same what will be the treatment of excise charged by our supplier on his invoice which is named on us. Thanks in advance for your kind consideration. Reagrds Mahendra Modi MAHENDRA MODI

    On reading your query we came to a conclusion that the job work that is being done on resins which is an intermediate process that facilitates in the manufacture of your final product. If your final product is dutiable then you can send the goods under Rule 4(5)(a) of Cenvat Credit Rules, 2004 or under Notification no. 214/86-C.E. dated 25.3.86 as amended. If you follow this procedure then there is no need to pay excise duty by job worker. But if your final product is not dutiable then the leviability of excise duty on such intermediate process depends on the fact that whether goods produced by the job worker amounts to manufacture in terms of the provisions of Central Excise Act, 1944 or not. If the process undertaken by the job worker amounts to manufacture, then excise duty is payable by the job worker as per the provisions of Rule 10A of the Central Excise Valuation Rules otherwise the service tax will be applicable. It is also subject to exemption contained in serial number 30 of Mega exemption notification no. 25/2012-ST dated 20.06.2012 which is to be checked at your end.
  • Dear Sir, We are manufacture of Beverages Product. We have sent some material (Resin i.e preform of preform) directly from supplier premises to Job worker premises, Job worker after processing (pet preform )that material, will send directly to us. On this material supplied by job worker we will do some further process and used it in packing (As a plastic bottle) of dutiable final product. I want to know that how job worker will raise his Invoice i.e. whether he will charge excise on total value of material or will charge excise on job work amount or he will charge service tax on the same. At the same what will be the treatment of excise charged by our supplier on his invoice which is named on us. Thanks in advance for your kind consideration. Reagrds Mahendra Modi MAHENDRA MODI

    On reading your query we came to a conclusion that the job work that is being done on resins which is an intermediate process that facilitates in the manufacture of your final product. If your final product is dutiable then you can send the goods under Rule 4(5)(a) of Cenvat Credit Rules, 2004 or under Notification no. 214/86-C.E. dated 25.3.86 as amended. If you follow this procedure then there is no need to pay excise duty by job worker. But if your final product is not dutiable then the leviability of excise duty on such intermediate process depends on the fact that whether goods produced by the job worker amounts to manufacture in terms of the provisions of Central Excise Act, 1944 or not. If the process undertaken by the job worker amounts to manufacture, then excise duty is payable by the job worker as per the provisions of Rule 10A of the Central Excise Valuation Rules otherwise the service tax will be applicable. It is also subject to exemption contained in serial number 30 of Mega exemption notification no. 25/2012-ST dated 20.06.2012 which is to be checked at your end.
  • Sir If any individual has taken registration as management consultant and paying service tax on it and at the same time he is generating income on rent then he is liable to pay service tax on rent income also? Surbhi

    As you are paying service tax on the services of management consultancy, it appears that the taxable value of the services is more than the small scale service provider exemption limit. It is submitted that an assessee may provide more than one services and in such a case, assessee is required to pay service tax on all the services rendered by him. As the service of renting of immovable property is being provided by you, you are liable to pay service tax. However, renting for residential purposes is exempt if the declared tariff of a unit of accommodation is below Rs. 1000 per day as specified in mega exemption notification no. 25/2012-ST dated 20.06.2012. It is also worth observing that the taxable value of all the services provided is to be considered while computing the benefit of small scale service provider exemption benefit. We cannot claim small scale service provider exemption separately for each service.
  • I am Business entity earning interest income from financing and/or doing trading activity. I paid fees to adv. Is it that I will be liable to pay service tax on adv. fees under reverse charge only if I have turnover of more than 10 lacs from taxable services? In this connection I draw your attention to para 66.3-1 and 66.4-2 of S.S. Gupta 35th Edition (Page1084 and 1085) Pl. consider his interpretation in para 66.3-1 under the heading "conclusion" and "value of exempt services also forms part of "turnover". Interest income earned by me is not taxable as the same is in negative list. Other service income are less than 10 lacs. Interest income and/or trading activity is more than 10 lacs. Whether I am liable for service tax under reverse charge on adv. fees SANJAY BOBRA

    The legal service of an advocate or advocate firms shall fall under reverse charge mechanism if the service provider is individual advocate or advocate firms and where service receiver is business entity having turnover exceeding Rs 10 lacs per annum, located in a taxable territory. For the purpose of Reverse Charge Mechanism, “Business entity” means any person ordinarily carrying out any activity relating to industry, commerce or any other business or profession-SECTION 65B(17) OF FINANCE ACT,1994. There is no definition of turnover provided in the Act. Thus, turnover shall be interpreted in general terms with no exclusion of the services covered under negative list. Thus, in your case as the interest income and/or trading activity is more than 10 lacs, you are liable to pay service tax under reverse charge mechanism on advocate fees.
  • Expert openion pm handling,exporting rice is exempted from service tax as paddy is an agricultural produce and primary market item but rice is not the same TSSASTRY

    Sir, your query isn’t clear enough so as to give you an exact answer. As per our understanding your query is whether service tax is leviable on handling of rice that is to be exported. The mega exemption notification no. 25/2012 has been amended wherein with effect from 17th February, 2014 Entry No 40 has been inserted in the aforesaid notification which gives exemption from levy of service tax on services by way of loading, unloading, packing, storage or warehousing of rice. As such, the handling of rice is exempted from service tax even if it is not specifically covered by the definition of agricultural produce w.e.f. 17.02.2014. {Query replied by: Ranu Dhoot}
  • Sir, We are the casting manufacturing industry and for manufacture of cstings sand mould is necessary. For sand mould preparation sand plant machines such as Sand mixer, Belt conveyor, screw feeder, Sand hopper etc equipments/machinery is necessary. The beams, angles and channels purchased and used for to run the equipments/machinery and availed cenvat credit in RG23C .Department says the angles, channels are not eligible cenvat credit under capital goods as the tariff mentioned under 73 chapter.Request your valuable advice. K.Srinivasan

    The Cenvat credit on angles, channels shall be allowed if these form an integral part of the machine in form of an accessory, component or spare. However Cenvat credit shall be disallowed if the angles, channels etc are used in making supporting structure. Since in your case the beams, angles and channels purchased are used for running the equipments/machinery, hence Cenvat Credit on the same is allowable.
  • TOTAL TRANSPORT CHARGES IS 80000/- PA, ON RECEIPIENT WHETHER I HAVE TO SERVICE TAX PAYABLE rajesh dayalji mistry

    We are unable to understand your query as it is not properly drafted. However, we are providing you with the provisions of taxability of service tax in case of GTA. In case of GTA, the liability under reverse charge arises on the service recipient when the service is provided by a goods transport company that issues consignment note and the consignor or consignee is covered by the list of specified persons. In such a case, the person who pays or is liable to pay freight shall be liable to pay service tax. The consignor or consignee should be any of the following:- • Factory registered under Factories Act,1948 • Society registered under Societies Registration Act, 1948 or under any law corresponding to that Act in force in any part of India • Any co-operative society established by or under any law • registered dealer of excisable goods • Any Body corporate established by or under any law • Partnership firm (whether registered or not) or AOP. We also submit that in case of reverse charge mechanism there is no benefit of SSI Exemption. Service tax under reverse charge is payable on each and every transaction.
  • Sir, if the repairing of fan motor is taxable service under rev.charge as a "reaping service" than we should calculate S.Tax on 60% or 70% of gross value, request to pls. give ur suggestion in this regard. Thanks P.S.Butola P.S.B

    Motor fan is a movable property and “electric fan motor rewinding” would be covered under works contract service because the repairing of fan would involve both material and labour. Reverse charge on repair movable property is applicable, if the service provider is Individual/HUF/FIRM/AOP and service recipient is a company. Hence Service tax @ 70% shall be chargeable on the gross value of repairing of fan motor. Although, liability of service recipient is only 50% of the service tax and 50% of the service tax would be paid by the service provider.
  • Sir ji.. I need clarification on the following: a) Interest paid on loan received from bank located outside India is taxable in India? b) Interest received from foreign subsidairy is taxable in India? Pl. clarify.. this is a grey area where actual services can be converted to non-services visuiyer

    Interest consideration is not leviable to service tax in view of the clause (n) of section 66D pertaining to the negative list. It has been provided in the negative list that services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount is not leviable to service tax. Hence, when no service tax is leviable, the question of analysing the provision of reverse charge mechanism does not arise.
  • Is Excise duty applicable on bakery products produced in restaurant?? Suman Jaisinghani

    Excise duty is levied on the basis of the product no matter where it is produced. Bakery products fall under the chapter heading 1905 of Central Excise Tariff Act and hence liable to appropriate excise duty as per the said chapter heading.
  • Sir ji.. can u please calrify the cenvat on capital goods vs. depreciation considered in the financial statement. under what circumstances the cenvat input will be disallowed on capital goods visuiyer

    According to Rule 4(4) of Cenvat Credit Rules, 2004 “The CENVAT credit in respect of capital goods shall not be allowed in respect of that part of the value of capital goods which represents the amount of duty on such capital goods, which the manufacturer or provider of output service claims as depreciation under section 32 of the Income Tax Act, 1961 (43 of 1961) “ Therefore, if credit of duty paid on capital goods is availed, then depreciation on the duty portion cannot be claimed in Income Tax Act because it would amount to taking double benefit.
  • sir, "electric fan motor rewinding" is taxable service under RCM. P.S.B

    It will come under repairing service and hence taxable.
  • Sir If any service bill is raised in F.Y. 2012-13 and at the time of payment the receiver is telling that he will not pay full amount. so can we raised the credit note against that bill in f.Y. 2013-14 Surbhi

    Yes, it can be done. The Rule 6 (3) also supports the same. If the service tax is paid then it can be adjusted in next quarter. There is no difference if the financial year is changed.
  • dear sir , if we take credit of service tax. It is compulsory to pay service tax on labour bill (no limit cross) MANISHA

    There is no option to take the credit with the assessee. If the output service is taxable then one can take credit. However, if you are claiming the threshold exemption under notification 6/2005 then also this benefit will be forgone since you have taken the credit.
  • Sir ji.. Is supply of manpower by corporate entity to Government department is taxable or not. What is the status in case of non corporate for payment under Reverse Charge Mechanism visuiyer

    The activity of supply of manpower to government department does not find mention in either negative list or the mega exemption notification. Hence, it is a taxable service. As far as liability under reverse charge mechanism is concerned, the same arises if services are provided by any individual, HUF, proprietor or partnership firm, AOP located in taxable territory to business entity registered as body corporate. {Query replied by: Ranu Dhoot}
  • sir, does CST is levied on freight charges..?? please revert as soon as possible. YOGESH BHARDWAJ

    We are not dealing in sales tax matters. Hence we will not be able to reply. We are dealing in Central Excise, customs, DGFT and service tax.
  • Sir, a company is rendering services of liasoning to obtain licenes and permissions under various laws to their client to establish a business unit. For eg. municipality permissions, land permissions etc., May I know the classification and category of these services for taking registration under service tax. Thank you sir. CA. C V SURYAM

    Since it is not covered under Negative list or under Megha exemption notification then it is chargeable to service tax. It may come under BSS service.
  • XYZ (Partnership Firm) is a authorised dealer for 2 and 4 wheeles oil dealer ,XYZ purchase Oil from its supplier and sale to its Dealer & customer. In addition to the regular profit on sale of oil, XYZ also received incentive on yearly basis from its supplier which depends on achievement of sales target as decided and intimated by its supplier from time to time. My question is whether such incentive received is taxable under service tax act and under which category. Sandip Patil

    Since you are authorized dealer and not an agent, hence you are purchasing the oil and selling it on your own behalf. The incentive given to you is in actual is discount only. There is no service tax on such discount. Only by saying it "incentive", it will not be chargeable to service tax.
  • Sir if the company raised the bill to its sister concern for the use of common generator than applicability of service tax arised or not Surbhi

    Since it is for use of common generator, this will fall under right to use tangible asset. Moreover, the sister concern is retaining the control and supervision of the generator then it is liable to service tax.
  • Sir, We are manufacturer of Pig Iron. This is sold locally as well as through Consignment Agents. At the time of dispatching goods from factory to consignment agents we pay excise duty on the price prevalent at that time at agent place. The agent received goods after 4-5 days through truck and sold at the same price.But by that time sale price might change at principal factory. Now department asking for the excise duty on the difference of basis price. Kindly suggest. RAJIV JAIN

    Rule 7 of Valuation Rules are very clear and you are paying duty rightly. There is no force in the department of demanding the differential duty.
  • DEAR SIR PLZ LET ME KNW OUR COMPANY HAS AVAILED SERVICE TAX CREDIT ON CIVIL CONSTRUCTION WORK DONE AT FACTORY / FACTORY BUILDING ON THE BASIS OF INPUT SERVICE TAX DEFINITION " CENVAT CREDIT AVAILABLE FOR BUSINESS RELATED ACTIVITY SUCH AS MODERNIZATION , RENOVATION , REPAIR AND MAINTENANCE ON FACTORY BUILDING " BUT RECENTLY EA AUDIT HAS BEEN CONDUCTED IN OUR FACTORY AUDITOR ASKED US REVERSE CENVAT CREDIT AVAILED ON CIVIL CONSTRUCTION WORK HAS MENTIONED BUDGET 2011-12 W.E.F 01-04-2012 IS IT CORRECT PLZ LET ME KNW UMESH BORA

    The contention of audit is correct. The definition of "input service" has undergone a change and construction service is specifically excluded from the definition of "input service".
  • DEAR SIR WE ARE "A" ENGAGED MANUFACTURING OF 39 CHAPTER GOODS PACKING BOXES WE HAVE SOLD OUR MATERIAL TO PARTY "B" AFTER CHARGING EXCISE DUTY IN INVOICE NOW OUR PARTY "B" HAS TO AVAIL BENEFIT OF EXCISE DUTY REFUND WHICHEVER CHARGED BY US PARTY "B" WENT FOR FILE TED REFUND AT THEIR DGFT HYDERABAD , THEIR DGFT HAS NOT ENTERTAINED TED REFUND HENCE PARTY "B" REQUESTED US TO CLAIM TED REFUND AT "A" EXCISE DIVISION OFFICE IS IT POSSIBLE NOTE:- WE MANUFACTURER "A" HAS AVAILED CENVAT CREDIT ON RAW MATERIAL MY POINT IS IT POSSIBLE TO MANUFACTURER TO FILE TED REFUND AT THEIR EXCISE DIVISION AND TED REFUND AVAILABLE IF MANUFACTURER HAVE ALREADY AVAILED CENVAT CREDIT ON RAW MATERIAL UMESH BORA

    Firstly, you can also file the TED refund if disclaimer is given by other party. But it is to be filed with the DGFT as per chapter 8 of Foreign trade policy. It cannot be filed with Central Excise department. Regarding second query, the only condition is that the recipient should not claim the Cenvat credit. There is no embargo to claim credit by supplier for TED refund.
  • e are presently claiming AIR duty draw back on the exports as per Notification no 98/2013-Cus (NT) dated 14.09.2013. Can we also claim Service Tax refund on the services availed for export of goods as per Notification 41/2012-ST dated 29.06.2012 apart from claiming draw back as mentioned above. Pl clarify. rgds o.v. srinivasan gokak textiles ltd O V Srinivasan

    This query is already answered that both are permissible.
  • Dear Pradeepjee, Some of the restaurants are charging service tax @ 4.944% on total bill amount in the case of parcel food (take away) in addition to VAT. So, does food parcels attract service tax sir? CA. C V SURYAM

    Firstly, the supply of food parcels is not covered by the outdoor catering services that constitutes 60% taxable value as the food is prepared in the restaurants itself. As such, the same is usually classified under restaurant services constituting 40% as the taxable value. Actually, there is ambiguity as regards service tax liability on food parcels and the restaurants to be on safer side, charge service tax from the customers because the ultimate burden of service tax is on the customer. On interpreting the provision as regards leviability of service tax on restaurants, assessee may contend that no service tax is to be payable on food parcels as it is mere sale and do not involve any service element. However, revenue department may object the non-payment of service tax on food parcels on the contention that delivering food parcels at homes amounts to rendering of service. Hence, the restaurants usually charge the service tax to avoid litigation.
  • WHEATHER GREY CLOTH MFG.DONE JOB WORK HE APPLICABLE OF SERVICES TAX AND WHAT AMOUNT OF SERVICES TAX LIMIT APPLICABLE mohan g chugh

    There is no service tax on intermediate production process as job work of textile processing is exempt by clause 30(a) of Megha exemption notification.
  • Please advice exporter are eligible to claim refund under both notification 41/2012-ST AND AIR duty drawback under Notification 98/2013-Cus ( NT )or has to claim under only one notification. O V Srinivasan

    There is no bar on simultaneously availing the refund under Notification 41/2012-ST along with duty drawback 98/2013-Cus (NT). There are two option under 41/2012 for claiming the refund of service tax. Either it can be claimed from the Central Excise department on actual basis or from the custom department at fixed rate notified in this notification itself. But the drawback will be allowed in addition to either of these benefits under 41/2007.
  • May I know the effect of the recent circular no.176/2/2014 dt.20/01/2014 regarding discharge certificate and cenvat credit utilization. Sir, there was no such restriction earlier when VCES was introduced. Does it mean that an assessee who availed VCES is not eligible to use accumulated cenvat credit balance against tax payable from January 13 onwards? Or is this circular applicable to service receivers? Eg. A provided service to B duly charging service tax in invoice. B availed the cenvat on the strength of this invoice since he paid entire amount of bill with tax to A. Now A gone for VCES since he had not paid tax at all earlier. How does B know all this and reverse the credit taken earlier and now take credit again after paying the balance 50% of tax by A? As per my understanding, this circular is applicable to service providers either not registered at all earlier or not charged tax though registered. In such case only, waiting by service receivers till the service provider pays entire amount of tax under VCES to avail cenvat credit will be applicable. CA. C V SURYAM

    Your view is totally correct. If the service provider has charged the service tax in his bill and the service recipient has paid the same to him then such recipient will not know whether the service tax has been paid by the supplier or not? Then the service tax cannot be disallowed to service recipient. But if a service provider has not charged the service tax from recipient and raises the supplementary invoice afterwards and tells him that he has filed the declaration in VCES then the service recipient can take the credit only after the whole amount of tax has been paid by service provider.
  • under circular no. 123/5/2010 TRU 1) lying of cables under and along side road shifting of overhead cables for renovation of roads 2) lying of electricals cables between greeds / sub stations / transpormers and 3) lying of electricals cables upto distribution point of residential or electricals complex were out of the perview of service tax The above circular was recind from 1-7-2012 due to negative list regime kindly let us know whether above work are still exempted under service tax under new provision applicable from 1-7-2012 if yes, kindly let us know the relevant circular or notification vedraj agarwal

    Under the negative list tax regime, all services except those specified in negative list or mega exemption notification are taxable. As the activity of laying of electrical cables are not specified in negative list and the mega exemption notification, the same is taxable to service tax after 1.7.2012. Moreover, as the above cited circular was issued under the positive list scenario, it does not has relevance in the context of present service tax laws. However, only activities relating to shifting of overhead cables for the purpose of renovation of roads may be exempt from the levy of service tax as in mega exemption notification, serial no. 13 exempts services provided by way of construction, errection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of road, bridge, tunnel etc. Hence, if the shifting of overhead cables is for renovation of roads, only then it is specifically exempted.
  • Dear Sir, Please guide, Whether Service tax is applicable on providing godown for storage of Rice and Corn. Balakrishna

    If these two falls under the definition of "agricultural produce" then the exemption will be available. The Finance minister has clarified that "rice" does not fall in the definition of "agricultural produce" and only paddy falls under the same. A separate exemption is given for rice by notification 4/2014.
  • Respected Sir, As per Circular No. 173/08/2013-ST, if goods are sold on MRP basis they have to be excluded from total amount for the determination of value of service portion. Now my query is that whether service tax would be applicable if liquor, mineral water etc are sold more than their MRP in restaurants and bar. Thanks & Regards, Ramesh Purbia RAMESH PURBIA

    Yes. The circular also means that. The analogy is that the amount charged over and above the MRP is for services only.
  • Respected sir, One of my client is providing restaurant services.the abatement available is 60%, so we pay tax on only 40 percent amount and rest of the amount is not taxable.so my question is that whether reversal of cenvat credit applies in case of restaurant services. If yes then whether it applies to all services on which abatement is available? Thanks & Regards Ramesh Purbia RAMESH PURBIA

    This is very typical issue. Actually, this is not abatement. Its value has been reduced under Valuation Rules. Most of leading hotels are treating it as exempted service and reversal is being done on the same. But for other abatement, such condition does not apply. Like for abatement under room service, it is clearly written that the credit on only "input" will not be allowed. Hence the credit on input service is allowed. If one see the definition of "exempted service" in 2(e) of CCR, 2004 it says that only those services where the abatement is allowed on the condition that no credit on input and input service is allowed. But credit of input service is allowed for "room accommodation" as said earlier. Hence, it will not be treated as exempted service and hence no need of reversal.
  • Sir, Greetings!!! Our client is a manufacturer of Chimney for Agro Waste Boilers (Energy Saving Device). The chimney is cleared from the client factory to a Rice Mill, who is going to Install a Agro Waste Boiler. The mill purchased Boiler from a diff. vendor and we supply only chimney to the Rice mill which falls under HSN 84029090. My view is,the company which clears chimney is eligible to claim exemption as per Noti.12/2012, S.No.332, List 8 - clause(16)&(21). Is my understanding is correct? Ganesh Prabhu

    This is technical issue and has to be verified on the factual position. If you are able to prove that your product is a part of Agricultural, forestry, agro-industrial, industrial, municipal and urban waste conversion device producing energy then you can get the exemption.
  • Imported capital goods (m/c spaers),spaers should cleared AS SUCH pl guide thanks in advance Ganesh Wanjarkhedkar Wanjarkhedkar G D

    The query is not clear. But we understand that you intend to know the procedure of clearance of capital goods from the factory. It has to be cleared under the cover of Rule 11 invoice. Normally, the depreciation @ 2.5% per quarter is allowed on the same. But if the goods are cleared as waste and scrap then duty is to be paid on transaction value. In case the goods are cleared in same year in which it is purchased then one can take the balance 50% of credit and then reverse the credit on clearance of capital goods.
  • Dear Sir, Please explain the procedure for TED Refund along with list of documents and where it has been file ( whether with DGFT OR at EXCISE DIVISION OFFICE )( Umesh Bora

    Chapter 8 of FTP prescribes the TED refund for deemed exports. It will be allowed by DGFT. You have to file the Application ANF 8. The list of documents are also given at the end of ANF 8 which is available on DGFT website.
  • we adopted VCES scheme for certain period and file the return of remaining period. now there is service tax audit team demanding documents related to VCES scheme. can we denies from providing documents and if they say these documents related to another period also and for audit purpose we have to check all document than we have to provide or not there is any circular MUKESH RATHI

    This is typical issue. As per VCES scheme also, no proceedings shall be initiated by the department under this scheme. Audit is also a type of proceeding. When the immunity from proceeding is provided then audit should not be conducted. We have also made the representation to the department but no result has come. The audit wing is regularly conducting of units who have opted for VCES.
  • Sir, If we are covered by compounded levy scheme and wish to issue excise invoice, how do we charge the excise duty in the invoice? Alok Agarwal

    Under Compounded levy scheme, there is no exemption from Rule 11 and hence the invoice is to be issued for clearing goods from registered factory. But the duty need not to be charged in the invoice. At the most, you can write that the unit is operating under compounded levy scheme.
  • Dear Sir, We are register dealer of central excise. We imported as well as domestic purchase raw material and take a cenvat credit in RG-23D register and we issued excisable invoice to consignee. And we file quarterly return. My Question is that : Do We required new addition registration as “importer” as per Notification no 10/2014 CE(NT) dated 28-02-2014 wef 01-04-2014 pritesh

    The main intention of adding “importer” in Rule 9 of the Central Excise Rules, 2002 is to ensure that the importer who issues cenvatable invoice also takes registration. When you are already registered dealer of excisable goods, and you are eligible to issue cenvatable invoices, you are not required to again take registration as “importer” unless and until you issue cenvatable invoices in the capacity of importer.
  • SIR, PL LET ME KNOW THE SERVICE TAX RATE ON ROOM ACCOMODATION & RESTAURANT. WE HAVE PROVIDING FOOD TO ROOM GUEST- PL LET ME KNOW THAT SERIVCES TO ROOM ARE FEE OF S.TAX. WE ARE ALSO PROVIDE HALL TO VARIOUS FUNCTION I.E. MARRIAGE, CONFERANCE ETC. HOW MUCH S.TAX WE HAVE TO CHARGE IN BILL ON THESE SERVICES. KINDLY ADVICE KAILAS

    The service tax is to be charged on 60% of taxable value. Rest 40% is abatement. In Restaurant, you have to pay the service tax 40% of billed amount. As per interpretation, the service tax is payable on food served in rooms also with effect from 1.7.2012. The providing of hall for social or business functions will fall under "Mandap Keeper" facility and the service tax is payable on 70% of billed amount. The rest 30% is abatement available for this service.
  • dear sir we are engaged in manufacturing of chap 27 % 28 products ( in this chapter heading packing & labeling considered as manufacturing activity or not) Umesh Bora

    As per chapter note 4 of chapter 27, for lubricating oils and lubricating preparations falling under Chapter 2710, labeling and packing will amount to manufacture. Further, as per Chapter note 9 of chapter 28, all the products of this chapter will fall under the definition of "deemed manufacture".
  • Respected Sir, One of my client has received the following services during the construction of a Hotel. a) Accounting Service, b)Advertisement Service, c)Architect Service, d)Auditing Service, e)Clearing & forward Agent Service, f) Security service, g) Consulting engineering service, h) Erection, commissioning or installation service, i) Information technology software service, j) Labour contractor service, k) Manpower recruitment and supply service and l) work contract service. Whether he can avail Cenvat credit on service tax paid by him on the aforesaid services during the construction of hotel? Thanks & Regards, CA. Ramesh Purbia RAMESH PURBIA

    The credit of the above services may be availed by your client even if these are being availed during the construction of the hotel and your client has not started providing taxable output service. This is based on the decision given in the case of AMBATTUR DEVELOPERS PVT LTD. Vs. COMMISSIONER OF SERVICE TAX, CHENNAI [2014-TIOL-242-CESTAT-MAD] wherein it has been held that when the credit of duty paid on capital goods is allowed even much before they are put to use, the denial of credit on the contention that no output service was provided during the credit availment period is not justifiable.
  • Respected Sir, One of my client has received the following services during the construction of a Hotel. a) Accounting Service, b)Advertisement Service, c)Architect Service, d)Auditing Service, e)Clearing & forward Agent Service, f) Security service, g) Consulting engineering service, h) Erection, commissioning or installation service, i) Information technology software service, j) Labour contractor service, k) Manpower recruitment and supply service and l) work contract service. Whether he can avail Cenvat credit on service tax paid by him on the aforesaid services during the construction of hotel? Thanks & Regards, CA. Ramesh Purbia RAMESH PURBIA

    The credit of the above services may be availed by your client even if these are being availed during the construction of the hotel and your client has not started providing taxable output service. This is based on the decision given in the case of AMBATTUR DEVELOPERS PVT LTD. Vs. COMMISSIONER OF SERVICE TAX, CHENNAI [2014-TIOL-242-CESTAT-MAD] wherein it has been held that when the credit of duty paid on capital goods is allowed even much before they are put to use, the denial of credit on the contention that no output service was provided during the credit availment period is not justifiable.
  • Exemption from Service for GTA in respect of Edible oils has been provided under Notification no. 03/2013-ST dated 1.3.2013 How this works for reverse charge Ganesh

    The exemption from the levy of service tax on transportation of edible oil has been granted vide Notification no. 03/2013 which seeks to amend the mega exemption notification no. 25/2012. It is very clear that any service that is specified in mega exemption notification is not leviable to service tax. When the service itself is not leviable to service tax, the question of liability under reverse charge does not arise as reverse charge is applicable only for services that are chargeable to service tax.
  • Dear sir, One of my client is providing restaurant services.the abatement available is 60%.so we pay tax on only 40 percent amount.Rest of the amount is not taxable.so my question is that whether reversal of cenvat credit applies in case of restaURANT SERVICES . BHUPENDRA

    First of all, it is not abatement. But 60% is done by valuation rules. Most of leading hotels, are treating this 60% as exempted services and proportionate reversal is being done on the same.
  • Dear sir, One of my client is providing restaurant services.the abatement available is 60%.so we pay tax on only 40 percent amount.Rest of the amount is not taxable.so my question is that whether reversal of cenvat credit applies in case of restaURANT SERVICES . BHUPENDRA

    Yes, the provisions of Rule 6 are applicable in case of restaurant services because as per the Valuation Rule 2C introduced by the notification no. 24/2012-ST dated 06.06.2012, the taxable value in case of restaurant services has been specified as 40% of the total amount received. This implies that the 60% of the amount is not taxable and is hence exempted. The provisions of Rule 6 come into play in case of provision of exempted services. Accordingly, all the leading hotels are reversing the credit attributable to 60% of the amount that is not chargeable to service tax.
  • Dear sir, I am manufacturer, I had been paid interest on central excise duty for the year 2009-2010 @ 13% , excise commissioner asking 13 % interest notification no. , please sir help me,Thanks uttam

    As per notification 5/2011-C.E.(N.T.) dated 1.3.2011, the rate of interest under Section 11AA is 18% w.e.f. 1.4.2011. Similarly, notification 6/2011 prescribes 18% under Section 11AB.
  • Dear Sir, we were a proprietorship firm manufacturing padlocks (used in vehicles),(excisable goods). In excise return of December 2013, credit of excise input on few bills were overlooked & left (not considered in return) by error which we came to know few days back. From 1 Jan 2014 our proprietorship firm got converted into a private limited company & registered afresh in excise. My question is whether we can take the input credit of those goods which were purchased in old firm's name? Or is there any other way out so that we could take benefit of that input? Please advice. Thanks in advance. Deepti

    Although there is provisions as such for such a situation. We think that you must have applied permission for transfer of Cenvat credit under Rule 10A. Hence, we can clearly plead that there is error of not taking of credit but it must be allowed to us.
  • Sir,We are the manufacturer of Pig Iron (Iron and Steel Industry) by importing basic raw material i.e. Coke. 20% of our finished goods are exported under LUT as well as under CT-1. Now my query is whether we can claim Duty Drawback? If yes, what are the procedure and the quantum? We had exported from last 3 years but never claimed Duty Drawback due to ignorance. RAJIV JAIN

    You can apply to commissioner for Conversion of free shipping bill into drawback. There are number of cases where such conversion is allowed.
  • Dear Sir, Please provide excise tariff for cooker and confirm the excise duty is applicable or not on pallets which made from agro west.Thanks in advance Wanjarkhedkar G D

    We think that you are asking about pressure cookers which falls under tariff heading 73239310.The pallets of wood falls under 44152000.
  • Dear Sir, We paid service tax on Insurance of Bulding for MFG company can we availed service tax cenvat credit for the same? Wanjarkhedkar G D

    There is embargo on insurance of motor vehicle but the credit on insurance of building should be allowed.
  • Dear Sir, We paid service tax on Insurance of Bulding for MFG company can we availed service tax cenvat credit for the same? Wanjarkhedkar G D

    As per Rule 2(1) of Cenvat Credit Rules, input service means “any service used by a provider of an output service, or used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal.” The phrase “in or in relation to” is of wide amplitude and covers all services directly or indirectly related to manufacture of final products. Hence credit on service tax paid on insurance of building is indirectly related to the manufacture of final products because building is necessary for manufacturing final products and any damage or destruction to building will have direct impact on the production of goods. This view is also supported by the decision given in the case of Utopia India Pvt. Ltd. Vs Commissioner of Service Tax, Bangalore -2011 (23) S.T.R. 25 (Tri. - Bang.) wherein para 4.3 states that “general insurance service is availed to insure the assets of the assessee such as computers, equipment, building, etc. and cannot be denied on the basis that insuring the premises and the equipment from which output service is provided is not an activity connected to the business of the appellants. Therefore, the service tax paid under the insurance service for insuring the assets in the premises is an eligible input service…..” Hence it is clear that credit can be availed of service tax paid on insurance premium paid for building of manufacturing company.
  • Dear Sir, We paid service tax on Insurance of Bulding for MFG company can we availed service tax cenvat credit for the same? Wanjarkhedkar G D

    As per Rule 2(1) of Cenvat Credit Rules, input service means “any service used by a provider of an output service, or used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal.” The phrase “in or in relation to” is of wide amplitude and covers all services directly or indirectly related to manufacture of final products. Hence credit on service tax paid on insurance of building is indirectly related to the manufacture of final products because building is necessary for manufacturing final products and any damage or destruction to building will have direct impact on the production of goods. This view is also supported by the decision given in the case of Utopia India Pvt. Ltd. Vs Commissioner of Service Tax, Bangalore -2011 (23) S.T.R. 25 (Tri. - Bang.) wherein para 4.3 states that “general insurance service is availed to insure the assets of the assessee such as computers, equipment, building, etc. and cannot be denied on the basis that insuring the premises and the equipment from which output service is provided is not an activity connected to the business of the appellants. Therefore, the service tax paid under the insurance service for insuring the assets in the premises is an eligible input service…..” Hence it is clear that credit can be availed of service tax paid on insurance premium paid for building of manufacturing company.
  • please make clarification as per recent law and judicial pronouncement regarding cenvat credit of service tax paid to sales agents for domestic sales Shah Jayesh

    The number of decisions which allows the cenvat credit of Service tax paid on sales agents. But the High Court in case of Cadila Healthcare has disallowed the service tax paid on sales commission saying that it is not for sales promotion. The definition of "input service " includes sales promotion and not sales commission. Since then the litigation is going on between the department and assesse.
  • Dear Sir, We are manufacturer & exporter of mechanical engineering spare parts , tailor made( H S code 84122100, 84129090). We buy indigenous input ( excisable & non excisable) & also buy from foreign market.We take credit of cenvat on input.We export without payment of duty against LUT.my quetion is can we claim duty drawback at AIR on our export if yes ,please explain procedure. Thanks & regards Nawal Gupta

    There are two type of drawback rates i.e with Cenvat credit and without cenvat credit. Since you are availing Cenvat credit on inputs, then you can claim the drawback with cenvat credit. It is lower than rate without cenvat credit. Drawback with Cenvat credit covers only Basic Custom duty where as the Drawback without Cenvat covers BCD,CVD, SAD and input service.
  • Respected sir ...I want to know that ...how to do jeneral entry of tds n income tax in tally ....? Plz help me ...bcoz I dont know ...n I want to learn Raj kapul

    We deal in Excise, Customs and Service tax laws. Ask queries related to them only.
  • i have red bricks business with p.a tunover rs.15 lacks. under which act it is better to register. employees are temporary and they work only 6 months. the business is held in a village R VENKATA RAO

    Your query is not clear. Please ask for the queries relating to Central Excise, service tax, custom and DGFT as we are dealing in these laws only.
  • 1.1. One of our clients is engaged in Overseas Education Consultancy ( named as ABC Consultants). On behalf of foreign universities, ABC Consultants offer admission services to students in India who intend to pursue higher studies at such overseas universities. 1.2. An agreement is executed between ABC Consultants and Foreign University, whereby, ABC Consultants agree to act as an agent of such University, for placement of prospective students. In terms of the said agreement, the services to be offered by ABC Consultants includes:  Advise on course and application formalities of the university;  Checking competency of the prospective student;  Ensuring authenticity of the documentation;  Promotion of activities of the university;  Supporting students in their visa applications;  Making students aware of the policies of the university 1.3. For the aforesaid services, Foreign University pays commission [as per the agreed terms] to ABC Consultants. Further, for the aforesaid assistance provided to students, ABC Consultants does not charge any fees to the students. 2. QUERY: 2.1. In light of the facts set out in the background above, ABC Consultants wishes to understand the Service tax implications on commission received from foreign universities, under the new regime for taxation of services introduced by Union Budget 2012-2013 (effective 1-7-2012). 2.2. Whether the said services will be covered under the definition of “Intermediary Services” as per Rule 9 of Place of Provision of Services Rules. Pavan Khabiya

    The definition of intermediary services is given in Rule 2 (f) of the Place of Provision of Service Rules, as follows:- “intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the ‘main’ service) between two or more persons, but does not include a person who provides the main service on his account. On analysing the above definition, the services provided by ABC Consultants get covered under intermediary services. As such, the provision of Rule 9 of the POPS Rules would apply. In case of specified services covered under Rule 9, the place of provision of service shall be the location of the service provider. Since ABC Consultants fall under intermediary service hence they are covered under Rule 9 and thus place of provision shall be location of service provider, i. e., place where ABC Consultant is situated. Since the query does not specify the location of ABC Consultant therefore levy of service tax is dependent on the location of ABC Consultant. If ABC Consultant is situated in India, i.e., taxable territory, the place of provision of service would be in taxable territory and so service tax would be payable by ABC consultants. However, if ABC Consultants is located outside India, then no tax would be payable as the place of provision of service would be in non-taxable territory
  • Being an assessee for contract/buildership in 2005-06 yr from Maharashtra state, Sales Tax authority issed a demand notice for 8% VAT liability, is it correct ? confirm in details ASHOK D CHOWRIWAR

    We do not deal in sales tax laws. Ask queries related to Excise, Customs and Service tax laws.
  • Dear Sir i would like to know about the treatment in excise & customs for 2% of Exported goods which is rejected by the party & the same is disposed off there only. kindly reply ASAp.. thank you sir Jigar

    If the rejected export goods are returned to India then exemption under Notification 158/95 or under Notification 94/96 can be claimed. If you have to pay complete duty then you can claim drawback under Section 74. But there is no provision if the goods are disposed off in foreign country only.
  • Service Tax charge by Pvt Ltd on One time Lease { commercial Property } which buy by Pvt Ltd can we take CNVAT Credit of Service Tax paidby us Against Lease service tax which we have to collect from party in future Mahendra

    Input service means any service which is directly or indirectly used in relation to the output service or production of final goods as the case may be, thus the credit of the above will be available to you if you are a service provider or manufacturer.
  • Sir, Please provide me the website where i can get the case laws on excise and service tax without any subscription fees. RAJIV JAIN

    We are also publishing the same. you can enroll on our website and you will receive weekly newsletter. There is no subscription for the same.
  • Dear Sir, We are 100% EOU, we want to import of Machinery without payment of Duty with providing Procurement Certificate.That machinery is heavy weight,now we are importing part shipment.we will import remaining part after one or two months .Purchase Order value is total machinery. Now my doubt is How to take PC for this part shipment? Raj

    There is no procedure prescribed for the same. Either you can take the one procurement certificate and use for both the consignments. Or Else take tow PCs after convincing your range authorities.
  • Facts of the Case: Our company is sending various equipments to Overseas OEMs/OEM Authorized service centers. These equipments were overhauled & we are paying charges towards overhaul charges, spares consumed & testing charges. The machines after overhauls, return back to India . Custom duty is being paid by us on total amount paid to vendor i.e overhauling charges, spares consumed & other Charges . Further, we are also paying service tax on overhaul charges under reverse mechanism & cenvat credit is being claimed on service tax paid on overhaul charges. Query : Can overhaul service charges paid to foreign vendors for above services at their premises( located outside taxable territory) be qualified as services provided in the taxable territory ? . If not , payment of service tax under Reverse Mechanism is applicable to our company ?. Relevant provisions of Service Tax Act & Rules are given below: Section 66 B: Charge of services tax on and after finance Act 2012 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. Section 66 C: Determination of place of provision of services: (1) The central Govt may, having regard to the nature and description of various services, by rules made in this regard, determine the place where such services are provided or deemed to have been provided or agreed to be provided or deemed to have been agreed to be provided. (2) Any Rule made under sub section (1) shall not be invalid merely on the ground that either the service provider or the service receiver or both are located at a place being outside the taxable territory. Place of Provision of Services Rules, 2012 Clause 4 : Place of provision of performance based services : The place of provision of services shall be the location where the services are actually performed, namely:- (a) Services provided in the respect of goods that are required to be made physically available by the recipient of the services to the provider of services, or to a person acting on behalf of the provider of service, in order to provide the service: Provided that when such services are provided from a remote location by way of electronic means the place of provision shall be the location where goods are situated at the time of provision of services ; Provided further that this sub-rule is not apply in the case of a service provided in respect of goods that are temporally imported ….. Section 68 : Payment of service tax (1) Every person providing taxable services to any person shall pay service tax at the rate specified in section 66 in such manner and within such period as may be specified. (2) Notwithstanding anything contained in sub-section(1) , in respect of such taxable services as may be notified by Central Govt in the Official Gazzatte, the service tax thereon shall be paid by such person and in such manner as may be prescribed at the rates specified in section 66 and all the provision of this chapter shall apply to such person as if he is the person liable for paying the service tax in relation to such service. Provided that the Central Govt may notify the services and the extent of services tax which shall be payable by such person and the provision of this chapter shall apply to such person to the extent so specified and the remaining part of the service tax shall be paid by the service provider. Reverse Charges Notification Under Section 68 (2) : Para 1 ( B) The taxable services provided or agreed to be provided by any person which is located in a non-taxable territory and received by any person located in the taxable territory ; The extent of service tax payable thereon by the person who provides the services and the person who receives the services for the taxable services specified in (1) shall be as specified in the following table , namely :- Sl no Description of services Percentage of service tax payable by the person providing services Percentage of service tax payable by the person receiving the service 10 In respect of any taxable services provided or agreed to be provided by any person who is located in a non taxable territory and received by any person located in the taxable territory Nil 100% S SAMPATH

    As per Rule 4 of POPS Rules, Place of Provision of performance based services is where the goods are physically made available to service provider or to person acting on behalf of provider of services. In the present case, services are related to repair of equipments that are necessarily required to be sent to overseas Authorised Service Stations for repair purpose. Hence, the transaction is covered by Rule 4 of POPS Rules as the essential characteristic of a service to be covered under this rule is that the goods temporarily come into the physical possession or control of the service provider, and without this happening, the service cannot be rendered. Since, overhaul service charges paid to foreign vendors for above services at their premises located outside taxable territory are covered under this Rule, hence the place of provision shall be where performance takes place. Since the place of provision is a non taxable territory service tax shall not be applicable on the same. Consequently, there is no liability under reverse charge mechanism on overhaul charges paid to overseas Authorised Service Station
  • Dear sir I am a regular reader and gained knowledge with your regular newslet. kindly applicability of service tax on following situation : suppose when any machine has been send to foreign country for repair / overhaudling and return to india after the same has been repaired /overhaudling in foreign country whether service tax is payable by the Service receiptant or after introduction of negative list whether the above service entered outside india is not liable to service tax regards s sampath S.SAMPATH

    As per Rule 4 of POPS Rules, Place of Provision of performance based services is where the goods are physically made available to service provider or to person acting on behalf of provider of services. In the present case, services are related to repair of equipments that are necessarily required to be sent to overseas Authorised Service Stations for repair purpose. Hence, the transaction is covered by Rule 4 of POPS Rules as the essential characteristic of a service to be covered under this rule is that the goods temporarily come into the physical possession or control of the service provider, and without this happening, the service cannot be rendered. Since, overhaul service charges paid to foreign vendors for above services at their premises located outside taxable territory are covered under this Rule, hence the place of provision shall be where performance takes place. Since the place of provision is a non taxable territory service tax shall not be applicable on the same. Consequently, there is no liability under reverse charge mechanism on overhaul charges paid to overseas Authorised Service Station.
  • is reversal of cenvat credit of Rule 4(5) is attract interest if reversal of credit not done with in 180 days. but we have sufficiant cenvat credit balance in our account. Chandra sekhar

    As per Rule 14 regarding Recovery of Cenvat Credit wrongly taken or erroneously refunded, it has been stated that “Where the Cenvat Credit has been taken and utilised wrongly or has been erroneously refunded, the same along with interest shall be recovered from the manufacturer of the provider of the output service and the provisions of section 11A and 11AA of the Excise Act or sections 73 and 75 of the Finance Act, shall apply mutatis mutandis for effecting such recoveries.” However in your case you have taken credit but not wrongly utilized it as there was sufficient Cenvat credit balance in your account. Therefore it does not amount to any loss to Revenue and there is no contravention. Thus you are not required to pay any interest on the reversal of credit not done within 180 days. We also wish to submit that similar view has been taken in the case of Sandvik Asia Ltd. Vs CCE, Ahmedabad [2010 (260) E.L.T. 81 (Tri.-Ahd)]. The head note of the case is produced as follows for your reference:- Interest - Cenvat/Modvat - Goods sent for job work but not received back within 180 days - Credit reversed after 180 days - Rule 4(5)(a) of Cenvat Credit Rules, 2004 providing for such reversal not provide any time-limit for same - Reasonable interpretation that such reversal be made immediately on expiry of 180 days - Rule 4(5)(a) ibid not provide for any interest or consequences of non-reversal of credit on expiry of 180 days - Rule 14 ibid provides where credit has been taken or utilised wrongly or has been refunded erroneously, for recovery of interest - Not clear presently whether credit required to be reversed was utilised or the same continued to remain in the account books - No interest if credit continued to remain in the account books - For verification of factual position, impugned order set aside and matter remanded to adjudicating authority. [paras 3, 4, 5, 6, 7, 8, 9, 10]
  • Dear sir, I had been paid interest on central excise duty for the year 2009-2010 @ 13% , excise commissioner asking 13 % interest notificaion no. , please sir help me, in which year interest rate 13% changed and notification No. Thanks Uttam uttam wagdare

    The rate of interest is changed to 18% under Section 11AA with effect from 1.4.2011 by Notification number 5/2011-C.E. (N.T.) dated 1.3.2011.
  • Dear Sir We are in to the business of print media (publishing English Daily News Paper) , Our major revenue Advertisement Revenue through news paper. my doubt is weather we have to pay any service tax. Kindly advise to us. now we are paying service to our transport agencies (for receiving news print through carriers). Shall we adjust to this liability to any input services like Telephone Bills, News Service agency service - for availing news services.) Thanks & Regards, M.RAM 8187897610 / 8019583696 rams.mvm@gmail.com manager accounts ram

    Service tax shall not be payable on advertisements published in print media as “Selling of space or time slots for advertisements other than advertisements broadcast by radio or television” is covered under clause (g) of Negative List. Hence, you are not required to pay service tax on advertisement published in print media. Further, you cannot adjust the service tax liability on transport agency to any other input services as services of Goods Transport Agency is covered under Reverse charge mechanism. Liability of Service tax under Reverse Charge Mechanism is required to be paid in CASH ONLY and cannot be adjusted through balance in Cenvat credit account.
  • Dear Sir, I have one export order & this order contains fifteen types of item. I want to prepare single ARE 1 at the time of dispach. Usually , An ARE 1 format has space for 4-5 items only. So, my question is that can I attach a additional sheet with ARE 1 for incorporating complete details of goods.Pls give your advice Nawal Gupta

    There is no rule prescribed for the same. But you can attach a annexure for the same. We presume that there will not be any objection to the department.
  • Dear Sir is crap sale liable to excise duty. SATISH KUMAR

    Yes, the sale of scrap is liable to excise duty if it is generated out of process of manufacture. There was Apex Court decision on this issue that the every rubbish thing can be sold in the market. But that does not mean that it is marketable. Hence scraps like dross or skimings are not liable to Excise duty. But later on the Section 2(d) was amended and it was held that clearly says that anything which capable of being sold for a consideration will be termed as "excisable goods" and these goods will be deemed to be marketable. Hence, the excise duty was levied on such goods after this amendment.
  • Sir ji.. is detention charges also subject to service tax. is this applicable even to GTA and GTO services. visuiyer

    After the introduction of Negative List w.e.f. 1-7-2012 detention charges are also chargeable to service list, since it is not included in the Negative List. It is covered by the phrase “agreeing to refrain from an act or to tolerate an act or a situation or to do an act” which is included in the definition of activity for the purpose of defining service.
  • our pvt limited paid paid one time premium to other pvt ltd for lease commercial properties is there service tax liability generated . Mahendra

    Yes the same would qualify for the renting of the immovable property as the definition of the renting includes the leasing under section 65B(41) of the Finance Act, 1994. Therefore the leasing of commercial property would be taxable @ 12.36 %.
  • I have recd FORM I from SEZ ZONE Purchases/Mfrs. for sale to SEZ Mfrs. I am also In SEZ Unit Holder Working, Let me know the USE/effect of FORM I, AND WHEN/WHAT IS THE USE OF FORM I ? CONFIRM ASHOK D CHOWRIWAR

    The above matter is governed by the VAT laws of respective states. Therefore we are unable to comment on the same. Ask queries related to the Central Excise, Service Tax, DGFT and Custom only.
  • Dear Sir one of my client is a retailer of Bosch company products he gets discount on purchases made from bosch but the same will be given subsequent to the invoice date.. say with in next month. The service tax department is asking him to pay ST on Discount saying it as a business auxilory Services (Department showing that the amount is reflected in my 23AS under 194H) please clarify wether the department can do so. Anil Kumar

    If it is discount on sale of goods then service tax cannot be charged on the same. But if it is in nature of commission then it will be chargeable to tax. Such type of show cause notices are normally issued to automobile dealers.
  • Sir, I am working with SEZ Unit, on sale to SEZ Unit,SEZ unit has (purchaser)issued form I to for not to charge of VAT at MAHARASHTRA-NAGPUR, Let me know the use of FORM I, AND TAX Liability to me at the time AssTT AT s.TAX authorities & FORM I WHEN & HOW TO USE ? CONFIRM ... ASHOK D CHOWRIWAR

    The above matter is governed by the VAT laws of respective states and we are not in dealing in the same. Therefore we are unable to comment on the same.
  • Dear Respected Sir With due respect, it is said that the following fact has to come our notice by the letter issued by Central Warehousing Corporation that it has been clarified by the ministry of finance vide its letter dated 08-11-2013 that Rice is not covered in the definition of agricultural produce as found in section 65B(5) of finance act and cannot be exempt from the preview of service tax. Kindly guide us whether rice is agriculture produce or not. We are taking its as agriculture produce and availing all exemption provided to agriculture produce on rice. Thanks Yours CA Praveen Bansal Mathura

    Yes, Recently Finance Minister has clarified that rice and cotton cannot be termed as an agricultural produce. Thus, the services related to these goods will not be covered under negative list. Agricultural produce, as defined under service tax law means any product that hasn't been processed at all or has only been subjected to minor process by a cultivator or producer that doesn't alter its essential characteristics but makes the commodity ready for sale in the primary market. Finance Minister P. Chidambaram has informed junior consumer affairs minister KV Thomas by issuing a letter dated 8th November, 2014 that rice and cotton does not comes under the definition of agriculture produce. It has been opined that paddy is an agricultural produce but rice is not since it has been processed and de-husked in a mill. Thus, it has been opined that it will not be classified under the definition of "agricultural produce" and thus, allied services will be subject leviable to service tax.
  • Dear Respected Sir We are constructing new factory building for Rice Mill. For this we are availing following service from our service provider- a Civil construction of factory building; b Civil construction for storage of raw material and finished goods' c erection, commissioning, or installation of required machinery. As per item no: 14 of notification no: 25-2012 construction, erection, commissioning, or installation of original works pertaining to,- (a) an airport, port or railways, including monorail or metro; (b) a single residential unit otherwise than as a part of a residential complex; (c) low- cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent authority empowered under the ‘Scheme of Affordable Housing in Partnership’ framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India; (d) post- harvest storage infrastructure for agricultural produce including a cold storages for such purposes; or (e) mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages; Please guide us that whether construction of factory building of rice mill and construction for storage of rice are exempted by item no: 14 of notification no: 25-2012. Thanks Yours CA Praveen Bansal Mathura

    Recently finance minister has clarified that rice and cotton are cannot be termed as an agricultural produce, thus, the services related to these goods will not be covered under negative list. Agricultural produce, as defined under service tax law means any product that hasn't been processed at all or has only been subjected to minor process by a cultivator or producer that doesn't alter its essential characteristics but makes the commodity ready for sale in the primary market. Finance Minister P. Chidambaram has informed junior consumer affairs minister KV Thomas by issuing a letter dated 8th November, 2014 that rice and cotton does not comes under the definition of agriculture produce. It has been opined that paddy is an agricultural produce but rice is not since it has been processed and de-husked in a mill. Thus, it has been opined that it will not be classified under the definition of "agricultural produce" and thus, allied services will be subject leviable to service tax.
  • Sir ji.. here again a clarifiction wrt Works Contract, an assessee is in Interior Decoration business categorising himself as WCS and claiming 60% abatement; but the dept contention is Interior decoration is a seperate service and works contract and abtement is not applicable. now the liability is very HUGE .... pl. advise with your comments. visuiyer

    Work contract is a composite contract of goods whereas "Interior Decorator" means any person engaged, whether directly or indirectly, in the business of providing by way of advice, consultancy, technical assistance or in any other manner, services related to planning, design or beautification of spaces, whether man-made or otherwise and includes a landscape designer; [Section 65(59) of Finance Act, 1994 as amended]. There is clear cut difference between the two services. If material along labour charges are taken from customers then it is works contract. But if only advice of interior decorator is given then it will fall under “Interior Decorator” services.
  • Sir ji.. Can u pl. clarify, an assessee is in CABLE LYING for a private telephone operator; business; but categorising himself as Works Contract Service and paying tax with 60% abatement. But the Dept contention is the other way. Can u pl. advise the assessee as to whether he is right. visuiyer

    Work contract is a composite contract of both labour and material. Also for the purpose of service tax the term work contract means a contract wherein the transfer of the property in goods involved in the execution of such contract is leviable to the tax as sale of goods and such contract is for the purpose of carrying out construction, erection , commissioning , installation, completion, fitting out, repair, maintenance, renovation , alteration o any movable property or for carrying out any other similar activity or part thereof in relation to such property. Therefore as in above case, if both the material and labour is involved then it will be work contract. However, if the material is not involved then it might be charged to “site formation” services.
  • Respected Sir, We are receiving a component from Nepal for Job Work (coating) and it will be return to Nepal after coating. Please advise, Is Service Tax applicable on it or not? Regards Naren Arora

    In respect of tax liability of a person carrying out job work for his clients, any process amounting to manufacture or production of goods is in the negative list. But if the process does not amount to manufacture or production of goods, and is further not covered in mega notification, the same is liable to service tax. Moreover, the location of service recipient is in India, hence also the service tax is applicable as per Place of Provision of Services.
  • Dear sir, My client is exporter of goods and having service tax input.He had taken service tax number recently. What is correct proceedure of refund of service tax? To apply for service tax claim under notification 41 by applying ARST-2 form to AC of Central Excise or claim input in service tax return and than apply for refund.What id difference between two. S.P.GUPTA

    There is a specific procedure prescribed in Notification No. 41/2012-ST, dt. 29.06.2012 for the exporters for claiming refund of service tax paid on input services. The Exporter of Goods can claim 100% refund of service tax paid to effect the export of goods beyond the place of removal to the port of export. The exporter needs to simply fill up the FORM A1 attached to notification and submit to the AC/DC in Excise division office.
  • Respected Sir, we are paying Service tax under RCM for Security & manpower so can we get credit of 75% after making the payment of Service Tax. Deepak Dalvi

    As per rule 9(1)(e) of the cenvat credit rules the assessee paying service tax under reverse charge mechanism method will be eligible for the cenvat credit of the service tax paid under reverse charge on the basis of GAR 7 Challan by which the tax is paid. The assessee should pay service tax in cash and must not utilize for the payment of service tax under reverse charge. In fact credit of 100% would be allowable to the service recipient as 75% on the basis of the GAR 7 Challan and balance 25 % would be available on the basis of the invoices. Furthermore, as per first proviso to Rule 4(7) of Cenvat Credit Rules, 2004 the credit of service tax paid under reverse charge can be taken when payment of value of input service is made in addition to payment of service tax. Hence, you have to make payment to service provider in addition to payment of service tax.
  • Sir, I need a copy of Notification No.214/86-under central excise exempting jobworker from payment of duty if principal undertakes to pay the duty. My email-id is bpil403@gmail.com CA Sasikumar

    We have sent the same on your e-mail id.
  • Dear Sir, is IGNOU is liable to pay Service Tax to House Keeping Contractor being a Government Educational Institution? Babu Nandan Sah

    The services provided to education institution are exempt by item no. 9 of Notification no. 25/2012-ST dated 20.6.2012. Further the CBEC has clarified vide circular 172/7/2013-ST dated 19.9.2013 that the house keeping services will be included in the same.
  • A newly incorporated Pvt Ltd is authorized dealer for Chevrolet Cars. The company has received some material and services during its construction of office and administrative building and showroom and workshop. They have incurred and paid Excise Duty on items like cement, iron, spare parts, mechanical euipments, plant and machinery, DG set, tools & equipments etc Similarly, the pvt ltd com has paid ST on installation and commissioning, consultancy, man power, etc. Is it possible to avail CENVAT Credit of Excise Duty and ST so paid during its construction period in ST payment? The company is going to file its first ST-3 in April 2014 If yes, please reply with details. Thanks Bhagirath

    The definition of "inputs" given in Rule 2(K) of Cenvat Credit Rules, 2004 clearly excludes the inputs used in construction or execution of works contract of a building or a civil structure of part thereof. Similarly, the definition of "input services" given in Rule 2(l) of CCR, 2004 excludes service portion in execution of a works contract and construction services. Hence the credit of material used in construction will not be allowed. But the credit on DG set, tools and equipment and plant and machinery will be allowed if they fall in definition of "capital goods" given in Rule 2(a)ibid.
  • Sir One of our clients is proprietory concern and is a dealer in cotton. The said cotton is received after ginning and grading For transportation of cotton our client is paying freight. whether we can claim exemption of notification no: 03/2013 treating the said cotton as agricultural produce ? Kindly Clarify a.r.s.krishna rao radha sri krishna rao

    Recently, it is clarified by Finance Minister that cotton does not fall in agricultural produce. Even the same stand was taken for rice but it is told that it will fall under "food stuff", hence the transportation of rice is exempt. But cotton can not fall in the same. Hence the service tax is not exempted for the same.
  • if forging are supplied to job worker, job worker does the machining and drilling will it amounts to manufacture? and the scrap so generated will it amount to duty? job worker is coming uner rule 4(5a) of CCRi.e 108 days. PLEASERELY AS SOON AS POSSIBLE. REGARDS, SWATI SWATI

    It seems that you are supplying goods under Rule 4(5)(a) to job worker. The job worker need not to pay the duty on the same and return the same to principal supplier. If the scrap is also returned then also it is not chargeable to duty. The manufacturer who has supplied the material to job worker will enter the scrap in his RG-1 for scrap and will clear after payment of duty.
  • Dear Sir, I have registered for Service Tax but the turnover has not exceeded the basic Limit of Rs.Ten lakhs. Am i liable for paying Service Tax for the same period? and this is the first year of my business. Jitesh

    If a person’s taxable service turnover does not exceed Rs. 10 lakhs in a financial year than no service tax is payable. However, clause (viii) of Notification No. 33 /2012 dated 20-6-12 provides that basic exemption of Rs 10 lakhs for payment of service tax is available if the aggregate value of taxable services rendered by a provider of taxable services from one or more premises, does not exceed Rs. ten lakhs in the preceding financial year. Therefore as your service taxable value does not exceeds rs ten lakh you need not to pay service tax but if your taxable service crosses nine lakhs you will have to get registered under service tax and will have to pay service tax if the taxable value crosses ten lakhs. However, it should be taken care of that the basic exemption limit of Rs. 10 lakhs is not available in case of liability to pay service tax under reverse charge.
  • We are paying service tax under partial reverse charge for GTA, Manpower suppy service & Security service. Whether separate accounting code to be use for respective service or single i.e.00441089 under reverse charge? Yogesh Pawar

    At present, accounting code 00441089 is not in operation. We have to deposit the service tax under the respective service’s accounting code. The accounting codes for three services as mentioned by you are as follows:- Transport of goods by road – 00440262 for tax and 00440263 for other receipts Manpower Recruitment Agency – 00440060 for tax and 00400061 for other receipts Security Services – 00440108 for tax and 00400109 for other receipts.
  • We are paying service tax under partial reverse charge for GTA, Manpower suppy service & Security service. Whether separate accounting code to be use for respective service or single i.e.00441089 under reverse charge? Yogesh Pawar

    At present, accounting code 00441089 is not in operation. We have to deposit the service tax under the respective service’s accounting code. The accounting codes for three services as mentioned by you are as follows:- Transport of goods by road – 00440262 for tax and 00440263 for other receipts Manpower Recruitment Agency – 00440060 for tax and 00400061 for other receipts Security Services – 00440108 for tax and 00400109 for other receipts.
  • Services are performed in India but as per rule 3 of the Place of Provision rules they are treated as deemed to be provided outside India. whether in such case service tax should be levied? Sweta Bhandari

    Rule 3 of place of provision rules is a residuary section and if the situation does not falls in any rule from 4 to rule 12 then rule 3 will apply. Rule 4 of place of provision rules 2012 specifically deals with the situations regarding determination of place for the services based on the specific performance. As per these rules the actual place where the services were performed will be the place of services. And in your case the services are being performed in India therefore the same would be taxable under finance act 1994.
  • In VAT if Goods are being supplied to passengers on Board i.e. 20-30 min later of flight take off, will subject to VAT. whether it will be outside the purview of VAT, if so why? if Not then why? please send any relevant case laws regarding this. thanks and regards. Swati

    We do not deal in VAT laws. Please ask queries related to excise, service tax and custom laws.
  • Dear Sir i am a service provider providing services of earth work using Excavator. my doubt is wether i can avail the Credit of Excise duty paid on purchase of excavator for paying Service tax on my out put service on earth work service. please clariry anil kumar m

    While analyzing the definition of inputs under the cenvat credit rules 2004 it has been specifically mentioned that input means all goods used for the providing any output service but excludes capital goods except when used as the manufacture of the final products. Therefore as you are using the excavator which is a capital goods (tariff head: 84294030) in providing of output service which will not be eligible for the credit. But as per rule 4 2(a) of cenvat credit rules 2004 the cenvat credit of the capital goods used by the output service provider can be taken as 50% in the first year and balance credit in the second year.
  • Dear Sir, Whether Reverse charge mechanism is application on the reimbursement of expenses to advocate . Please explain . Ankur K Prince

    As per Rule 5 (1), reimbursement of expenditures incurred by the service provider in the course of providing taxable service shall be treated as consideration for the taxable service provided or to be provided and shall be included in the value of taxable service. And thus reverse charge will also apply on the same. However, Delhi High Court in the case of International Consultants and Technorats Pvt. Ltd. has decided that reimbursement of expenses cannot be charged to service tax by treating the same as part of service charges. Rule 5(1) of Service Tax (Determination of value) Rules has been held as ultra virus to the extent it brings the reimbursement of expenses within the ambit of service tax in this case. Practically service tax is paid on reimbursement of expenses.
  • Good Morning Sir, Kindly educate on the service tax rules applicable with respect to sale of drinking water along wih responsibilites of provider & receiver of services with applicable tax rates. Thanks & Regards, k.v. sai giridhar. kv.saigiridhar@itc.in K V SAI GIRIDHAR

    As per Circular No.173/8/2013 – ST, if goods are sold on MRP basis (fixed under the Legal Metrology Act) in an air conditioned Restaurant then they have to be excluded from total amount for the determination of value of service portion. Hence, there is no service tax on sale of drinking water at MRP.
  • sir, under rent a cab if service reciepant is a company and is paying the ST by claiming the abatement of 60% then weather the service provider not calming is required to take registration under ST ajay

    There are two type of service tax payment. If the provider claims credit then service tax on 60% of value is to be paid by service provider and rest 40% will be paid by service recipient. But if the provider is not taking credit then the service tax is to be paid by service recipient on 40% of value of taxable service. In this case, it seems that the company is paying tax and service provider is not taking credit. Hence the complete service @4.944% is to be paid by company only. If service provider is not liable to pay tax then he needs not to take the registration.
  • I am manufacturing excisable commodity say, motor pumps and paying duty and during the manufacturing process I get some scraps which is cleared without payment of duty. I also avail cenvat credit for my finished product. The department now says that I should reverse cenvat under Rul3 6(3) as I am clearing the scraps without duty. Rule 6(3) applies if only I use the cenvat for common inputs for manufacturing taxable and exempted products. My scrap is not manufactured. Is the Dept right? rengaraj

    For the above purpose you need to see whether your scrap is covered under any duty exemption notification. If the scrap is exempted then rule 6 gets attracted although there have been several cases where the applicant has contended that the scrap was not manufactured but emerged as a byproduct therefore rule 6 shall not apply but the point is under litigation. Therefore, Rule 6 (3) shall apply and you should reverse cenvat under Rule 6(3) as you have cleared scraps without payment of duty, The same view has been taken by Hon’ble Supreme Court in the case of Grasim Industries v. Union of India, [(2011) 10 SCC 653]. Practically also the assesses generally reverses the duty due to the small amount of duty involved.
  • Dear Sir, Could you please clarify the following doubts in Service tax on works contract. 1) X Proprietor based firm is diong construction work of ` 10,00,000/- including service for Y limited company (service receiver) than what is the service portion to calculated service tax to X ? and what is VAT portion to calculate value added tax? 2) X is calculated service tax and charged it on his bill then Y limited company has to pay complete tax amount or not as per reverse mechanism? 3) As per the reverse mechanism of service tax, Y service receiver has to hold 50% of service tax amount of the above bill with him and deposit the same in Government account though registration or shall Y company has to pay complete Service tax amount to X ? Praveen Kumar

    Service portion in works contract for original work is determined by 40% of total taxable value. In our case taxable value for service tax would be 1000000*40%= 400000. For computation of VAT respective state VAT laws will be seen. No, Y is not liable to pay complete tax. As partial reverse charge is applicable on works contract therefore he will be paying only 50% of total tax and rest 50% will be paid by the X. Y will hold 50% of service tax and shall pay the same to the government after getting registration. And rest 50% will be paid to X which X shall deposit the same to government.
  • Dear Sir, If a M/s ABC LTD, Service Provider ( i.e. GTA) is Company and XYZ Ltd ,Service Receiver (i.e. Company) is also a Company and Consignee is Individual. then, in that case who is liable to pay service tax ABC Ltd or XYZ Ltd, and for the same M/s ABC Ltd is taken a Service Tax number, but not charge service tax separately in the bill, then, in that case, who will be liable to pay service tax under reverse charge. Thanks and Regards Darpan Aggarwal 9711426455 DARPAN AGGARWAL

    Any person who pays or is liable to pay freight either himself or through his agent for the transportation of such goods by road in a goods carriage shall be liable to pay service tax.
  • Dear Sir, Is service tax credit is available on premium paid on marine insurance for outgoing of finished goods as well as on incoming of raw materials. Thanks & regards Nawal Gupta

    While analysing the definition of input service it is clear that any service utilised by the manufacturer whether directly or indirectly in or in relation to the manufacture of final product and clearances of final products up to the place of removal would be eligible for the cenvat credit. The above service of marine insurance i.e. the premium paid on the insurance of incoming raw material will be eligible for the input credit as it has direct nexuses with the production whereas the premium paid towards the insurance of outgoing finished goods are beyond the place of removal therefore disqualifies for the input credit. However, the board circular has clarified in case of transportation that the credit will be allowed on outward transportation if three conditions are satisfied. First condition is sale is FOR destination. Secondly the risk of damages is on consignor and price charged by supplier of goods is inclusive of transportation charges. If these conditions are satisfied for insurance also then the credit should be allowed in that case.
  • dear Sirji, What is the excise classification (excise tariff heading number) for the tyre oil extracted from old tyres and plastics from pyrolysis method. The by products are carbon black and steel wire,after extracting the tyre oil used as fuel oil in industries. Thanks, rengaraj

    Tariff head pertaining to the oils extracted from the minerals is 2710. It has been clearly mentioned in the chapter that references in heading 2710 to “petroleum oils and oils obtained from bituminous minerals” include not only petroleum oils and oils obtained from the bituminous minerals but also from the similar oils, as well as those consisting mainly of mixed unsaturated hydrocarbons, obtained by any process, provided that the weight of the non aromatic constituents exceeds that of the aromatic constituents. Therefore on the whole it can be concluded on the basis above language and on the property of the oil i.e. industrial fuel a specific entry has been mentioned which are 27101950 which will be eligible for the above oil.
  • Construction of Complex One flat is booked in the name of Mr. 'A' & he has paid part payment (40%on total Consideration. Service tax has been paid on that part by client. What will happen on cancellation of agreement of such flat & same was taken by another buyer. Is service tax is payable by dubble on sale of same flat ? if whole amt including service tax is returned to first buyer ? Or how credit is taken on tax paid on first sale ? chandra prakash

    As per rule6{3} of service tax rules, 1994 if the buyer decides to exit from the project at a later date then the builder/developer will be entitled to take credit to the extent he has refunded the original amount along with service tax. If the builder/developer resells the flat before the issuance of completion certificate, again tax liability would arise.
  • Construction of Complex One flat is booked in the name of Mr. 'A' & he has paid part payment (40%on total Consideration. Service tax has been paid on that part by client. What will happen on cancellation of agreement of such flat & same was taken by another buyer. Is service tax is payable by dubble on sale of same flat ? if whole amt including service tax is returned to first buyer ? Or how credit is taken on tax paid on first sale ? chandra prakash

    As per rule6{3} of service tax rules, 1994 if the buyer decides to exit from the project at a later date then the builder/developer will be entitled to take credit to the extent he has refunded the original amount along with service tax. If the builder/developer resells the flat before the issuance of completion certificate, again tax liability would arise.
  • Dear Sir, Can you provide me the solution to the following case discussed below: A-customer of B C-customer of D D-customer of A A (a subsidiary company in Mumbai) purchases material from B (a dealer in Mumbai). However the goods are directly delivered to C (a party in Orissa)by B.Further, A has billed D (holding company situated outside India)rather than C.Taxes charged in the above instances are as follows: B while billing A has charged M vat 12.5% which seems wrong to me. Also A while billing to D(foreign co)has charged Cst 12.5% and 5%. No idea of what D has done while billing to C. Can you please mention in the above case what forms are to be given by whom as everyone has been taxed which is normally not the case in sale in transit and also whether the M vat charged by B to A can be allowed as a set off to A because in reality considering the nature of transaction Cst should be charged.However since we have also charged Cst later will there be any need of forms. Please reply its really urgent.Please...... Lubhani Singh

    We do not deal in VAT laws . Ask queries relating to Excise, service tax and custom.
  • A company has obtained service tax registration , intending to provide banking and financial services . However no taxable services provided since the registration taken for last 5 years and company neither required to pay any service tax nor filed any return . from the books of accounts and certified accountants , it is clear no taxable service provided at all . company also not applied for cancellation of registration certificate . Now department under show cause notice intend to charge for for non filing of returns for each of the 10 6 monthly return filing period . What the defence company take in this case . any case law on the subject . one possible defence is that since company has not provided any taxable service , it is niether laible for registration nor filing any return . mere taking registration under abundant precaution should not be liable for nay penalty / late fee your valuable advise sought to defend the case thanks S S Gaur s s gaur

    It has been clarified by CBEC in circular no. 97/8/2007 dated 23.8.2007 that a person who is not liable to pay the service tax is also not liable to file the service tax return. The relevant para from this circular is reproduced as follows:- 6.1 The service tax return is required to be filed under Section 70 of the Act read with rule 7 of the Rules, by 'any person liable to pay the service tax'. This return is required to be filed on a half yearly basis, in Form ST-3. For the periods from April to September and October to March, it must be filed by the 25th October and the 25th April respectively. Further, ‘Input Service Distributor’ is also required to file this return. Persons who are not liable to pay service tax (because of an exemption including turnover based exemption), are not required to file ST-3 return.” As department cannot take any step contrary to the board circulars hence the benefit of this circular can be taken. Even the provision for late fees also says “the person liable to pay tax.....”. Hence no late fees is required to be paid for this also.
  • Sir, DTA unit who is supplying goods to 100% EOU (deemed export) by discharging the applicable duty can claim rebate under rule 18 of the Central Excise Rules, 2002 Srinivas Urs

    Foreign Trade policy refers such supplies as “deemed exports” but the Central Excise or Customs Act does not recognise it as exports. Hence the rebate under Rule 18 will not be available to supplier. But the refund of terminal excise duty is allowed under Foreign trade policy on such supplies. It is as good as rebate under Rule 18. However, the objection is also raised on such refund by a trade circular issued by DGFT. It says that the supply to 100% EOU is exempted from payment of excise duty, hence the refund of terminal excise duty will not be allowed.
  • ssir, we are constructing a hotel with 60 rooms with restaurant, banguet halls etc which is under construction and it takes another year for commercial lanching. In the meantime how to set off cenvat credits on capital items we purchse for hotel building and from plant & machinery items against our service outputs which is not yet started. will the authorities allow set off of previous periods against future service output collections pl clarify with your valuable suggestion and thanks in advance J. RANGANADHAM

    Definition of capital goods as per Rule 2 of Cenvat credit rules, 2004, includes capital good used for providing output services. Since, the capital goods are used for providing output service, the credit shall be allowed for the same. Further, Rule 4(1) of Cenvat credit Rules state that credit may be taken immediately on receipt of input/capital goods in the factory/premises of service provider. Thus, it prescribes the point of time from which the credit can be taken and do not provide for any specific time limit upto which the credit can be taken. Hence, the credit shall be allowed and it can be utilised at any time.
  • Dear Sir, I am working in manufacturing company and we have excess cenvat credit and my question is can we adjust excess cenvat credit of Basic excise duty to payable of Education cess and S.H.Edu.cess of finished goods or not? pravin_gooty@yahoo.co.in

    As far as utilisation of Cenvat Credit of Basic Excise Duty is concerned there is no such clause which restricts the assessee from using the Cenvat Credit of Basic Excise Duty for payment of Education Cess & Secondary Education Cess. So if there is no restriction then Cenvat credit of Basic Excise Duty can be used for payment of Education Cess & Secondary Education Cess. In addition to this the same issue has been already decided in case of Commissioner of Central Excise, Vapi Versus Donear Inds. Ltd.[ 2009 (233) ELT 0221 (Tri. – Ahmd.)] by holding that credit of Basic Excise duty can be utilized for payment of any duty of excise.
  • Sir,We have paid GTA service tax on fright inward & fright outward. Now i want to avail cenvat credit on fright inward only then how can i avail it? i.e which documentation procedure to be follow? Yogesh Pawar

    The basic document for availing the credit under reverse charge as per rule 9 of Cenvat Credit Rules, 2004 is GAR-7 challan only. It will be allowed if otherwise the credit is allowed in Cenvat Credit Rules ibid.
  • a person who is liable to pay tax under RCM can get benefit of cenvat crdit or not Mukesh jain

    As per rule 9 (1) (e) of Cenvat Credit Rules, the assessee paying service tax under reverse charge mechanism method will be eligible to avail cenvat credit of the service tax paid , on the basis of GAR 7 Challan by which the tax is paid. However, it should otherwise be allowed in Cenvat Credit Rules.
  • sir my query is.... In case of hotel industry if they are charging Luxury Tax then taxable value in respect of service tax will be including luxury tax or excluding luxury tax Mukesh jain

    It has been clearly mentioned in the circular no. 139/8/2011- TRU. F.No.334/81/2011-TRU that in case of Short Term Accommodation Service i.e the hotel industry the luxury tax imposed by the state won’t form the part of taxable value for the purpose of calculating service tax.
  • Hello sir, One of my client purchase air ticket from Authorized Agents who charged service tax accordingly. We sell these ticket to our customer with some margin. I want to now the manner we will raised invoice to our customer. ANKUR AGARWAL

    Rule 6 (1) of Service Tax (Determination Value) Rules, 2006 says that the commission charged by air travel agent is required to be included in value of taxable service. Sub-rule (2) of Rule 6 ibid says that the airfare will not be included for determination of value for air travel agent. Further, Rule 6(7) of Service Tax Rules says that air travel agent can discharge his service tax liability by opting for payment @0.6% in case of domestic flights and 1.2% in case of international flights of basic fare. However, you will be treated as sub-agent in this case. Hence, you have to pay the tax on your brokerage and main broker will take the credit of the same.
  • a factory providing vegetarian food during lunch hour in A/C dining hall to their employees by entering contract with non corporate catering service provider. what is the status of the factory who is corporate assesee in respect of Service tax liability. visuiyer

    Recently, the mega exemption notification has been amended vide notification no. 14/2013-ST wherein serial no. 19A has been inserted which reads as follows:- “19A. Services provided in relation to serving of food or beverages by a canteen maintained in a factory covered under the Factories Act, 1948 (63 of 1948), having the facility of air-conditioning or central air-heating at any time during the year.”. On analysing the above provision, it is clear that serving of food by a canteen in a factory is exempted from service tax even if it has air conditioning facility provided that the factory is covered under Factories Act, 1948. The A/C dining hall would also be covered within the expression canteen and would also be eligible for exemption provided the factory is covered by the Factories Act, 1948. However, service tax is chargeable on outdoor catering services and if service the outdoor catering service provider is not a small service provider, then service tax would be charged by the service provider.
  • A unit in WCS is providing all related services includes (WCS, Realestate, Maintenance repair and Commercial construction etc) in different abatement in the same service but no provision is available in ST03 to give them in detail; how to keep the informed the department on this various abatement in one service. visuiyer

    While filing the ST-3 return for the work contract service, you will have to select the service as work contract service which is listed on no. 119. Also for the purpose multi abatement taken you will have to add each and every individual abatement notification in add notification column. But the value of the abatement will be shown in consolidation.
  • Is out door catering is covered under Reverse charge mechanism. But one assessee is paying tax under RCM. How to get back the refund or adjust with other liability in case the amount is paid ignorantly visuiyer

    No, outdoor catering is not covered under the Reverse Charge Mechanism. If an assessee is paying service tax on outdoor catering under reverse charge basis by mistake then he should apply for refund. The refund will be subject to doctrine of unjust enrichment. The Apex Court has held that the doctrine of unjust enrichment is applicable for inputs and capital goods also. Following the same analogy, this doctrine is applicable for input services also.
  • Dear Pradeep Sir, Greetings. sir, we engaged a private limited company as contractor for civil construction, where we are providing sand and gitty to him. he is charging service tax under composition scheme under rule 2A(ii), without considering the fair value of the sand and gitty which we supplied. as being the company himself, reverse charge would not be applicable, but my quarry is, is there any liability on our company towards service tax, on the value of such sand and gitty? please clear my doubt. thanks in advance. (P Rathi) Parmeshwar Rathi

    According to rule 2A(ii) of service tax determination rules 2006 under composition scheme it is stated that service tax would be payable at the specified percentage of the total amount i.e including the value of material supplied under the contract. It is not clear whether free supplies would be included in the taxable value or not but till now free supplies were being added in the taxable value of service. However, on account of the recent decision made in the case of Bhayana Builders [2013-TIOL-1331-CESTAT-DEL-LB] it was held that the value of free materials supplied by service recipient do not form part of the taxable value for the purpose of service tax. In view of the said decision, there is no liability of your company on the supplies made to the service provider. However, as the matter involves interpretation of law, it is prone to litigation in future.
  • Dear Pradeep Sir, Greetings. sir, we engaged a private limited company as contractor for civil construction, where we are providing sand and gitty to him. he is charging service tax under composition scheme under rule 2A(ii), without considering the fair value of the sand and gitty which we supplied. as being the company himself, reverse charge would not be applicable, but my quarry is, is there any liability on our company towards service tax, on the value of such sand and gitty? please clear my doubt. thanks in advance. (P Rathi) Parmeshwar Rathi

    According to rule 2A(ii) of service tax determination rules 2006 under composition scheme it is stated that service tax would be payable at the specified percentage of the total amount i.e including the value of material supplied under the contract. It is not clear whether free supplies would be included in the taxable value or not but till now free supplies were being added in the taxable value of service. However, on account of the recent decision made in the case of Bhayana Builders [2013-TIOL-1331-CESTAT-DEL-LB] it was held that the value of free materials supplied by service recipient do not form part of the taxable value for the purpose of service tax. In view of the said decision, there is no liability of your company on the supplies made to the service provider. However, as the matter involves interpretation of law, it is prone to litigation in future.
  • Dear Pradeep Sir, Greetings. sir, we engaged a private limited company as contractor for civil construction, where we are providing sand and gitty to him. he is charging service tax under composition scheme under rule 2A(ii), without considering the fair value of the sand and gitty which we supplied. as being the company himself, reverse charge would not be applicable, but my quarry is, is there any liability on our company towards service tax, on the value of such sand and gitty? please clear my doubt. thanks in advance. (P Rathi) Parmeshwar Rathi

    According to rule 2A(ii) of service tax determination rules 2006 under composition scheme it is stated that service tax would be payable at the specified percentage of the total amount i.e including the value of material supplied under the contract. It is not clear whether free supplies would be included in the taxable value or not but till now free supplies were being added in the taxable value of service. However, on account of the recent decision made in the case of Bhayana Builders [2013-TIOL-1331-CESTAT-DEL-LB] it was held that the value of free materials supplied by service recipient do not form part of the taxable value for the purpose of service tax. In view of the said decision, there is no liability of your company on the supplies made to the service provider. However, as the matter involves interpretation of law, it is prone to litigation in future.
  • Dear Pradeep Sir, Greetings. sir, we engaged a private limited company as contractor for civil construction, where we are providing sand and gitty to him. he is charging service tax under composition scheme under rule 2A(ii), without considering the fair value of the sand and gitty which we supplied. as being the company himself, reverse charge would not be applicable, but my quarry is, is there any liability on our company towards service tax, on the value of such sand and gitty? please clear my doubt. thanks in advance. (P Rathi) Parmeshwar Rathi

    According to rule 2A(ii) of service tax determination rules 2006 under composition scheme it is stated that service tax would be payable at the specified percentage of the total amount i.e including the value of material supplied under the contract. It is not clear whether free supplies would be included in the taxable value or not but till now free supplies were being added in the taxable value of service. However, on account of the recent decision made in the case of Bhayana Builders [2013-TIOL-1331-CESTAT-DEL-LB] it was held that the value of free materials supplied by service recipient do not form part of the taxable value for the purpose of service tax. In view of the said decision, there is no liability of your company on the supplies made to the service provider. However, as the matter involves interpretation of law, it is prone to litigation in future.
  • Dear Pradeep Sir, Greetings. sir, we engaged a private limited company as contractor for civil construction, where we are providing sand and gitty to him. he is charging service tax under composition scheme under rule 2A(ii), without considering the fair value of the sand and gitty which we supplied. as being the company himself, reverse charge would not be applicable, but my quarry is, is there any liability on our company towards service tax, on the value of such sand and gitty? please clear my doubt. thanks in advance. (P Rathi) Parmeshwar Rathi

    According to rule 2A(ii) of service tax determination rules 2006 under composition scheme it is stated that service tax would be payable at the specified percentage of the total amount i.e including the value of material supplied under the contract. It is not clear whether free supplies would be included in the taxable value or not but till now free supplies were being added in the taxable value of service. However, on account of the recent decision made in the case of Bhayana Builders [2013-TIOL-1331-CESTAT-DEL-LB] it was held that the value of free materials supplied by service recipient do not form part of the taxable value for the purpose of service tax. In view of the said decision, there is no liability of your company on the supplies made to the service provider. However, as the matter involves interpretation of law, it is prone to litigation in future.
  • What is due date for vat audit in maharashtra suresh mehta

    We do not deal in VAT. Ask queries related to service tax, excise, customs and DGFT only.
  • Dear Sir, Yesterday one Notfn realeased i.e.,14/2013-ST. now pl clarify, if industrial canteen not have Air condition facility and having cooking with process steam, service tax liability as per new notification. Satya

    No the service tax liability will not arise if the canteen is situated in a factory registered under the Factories Act as this has been specifically exempted vide notification no. 14/2013 by inserting entry no. 19A in the notification no. 25/2012-ST. As per said notification, entry no.19A reads as follows:-“ Services provided in relation to serving of food or beverages by a canteen maintained in a factory covered under the Factories Act, 1948 (63 of 1948), having the facility of air-conditioning or central air-heating at any time during the year.” Therefore, there will be no service tax liability on such canteens maintained in a factory.
  • Dear Sir We are into shipping business and have a query on cenvat credit we make advance payment towards rail freigh to a comapnay say "A" but we are getting bills toward the service paid to "A" from "B" hence would like to know if Cenvat credit can be taken atul

    Yes the credit of the same can be taken on receipt of the invoice from the third party provided the invoice is in your name or you can establish that the service tax paid with respect to said invoice has been paid by you.
  • Dear Sir, Please advise, we are a service provider (Pvt ltd. company)providing commercial coaching services. At present,the company is constructing an office building (for its own use) and paid excise duty on building materials, generator, transformer etc. Whether we can avail and utilize the credit of excise duty paid on these inputs, while the building construction is still in progress. Thanks in anticipation CA Deepti Pal

    The definition of input and input services specifically excludes availment of credit on goods used for construction or execution of works contract of a building or civil structure or part thereof and so excise duty paid on the materials used thereon will not be eligible for Credit.
  • Dear Sir, Can Excise Return ER-1 be revised. If yes, please guide us on how to revise it. And if no, then advise how to rectify the error in ER-1 already filed. Thanks in anticipation CA Deepti Pal

    There is no such provision of revision of excise return. You will have to intimate about the mistake to the department via letter.
  • Respected Sir, ST-3 provides a column (part-I) for giving details of cenvat credit availed and utilised. But this column is for service providers only. My question is how can a service recipient (liable to pay ST under RCM) intimate the govt. authorities about the CENVAT that he wants to avail and utilise towards excise duty payment.  NITU

    Under reverse charge mechanism, the liability to pay service tax is in cash, and cenvat credit cannot be utilised. As regards utilisation of cenvat credit towards excise duty payment is concerned, the same would be shown in Excise Return.
  • Respected Sir,ST-3 provides a column (part-I) for giving details of cenvat credit availed and utilised. But this column is for service providers only. My question is how can a service recipient (liable to pay ST under RCM) intimate the govt. authorities about the CENVAT that he wants to avail and utilise towards excise duty payment to be done in coming years.  NITU

    Under reverse charge mechanism, the liability to pay service tax is in cash, and cenvat credit cannot be utilised. As regards utilisation of cenvat credit towards excise duty payment is concerned, the same would be shown in Excise Return.
  • Dear Sir, "A packaging Industry in Maharashtra has awarded annual garden maintenance contract for maintaining the gardens around factory. maintenance contract includes 3 workers, manure and replacement of plants to be directly used in the garden which are exempted from tax, garden tools which is contractors' property. Service tax is already being paid by contracor and reimbursed by company.QUERY is whether this attracts amny work contract tax and pacaging industry has compulsion to deduct and work contract TDS apart from re-imbursing service tax as per present laws in maharashtra? Please guide. Bharat K.

    We do not deal in VAT/TDS Laws. Please ask queries related to Excise, Customs, Service Tax and DGFT Laws only.
  • Respected Sir, Please inform us last date to submit EXP2 SUNIL

    The EXP2 is to be filed every six months. It is to be filed within 15 days from the completion of the half year as per Notification No. 31/2012-ST dated 20.06.2012. For eg. For Half Year ended September, 2013 it should be filed before 15 October, 2013.
  • Respected Sir, We have deposited reverse charge upon payment made to lawyer during sep'13. however lateron cheque has not been paid and also will no be paid. So can we take the credit of reverse charge deposited or is there any other alternative? Thanks in advance Sumit Pratap Singh

    As per first proviso to Rule 4(7) of Cenvat credit Rules, the payment of invoice as well as service tax has to be made to avail the Cenvat Credit.
  • Sir,please let me know whether work contract tax is applicable in Maharashtra on pure annual garden maintenance contract where labour work, supervision and materials like plant and cowdung manure (which are not taxable)is provided and totally used in the garden areas.Even tools used are also contractors' property. client is pacakaging industry and have awarded annual garden maintenance contract. whether cilent has to deduct WCT-TDS @ 5% from contractor's bills and pay to Authorities? Kindly guide. bharatgreen

    We do not deal in VAT/TDS Laws. Please ask queries related to Excise, Customs, Service Tax and DGFT Laws only.
  • Dear Sir, please clarify that if one registered gta gives transportation services under a single factory premises i.e. transport salt in the same factory premises is exempt from service tax or not ? sumit sharma

    The transportation of salt is exempted by virtue of clause (d) of the serial no. 21 of the Mega Exemption Notification No. 25/2013-ST which reads as follows:- “(d) foodstuff including flours, tea, coffee, jaggery, sugar, milk products, salt and edible oil, excluding alcoholic beverages;” This was being amended vide Notification no. 03/2013-ST dated 01.03.2013. Therefore, due to specific exemption, no service tax is leviable on transportation of salt.
  • Sir,This is reg. service tax on freight by road. Is Service tax is to be paid on loading & unloading labour charges also. KAILASH GUPTA

    General definition of freight does not include the loading and unloading charges but as the amount involved in such activities is very less, therefore it is advisable to pay service tax on them also as the same has been disputed by the department many times.
  • Sir We export goods we are required to pay freight from Mumbai to overseas location for transport of goods by sea by vessel are we liable to pay service tax on reverse charge basis on freight paid AJIT

    The transportation of goods by sea by a vessel is not leviable to service tax on reverse charge basis.
  • My Client is engaged in Mining Operations. He owns Excavators, Loaders, Trucks & Dumpers for the said purpose. He is constructing a Guest House/Office and Site development for improving & enhancing the mining operations. He shall be purchasing Air Conditioners, Plywood and Stones like Marble/Granite under Excise Invoice. Can he avail and utilize the Cenvat Credit on such Inputs towards Service Tax Chandani

    The definition of input and input services specifically excludes availment of credit on goods used for construction or execution of works contract of a building or civil structure or part thereof and so excise duty paid on the materials used thereon will not be eligible for Credit.
  • Dear Sir, My query is if we have paid service tax @25% on gta service ( we have dispacthed goods)then it is outward service and further because we have taken abatement, we cannot take cenvat credit of it right? now if we have paid 12.36% on gta service ( ooutward transportation) whether cenvat is available ? Aadish Jain

    Credit on GTA outward is available only if the following conditions are satisfied: 1) The sales takes place at the buyers place /door or the property in the goods remains with the seller till the goods reaches buyer in an acceptable condition. 2) The risk of damage to goods during the transit is Bourne by seller /manufacturer. 3) The freight charges are integral part of price of goods. Usually the credit on the output freight is disallowed due to non fulfilment of above conditions and not due to the fact that service tax is payable on 25% of total freight. When the cenvat credit on input is not availed by the GTA then the service recipient is eligible to pay tax on 25%. Else the tax is payable on full 100%. In both the scenario the cenvat credit on outward freight is available only if above three conditions are fulfilled.
  • Dear Sir, My query is we are manufacturer ,if we have paid 25% of service tax on gta service( goods have received in the factory) then it is input service, so whether we can take cenvat of it because we have taken an abatement ? Aadish Jain

    Any service tax paid on the service which is used directly for the purpose of providing of output service or for the manufacture of the finished goods can be taken as the input credit. In case of GTA service the service tax is payable on 25% of total freight if the credit on inputs has not been taken by the GTA. If the credit on input has been taken then the service tax is payable on the total 100% freight. In both the cases the credit of ST paid on GTA would be available to the service recipient i.e. the person paying ST.
  • Whether jobwork charges for fabrication isliable to service tax? Here Fabrication includes all work which are done during the course of conversion of cloth into ready made garment i.e. cutting, stiching etc. Pradeep Kr. Varshney

    As per clause (f) of negative list of services as per section 66D of finance act 1994 any process amounting to manufacture or production of goods is not taxable service. As per excise laws any activity which creates a new and identifiable product having distinctive name, character or use must emerge. Conversion of cloth into readymade garment amounts to manufacture. Even Excise duty was charged on the same prior to 1.3.2013. It is exempted by amending Notification 29/2004 and 30/2004 by notification number 11/2013. Secondly, there is exemption to textile processing also. This will fall under textile processing only. Hence, it is once again not chargeable to service tax.
  • Educatinal Institution is providing Bus Service to students though its owned buses. Should they charge Service Tax ? If yes, at what rate ? PRAVIN SARASWAT

    Initially, in Mega Exemption Notification No. 25/2013 dated 20.06.2012, auxiliary educational Services provided to or by an educational institution in respect of education exempted from service tax. Later, vide Notification no. 03/2013-dated 01.03.2013, this notification no. 25/2012 got amended to exempt only services provided to an educational institution. Hence, at present transport services provided by an educational institution to students are taxable services and at the normal rates of service tax, i.e., @12.36%. But if there is a contract carriage for the transportation of passengers/STUDENTS, excluding tourism, conducted tour, charter or hire; then the above service will itself get exempt under entry no. 23(b) of the mega exemption notification no. 25/2012 dt.20.06.2012.
  • Respected Sir, Instead of deposite in PLA for 2% Ed. Cess & 1% H & S Can we utilised from 12% BED Balance ? shayan

    As far as utilisation of Cenvat Credit of Basic Excise Duty is concerned there is no such clause which restricts the assessee from using the Cenvat Credit of Basic Excise Duty for payment of Education Cess & Secondary Education Cess. So if there is no restriction then Cenvat credit of Basic Excise Duty can be used for payment of Education Cess & Secondary Education Cess. In addition to this the same issue has been already decided in case of Commissioner of Central Excise, Vapi Versus Donear Inds. Ltd.[ 2009 (233) ELT 0221 (Tri. – Ahmd.)] by holding that credit of Basic Excise duty can be utilized for payment of any duty of excise.
  • Requested to pelase arrange to furnsih the servicetax exemption and abatement notification no. for manpower recruitment agency. Regards, Sandeep Jain sandeep jain

    There is no separate and specific exemption available for the man power recruitment service. Only general exemption is available i.e the SSP exemption given in item no. 8 of notification no. 30/2012, dated 20.6.2012. The service tax in respect of services of manpower supply provided by individual, HUF, proprietary firm or partnership firm including association of person located in taxable territory provided to business entity registered as body corporate located in taxable territory is payable 75% by service provider and 25% by service receiver. The above arrangement is prescribed under reverse charge mechanism.
  • Dear Sir, Please clarify our RO is telling that, if you have taken cenvat credit of Service providers invoice, it is responsible of receiver(credit taken firm) to check whether SP has paid his liability of ST to govt? as per my knowledge it is not our(SR) responsibility sir. hence , you please clarify where in the rule this issue? Satya

    Earlier there was a Rule 9 (3) in the Cenvat credit rules which states that reasonable steps like proof of identification of service provider or manufacturer etc must be taken by the service receiver so as to safeguard his Cenvat Credit taken but the same has been deleted. Therefore the contention of RO is not sustainable.
  • Hello sir.I want to know whether we can claim input credit of the service tax paid on rent for the stockhouses or warehouses where our goods are stocked for further action or despatch and whether we can claim the input of the admin building also? Bharath

    The query is not clear whether you are manufacturer or a service provider (say Clearing and forwarding agent). However, we are presuming that you are manufacturer. The definition of “input service” given in CCR, 2004 says that the services should be used by manufacturer, directly or indirectly, in or relation to the manufacturer of the final products and clearance of final products up to the place of removal. If the final product are stored outside the factory premises in the warehouse then the department will object the same saying that these are post removal expenses. But when the sales promotion and advertisement are allowed then the credit on these expenses should be allowed. Similarly, for the administrative building, the department will say that it is not used for the manufacture but it is directly or indirectly used for such service.
  • For ER-6,which weight to be considered as consumption Qty( Input weight or final product weight)? Yogesh Pawar

    While mentioning the details of the input consumed the weight description will be of inputs only as at the time of consumption the finished goods are not in the existence.
  • dear sir, my query is our client is builder & what ever expenses incurred by company is transfer to closing WIP. company also received an advances against sale of flat hence company is liable to pay service tax on amt. received. but company had not remit the service tax to government account is it disallowed under section 43b. even those their is no profit in profit & loss account. RUPESH MORE

    We are not dealing with Income tax matters and hence are not expert under the same. Hence we are not able to reply our query. However, as far as our knowledge goes Section 43b of Income Tax Act 1961 states that certain items like government dues e.g. duty, tax etc are allowed on payment basis. Thus if you have not paid the service tax the same will be disallowed under section 43b while computing the income as per section 28 of Income tax act 1961.
  • Whether CENVAT credit of Service Tax is admissible on the Services availed for Dismantling of closed plants? Rahul

    Input service is the service which is used directly or indirectly for providing of output service or for the clearances of the dutiable product. Hence, it is to be proved that the same is used for providing output service or in manufacture of final product. Thereafter, you can take the cenvat credit.
  • Respected Sir We have received some bills from an advertising agency who have charged service tax on 15% value i.e. after claiming abatement of 85%. There is any legal notification through which the party claimed abatement of 85%. Can we take service tax input of above Amount Rajat jain

    There is no service tax on advertisement published in print media. The service tax is only on the commission of advertisement agency. Normally, the newspapers gives commission of 15% to advertisement agency, hence the service tax on the same is correctly charged.
  • Dear Sir, One of my clients is into sub contracting work of windows installations for the entire building of the builder. Kindly suggest whether he will have to charge service tax at 40%, 60% or 70% Jinendra Parakh

    In case of work contract relating to the immovable property, original works relating to installation of equipment the taxable portion is 40% of the total amount charged.
  • pl let us know the tipping vehicles used are exempted from GTA; pl cite the notification/circular if any avilable visuiyer

    The GTA exemption is available on the basis of the consignment note issued by the registered transport agency and not on the nature or type of the vehicle used for the transportation. If the owner of the tipping vehicle is a registered goods transport agency and issues consignment note then the transaction would be taxable as GTA service.
  • Sir,suppose we processed some input inhouse & sent for next processing to job worker & we did not received this material within 180 days then cenvat credit to be reverse on availed on principle input or on principle input+inhouse overhades ( Machining+manpower wages+power comsumption etc.)? Yogesh Pawar

    In case of job work if the inputs or the capital goods are not received back within one hundred and eighty days, the manufacturer shall pay an amount equivalent to the Cenvat credit attributable to the inputs or capital goods by debiting the Cenvat credit account with the amount so attributable to the inputs or capital goods not received. But the manufacturer can take once again the Cenvat credit so debited when the inputs or capital goods are received back in his factory. Thus the value for overheads i.e. allocated cost is not to be included in the value of the inputs on which the credit is to be reversed.
  • Sir,suppose we processed some input inhouse & sent for next processing to job worker & we did not received this material within 180 days then cenvat credit to be reverse on availed on principle input or on principle input+inhouse overhades ( Machining+manpower wages+power comsumption etc.)? Yogesh Pawar

    Already answered. In case of job work if the inputs or the capital goods are not received back within one hundred and eighty days, the manufacturer shall pay an amount equivalent to the Cenvat credit attributable to the inputs or capital goods by debiting the Cenvat credit account with the amount so attributable to the inputs or capital goods not received. But the manufacturer can take once again the Cenvat credit so debited when the inputs or capital goods are received back in his factory. Thus the value for overheads i.e. allocated cost is not to be included in the value of the inputs on which the credit is to be reversed.
  • Sir,suppose we processed some input inhouse & sent for next processing to job worker & we did not received this material within 180 days then cenvat credit to be reverse on availed on principle input or on principle input+inhouse overhades ( Machining+manpower wages+power comsumption etc.)? Yogesh Pawar

    Already answered. In case of job work if the inputs or the capital goods are not received back within one hundred and eighty days, the manufacturer shall pay an amount equivalent to the Cenvat credit attributable to the inputs or capital goods by debiting the Cenvat credit account with the amount so attributable to the inputs or capital goods not received. But the manufacturer can take once again the Cenvat credit so debited when the inputs or capital goods are received back in his factory. Thus the value for overheads i.e. allocated cost is not to be included in the value of the inputs on which the credit is to be reversed.
  • Respected Sir, Can you kindly tell me the Mega exemption notification number for service tax under job work against Excise 4(5) Challan. can we take the exemption under notification number 25/2012 ST 30(C). please correct me. Regards, Deepak Deepak Dalvi

    The exemption from the payment of service tax in case of job work is specified in the Entry no. 30 -clause c of the mega exemption notification no. 25/2012- ST. It says that the intermediate process is exempted when the supplier pays the appropriate duty on final product. Since he is supplying the goods under Rule 4(5) of Cenvat Credit Rules, then it is implied that he has taken the cenvat credit on the inputs. The credit is allowed when the final product is chargeable to duty. Hence, the supplier will clear the final product on payment of duty.
  • Dear Sir, II have a one contract which is related to paint (SUNCITY PROJECTS PVT. LTD) on wall and water tank( tower),party also charged service tax @12.36% on rate per sq.ft.( specified). Pls guide me applicability of reverse charges on it. Whether above contract cover under work contract? If party would not be charged service tax then what action will be taken? Pls guide me. Thanks and regards Amit Gupta ASST. MANAGER SUNCITY PROJECTS PVT.LTD. Amit Gupta

    Firstly, it is not clear that the contractor is individual or company. If he is a company then reverse charge is not applicable. But if he is an individual then the next it is not clear whether the contract is inclusive of material or labour charges only. If it is inclusive of material then it will fall under works contract. The next question will be whether the same is done on a new building or old building. If done first time on new building then it will fall under construction and the service tax will be payable @ 60% under finishing services. But if it is done on old building then the service tax will be payable on maintenance or repair then the service tax will be payable @ 70% of gross value. If the answer to first question of labour and material is in negative i.e. it is labour contract only then we have to see whether it falls under manpower supply agency. For this, we have to see whether the supervision and control is with contractor or the company. This will be dependent on terms and conditions of agreement. However, when the work is on piece rate as is in your case then normally the supervision and control is with the contractor. But we reiterate that it will depend solely depend on terms and conditions of agreement. If the control and supervision is with the contractor then no reverse charge is applicable. In other case, the reverse charge is applicable and company has to pay the service tax on 75% of total service tax amount.
  • Sir, Ours is a Manufacturing company. Our supplier is showing material value and transportation value in One Invoice. How to take input credit on Inward freight charges Pls clarify. Gururaj

    This is not clear whether the service tax amount is also charged by him in the invoice. Normally, we have seen that the service tax is also charged in the invoice. But the department says that the credit is not available on such invoice as the credit is available only on basis of challan as per Rule 9 (1)(e) of Cenvat credit Rules. But this clause says that the credit is available when the service recipient is liable for payment of service tax. But as per Rule 2(1)(d)(v) of Service Tax Rules, the person paying the transportation charges to the transporter is liable to service tax. Since your supplier has paid the freight to transporter then he is liable to pay service tax. As he has charged the service tax in invoice under Rule 11 which is valid duty paying document then you can take the credit on the same.
  • What can be the Consequences, if ER-2 is not filed by a company till date? Jitesh

    The penal action will be imitated by the department for non filing of return. A show cause notice will be issued to you.
  • Sir, We are the service reciever by goods transportation by road through transport agency. I trouble the return file what is the abetmend and sr.no. Pl. help the above query Thanking you Suresh Prajapati

    The exemption for GTA is contained in notification is 30/2012 serial no. 21 (a)/(b)/(c) and for abatement, notification for GTA exemption is 26/2012 serial no. 7.
  • Sir, In our recent excise audit, Dept has given a memo to reverse credit of service tax taken on work contract service/civil work. Actually we took credit because it relates to repairs/renovation of our factory boundary wall, main gate, floor repairing etc. Now they are saying that nothing is allowed under work contract/civil construction. As per bill they found that RCC/PCC work upto 300 mm plinth level construction falls under work contract and abatement is on different rent. our contractor has charged service tax on full value and we took credit the same and also utilized against excise duty payable. Please suggest us what to do? they are also threatening us if we fail to prove it right we have to pay 100% penalty of the credit taken i.e. Rs. 1.93 lacs on civil repairs. Sir, need your guidance... rgds, Anurag Anurag Singh Rajpoot

    When the contract of service cannot be differentiated from the material supplied the valuation rules as prescribed in the Rule 2A(ii) of the service tax (determination of value) 2006 would apply. As per this clause, the service tax is to be paid on value after abatement. Also it is clearly mentioned in the input service definition that the construction pertaining to new construction or execution of work contract is specifically excluded for the eligibility of the service tax credit. However, if the same is related to repairing, renovation etc then it falls under main definition. But this is also not free of doubt because the exclusion clause says that the credit will not be available for construction or work contract service related to building or civil structure.
  • Sir, In our recent excise audit, Dept has given a memo to reverse credit of service tax taken on work contract service/civil work. Actually we took credit because it relates to repairs/renovation of our factory boundary wall, main gate, floor repairing etc. Now they are saying that nothing is allowed under work contract/civil construction. As per bill they found that RCC/PCC work upto 300 mm plinth level construction falls under work contract and abatement is on different rent. our contractor has charged service tax on full value and we took credit the same and also utilized against excise duty payable. Please suggest us what to do? they are also threatening us if we fail to prove it right we have to pay 100% penalty of the credit taken i.e. Rs. 1.93 lacs on civil repairs. Sir, need your guidance... rgds, Anurag Anurag Singh Rajpoot

    When the contract of service cannot be differentiated from the material supplied the valuation rules as prescribed in the Rule 2A(ii) of the service tax (determination of value) 2006 would apply. As per this clause, the service tax is to be paid on value after abatement. Also it is clearly mentioned in the input service definition that the construction pertaining to new construction or execution of work contract is specifically excluded for the eligibility of the service tax credit. However, if the same is related to repairing, renovation etc then it falls under main definition. But this is also not free of doubt because the exclusion clause says that the credit will not be available for construction or work contract service related to building or civil structure.
  • Respected Sir, Party sends us material for job work with Excise 4(5) Challan in our factory. we charges labour charges in the bill. can we charge service tax in the bill or not. if not then why. Deepak Dalvi

    The exemption is given to intermediate process under clause 30 of Mega exemption notification. It says that if the principal manufacturer pays the duty on goods. Since the principal manufacturer is giving material under Rule 4(5)(a) of CCR, 2004, it implies that he has taken credit on the same. He will be required to pay the duty on final product after processing. Hence, you cannot charge the service tax as the exemption is available to you.
  • Purchased an equipment from registered dealer (first stage delear ) under central excise. Excise duty is not shown separately in invoice but mentioned as” selling price is inclusive of excise duty”. The equipment is input to the provider of taxable service. Will the invoice be valid duty paying document to claim cenvat credit? sivakumar

    Rule 11 of cenvat credit rules 2004 specifies certain requirements that must be present in the excise invoice such as date and time of removal and preparations of invoice, transporters details, excise registration number, consignee details, complete address of range and division, etc one of the condition is that duty amount and rate must be separately shown in the invoice. Such conditions also apply invariably to the 1st stage and 2nd stage dealer. Thus in light of the above provision, the department may object the availment of the credit.
  • Sir, BSNL as a service provider, CIVIL unit of the BSNL, make a works relates to maintenance of all the Telephone Exchanges (from which the service provide to the customer like Basic Telephone Service, Broadband, Leaseline, Wi-fi, Hot line etc.......)i.e. construction of compound wall, shelter for GSM TOWER BTS, etc. sir I want to know that whether we can avail the CENVAT Credit for such maintenance work ? If so, the relevant guideline/rules/notification may be mentioned/provided pl. dinesh chaudhari

    Your query is not much clear. The query understood by is that one unit of BSNL is providing service of repairing to BSNL and paying service tax on the same. The BSNL intends to take credit on the same. If the query understood by is us is correct then our reply is as under:- One unit of same person is providing service to another unit. But for imposition of service tax, there should be two persons. When one unit of same person is providing service to another unit in India then it is not service at all. One cannot provide to himself. Hence the service tax is not payable at all.
  • Whether jobwork charges for fabrication or embroidery of garment/textile are subject to service tax. Pradeep Varshney

    If the process undertaken by you is termed as “textile processing” then it is exempt from levy of service tax. Secondly, if these process amounts to manufacture under Central Excise then the service tax is not applicable. To reply more specifically, the details of raw material, process undertaken and finished goods manufactured is required.
  • Dear Sir I am maintained 2 units same name and different excise ranges and vat is same my query is i am purchase machinery in uni-1 name but now i am transfer to machinery our Unit-II how what is the process? Balaraju

    We are dealing in Central Excise matters. Hence, we can tell you about central excise provisions. The premises are registered in Central excise and hence two units located at two different locations will have different registration. If we despatch the capital goods from one unit to another then it will be cleared under Central Excise invoice. If the capital goods are cleared as such before put to use then unit must have taken 50% credit. He can take the another 50% credit and clear the capital goods by reversing the complete Cenvat duty. The unit can take the credit on the same. There is no question of sales price as one unit is clearing to another unit. If the capital goods are cleared after being put to use then the depreciation @ 2.5% per quarter will be available. The unit clearing the material has to reverse the cenvat credit after such depreciation. The unit receiving the goods can take the credit if these are capital goods for him.
  • whether cenvat credit allow under import capital goods under EPCG Scheme, as per our Bill of entry Total duty debited from Duty Bond amount , mention in bill of entry. Ashok Makwana

    EPCG scheme allows import of capital goods at zero duty for specific sectors and at a concessional rate of 3% of customs duty for all sectors. But this 3% duty is Basic custom duty. Hence, when the duty is not paid at the time of import then no question of taking credit arises.
  • My client is running Restaurant collecting service tax @4.944%.My querry is whether it can take cenvat credit on service tax paid on rent and excisevpaid on liquor Punita Batia

    In case of restaurant services, the service tax is payable on the 40 % of the total amount as per Rule 2C of Service Tax (Determination of Value) Rules, 2006. The Explanation 2 of above rule clearly say that credit on inputs falling under Chapter 1 to 22 will not be available. Moreover, the liquor is chargeable to State Excise duty and not to Central Excise duty. Hence the credit of the same is not available. However, there is no restriction on credit of input service and capital goods. Hence, the credit of same is available provided the same is allowed in Cenvat Credit Rules, 2004.
  • Service tax on GTA under reverse charge mechanishm is applicable if service provider is cargo handling services. chaitanya

    Cargo handling service is itself a different service taxable. This service is not covered under reverse charge mechanism. Therefore the service tax is payable by the service provider only.
  • Our company Ajmer Vidyut Vitran Nigam Limited, involved in electric distribution work. AVVNL provide the material to contractor and contractor use that material for erection of 11 KV/ LT lines. Contractor produces his labour portion bill to AVVNL. Is AVVNL liable to pay 50% service tax on contractor bill under reverse charge mechanism? please Advise. Ganesh Kumar Vijay

    If terms of agreement show that the contractor will use some of his owned material as well as labour charges then the above service would fall under the work contract. Also the work contract service falls under the reverse charge. In that case, the free supply material will be added and service tax will be payable on complete amount. However, this will be subject to other provisions of works contract. However, if the terms of contract are that all material will be provided by you and he will charge only for labour charges then it will be labour contract only then it will not fall under works contract and reverse charge will not be applicable. As you have mentioned also that it is labour contract only, then no reverse charge applicable. However, you can also examine whether the contract does not fall under “manpower supply agreement”.
  • We paid service tax on general insurance for building,cash and gold but we can't availed credit of it.Is it right or wrong ? What should we have to do? shashikant borse

    You have not told the type of work undertaken by you. Hence, it will be difficult to comment on the same. The general insurance in relation to vehicles is not allowed. However, the credit of general insurance is allowed if the same is used by provider of output service for providing output service or by manufacturer in or in relation to manufacture of final product. Please judge the same on your own.
  • Can a Restaurant providing "Restaurant Service" and "Mandap Keeper Service" avail CENVAT credit of Service Tax paid on Rent of premises. please clarify. anil kumar m

    In case of restaurant services as per Rule 2C of Service Tax (Determination of Value) Rules, 2006 prescribed from 01-07-2012 under Notification No. 24/2012, the abatement is available for restaurant service @ 60%. Therefore the effective service tax payable will be 4.944%. (12.36*40%). If the abatement option is to be availed then service provider shall not take CENVAT credit of duties or cess paid on any goods. But the credit of input services is allowed.
  • MY UNCLE PRODUCED AND SALE ONION RS.32,00,000 FROM HIM OWN AGRICULTURE LAND IN VILLAGE PLACE OF FINANCIAL YEAR 2012-13. NOW HOW MUCH AMOUNT EXEMPTION HE WILL GET BY INCOME TAX ACT 1961. PLEASE GUIDE ME SIR RAJALAKSHMI.G

    We do not deal in direct taxes hence we are not able to comment on the same.
  • we are manufacturer and service provider of glow sign board. we are taking cenvat credit of service tax on factory rent.(Rent is Rs.1,50,000/=+12.36%). my vat turnover is 400 lacs and cargable service tax turnover is only 5 lacs. question is can we take cenvat credit or not? manoj

    As per notification no. 33/2012-ST dated 20-6-2012 exemption is available to a small service provider whose taxable service does not exceed Rs ten lakh. As in above case your taxable service does not exceed ten lakh therefore the exemption is available to you. Also it has been clearly mentioned that in case service provider is claiming exemption he cannot avail the cenvat credit under the cenvat credit rules. But if you decide to forgo the exemption then the credit is available to you.
  • Service tax liability in case of repair of car where separate bills for service portion and material portion Ramit Kumar

    The service will fall under the works contract as material and labour are involved. But the works contract valuation rules itself says that first of all, we should bifurcate the material and labour and then the service tax should be paid on labour charges only. Hence, you should pay service tax @12.36% on labour charges.
  • Sir, We are constructing Residential Building and awarding contracts on labour supply and also with material.Is Contractors providing labour applicable for Service Tax on Reverse Charge.Should we deduct the Service Tax Liability payable from them. Chandan Samal

    If the material and labour charges are awarded to the contractor then the above service would fall under the work contract. Also the work contract service falls under the reverse charge mechanism if the provider is individual, huf or partnership firm and service recipient is a body corporate. Under reverse charge mechanism, fifty percent liability falls on both service receiver and service provider. Your second query is that the labour contract is chargeable to service tax. We understand that you are asking when a contract is pure labour contract and material is supplied by service recipient then it is chargeable to service tax. The answer is that such contract does not fall under works contract then the reverse charge in this category is not applicable. However, if this activity falls under manpower supply agency then the service tax is applicable. Third query is of deduction of service tax under reverse charge. Unless your agreement provides so, the service tax is not to be deducted but it is to be calculated over and above this amount and paid to the Government.
  • my uncle birthday is 06/12/1948....he liable to pay profession tax(ptec) for f.y.2013-14...as he complete 65years of age in middle of finnancial year 2013-14...please reply whether he is liablr to pay patc...?? Keval gandhi

    We deal in service tax, Excise, CUSTOM and DGFT. Ask queries related to them.
  • Sir, We are 100% EOU.Now we want to clear waste/scrap in DTA sale.What is the procedure follow the clear scrap to Domestic Customers ? Thanking you Raj

    As per FTP policy 2009-14 you are entitle to sale goods up to 50% of the FOB value of the export subject to fulfillment of positive NFE. You can clear the goods from the units after paying applicable excise duty.
  • sir, We are 100% EOU,now we want to clear scrap in DTA sale, what is the procedure to clear the same.Thanking you Rajendra

    As per FTP policy 2009-14 you are entitled to sale goods up to 50% of the FOB value of the export subject to fulfilment of positive NFE. You can clear the waste and scrap to that extent subject to payment to applicable excise duty.
  • Can principle manufacturer avail credit for the stocks lying in the job workers end. Earlier raw materials sent to job worker on payment of duty or invoice in the name of principle manufacturer delivery to job worker. After credit at job worker end there is no production . Can job worker can pass on the accumulated credit to principle manufacturer. I need your reply K.Srinivasan

    As per Rule 4(1) of Cenvat Credit Rules, the Cenvat credit in respect of inputs may be immediately on receipt of the inputs in the factory of the manufacturer. Following this analogy, the goods should be received in factory of manufacturer. If this is directly delivered at job worker premises then the credit will be taken by manufacturer on this invoice only after receipt of material from job worker. There is no provision to take the credit of accumulated credit at job worker premises by principal manufacturer. We have given this reply assuming that the principal has issued the challan under Rule 4(5)(a) of Cenvat Credit Rules read with Notification number 214/86-C.E. dated 1.3.1986.
  • Sir, Whether Duty which is paid under CCR rule 3(5) for as such Clarence can be collected from the buyer? Dayananda K N

    As per Rule 3(5) of Cenvat Credit Rules, the cenvat credit is to be reversed on as such clearance of inputs. The assessee can collect this reversed duty from the buyer. Even the buyer is also eligible on take credit on the same.
  • Sir, I had a query regarding calculation of threshold limit of Rs. 10 lacs as specified in Notification No. 33/2012. My Query is whether for the purpose of calculating threshold exemption limit as per the aforesaid notification, whether services in the nature wherein the service receiver is liable to pay service tax shall be considered for calculating the threshold exemption limit? Thanks! Mayank Bang

    Services covered under complete reverse charge and partial reverse charge has to be included in the calculating aggregate value for service provider except complete reverse charge in case of GTA service as clarified in the notification no. 33/2012-ST itself. The payment received towards the gross amount charged by such goods transport agency where Goods transport Agency is not liable (i.e. receiver liable), shall not be taken into account i.e. for the service receiver in case of gta the ssi exemption is not available.
  • whether builder of residental flats is require to charge service tax in his invoices to buyers of flat? Manish Dungarwal

    It has been clearly mentioned in the circular no Circular No. 151 /2 /2012-ST dated 10.02.2012 that the construction service provided by the builder/developer is taxable in case any part of the payment/development rights of the land was received by the builder/developer before the issuance of completion certificate and the service tax would be required to be paid by builder/developers even for the flats given to the land owner. The service tax is to be shown in the invoices raised by builders.
  • Dear Sir, Thanks for your reply, Please clear was GTA applicable on mustard seed before Notification no 03/2013-ST dated 01.03.2013. Sir, WE BRING MUSTARD SEEDS BY ROAD TRANSPORT TO OUR CRUSHING UNIT AT KOLKATA. MY QUERY IS THAT IS GTA APPLICABLE IN OUR CASE AS THE MUSTARD SEED IS AN AGRICULTURE PRODUCE. Notification no 03/2013-ST dated 01.03.2013 as amended the earlier exemption notification no. 25/2012-st, and the exemption of paying service tax on GTA was extended to the agriculture produce. Agricultural produce has been defined in section 65B of the Act which means any produce of agriculture on which either no processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market. It also includes specified processes in the definition like tending, pruning, grading, sorting etc. which may be carried out at the farm or elsewhere as long as they do not alter the essential characteristics. Therefore the above mustard seeds will be covered in agriculture produce and hence exemption will be allowable. However, we would like to decide your case in light of above definition. Nawal Gupta

    W.e.f. 01.03.2013, services by goods transport agency by way of transport of agriculture produce is exempt. Mustard seed on which no processing is done or processing is done which do not alters its essential character is covered under agriculture produce hence transport of mustard seed is exempt w.e.f. 01.01.2013. Before 01.01.2013, as per Mega Exemption notification, Service provided by a GTA by way of transportation of fruits, vegetables, eggs, milk, food grains or pulses in a goods carriage is exempt of service tax. In our opinion mastered seeds are food grains therefore transportation of the same was also exempt before 01.03.2013.
  • dear sir is export of services amount will be considered in valuation of 10lakh ssi exemption amount Bharat

    As per Notification No. 33/2012 – ST, “aggregate value means the sum total of value of taxable services charged in the first consecutive invoices issued or required to be issued, as the case may be, during a financial year but does not include value charged in invoices issued towards such services which are exempt from whole of service tax leviable thereon under section 66B of the said Finance Act under any other notification.” Thus aggregate value includes only taxable services. Export of service is not chargeable to service tax by virtue of section 66B because as per section 66B service tax is leviable on services provided in “taxable territory (i.e. India except Jammu & Kashmir)” only and in case of export of service, taxable territory is normally outside India in accordance with Place of Provision Rules, 2012. As export of services are not chargeable to service tax therefore the same are not included in computing aggregate value of 10 Lakhs.
  • sir, while submitting service tax return for the period April to September 2013, client fails to submit invoice regarding purchase of capital goods so Cenvat credit on capital goods can not be availed . can Cenvat credit on capital goods can be availed during Service tax return for the period Oct.-March 2013 period Shri Niwas Malani

    Although there is no time limit fixed for taking of cenvat credit on the inputs, input service or capital goods. However, it is clarified that assessee may avail the credit immediately on receipt of the inputs but nothing has been said about the utilisation of the credit. The credit on capital goods can be taken 50% in first year and balance in second year. There are number of decisions which says that the credit can be taken afterwards. Thus you can mention the same in the details of the return pertains to October to march. Note: Returns pertaining to April 13 and onwards are yet to be filed and returns for the Oct- March 2013 has been already filed.
  • sir, i have a proprietor ship firm , my firm doing photocopy work. if i have a work contract with any company so tell me percentage of service tax . we also charge VAT. sandeep srivastava

    Now the photocopy work is neither covered under Negative list and Megha exemption notification. But since you are paying tax then it can be termed as transfer of title in goods then the service tax is not attracted. But it can be argued that the doing photocopy is not only sale of goods but it involves services also. In such a situation, it is composite contract. Following the education guide issued by CBEC, one has to apply dominant nature test. If the dominant is service then service tax is applicable. But in case dominant is sale then no service tax is applicable. Although it is very difficult to comment in such a situation as well as it will always be prone to litigation, but it seems that the sale is dominant in this case and no service tax is applicable.
  • SIR, ONE OF MY SSI UNIT CLIENT MANUFACTURING READY MADE CHAPPATHI AND PAROTTA. THEY HAVE CROSSED 1.50 LAKHS FOR THE LAST YEAR. THIS YEAR EXPECTED TURNOVER IS MORE THAN 4 CRORES. WHETHER CENTRAL EXCISE IS APPLICABLE TO THIS UNIT OR EXEMPTED rvperumal

    In case of pre packaged food two exemptions are available: 1) Under notification no. 1/2011-C.E. dt. 1.3.2011 the duty equal to 2% is payable and in such case the cenvat credit on inputs is not available. 2) Under notification no.2/2011-C.E. dt. 1.3.2011 the duty is payable equal to 6% and in that case assessee can avail the cenvat credit. Both the above notifications are mutually exclusive. For availing the SSI exemption in both the cases specified condition of the ssi exemption must be satisfied. Also if you are manufacturing under any brand name of any other person then the SSI exemption is not available. SSI exemption is available if the total clearances in the current year are 150 lakhs with a condition that the total turnover in the previous year is less than 400 lakhs i.e the SSI exemption would be available to you and you won’t have to pay duty up to 150 lakh clearances but after that duty would be leviable. Moreover, one must go through the SSI exemption notification 8/2003-C.E dated 1.3.2003 and as amended to see that all other terms and conditions of notification are satisfied.
  • Dear sir If we purchase old iron & scrap from the open market and without duty then sagregate it then sale to the manufacturer . 1)wthether there will be any excise duty liability . 2) Whether this process is amount to manufacturer Please advise. Thanks Munesh munesh

    The most commonly used test for ascertaining "manufacture" for the purpose of attracting Central Excise duty has taken place was evolved by the Supreme Court in the case of Delhi Cloth and General Mills 1977 (1) ELT (J 199). In terms of this decision, the activity or process in order to amount to "manufacture" must lead to emergence of a new commercial product, different from the one with which the process started. In other words, it must be an article with different name, character or use. Thus, a process which simply changes the form or size of the same article or substance would not ordinarily amount to manufacture and no excise duty would be payable unless it is deemed to be manufacture. If in above case there is only transformation in shape and not leading to a distinct product being marketable then this won’t amount to manufacture and duty would not be leviable.
  • Dear sir I have a question that if we purchase plastic old drums from the market or from the scrap market without excise duty then I cut it into small pieces/grind as granules .. After that I sell to any one now my question is whether this is amount to manufacture and excise duty will be applicable . Suppose, I have an SSI unit then I will have to take excise registration .what is the annually limit of ssi . Kindly suggest for the same . I shall be very thanful to you . Thanks Munesh munesh

    The most commonly used test for ascertaining "manufacture" for the purpose of attracting Central Excise duty has taken place was evolved by the Supreme Court in the case of Delhi Cloth and General Mills 1977 (1) ELT (J 199). In terms of this decision, the activity or process in order to amount to "manufacture" must lead to emergence of a new commercial product, different from the one with which the process started. In other words, it must be an article with different name, character or use. Thus, a process which simply changes the form or size of the same article or substance would not ordinarily amount to manufacture and no excise duty would be payable unless it is deemed to be manufacture. In the above case as the plastic drums are cut and grinded into granules which are itself marketable under the name granules, therefore, the same would amount to “manufacture”. SSI exemption is available if the aggregate value of clearances in the current year is Less than 150 lakhs with a condition that the aggregate value of clearances in the previous financial year is less than 400 lakhs. This SSI exemption notification 8/2003 is subject to other conditions. If you satisfy all the conditions then you are eligible to SSI exemption and there is no need of Central Excise registration till your turnover is below exemption limit.
  • Sir, We have taken a premesis on rent for our pre-process of production. we are paying rent for said premises. can we claim input of service tax paying on rent ? Satish Kumar

    The input service definition states that a service utilised directly or indirectly for providing the output service will be eligible for the cenvat credit. As the RENT is paid towards the RENT of the premises for a pre-process production has a direct link with the final production, therefore eligible.
  • Dear Sir, Please advise, can we claim CENVAT Credit if we clear goods after repacking and charge of Excise Duty. HS Code of our product is 79040030 Please advise ungently. naren Naren Arora

    Under the tariff head 79040030, 12% duty is levied. But packing does not amount to manufacture for this product. There is neither any chapter note and nor it is chargeable to MRP based valuation. Hence, you cannot take the credit on the same.
  • We are in business of manufacturer, supply, erection and installation of Transmission line tower. We have received separate order for supply and erection of transmission towers. Our client insist us to charge service tax on 40% amount of erection charges as per new service tax valuation rules. Our query is that whether we should charge service tax on 40% value of only erection work or should charge on value of supply of tower material + value of free issued material + value of erection work Manish Thakkar

    There are two methods of valuation in works contract. Firstly, one should deduct the value of material from total value and pay the service tax @12.36% on remaining labour charges. But if one is not able to bifurcate the same then the service tax is payable on percentage of value. Even the free supply material is to be added for arriving such value.
  • We are in business of manufacturer, supply, erection and installation of Transmission line tower. We have received separate order for supply and erection of transmission towers. Our client insist us to charge service tax on 40% amount of erection charges as per new service tax valuation rules. Our query is that whether we should charge service tax on 40% value of only erection work or should charge on value of supply of tower material + value of free issued material + value of erection work Manish Thakkar

    There are two methods of valuation in works contract. Firstly, one should deduct the value of material from total value and pay the service tax @12.36% on remaining labour charges. But if one is not able to bifurcate the same then the service tax is payable on percentage of value. Even the free supply material is to be added for arriving such value.
  • We are in business of manufacturer, supply, erection and installation of Transmission line tower. We have received separate order for supply and erection of transmission towers. Our client insist us to charge service tax on 40% amount of erection charges as per new service tax valuation rules. Our query is that whether we should charge service tax on 40% value of only erection work or should charge on value of supply of tower material + value of free issued material + value of erection work Manish Thakkar

    There are two methods of valuation in works contract. Firstly, one should deduct the value of material from total value and pay the service tax @12.36% on remaining labour charges. But if one is not able to bifurcate the same then the service tax is payable on percentage of value. Even the free supply material is to be added for arriving such value.
  • We are in business of manufacturer, supply, erection and installation of Transmission line tower. We have received separate order for supply and erection of transmission towers. Our client insist us to charge service tax on 40% value of erection charges as per new service tax valuation rules. Our query is that whether we should charge service tax on 40% value of only erection work or should charge on value of supply of tower material + value of free issued material + value of erection work? pl. reply. thanks Manish Thakkar

    There are two methods of valuation in works contract. Firstly, one should deduct the value of material from total value and pay the service tax @12.36% on remaining labour charges. But if one is not able to bifurcate the same then the service tax is payable on percentage of value. Even the free supply material is to be added for arriving such value.
  • service tax on transportation outward will credit allowable to manufacturer. Uttam

    The Credit of Service Tax on Outward freight will be allowed if the following 3 conditions are fulfilled: 1. The sale takes place at the buyer’s door or the property in the goods remains with the seller till the goods reaches buyer in an acceptable condition; 2. The risk of damage to goods during the transit is borne by the seller/manufacturer; and 3. The freight charges are integral part of the price of the goods.
  • Dear Sir, Kindly let me know the person liable in the following case. A COMPANY is purchasing goods by way of a Purchase Order issued on supplier by specifying freight extra at actuals on P.O. Also, the supplier (Manufacturer of goods)(COMPANY) while giving quote for the material supply, clearly specifies that price is ex-factory and mentions that, transportation charges to be borne by purchaser. Now, the purchaser receives the invoice for material value followed by a debit note for the transportation charges paid to the transporter (backed up with consignment note issued by the transporter (GTA/NOT no idea) where supplier co. is the consignor & purchasing co. is the consignee). pls. let me know the liability of supplying/purchasing company w.r.to payment of service tax to the dept. under REVERSE CHARGE MECHANISM if applicable. service tax applicability on payment of freight charges to supplier of goods who's claim is by way o

    Reverse charge is applicable on transport of goods by road. Here the liability of payment of service tax falls on the person who is liable to pay or pays freight. However, the seven categories of person are liable to service tax under reverse charge as per provision of Rule 2(1) (d)(v) of Service tax Rules. If you do not fall under these categories then the service tax will fall back on transporter. This is subject to exemptions available under GTA services. Therefore in above case the liability to pay service tax will fall on you as you have paid freight. To avoid that liability, one has to prove that the manufacturer is paying the freight as an agent of the buyer. In that case, the service tax liability will fall back on supplier of the goods.
  • dear air, Please advise, can I avail cenvat credit if I sale my product after change of packing and charge excise duty at the time of sales. HS code of my product is 79040030 naren

    Under the tariff head 79040030, 12% duty is levied. But packing does not amount to manufacture for this product. There is neither any chapter note and nor it is chargeable to MRP based valuation. Hence, you cannot take the credit on the same.
  • whether gold refining process from gold jewellery and making of bangles from refined gold and gold biscuits or bars attracts any excise duty?Notification no. 12/2012 CE dated 17/03/2012 under sl no. 188 primary gold converted with the aid of power from any form of gold other that gold ore, concentrate or dore bar attracts NIL duty. will this notification applicable for refining process? whether we have to register with department and file returns? Raghavender upadhyay

    The entry no. 188 of Notification no. 12/2012 CE dt. 17/03/2012 primary gold converted with the aid of power from any form of gold other than gold ore, concentrate or dore bar is eligible for nil rate of duty. Explanation.-For the purposes of this entry, ―primary gold means gold in any unfinished or semi finished form and includes ingots, bars, blocks, slabs, billets, shots, pellets, rods, sheets, foils and wires. Thus as you are converting primary gold to other form then you will be eligible for the exemption.
  • sir we are manufacturer of HDPE TARPAULIN, WE ARE GETTING CHARGED OF EXCISE DUTY ON PURCHASE HDPE LAMINATED FABRIC IS IT POSSIBLE TO CLAIM THE EXCISE DUTY WHICH CHARGED ON MY PURCHASE. c ramesh

    A manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit of excise duty paid on inputs used in manufacture of final product. But in the case of M/s Mohan Sales Corporation v/s CCE, Ahmedabad-I the Tribunal held that the process of stitching, cutting and eyeleting undertaken the appellant does not amount to manufacture. And when there was no manufacturing involved, no excise duty can be imposed on the said product. Therefore, one cannot take credit on inputs in such a case.
  • AN AUTHORISED SERVICE CENTRE FOR TVS MOTORS LTD. HERE SERVICES WITH / WITHOUT SPARES. THE DEPARTMENT ASKED TO REMIT SERVICE TAX EVEN THOUGH THE AUTHORISED CENTRE'S PROPRIETOR HAS NOT YET REACHED THE TUROVER OF RS.5 LAKHS AND MORE. WHETHER SERICE TAX IS APPLICABLE TO HIM BECAUSE OF BRANDED MANUFACTURER'S SERVICE CENTRE. THE OFFICIALS SAID THE TVS IS BRAND NAME. CLARIFY rvperumal

    Already answered. As per the notification no. 33/2012-ST dt. 20.6.2012 the threshold exemption of ten lakh is generally allowed on the fulfillment of certain conditions which are mentioned in the notification itself. But if the services are providing under a brand name or trade name then such then the notification will not be applicable to it. But you have to see whether you are providing services under a brand name or not. Moreover, the brand name should be of service provider and not of manufacturer of goods. This is clear from the definition of “brand name” given in the notification. You have to see your query on this aspect.
  • Dear Sir, Can I take cenvat benefit on items to be sold as such after only re-packing and charge excise duty at the time of sale (after some value addition) ? Please advise ! naren

    Under Central Excise Act certain processes of packing, repacking, labelling or relabeling has been deemed to be ‘Manufacture' under following two Categories – (a) CETA specifies some processes in the section notes and chapter notes of First Schedules ‘amounting to manufacture'. If any of these processes are carried out, goods will be said to be manufactured, even if as per Court decisions, the process may not amount to ‘manufacture' {section 2(f)(ii)} (b) As per section 2(f)(iii), in respect of goods specified in third schedule to Central Excise Act, repacking, re-labeling, putting or altering retail sale price etc. will be ‘manufacture'. The goods included in Third Schedule of Central Excise Act are by and large same as those on which excise duty is payable u/s 4A on basis of MRP printed on the package. Since product classificaiton is not provided to us, hence you will have to see whether your product fall from the above two catgories. If you are covered under any of the above it will be treated as the deemed manufacture and you will be eligible to take the credit on the inputs. But if your product does not hit by above two categories then you cannot take cenvat credit.
  • An individual in chennai (taxable territory) earns commission in USD for arranging a buyer (USA) for a seller (UK). Both are in non-taxable territory. Now the question is by applying place of provision rules, whether such commission received in foriegn exchange attracts service tax in Indian soil? rengaraj

    On the analyses of the place of provision rules generally the place of service receiver is the taxable territory but in case of the Intermediary services services the location of service provider will be the taxable territory. Inermediary service include commission agent for services but does not include commission agent for goods. In this case, the service provider is in Chennai and service recipient (who pays commission- whether UK party or USA party) is outside India. Therefore, if the service provider is commission agent of services then it will fall in intermediary service and place of provision will be taxable territory. But if service provider is commission agnet for goods then place of provision will covered under Rule 3 i.e. place of service recipient. In that casse, it will be outside taxable territory.
  • Respected sir, We are providing Erection and commissioning services in power plants having capacity more than 1000MW and 4000MW plants Know sir under notification no:12/2012,S.no:507 applies to power sector they said Goods required for setting up of power plant can avail custom duty exemption but i want to know Whether the definition includes capital goods or not i.e.,Cranes are covered or not varun

    As per entry no. 507 of Notification no. 12/2012-Cus (Tariff) the goods covered under the tariff head 9801 are covered under the said custom duty exemption. As per Circular No. 490/56/99CX dated 25/10/1999 Heading 9801 covers all items of machinery, including prime movers, instruments, apparatus and appliances, control gear and transmission equipment, auxiliary equipment (including those required for research and development purposes, testing and quality control) as well as all components (whether finished or not) or raw materials for the manufactured of the aforesaid items and their components, required for the initial settings up of a unit, or the substantial expansion of an existing unit. Even the notification says that the goods required for setting up of plant. Hence, goods includes capital goods and even the word “setting up” also implies that it will include capital goods.
  • Sir, We are are a compny awarded the contrect for assitance in various jobs in plant & paying to contractor on items rate basis not on man day basis, wheather it will come under "supply of man power or repair or maintinence services in view of reverse charge mechanisum. 

    For a service to be able to fall in the definition supply of man power supply, it is mandatory that the control and supervision on such man power must lie with the person receiving such service. Although the payment on item rate basis is strong indication that the control and supervision is with service provider only and hence it will not fall under manpower supply agency. However, it will depend on the complete terms and conditions of the agreement.
  • Dear Sir, WE BRING MUSTARD SEEDS BY ROAD TRANSPORT TO OUR CRUSHING UNIT AT KOLKATA. MY QUERY IS THAT IS GTA APPLICABLE IN OUR CASE AS THE MUSTARD SEED IS AN AGRICULTURE PRODUCE. Nawal Gupta

    Notification no 03/2013-ST dated 01.03.2013 as amended the earlier exemption notification no. 25/2012-st, and the exemption of paying service tax on GTA was extended to the agriculture produce. Agricultural produce has been defined in section 65B of the Act which means any produce of agriculture on which either no processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market. It also includes specified processes in the definition like tending, pruning, grading, sorting etc. which may be carried out at the farm or elsewhere as long as they do not alter the essential characteristics. Therefore the above mustard seeds will be covered in agriculture produce and hence exemption will be allowable. However, we would like to decide your case in light of above definition.
  • sir, my client working under NTPC and providing civil construction service,manpower supply service and cargo handling service inside the NTPC plant area.The NTPC service tax in refer to the NDC issued by the local sales tax department.example If NDC isuued on the certain work 65% exempted from VAT then NTPC paid service tax on the 65% of the bill value ,the same like goes on for every kind of taxable service which we provided regularly,and the service tax dept demanded service tax on the diff.value of the bill in each taxable service provinded by us , sir pls clarify me to what to do,PLS ammar biswa mohan

    The decision in a landmark case of BSNL V/S UNION OF INDIA it was held the contracts other than the work contract service and catering services cannot be split up into the service portion and sale of goods. Even the education guide issued by CBEC has also clarified on the same. Thereafter, it says that the dominant nature test is to be applied. If the dominant nature is service then service tax is applicable otherwise not.
  • sir, can we liable to pay GTA on outword freight (from factory to CFS JNPT)which is paid for export the goods to germany Vijay Argade

    As per notification no. 31/2012-ST government has exempted an exporter from the payment of whole of the service tax on the input services utilized for the export of the goods. For this purpose, certain conditions specified in the notification itself along with filling of EXP-1 AND EXP-2 must be fulfilled. Alternatively one can pay the service tax on GTA and can file refund of the same later on. Therefore you have these two alternatives but eventually in both case the service tax on GTA of goods to be exported is exempt. Third option lies is to pay the service tax and claim Cenvat credit on input service, if available under Cenvat Credit Rules, 2004.
  • Our Company is a Manufacture in Hyderabad and our one dealer office in Visakhapatnam,I send goods directly from depot to Customer, can service tax paid on freight outward as cenvat cerdit in factory? Saurabh

    On the analyses of amended definition of “input services” effective from 1.4.2011, it is clear that credit on freight outward is allowed only if the goods are transported to the place of removal e.g. goods removed to take them to godown etc. in your case. You are sending the goods from depot to customer, therefore the same will not fall in the definition of input services and hence credit will not be allowed.
  • Sir, an individual started a tvs two wheeler authorised station. Here, he reconditioning the vehicles and replace if any spares. Now, the department asked to pay service tax even though he has not yet touched 5 lakhs and they issued a notice that there is no threshold limit applied to this because this is a branded service station. Now, I want to know whether the service tax applicable to this individual's two wheeler service station rvperumal

    As per the notification no. 33/2012-ST dt. 20.6.2012 the threshold exemption of ten lakh is generally allowed on the fulfillment of certain conditions which are mentioned in the notification itself. But if the services are providing under a brand name or trade name then such then the notification will not be applicable to it. But you have to see whether you are providing services under a brand name or not. Moreover, the brand name should be of service provider and not of manufacturer of goods. This is clear from the definition of “brand name” given in the notification. You have to see your query on this aspect.
  • Dear Sir, Is it mandatory to give prior intimation ( before starting to send input for process to new job worker) to assistant commissioner of central excise having jurisdiction over the factory of job worker . Please reply . If the reply is in no kindly give reference of rule, sec & example cases. Nawal Gupta

    There are two alternative procedure of job work. One is under Notification number 214/86-CE dated 25.3.1986 and as amended and the second is Rule 4(5)(a) of Cenvat Credit Rules, 2004. As per notification no. 214/86 amended from time to time, the undertaking of duty liability is to be given to Deputy Commissioner of job worker. But no such intimation required under Rule 4(5)(a) ibid.
  • Respected Sir, We had a proprietorship firm recenty we have make a deed to convert into partnershipfirm. now question will the service tax no be changed as we have service tax no.of proprietorship firm. mita mukherjee

    Registration in service tax is mandatory if you are liable for paying service tax, and the amendment is necessary if there is any change in the information supplied in the form ST-1 , such changes must be informed within a 30 days of changes jurisdictional AC/DC. As there is change in your constitution, the PAN number is changed. The service tax registration is PAN based, therefore you will need to get apply for new registration and a fresh registration code will be issued.
  • Sir. we had received tooling cost from customer & we had made these tooling & are using for mfg of final product.Also we have made excise invoice to customer for tooling & paid excise duty one time as per request of customer. Now is it mandatory to amortise these tooling & charge amortisation cost to customer in excise invoice in every dispatch ? Yogesh Pawar

    As you have charged for the tooling and hence the ownership is transferred. But you are using the same tooling for manufacture of our final product then it will be termed as free supply of material by buyer for manufacture of final product. As per valuation Rules, the cost of free supply will be added to the cost of finished goods to arrive correct transaction cost. Since the goods are in capital nature, the amortized value of such tooling is to be added in value of finished goods for payment of excise duty.
  • We are a registered company and receiving services of construction and repair maintenance of building we would like to know that is the RCM applicable on such cases and what should be classification of such services Mohd Zaheer

    Reverse charge is applicable on the works contract services if the service receiver is a company and the service provider is an individual, HUF, proprietor or partnership firm, AOP located in the taxable territory. If the material value is included in such service then it fall under works contract and service tax will be payable under “works contract”.
  • Dear sir I have a query that If we sale/clear our inputs as such on less basic value and pass on excise duty as cenvat credit taken then my query is :- 1.whether there will be any obligation of the excise department/income tax department. Hope for your reply very soon. Thanks Munesh munesh

    As per Rule 3(5) of cenvat credit rules 2004 when inputs on which cenvat credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products or provider of output services, as the case may be, shall pay an amount equal to the credit availed in respect of such inputs and such removal shall be made under the cover of an invoice referred to in Rule 9. Therefore when inputs are removed as such from the factory then it is removed on payment of duty strictly equal to the duty paid when such goods were received in the factory, no matter what is the transaction value. Thus as in your case as the duty element has not been effected thus the same must not be litigated by the department.
  • Sir, we have to pay commission to Indian agents against export sale.On this commission we have to pay service tax.Sir,please clarify that can we claim refund of service tax on commission paid under notification no. 41/2012 of Service Tax dt 29.06.2012.Because in this notification services are not specified. Also clarify that refund will be granted on commission paid on sale executed after 29.06.2012 or any sale executed before 29.06.2012 but refund of commission on that sale filed after 29.06.2012 is also liable for refund. Thanks CA Parveen Khurana PARVEEN KHURANA

    As per the notification no 41/2012 except the services mentioned in the amended definition of input service exemptions by way of refund can be availed by a exporter of goods in relation to the service tax paid on the taxable services used for the export of goods. Input service means: The amended definition of input service excludes the following services from the ambit of input service for the purpose of admissibility of credit: (A) Services specified in the following sub-clauses of clause 105 of Section 65 of Finance Act, 1994 (p)- Services provided by architect (zn)- Services provided by port (zzl)- Services provided by other port, (zzm)- Service provided airport (zzq)- Commercial or industrial construction services, (zzzh)- Construction of complex service and (zzzza)- works contract service In so far as they are used for- (a) Construction of a building or a civil structure or a part thereof; or (b) Laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or (B) The following Services specified in sub-clauses of clause (105) of section 65 of the Finance Act, (d)- General insurance service, (o)- Rent-a-cab service, (zo)-authorised service station and (zzzzj)- Supply of tangible goods in so far as they relate to a motor vehicle except when used for the provision of taxable services for which the credit on motor vehicle is available as capital goods; It specifically excludes services (C) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee. This amendment will come into force from 1.04.2011 Prior to this notification, notification no.52/2011 was effective and this notification exempted some specified services which were mentioned in the notification itself. On close analyses of list, it can be concluded that commission on sale is not specifically mentioned in the notification thus it will not be allowed prior to 29.06.2013.
  • sir, whan goods deleverd by truck owner and truck union in a singal truck . what is service tax libility of a corporation ajay kumar meena

    Goods transport Agency has been defined as “any person who provides service in relation to transport of goods by road and issues consignment note by whatever name called.” Also the exemption available in case of goods transport services is for single consignee up to Rs.750 and for single vehicle up to Rs.1500 is exempt. Therefore in case of goods transported through single truck the exemption available is 1500 if the total of all bilties to a single truck owner does not exceed Rs 1500. However, the truck owner directly provides service and no consignment note is issued due to the reason that there is no agency in between, then the service tax is not payable.
  • i have paid excise duty on purchases Rs 64.00 lakhs and collected Rs 42.00 lakhs on sales whre should i show the balance CENVAT OF rS 22.00 LAKHS IN bALANCE SHEET AND PROFIT AND LOSS ACCOUNT v srinivasa rao

    The balance 22 lakh shows the DEBIT balance on CENVAT credit. As per revised schedule VI the balance of Cenvat credit is shown as CENVAT CREDIT RECEIVABLE (INPUT) A/C or CENVAT CREDIT ON CAPITAL GOODS as the case may be in “other current assets” under the main heading of current assets in assets side of balance sheet.
  • Respected Sir, One of my client is providing construction services for Single Residential Unit on labor contract basis. Whether he will be covered under Service Tax? And if yes under which service he will be covered? Thanks Ramesh Purbia

    The above service has been specifically exempted from service tax vide notification 25/2012-ST i.e. mega exemption notification.
  • Respected Sir, One of my client is providing construction services for Single Residential Unit on labor contract basis. Whether he will be covered under Service Tax? And if yes under which service he will be covered? Thanks Ramesh Purbia

    The above service has been specifically exempted from service tax vide notification 25/2012-ST i.e. mega exemption notification.
  • Sir, In one case service tax was wrongly collected by the provider of service for the period for which service tax was not applicable.on raising the issue with the provider of service, a refund claim was lodged by the provider of service with the department.It has been turned down by the First appellate authority.The order passed is more than a year old. Now my query is can the recipient who also holds service tax registration in a different place can he claim refund ? If so, In whose jurisdictional office (ie servcie provider/service receiver)Refund claim is to be filed by the receipient ? I think that time bar should not be an issue for refund, since it can be claimed under mistake of law under Limitation Act. Thanking you in advance. Ramani 

    Section 83 of the Finance Act 1994 provides that the provisions of sections 11B of the Central Excise Act, 1944 are applicable to Service tax matters. The refund can be claimed under Section 11B of Central Excise Act. The Section 11Bibid says that any person can claim the refund from whom the duty is collected or paid by him. Hence the service recipient can claim the refund. But the time limit of refund is given as one year in Section 11B. But since we have not paid the service tax, the Madras High Court in case of NATRAJ AND VENKAT ASSOCIATES V/S ACST has held that time limit does not apply to the amount which is not “service tax” at all and court can order refund. However, the view prevailing in this issue is that the High Court can grant waiver from time limit but the adjudication and appellate authorities cannot do so.
  • SIr, My question is, if the company/ firm is providing service to foreign sellers by selling their ferrous or non-ferrous scrap in india,then whether service tax would be applicable on it?? i am in dilemma because since the service is provided in india, whether it is export of service although the service receiver is based outside india. or whether it will fall under rule 3 of POPS rules.Please clarify sir??? Ankit Khandelwal

    For a service to be covered under the export of service, Rule 6A of Service tax Rules to be seen. All other conditions are fulfilled in this case but the important condition is that the place of provision of service should be outside India. For deciding place of provision of service, the Place of Provision of Service Rules is to be seen. Rule 3 of impugned rules will be applicable in this case. This rule says that the location of service Receiver is taken as place of provision of service. Since service recipient is located outside India, hence place of provision of service is outside India. Hence, the service will be termed as export of service provided the payment for such service is in convertible foreign currency.
  • Dear Sir We are sponge iron manufacturing unit.Prsently we working under job work under notification no 214/86 .Should we required to show incoming raw material as well consumption related to conversion job in ER-6. Regards kamal Bandyopadhyay

    ER-6 return is to be filed on monthly basis; it contains details of principal inputs and manufacturer. Job worker done under notification 214/86 cannot enter the details of job work done in its ER-6 return, as the same will be shown by the principal manufacturer.
  • Dear Sir We are sponge iron manufacturing unit.Prsently we working under job work under notification no 214/86 .Should we required to show incoming raw material as well consumption related to conversion job in ER-6. Regards kamal Bandyopadhyay

    ER-6 return is to be filed on monthly basis; it contains details of principal inputs and manufacturer. Job worker done under notification 214/86 cannot enter the details of job work done in its ER-6 return, as the same will be shown by the principal manufacturer.
  • Dear Sir We are sponge iron manufacturing unit.Prsently we working under job work under notification no 214/86 .Should we required to show incoming raw material as well consumption related to conversion job in ER-6. Regards kamal Bandyopadhyay

    ER-6 return is to be filed on monthly basis; it contains details of principal inputs and manufacturer. Job worker done under notification 214/86 cannot enter the details of job work done in its ER-6 return, as the same will be shown by the principal manufacturer.
  • Dear Sir We are sponge iron manufacturing unit.Prsently we working under job work under notification no 214/86 .Should we required to show incoming raw material as well consumption related to conversion job in ER-6. Regards kamal Bandyopadhyay

    ER-6 return is to be filed on monthly basis; it contains details of principal inputs and manufacturer. Job worker done under notification 214/86 cannot enter the details of job work done in its ER-6 return, as the same will be shown by the principal manufacturer.
  • as per case law of cadila helth care p. ltd. of gujarat high court. in this connection our range suptd. hase been asking for reverse the service tax credit on foreigh sales commission, after we have reverse the same, the range suptrd. has issued S.C.N.! NOW IT IS POSSIBLE TO ISSUE S.C.N UNDER THIRD PARTY JUDGEMENT. ashok makwana

    The tribunal is continuously following this judgement. Even in a recent judgement, the CESTAT held that the foreign commission agent is just like Indian commission agent and hence the credit is not admissible.
  • If the service tax reverse charge is applicable clinical establishment providing exempted service of health care , if the clinical establishment falls in definition of business entity or body incorporate or one of the 7 specified agencies for payment of freight as in case reverse charge these recipients have been made liable for reverse charge for some of the services even though thier output service i e health care services are not subject service tax s s gaur

    The fact that your output service is exempted cannot change your liability in case of input services. These are two separate transactions. The service tax has to be judged for each transaction.
  • In case of centralized registration how does one fill service tax return? whether one is required to put details in consolidation or we are still required to show details separately for different branches included in centralized registration? Please provide suitable guidance. Sweta Kalantri

    Centralised registration is available in case where there is centralised billing or centralised accounting system exists. Therefore in such case all the revenue figures will be consolidated and no branch wise classification will arise. Also the recent ST-3 return format does not contain any branch wise classifications rather the classification is made on services wise.
  • one of my client is a partnership firm,can firm liable to pay service tax under reverse charge machanism on purchase of sand,kapchi ect. vijaykumar

    The reverse charge is not applicable on purchase of sand but it it applicable on transportation of sand by road. You have to judge whether the same is purchase of sand or transportation of sand. If it is transportation then the reverse charge is applicable on partnership concern.
  • hello sir, Please let me know that if i fall under the scope of reverse charge tax under GTA, Car rent and Professional Advocate fees but i am neither an output service porvider nor manufacturing concern, am i liable to register for service tax and pay those service tax under reverse charge mechanism....Kindly revert with your advice.. Thanks ankit mehta

    In case of goods transport agency service tax is payable under reverse charge mechanism is applicable. If you fall under the specified seven category as mentioned in the provisio to rule 2(d)(B) of service tax rules then you will be liable to pay the service tax under RCM and thus a person liable to pay service tax is mandatory to get himself registered.
  • SIR, WE ARE A MANUFACTURER TAKING BENEFIT OF SSI EXEMPTION AND THIS IS OUR FIRST YEAR TO START BUSINESS. WE ARE ALSO DOING JOB WORK OF SOME CLIENTS ALONG WITH MANUFACTURING. MY QUERIES ARE : 1. WHETHER TWO SEPARATE INVOICE MADE BY USE FOR MANUFACTURING AND JOB WORKING? OR SAME SEQUENCE MAINTAINED. 2. UPTO 150 LAKHS SALES WE DONT PAY EXCISE DUTY. WE ARE PAYING VAT ONLY. SO WHAT ABOUT JOB WORK CHARGES? HOW WE CHARGE JOB WORK CHARGES? 3. AFTER 150 LAKHS SALES WHEN WE START PAYING EXCISE DUTY AND SUPPOSE WE MAKE JOB WORK TO NON EXCISABLE UNIT WHETHER E.C. CHARGED? IF WE MADE JOB WORK TO REGISTER EXCISE DEALER DOES IT MAKE ANY CHANGE? CA. BHAVESHKUMAR

    Since you are not registered with the department as operating below Rs. 150 Lakhs then the Rule 11 of Central Excise Rules does not apply on you. This Rule requires that only one invoice book is to be kept. Secondly if the principal giving job work under Rule 4(5)(a) of CCR, 2004 or under notification 214/86 or under notification 83/94 then there is no need to include these job charges for computing aggregate value of Rs. 150 Lakhs. But if non excisable unit is giving job to you and the process undertaken by you amounts to manufacture then the same is to be included into your aggregate value. The sale value of principal will be included in your aggregate value (not only job charges) as per Rule 10A of Vaulation Rules. As said above, the job work done for non excisable unit then the excise duty is to be paid. Similar is the case of job work of excise registered dealer.
  • sir,we are broker,selling readymade garments is we require any service tax to pay getting comission about 1.5 lakh annually rajendra

    yes the commission is taxable @ 12.36% but small service provider exemption of Rs ten lakh is available.
  • Is it required to charge service tax on ground rent received by real estate company ganeshbabu

    yes service tax @ 12.36 % is payable on the same.
  • Sir, VCES rule require cash payment towards service tax arrears. Is this cash payment available as cenvat credit in case the tax relate to input services? Your views, sir...regards krsrajan

    Under the VCES scheme the service tax has to be paid in cash only and service tax credit cannot be utilised. Although the credit on inputs services pertaining to the period for which you are paying service tax can be availed, but it can be utilised for payment of service tax in next period. Also, the credit of such payment is available if the same is allowed as per Cenvat Credit Rules. These issues are also clarified by CBEC in recent circular 170/5/2013 dated August 8, 2013.
  • Sir, VCES rules require payment of service tax arrears by cash only. Is this cash payment available as cenvat credit in case the service tax dues paid relate to input services? Your view sir krsrajan

    Under the VCES scheme the service tax has to be paid in cash only and service tax credit cannot be utilised. Although the credit on inputs services pertaining to the period for which you are paying service tax can be availed, but it can be utilised for payment of service tax in next period. Also, the credit of such payment is available if the same is allowed as per Cenvat Credit Rules. These issues are also clarified by CBEC in recent circular 170/5/2013 dated August 8, 2013.
  • We are the manufacturer, we are paying service tax on transport as a recipient. My query is whether we can pay this liability thru cenvat input? CENVAT AGAINST SERVICE TAX ON GTA

    It has been clearly mentioned in explanation to Rule 3(4) of Cenvat credit Rules that cenvat credit cannot be utilised for the payment of service tax where service recipient is liable for payment of service tax. This explanation has been inserted by Notification 28/2012-C.E.(N.T.) dated 1.3.2012.
  • Dear sir, If services from Orissa University of Agriculture and Technology, Bhubaneswar- 751003 on Testing of HPBI 25 SC against BPH AND WBPH of Paddy - Is reverse charge is applicable on Company in the category of support services by govt. or not. I also have a doubt if reverse charge is applicable , then, in negative list of service tax under section 66D (d) (i) Every testing relating to agriculture and agricultural produce is exempted. Our company deals in pesticides, insectides, herbicides and chemicals. Thanks and Regards. DARPAN AGGARWAL

    As per entry no. D of negative list services relating to agriculture by way of — (I) Agricultural operations directly related to production of any agricultural produce including cultivation, Harvesting, threshing, plant protection or seed testing. Therefore, all services like laboratory testing services, animal feed testing, testing of plants or animals, soil testing etc. in relation to agriculture or agriculture produce which are essential to determine the quality of agriculture or agricultural produce has now kept outside the purview of service tax. Pesticides can be classified under the plant protection therefore well be exempted and therefore the service will be exempted. If the service tax is exempted then there is no question of reverse charge.
  • Dear sir, If services from Orissa University of Agriculture and Technology, Bhubaneswar- 751003 on Testing of HPBI 25 SC against BPH AND WBPH of Paddy - Is reverse charge is applicable on Company in the category of support services by govt. or not. I also have a doubt if reverse charge is applicable , then, in negative list of service tax under section 66D (d) (i) Every testing relating to agriculture and agricultural produce is exempted. Our company deals in pesticides, insectides, herbicides and chemicals. Thanks and Regards. DARPAN AGGARWAL

    As per entry no. D of negative list services relating to agriculture by way of — (I) Agricultural operations directly related to production of any agricultural produce including cultivation, Harvesting, threshing, plant protection or seed testing. Therefore, all services like laboratory testing services, animal feed testing, testing of plants or animals, soil testing etc. in relation to agriculture or agriculture produce which are essential to determine the quality of agriculture or agricultural produce has now kept outside the purview of service tax. Pesticides can be classified under the plant protection therefore well be exempted and therefore the service will be exempted. If the service tax is exempted then there is no question of reverse charge.
  • AS PER RULE 4(7) OF CENVAT CREDIT, ONE CAN TAKE CREDIT OF INPUT SERVICE AT THE TIME OF BILL RAISE, BUT PAYMENT HAVE TO BE MADE WITHIN 3 MONTHS. MY QUERY IS ( BY EXAMPLE) THERE ARE 3 CO'S A, B, C B IS PROVIDING SERVICE TO A AND FOR THAT TAKING HELP OF C. C WILL GET CERTAIN PERCENTAGE ON AMOUNT RECEIVED BY B, BUT C WILL GET MONEY ONLY AFTER AMOUNT RECEIVED BY B. IN THIS IF B TAKES CENVAT CREDIT ON INPUT SERVICE OF C AT THE TIME OF BILLING AND B IT SELF RECEIVE PAYMENT AFTER 3 MONTHS BILL DATE THEN WHAT WOULD BE THE CONSEQUENCES FOR B IN RESPECT OF CENVAT CREDIT??? TandS

    In respect of Cenvat credit of service tax, if payment is not made to service provider within 3 months, credit is to be reversed. As in your example b has taken the credit on the service received from c, but has not made the payment to him within 3 months. Thus the same has to be reversed.
  • Colour and polishing work on Packing Spools and Bobbins provided by individual whether falls under Reverse Charge mechanism?What is the liabilites of service receiver as a manufacturing company?? Pradeep Rana

    Currently reverse charge mechanism in service tax is being applicable on certain specified services and the above service is not one of them. Thus reverse charge would not be applicable on this service and as a service receiver the liability under reverse charge would not arise. Even the works contract service only applies to construction, repair and maintenance and installation and commissioning services only.
  • Sir/Ma'am, Whether auditor has to qualify the audit report if there is income disclosed u/s 115BBE for which there is nothing available about source or nature? Rakesh Porwal

    We do not deal in Direct taxes. Please ask queries relating to the Excise, service tax or customs.
  • Sir, Can we taken full credit on material which is directly supplied to jobworker ? shayan

    Since excise duty is on ‘manufacture’, duty liability arises only when the goods are manufactured during job work. The test as to whether the process amounts to manufacture or not would be determined by analyzing whether a new article having a distinctive name, character or use emerges or not from the said process in accordance with the decision of the Honorable Supreme Court in Delhi Cloth and General Mills Co. Ltd Vs UOI. Where the goods are manufactured during job work, the job worker would be liable to pay duty of excise on the goods so manufactured unless the principal manufacturer who has supplied him the goods for job work, furnishes a declaration under Notification 214/86 dated 25.03.1986 which exempts goods manufactured by a job worker from duty of excise provided the said goods after job work are returned to the principal or cleared for export or cleared for home consumption on payment of duty of excise. Where the goods are returned to the principal, the principal should either clear it on payment of duty or use it in his manufacturing process which should result in a dutiable product being manufactured. The declaration as stated above should be given to the Assistant Commissioner of Central Excise who has jurisdiction over the factory of the job worker. Thus if the material send by you is received back after job work process and then cleared on the removal of dutiable product then the credit on the duty paid on inputs sent to job worker can be taken.
  • whether renting of hotel building is liable to service tax as it is excluded from the definition of immovable property ca yogesh k sahrma

    It seems from the query that the complete hotel is being given by you on rent. Earlier definition of “Renting of immovable property” excluded the same. Hence service tax was not payable. But after 1.7.2012, no such provision exists in negative list or mega exemption notification. Hence service tax is applicable on the same.
  • One of my client received goods by truck. He pays service tax on the amount of goods received. What will be his liability in case of service tax?? Plz suggest URGENT.. gaurav

    Reverse charge is applicable on transport of goods by road. Here the liability of payment of service tax falls on the person who is liable to pay freight. However, the seven categories of person are liable to service tax under reverse charge as per provision of Rule 2(1)(d)(v) of Service tax Rules. If you do not fall under these categories then the service tax will fall back on transporter. This is subject to exemptions available under GTA services.
  • Sir, In our factory premises one new project is coming up for which we have issued various work order e.g for construction building, consultancy as applicable to a business set up.Please advice what are the service eleigible for cenvat credit after the notification issued on 01.04.2011. CMA Ramesh kumar gochhayat

    The definition of “input service” has now been amended, Rule 2(l) of Cenvat Credit Rules (as effective from 1-4-2011), defines ‘input service’ (relevant for the query) as follows – “input service” means any service, - (i) used by a provider of taxable service for providing an output service; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal, and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation up to the place of removal; but excludes services,- (A) Specified in sub-clauses (p), (zn), (zzl), (zzm), (zzq), (zzzh) and (zzzza) of clause (105) of section 65 of the Finance Act (hereinafter referred as specified services), in so far as they are used for- (a) Construction of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or Therefore it is clear from above definition that a service covered under works contract relates to the renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises then only the input credit is available. However, the exclusion clause excludes the construction of a building or civil structure. There is dispute in it. The department tries to disallow the credit on construction though it relates to repair or renovation. There is no clarity on the same. But in the instant case, new project is coming up then the credit will not be allowed on construction. It is not clear in query that what type of consultancy is being provided by you?
  • Sir, Pls guide us the procedures to be adopted after the order passed by Commissioner in relation to Clandestine removal of goods (DGCEI). Also clarify who will pay the penalty amount imposed on senior employes of the company who are still with the company and those who have left the company? RAJIV JAIN

    The appeal before the CESTAT can be filed against the order of Commissioner. Normally, the person is liable to pay the penalty on which the same is imposed. The department will recover the same from him. Since he was employee of company, the company can pay on his behalf.
  • Dear Members, One of my client is a dealer of leading motorcycle company. In his premises, he is providing some space to Finance Company's agents. When customer opt for this finance company for finance, Finance Company gives commission to dealer in lieu of space provided. Whether dealer is required to charge Service Tax for providing space and if yes, in which service he would be covered? Thanks. Ramesh Purbia

    The above matter is under dispute and litigation. The department normally initiates proceedings under the head of Business Auxiliary services treating the amount received as a commission. There are many cases decided either in favour or against. In the case of TRIBHUVAN MOTORS LTD. Versus COMMR. OF SERVICE TAX, MANGALORE [2010 (17) S.T.R. 281 (Tri. - Bang.)] it was held that the portion of premises let out to the finance company cannot be treated as business auxiliary services.
  • If We are not Service Provider but consume service from other Registrar delar Can we Claim for Service Tax Pritesh

    As per Cenvat Credit rules 2004, Cenvat credit is available either to a manufacturer of final products or a provider of taxable service. As you are neither service provider, nor manufacturer, credit cannot be availed by you.
  • Sir, We have paid facebook ads through credit card for our client, and then billed to client, so we have to be payable to service tax under (import of service) and avail cenvat credit that amount Paramasivam

    The above mentioned activity of paying for display of online advertisements on the website of facebook falls under online information and database access or retrieval services which is covered by Rule 9 of Place of Provision Rules, 2012. As per Rule 9 Place of Provision of Service Rules, 2012, the place of provision of service in this case shall be the location of service provider. As the facebook is a company that is registered outside India, its location is in non-taxable territory. Hence, the transaction would not be leviable to service tax under the reverse charge mechanism. {Query replied by: Ranu Dhoot}
  • If sponsership services are provided by a company to a firm...then will the firm receiving such services liable to pay ST u/rev chg mechanism OR the co. providing the services will be liable to pay ST...Pls clarify...thanks Saurabh Chokhra

    Sponsorship services falls under reverse charge mechanism. In this case service provider can be any person and the service receiver is anybody corporate or partnership firm located in the taxable territory. The entire tax is payable by service receiver. If the service receiver is not a body corporate or partnership firm or they are not located in the taxable territory, the service provider i.e. the person receiving the sponsorship money will be liable to pay service tax.
  • can i know facilities like town,creches, education , rural community development comes under input service as these services are being provided to th employees for motivating them to work properly which help the production indirectly.SO DOES IT COMES UNDER INPUT SERVICES JYOTI KUMARI

    The facilities stated by you do not directly fall in the definition of input service. Also, the existing definition of input service specifically excludes the expenditure of personal nature incurred for the employees. Due to this, the departmental officers continuously dispute the availment of credit on these services. The Supreme Court has decided in the case of Maruti Suzuki [2009 (240) ELT 641 SC] that unless the nexus is established between the services rendered and the business carried on by the tax payer, CENVAT Credit is not admissible. In view of definition of input service and the decision of Apex Court, the issue is highly prone to litigation and in our view credit should not be availed unless the amount involved is extremely high and we intend to take a stake.
  • we take work on job work basis where all inputs are given by our clients. our unit is also excisable unit. so who is liable excise duty. and we have liable service tax or not. our product also trademark and patent bhavin kansagra

    If the work undertaken on behalf of the client amounts to manufacture in terms of section 2(f) of the Central Excise Act, 1944 and the goods are received under a cover of proper job challan, no excise duty is payable by your firm. If the goods are not received by us under a cover of challan and the process amounts to manufacture; then the liability to pay the excise duty lies on us as a job worker. If the process carried on by us does not amounts to manufacture, the service tax is payable by us unless it is otherwise exempted under service tax law.
  • We are in the business of power generation thru wind mills.For installation of wind mills at remote / forest location we are buying land and subsequently we build road network to connect these wind mills. Road are most critical requirement as these helps in the movement of men/material/vehicles during installation and also for maintenance. For construction of these Roads we use services of civil contractors. For pure labour work involved in Road construction we issue work order with 12.36% of service tax impact and for the material to be used in Road we issue PO on the contractor with applicable VAT. Please advise 1) whether this treatment is in order or this may be treated as works contract under service tax which may have different treatment all together from service tax point of view . 2) If the service provider is non company what will be impact on us if this is considered as works contract. 3) If this Road contract job is considered as works contract , should we enter into work contract , with both labour and supply cost component. Kindly revert with your advise. NILESH BHANDARI

    Pure Labour Contracts do not fall in the definition of works contract for the purpose of service tax. To fall in the definition of works contract it is necessary that there should be transfer of property in goods involved in the execution of such contract which is leviable to tax as sale of goods. Pure labour contracts are therefore not works contracts. Since such contracts are not works contract, the reverse charge mechanism is also not applicable and the entire service tax is payable by the service provider only. However, even if a small part of material is supplied by the contractor alongwith services, it will come under the definition of works contract and accordingly reverse charge will be applicable if the service provider is an individual/HUF/Partnership firm/AOP. Also, kindly have a note that the services in relation to construction of roads are exempted under entry no. 13 of notification no. 25/2012-ST dated 20.6.2012; w.e.f. 1.7.2012 if the roads are being constructed for use of general public. Thus, if we can prove that the roads in our case are being constructed for use by general public, we can claim total exemption from service tax.
  • We are in the business of power generation thru wind mills.For installation of wind mills at remote / forest location we are buying land and subsequently we build road network to connect these wind mills. Road are most critical requirement as these helps in the movement of men/material/vehicles during installation and also for maintenance. For construction of these Roads we use services of civil contractors. For pure labour work involved in Road construction we issue work order with 12.36% of service tax impact and for the material to be used in Road we issue PO on the contractor with applicable VAT. Please advise 1) whether this treatment is in order or this may be treated as works contract under service tax which may have different treatment all together from service tax point of view . 2) If the service provider is non company what will be impact on us if this is considered as works contract. 3) If this Road contract job is considered as works contract , should we enter into work contract , with both labour and supply cost component. Kindly revert with your advise. nilesh

    Pure Labour Contracts do not fall in the definition of works contract for the purpose of service tax. To fall in the definition of works contract it is necessary that there should be transfer of property in goods involved in the execution of such contract which is leviable to tax as sale of goods. Pure labour contracts are therefore not works contracts. Since such contracts are not works contract, the reverse charge mechanism is also not applicable and the entire service tax is payable by the service provider only. However, even if a small part of material is supplied by the contractor alongwith services, it will come under the definition of works contract and accordingly reverse charge will be applicable if the service provider is an individual/HUF/Partnership firm/AOP. Also, kindly have a note that the services in relation to construction of roads are exempted under entry no. 13 of notification no. 25/2012-ST dated 20.6.2012; w.e.f. 1.7.2012 if the roads are being constructed for use of general public. Thus, if we can prove that the roads in our case are being constructed for use by general public, we can claim total exemption from service tax.
  • We are in the business of power generation thru wind mills.For installation of wind mills at remote / forest location we are buying land and subsequently we build road network to connect these wind mills. Road are most critical requirement as these helps in the movement of men/material/vehicles during installation and also for maintenance. For construction of these Roads we use services of civil contractors. For pure labour work involved in Road construction we issue work order with 12.36% of service tax impact and for the material to be used in Road we issue PO on the contractor with applicable VAT. Please advise 1) whether this treatment is in order or this may be treated as works contract under service tax which may have different treatment all together from service tax point of view . 2) If the service provider is non company what will be impact on us if this is considered as works contract. 3) If this Road contract job is considered as works contract , should we enter into work contract , with both labour and supply cost component. Kindly revert with your advise. nilesh

    Pure Labour Contracts do not fall in the definition of works contract for the purpose of service tax. To fall in the definition of works contract it is necessary that there should be transfer of property in goods involved in the execution of such contract which is leviable to tax as sale of goods. Pure labour contracts are therefore not works contracts. Since such contracts are not works contract, the reverse charge mechanism is also not applicable and the entire service tax is payable by the service provider only. However, even if a small part of material is supplied by the contractor alongwith services, it will come under the definition of works contract and accordingly reverse charge will be applicable if the service provider is an individual/HUF/Partnership firm/AOP. Also, kindly have a note that the services in relation to construction of roads are exempted under entry no. 13 of notification no. 25/2012-ST dated 20.6.2012; w.e.f. 1.7.2012 if the roads are being constructed for use of general public. Thus, if we can prove that the roads in our case are being constructed for use by general public, we can claim total exemption from service tax.
  • Is it require to collect c-form for nil tax item sale to outside State? Please note that item not exempted but nil rate. Dharmesh

    We do not deal in VAT / Sales Tax. Kindly confirm the same from any VAT/ sales tax consultant.
  • It is a private limited co. is the approval or CentralGovt. needed to pay a salary of Rs.1.50 lakhs pm with perks to its Executive Director. he is not a relative of any director. if he is a wholetime director, i opine that no approval is needed. i need ur guidance mrs. rama s rao

    We do not deal in Companies Act 1956, therefore we cannot comment on the same.
  • Can a Company claim credit for the Vat paid on purchase of Computers & its maintenance expenses such as laptop battery in Maharashtra. Vinay

    We do not deal in VAT / Sales Tax. Kindly confirm the same from any VAT/ sales tax consultant.
  • Sir, we are manufacture of Material Handling Equipment, we will design as per client requirement. Some of the parts of machinery we will manufacture in our factory and remaining we will directly outsource/buy as per our desing specification. All the parts we will bring to our factory, put the markings/labeling and despatch from our factory to client site. We will assemble all the parts at site and run the equipment. We have doubt we are bying directly from supplier with our specification/design and with their materia, whether it is acceptable or not as per law. Ram Ramesh

    Your query is not clear thus we assume that you are asking about the levy of excise duty on goods directly purchased from buyer, assembled and then removed to the client site. The Section 2(f) of the Act defines the term "manufacture" in an inclusive manner so as to include any process: (i) Incidental or ancillary to the completion of a manufactured product; and (ii) Which is specified in relation to any goods in the Section or Chapter notes of the Schedule to the Central Excise Tariff Act, 1985 as amounting to manufacture; and (iii) Which in relation to goods specified in the Third Schedule to the Central Excise Tariff Act, 1985, involves packing or repacking of such goods in a unit, container or labelling or re-labelling of containers or declaration or alteration of retail sale price or any other treatment to render the product marketable to consumer. (The clauses (ii) and (iii) above are termed as ‘deemed manufacture’.) The aforesaid definition gives a wider content to the expression "manufacture" as several processes which would not ordinarily be understood as amounting to manufacture are specifically included therein. However, the most commonly used test for ascertaining "manufacture" for the purpose of attracting Central Excise duty has taken place was evolved by the Supreme Court in the case of Delhi Cloth and General Mills 1977 (1) ELT (J 199). In terms of this decision, the activity or process in order to amount to "manufacture" must lead to emergence of a new commercial product, different from the one with which the process started. In other words, it must be an article with different name, character or use. Thus, a process which simply changes the form or size of the same article or substance would not ordinarily amount to manufacture and no excise duty would be payable unless it is deemed to be manufacture as follows: 1. In a particular case by a section or Chapter note of the Tariff; or 2. In relation to goods, which are specified under MRP based assessment under section 4A, packing or repacking of such goods, labelling or re-labelling of containers including declaration or alteration of retail sales price shall amount to manufacture. Thus Excise duty is leviable if the manufacturing process is carried out. It is to be checked at your end whether the process undertaken by you amounts to manufacture or not?
  • Please clarify that services provided by hospitals to the patients whose claims satisfied by insurance companies(or any other business entities) is taxable under service tax. ganesh

    The health care services provided by the hospitals are exempted by virtue of entry no. 2 of the notification no. 25/2012-ST dated 20.6.2012. This notification simply exempts the health care services (cosmetic surgery or plastic surgery or hair transplantation is not included) on the grounds that these are provided by clinical establishments. This notification does not put any such condition regarding settlement of claims by insurance companies or any other business entities. Thus, the exemption under this notification will be unaffected by the fact that the patients are being reimbursed by the insurance companies or any other business entities.
  • DEAR SIR, ONE OF OUR CLIENT IS ENGAGED IN THE BUSINESS OF PROVIDING PURE LABOUR SERVICES TO PUNJAB STATE POWER CORPORATION LTD IN WHICH THE MATERIAL IS PROVIDED BY PSPCL AND THEY ARE DRAWING LINES SHHIFTING LINES ON BEHALF OF PSPCL WHETHER THE CONTRACTOR IS LIABLE TO PAY SERVICE TAX AND UNDER WHAT HEAD WE SHALL GET OURSELVES REGISTERED AND WHAT WOULD BE THE TAX LIABLITY IF THE TOTAL CONTRACT IS FOR rS. 1 CR AMAN SOOD

    Pure Labour Contracts do not fall in the definition of works contract for the purpose of service tax. To fall in the definition of works contract it is necessary that there should be transfer of property in goods involved in the execution of such contract which is leviable to tax as sale of goods. Pure labour contracts are therefore not works contracts; as such, the service tax would be payable on the total value of services (i.e. on Rs. 1 cr.) at the rate of 12.36%. The registration for drawing lines or shifting lines is required to be taken in the head of Erection, Commissioning & Installation services (clause zzd).
  • good evening sir, can you tell me about notification no. 214/86 of excise . who will submit this letter under this notification 214/86 and why. please reply rajiv

    Excisable goods can be sent on job work without payment of duty under notification no. 214/86-CE. For the purpose of this notification, the goods are to be sent under a cover of challan and the job worker can also send back the goods after processing without payment of duty. As given in this notification, the supplier of goods for job work is required to give an undertaking to the jurisdictional Assistant/Deputy Commissioner of Central Excise of the job worker. The letter moved by the supplier should include the undertaking that the supplier will use the goods received after job work in manufacture of excisable goods which will be cleared in accordance with the provisions of this notification.
  • good evening sir, can you tell me about notification no. 214/86 of excise . who will submit this letter under this notification 214/86 and why. please reply rajiv

    Excisable goods can be sent on job work without payment of duty under notification no. 214/86-CE. For the purpose of this notification, the goods are to be sent under a cover of challan and the job worker can also send back the goods after processing without payment of duty. As given in this notification, the supplier of goods for job work is required to give an undertaking to the jurisdictional Assistant/Deputy Commissioner of Central Excise of the job worker. The letter moved by the supplier should include the undertaking that the supplier will use the goods received after job work in manufacture of excisable goods which will be cleared in accordance with the provisions of this notification.
  • Whether Customs SAD 4% refund is admissible if the local sales tax is exempted / goods imported are covered under exempted list of sales tax Satya Narayan Panda

    No, refund of 4% SAD is not admissible if no VAT / Sales tax is payable on the imported goods. The basic condition for allowing the SAD refund under Notification No. 102/2007-Customs dated 14.9.2007 is that the imported goods are also subject to levy of VAT/Sales tax.
  • whether service tax will be charged on bill raised on 100% EOU. mukesh

    Yes, service tax has to be charged on the bill raised on 100% EOU as no specific exemption has been given in respect of services provided to EOUs. However, 100% EOU can file refund of service tax so paid under rule 5 of the Cenvat Credit Rules, 2004.
  • Sir , if we dispatch goods under Notification 33/CE dt.09.07.2012( Dispatch under SHIS License )do we have to pay excise duty @ 6 % under Rule 6 ? MEHUL SHAH

    This notification allows the holder to get cleared the capital goods without cash payment of duty. However, the duty involved in the capital goods is debited at the back of the scrip. Thus, the capital goods so cleared are not actually exempted, but the duty payable on the same is not paid in cash and it is debited in the scrip. As such, it cannot be termed as exempted clearances. Also, this is similar to removal of goods against Annexure-1 or CT-2. Thus, no reversal is required under rule 6 of Cenvat Credit Rules, 2004.
  • Sir , if we dispatch goods under Notification 33/CE dt.09.07.2012( Dispatch under SHIS License )do we have to pay excise duty @ 6 % under Rule 6 ? MEHUL SHAH

    Already answered.
  • Sir , if we dispatch goods under Notification 33/CE dt.09.07.2012( Dispatch under SHIS License )do we have to pay excise duty @ 6 % under Rule 6 ? MEHUL SHAH

    Already answered.
  • Being a builder we have taken services from advocates whose turnover is above exemption limit.Still there are no activity as such in company as we are still in process of procuring land. Whether we are liable to pay service tax under reverse charge mechanism for taking legal and professional fees from advocates even if we havnt earned any income yet? Please reply Pinky Singhvi

    Reverse charge is applicable in case of legal consultancy service if the service is provided by an Advocate or by a firm of advocates. However notification no. 25/2012-ST dated 20.6.2012 [serial no. 6(b)(iii)] exempts services provided by an individual as an advocate or a partnership firm of advocates to a business entity with a turnover upto Rs ten lakhs in the preceding financial year. Since there was no income in the company in the preceding financial year, the legal services availed by it will get exemption under this entry. Since the service is exempted, there is no question of applicability of Reverse charge mechanism.
  • Sir, We are registered as manufacturer under central excise. After clearing the goods (raw material)from custom area we had directly sold it to third party without bringing it into our factory premises i.e. sale as such. So we have drawn only tax invoice and not excise invoice. Sir, my query is whether the Cenvat Credit of Bill of entry cleared by us be taken by the purchaser if we endorse the same. RAJIV JAIN

    Cenvat credit can be availed on the basis of an invoice/bill of entry as per rule 11 of the Central Excise Rules, 2002. However, the invoice/bill of entry should have certain details as given in this rule. One such detail is that the name and address of the consignee should be mentioned on the invoice. In our case, the name and address of consignee (i.e. actual user) is not mentioned in the invoice. Therefore, department may dispute on availment of credit by the buyer. Further, there is no such provision in Central Excise Act or rules for endorsement. However, there are a no. of cases wherein credit has been allowed by Tribunal on the basis of endorsement and to the satisfaction of the condition that the material under that invoice/bill of entry has been used by the endorsee in or in relation to manufacture of final product.
  • I am going to purchase an apartment house. I required the following clarifications. 1.Service tax is applicable whether only at the time of Registration or at the time of hand over the apartment? 2) Car Parking is inclusive of service tax? 3)I have made payments from Sep 2010. Just I want to know the rate applicable at the time of payment or reciept time of flats? 3)Is service tax attracts on Car parking area? rvperumal

    1) The payment of service tax depends on the nature of the sale i.e. if you are buying a apartment under construction and payment is being made in installments then ST is applicable. But the completed apartment is being purchased (after issuance of completion certificate by competent authority) then no service tax is applicable. Supposing there is ST liability on you then as per the provisions of service tax, w.e.f. April 1, 2011 service tax is liable to be paid on accrual basis or receipt basis whichever is earlier. But the construction of complete complex takes a long time then it will fall under continuous service. The point of taxation will be every point when the payment is due as per agreement with the builder. Hence, the service tax will be payable on each such time. 2) Certain services were listed in the negative list as well as in the mega exemption notification no. 25/2012-ST dated 20.6.2012 which were exempted. One such service listed in the mega exemption notification was “Services by way of motor vehicle parking to general public excluding leasing of space to an entity for providing such parking facility” was also exempted. However from this budget, this exemption has also been removed. Hence the Car parking will be chargeable to tax. 3) We are unable to comment on the third query as it looks a bit unclear on reading and the question raised is not clear.
  • Sir,We are manufacturers of machineries.We provide warranty for our machineries free of cost.Also undertake comprehensive AMC contracts. We pay vat under presemtive basis @ 75% of the contract value. We are not able to quantify the value of the material at the time of entering/receiving AMC charges.on what amount we should pay service tax assuming amc value is RS 6000/- per year. Pl clarify Ramani

    AMC contracts fall under the category of works contract service. It is presumed that there is transfer of right in property coupled with labor charges. As far as the valuation is concerned, the value of works contracts is gross value charged under contract as deducted by the value of material, if any. In your case where the quantum of material can’t be determined, you can avail the benefit of various abatements provided under this service. 70% abatement is available on repair maintenance of goods i.e. movable property. As you are providing AMC services of plant and machinery you shall be eligible for this abatement rate. Assuming the value of AMC is Rs 6000/- the service tax shall be: 6000*70*12.36% = 519/-. It is worth noting that works contract service comes under reverse charge. Thus if the service receiver is a business entity registered as a body corporate and you are person other than body corporate then you have to pay service tax @50% i.e. Rs 260/- only.
  • D/Sir,One of our client is paying service tax 12.36% from July 2012 on RENTING OF IMMOVABLE PROPERTY SERVICE because he is crossed the exemp.limit Rs.10/-Lac. My question is : Can assesse claim any abatement against his service tax (i.e.12.36%). Kindly give your valuable advise ... Thanks & Regrads, Kalpana Singh kalpana singh

    No, there is no such abatement available on provision of service of renting of immovable property.
  • In an Manufacture Concern assessee has not take Excise Import Licence for Importing R/M Now They are selling these material as finished product & charged & not passed Excise duty in past sales ...So please suggest me proceeding for taking license. Vishvas Mistri

    There is no such license called Excise Import license. Although there is a license called Import Export License which is to be obtained by importers/exporters of goods. The procedure for the same is as follows: An application for grant of IEC number shall be made by the Registered/Head Office of the applicant and apply to the nearest Regional Authority of Directorate General Foreign Trade, the Registered office in case of company and Head office in case of others, falls in the ‘Aayaat Niryaat Form - ANF2A’ and shall be accompanied by documents prescribed therein. In case of STPI/ EHTP/ BTP units, the Regional Offices of the DGFT having jurisdiction over the district in which the Registered/ Head Office of the STPI unit is located shall issue or amend the IECs. Only one IEC would be issued against a single PAN number. Any proprietor can have only one IEC number and in case there are more than one IECs allotted to a proprietor, the same may be surrendered to the Regional Office for cancellation. Rest of your query is not clear. Hence, we request you to submit your query in simple words so that we can answer the same.
  • Sir,If a company or individual taking contract for event or film shooting or cultural event and in that case if he is paid by service receiver the amount including his reimbursement of expense, then for assessing service tax what amount would be considered ? Gross or only those part which he received as his remunaration MEHUL SHAH

    The Service Tax valuation rules states that reimbursement of expenses (often termed as out of pocket expenses) are charges for taxable services and are includible. However as per rule 5(2) of Service Tax (determination of value) Rules, 2006, expenditure or cost incurred by service provider is not includible only if he is acting as a pure agent and all the following conditions are satisfied:  The service provider acts as a pure agent of the recipient of service when he makes payment to third party for the goods or services procured;  The recipient of service receives and uses the goods or services so procured by the service provider in his capacity as pure agent of the recipient of service;  The recipient of service is liable to make payment to the third party;  The recipient of service authorises the service provider to make payment on his behalf;  The recipient of service knows that the goods and services for which payment has been made by the service provider shall be provided by the third party;  The payment made by the service provider on behalf of the recipient of service has been separately indicated in the invoice issued by the service provider to the recipient of service;  The service provider recovers from the recipient of service only such amount as has been paid by him to the third party; and the goods or services procured by the service provider from the third party as a pure agent of the recipient of service are in addition to the services he provides on his own account.
  • Want to pending list of duty drawback EGM/STUFF/STUFF ALLOW ACT. satishrai

    We are unable to comment on the same as the query is not clear. We request you to kindly post your query in simple but clear words.
  • In case if annexure 19 is not filed on on some month i.e. Sept, Jan & Aug (NIL return) how much late filling fees to be paid or what penalty can depart Rekha S Ghadage

    There no provision regarding late fees and penalty for late filling of annexure 19
  • Sir ji. Pl. clarify whether CENVAT is available to corporate assessee for WCS where service provided by non corporate(50%) to corporate visu iyer

    The credit of service tax paid on works contract service is available to corporate assessees on the basis of invoice of non corporate assessee wherein he has charges service tax @ 50%. The rest of service tax paid by corporate assessee himself is also available on the basis of challan. This is allowed subject to definition of input service given under 2(l) of Cenvat credit Rules. The works contract service mainly covers construction, repair and maintenance and installation and commissioning services. The credit on construction of building or civil structure is clearly excluded from the definition. Likewise, the repair and maintenance of vehicle is also excluded. Since the type of service is not given in the query, you have to judge at your own.
  • MY COMPANY'S TURNOVER IS RS 10 LAKH IN FY 2010-11 SO CAN LIABLE TO PAY EXCISE DUTY? Vishal

    As per Exemption Notification No. 8/2003-CE Dt. 01.03.2003, if the turnover in the preceeding financial year does not exceeds the limit of Rs. 400 Lakhs, then there is no liability to pay excise duty upto the limit of 150 lakhs in the current year. Thus it is clear that your turn over being less than the statutory limit, you are not liable to pay excise duty as of now. This is subject to condition that your product is covered under the aforesaid notification and you comply with other terms and conditions of the same.
  • Dear Respected Sir With due respect, My query is in relation to reverse charges liability of corporate entity if it is service receiver in following matter:- 1- Legal Service- corporate entity is receiving legal service from an individual advocate of Rs 500000/- during the f.y.13-14 and it has received service for Rs 500000/- during f.y.12-13. whether it is liable under 30-2012 reverse charges or it can claim serial no: 6(b)iii of notification no: 25-2012. 2- Work Contract- a work for fabrication is given by a corporate entity to a individual contractor with the term and condition that all the material will be given by corporate entity even welding machine and welding road used in fabrication work. No material will be used by contractor during work. There is nothing transfer of any property taxable under sales tax. Please guide it will cover under work contract because if it will cover work contract we have to pay service tax. The control and supervision will also remain with contractor. thanks Your CA Praveen Bansal Mathura M-9411854723 CA Praveen Bansal Mathura

    Regarding your first query, you are liable to pay service tax under reverse charge mechanism for obtaining legal services. For the F.Y 2012-13, you have to pay tax on services received after 1st July, 2012 onwards only. Exemption under the serial no. 6(b)(iii) of mega exemption notification can be availed only if the turnover of the entity is less than Rs 10 lacs. Regarding your second query, please consider the fact that under works contract service, there has to be transfer of material from the provider to recipient. . In instant case, as the service provider will be charging only labour charges from you and there is no transfer of material then it will be termed as pure labour contract. Hence, no liability under reverse charge shall be incurred by you.
  • During the course of departmental audit it was observed that the service provider didnot claim SSI exemption for the first three quarters , but he claimed the same in the last quarter.....but deptt has raised objections and demanding differential tax ...... Please suggest any remedy available to challenge the audit objection? Thanks in Anticipation... Saurabh Chokhra

    The threshold exemption under Notification 6/2003 is an optional exemption notification. It provides an option to assesse either to avail this exemption or to forgo the same. But once the same is forgone then we cannot avail this notification in same financial year.
  • During the course of departmental audit it was observed that the service provider didnot claim SSI exemption for the first three quarters , but he claimed the same in the last quarter.....but deptt has raised objections and demanding differential tax ...... Please suggest any remedy available to challenge the audit objection? Thanks in Anticipation... Saurabh Chokhra

    In Small service provider exemption (current notification no. 33/2012-ST dated 20.6.2012), it is clearly mentioned that the exemption is optional and a service provider may not opt for it and he may pay the service tax. However, there is a condition in this notification which says that once the service provider opts not to avail this exemption and starts paying the service tax, this option cannot be withdrawn during the remaining part of the year.
  • Service tax paid under reverse charge on freight on Raw material sent to Job worker for further process on sale basis i.e as such clearance.Whether cenvat credit of service tax paid of freight available as input service or not.Pl also quote some legal provisio in support of your reply Sunil Bhageria

    We have sent the raw material to job workers premises from where it is to be sold further after completion of job work. In this case, place of removal of goods is the premises of job worker. Therefore, the freight so paid falls under the definition of input services as given in rule 2(l) of the Cenvat Credit Rules, 2004. Therefore, credit of service tax paid on the freight is allowed.
  • Pl let me know whether full service tax(12.36%) is to be shown in the invoice by the service provider providing services covered under reverse charge or only service providers's share of service tax Ramani

    He has to show only the portion which he is liable to pay service tax.
  • 2 years back i had already taken cenvat credit but forgot to show it in retun. how can i represent it now??? please suggest.. gauri

    In the query, it is not specified, whether you are service provider or a manufacturer. Please note that in case of service provider, the return can be revised after 90 days but there is no such provision in the Central Excise. Intimation of mistake is given to the department in central excise law. But it is very surprising as in such a case, the figures of Cenvat register and return cannot tally in any case. So, how come this mistake remains hidden for two years?
  • Thank you sir for resolving my query regarding ER-7, sir pl. let me know the time limit for filing ER-7 kailas patil

    It is to be filed by April 30 every year.
  • Sir, My Unit is 100% EOU. I receive Invoice from my freight forwarder/clearing agent/transporter inclusive of service tax. weather my unit(100% EOU) is liable to pay service tax to freight forwarder? if yes, shall i claim the refund of service tax ? CA Pars patel

    There is no direct exemption to 100% EOU from service tax. The service provider will charge the same in his invoice. If the services falls under the definition of "input service" then you can take the credit on the same. Else, if it is relating to export then the refund of service tax can be claimed.
  • Sir,we are manufacturer of pvc pipes & filing er-1 monthly basis& paying excise duty centvat+pla 50lacs please let me know we are liable to file ER-7 return & ER-8 return KAILAS

    ER-7 is applicable on every registered manufacturer but ER-8 is to be filed by manufacturer who are paying concessional rate of duty of 2% under notification 1/2011.
  • Sir, We are running an educational institution regd under Sec 12AA of IT Act. Are we exempted from paying Service Tax in respect of construction of college buildings by virtue of Item No. 13(c) of Mega Exemption Circular. Pls advice. Regads Srinivasan N

    Sr. no. 13(c) of mega exemption notification no. 25/2012, exempts the Services provided by way of construction, erection, etc. of a building owned by an entity registered under section 12 AA of the Income tax Act, 1961(43 of 1961) and meant predominantly for religious use by general public. As per your query you are using the building for providing the education services, not for the religious purpose used by general public, hence this exemption is not available to your educational institute.
  • Can a assessee take CENVAT on the tax paid under Reverse Charge on import of service. Pl. advise..!! visu iyer

    yes, he is eligible to take credit subject to condition that the same is allowed as per "input service" definition given under 2(l) of Cenvat Credit Rules, 2004.
  • Sir One of our client is a charitable trust running educational institutions and is enjoying Sec.12A exemption under the income tax act. My question is : In respect of security, cleaning and manpower serices obtained by the trust from specified perosons whether they are liable to pay service tax under Reverse Charge mechanism. I strongly believe that they are not liable since they do not fall within the definition of body corporate registered as a business entity as per the said notification. Kindly give your valuable advise a r s krishna rao

    Your version is correct. Trust does not come in the definition of "body corporate".
  • I HAVE DTA MANUFACTUER AND I EXPORT GOODS THROUGH ARE-1 TO SEZ AND SEZ CUSTOMER QUALITY PROBLEM IN GOODS AND THEY WANT TO WHOLE GOODS PREMANENTALY RETUNED WHAT IS THE PROCEDURE ? SHELENDRA

    There is no prescribed procedure for bringing goods from SEZ. But it is equated with physical exports. Hence, on return, you have to give D-3 intimation to Central Excise officers and enter the same in non duty paid RG-1 register.
  • Sir, we are using tools manufactured by us on behalf of customer.Ownership of these tools ( Dies & Fixtures) is of customer. Now tell me how can i calculate amortization cost( whether it is calculate on No. of stroks or No. of components produced by using these tools)Please explain me how to calculate amortisation value? Yogesh Pawar

    Yes, the amortised value is to be taken. It is to be taken on the basis expected number of components to be produced with this dies. It has to be linked with finished goods produced with this tools.
  • Sir, if residential complex started construction before 1st July,2010 and such project is more than 12 units than and collecting amount as advance from customer before completion of construction than service tax applicable from where ......???????? pradip

    The exemption was provided to payment received prior to July 2010. Further, as per our opinion, the ST is applicable on construction undertaken after the date of July 2010. Hence, a certificate from Chartered Engineer is to be taken for completion before that date.
  • Sir in case of change in rates, whether service tax rate is determined by section 67A of finance act 1994 or rule 4 of Point of taxation rules.Where section 67A will apply. Thanks Deepak Gupta deepak

    Rule 4 of POT Rules, 2011 determines point of taxation in cases where there is a change in effective rate of tax in respect of a service. Whereas, Section 67A of the Finance Act, 1994 determines the rate of service tax, value of a taxable service and rate of exchange. Thus, for calculating service tax rate, Section 67A shall apply.
  • Dear sir, we are manufacturer of pvc pipes & paying cenvat + PLA 48 lacs p.a. our annual T.O. is 7.80 coror we are filing ER-1 monthly basis. Please let me know whether we are liable to file any other return under excise law. KAILAS

    Already Answered.As per Notification No. 17/2006-Central Excise (NT), dated 01.08.2006, as amended, issued under Rule 12(2)(b) of the Central Excise Rules, 2002, inter alia, exempts assessee who paid duty of excise less than Rs. 1 crore in the preceding financial year, from filing the ER-4 return. Similarly, Notification No. 39/2004 Central Excise (NT), dated 25.11.2004, as amended, issued Rule 9A(4) of the CENVAT Credit Rules, 2004, exempts the specified class of manufacturers who paid duty of excise less than Rs. 1 crore in the preceding financial year, from filing ER-5 declaration and ER-6 return. Thus you need not to file ER-4 , ER-5 and ER-6 return
  • sir my company is a meat processing factory and than export the frozen foods to other country and but the p.y we start ti installed SLAUGHTER/ETP/REFGERATION UNIT FOR THE PURPOSE TO EXPORT FROZEN FOODS TO OTHER COUNTRIES.SO I WANT TO TAKE INPUT VAT ON MACHINERY FOR WIP AS REIMBURSE IN THE CURRENT YEAR 50%.THIS IS CORRECT OR NOT PLEASE GUIDE ME ayesha

    We do not deal in VAT. Thus, we will not be able to comment on the same.
  • Sir I am going to start with a private limited company providing pre-school (Kindergarten) service and also services such as training and development, business stratergy, etc. There are two different units of which one is Pre-school business and other is training and development. The querry is, do I need to charge service tax in pre-school business? The other unit of my business which is training and development are taxable under service tax perview but do I also need to charge service tax in pre school business? Hussain Umrethwala

    As per sec 66D ENTRY NO. (l) Services by way of pre-school education and education up to higher secondary school or equivalent have been exempted from the levy of service tax. Hence, you need not to charge service tax on pre- school service.
  • Dear Sir One of our Prop. Firm is working as a sub-contractor of steel binding on labour rate i.e Client is providing us material and we are doing work. The labour is in our supervision and we are issuing invoice on per Mt. Tone /area basis. Sir Please tell us in which category of service tax we will falls. dinesh negi

    The further details of work to be done, place of work etc. are required to classify the same. But it will not fall under works contract as own material is not used by us.
  • Sir, We are paying service tax on inward freight under reverse charge Notification and claiming abetment 75%. We are despatching material to our customer. GTA is charging Service tax on outward despatch. My question is what will be service tax position if freight paid by us or freight paid by customer. Consignment Note is in name of customer? S.P.Gupta

    In case of GTA service tax is payable on reverse charge basis. The person who is liable to pay freight, is liable to pay service tax as per Rule 2(1)(d) provided he falls under seven categories. But if the person making the payment does not fall under any of seven categories then the liability pay service tax is on the transporter.
  • Dear sir, My company is a IT Company in Pune, We have to pay the service tax to our landlord. The owner will file service tax in his own name. Can we use that service tax in set off in our business. Darpan Gupta

    Input service means any service, used by a provider of taxable service for providing an output service. The CENVAT credit in respect of input service shall be allowed, on or after the day which payment is made of the value of input service and the service tax paid or payable as is indicated in invoice, bill or, as the case may be, challan referred to in rule 9. Thus if you are providing taxable service then you can take the credit of service tax paid on input services.
  • Suppose a company purchase capital goods and taken cenvat cr.50% and return it within 180 days due to some problem then is interest chargable on portion of cr taken or not Shyam Kumar

    Already Answered. If the capital goods, on which CENVAT credit has been taken, are removed after being used, the manufacturer or provider of output services shall pay an amount equal to the CENVAT credit taken on the said capital goods reduced by the percentage points calculated on the straight line basis as specified below for each quarter of a year or a part thereof from the date of taking the credit , namely: 1. For computers and its peripherals,: a. For each quarter in first year@10% 2. For capital goods other than computer and its peripherals@ 2.5% for each quarter. Provided that if the amount so calculated is less than the amount equal the duty leviable on the transaction value, the amount shall be equal to the duty leviable on the transaction value. Moreover, if the capital goods are removed in the same year then he should take the balance 50% credit and then remove the capital goods under an invoice issued under Rule 11 after reversing ht credit as per provisions narrated above. But no interest is payable on the same.
  • Suppose a company purchase capital goods and taken cenvat cr.50% and return it within 180 days due to some problem then is interest chargable on portion of cr taken or not Shyam Kumar

    If the capital goods, on which CENVAT credit has been taken, are removed after being used, the manufacturer or provider of output services shall pay an amount equal to the CENVAT credit taken on the said capital goods reduced by the percentage points calculated on the straight line basis as specified below for each quarter of a year or a part thereof from the date of taking the credit , namely: 1. For computers and its peripherals,: a. For each quarter in first year@10% 2. For capital goods other than computer and its peripherals@ 2.5% for each quarter. Provided that if the amount so calculated is less than the amount equal the duty leviable on the transaction value, the amount shall be equal to the duty leviable on the transaction value. Moreover, if the capital goods are removed in the same year then he should take the balance 50% credit and then remove the capital goods under an invoice issued under Rule 11 after reversing ht credit as per provisions narrated above. But no interest is payable on the same.
  • hlo sir. suppose a factory owner selling goods to another. and the second party is exporting those goods through merchant exporter. so whether first party's transaction would be including in claiming Rs. 400 lakhs exemption limit as home clearance sunil mehla

    First of all, the small scale exemption under Notification number 8/2003 is available upto Rs. 150 Lakh if the aggregate value of clearances in last financial year is less than Rs 400 lakh. Your query is that whether the goods cleared to a person and he is exporting through merchant exporter will be counted in computing this limit of Rs. 400 Lakhs. The export sale is not counted towards the same. However, it is not direct export as well as export through merchant exporter. You have cleared to third party and this party is exporting through merchant exporter. Hence, as per our opinion, this will not be termed as exports and will be termed as home clearances. Hence, this will be counted in aggregate value to be computed in Rs. 400 Lakhs.
  • DEAR SIR, Regarding my earlier query ST-25/212 read with Notification 3/2013 GTA carrying agro produce and foodstuff is exempt from service tax. Earlier food grain was used. My query is foodstuff includes human or animal or both? Whether poultry feed and Roasted Gaur Korma, supplements are include in foodstuff? SATYA PARKASH GUPTA

    Prior to the notification no. 3/2013 service tax on GTA was exempt in respect transportation of fruits, vegetables, eggs, milk, food grains or pulses in a goods carriage but this was amended trough the Notification no. 3/2013, through this notification service tax on GTA was exempted in relation to the agricultural produce and foods stuff. Generally food stuff is any item that can be used or prepared for use as food. As per sec 65(b) "agricultural produce" means any produce of agriculture on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market. Usually guar seed when passed through solvent extraction process turns to guar gum split and Churi korma. Thus it won’t be covered under exemption notification as it has been materially altered.
  • Sir, We are manufacturing co. & SSI unit having annual turnover Rs. 7.00 corer & paying excise duty near about 48 lakhs (centvat + PLA) Presently we are filing ER-I return. My query is whether we are liable to file ER-4/ER-5/Er-6?Pl advise KAILAS PATIL

    As per Notification No. 17/2006-Central Excise (NT), dated 01.08.2006, as amended, issued under Rule 12(2)(b) of the Central Excise Rules, 2002, inter alia, exempts assessee who paid duty of excise less than Rs. 1 crore in the preceding financial year, from filing the ER-4 return. Similarly, Notification No. 39/2004 Central Excise (NT), dated 25.11.2004, as amended, issued Rule 9A(4) of the CENVAT Credit Rules, 2004, exempts the specified class of manufacturers who paid duty of excise less than Rs. 1 crore in the preceding financial year, from filing ER-5 declaration and ER-6 return. Thus you need not to file ER-4 , ER-5 and ER-6 return.
  • If any service provider not crossing the limit i.e 10 lakhs, getting registred have to comply with the service tax laws & Procedure. Raghavender upadhyay

    If he is registered with the department then he has to file returns and comply with services tax rules and regulations. However, he can claim the exemption of Rs. 10 Lakh in his return.
  • sir, one of my client has purchased a manufacturing unit & the seller is charging excise duty on sale of machinery. is seller is eligible to charge excise duty? If yes, than can we take credit of it? ca deepak vaarmora

    The excise duty is to be charged on removal of goods from his factory. It cannot be charged when the complete unit is sold. On the contray, you can get unutilised credit lying in balance under Rule 10 of Cenvat credit Rules provided all the stock of raw material, under proces and finished goods is also transferred and complete liabilities of old unit is undertaken by the new unit.
  • Dear sir, Our unit is manufacturing we are purchasing aluminium scrap with duty paid, this same material sent to job work, and after job work material received with rod and this rod is issued for production, my query is how to show in excise book like, RG 23 part 1. Uttam wagdare

    When the materila is issued for job work then show the material issued in RG 23 A part I register also. It will also be entered in job work register. On receipt from job worker, it will be shown in job work register. If you are maintaining the RG 23 A part I register for rods also, then also show the receipt of the same in this register also.
  • Dear Sir. we are the manufacturer of small commercial vehicles and we are selling our vehicles to our authorized dealers. As a condition of sale the dealer is giving free warranty service to end customers and for which dealer is recovering cost of service along the with service tax from us(Manufacturer)  Can we avail cenvat credit on dealer bill  we have taken marine insurance policy which is covering all vehicles sold to dealers in transit. we are recovering the premium amount proportionately from the dealer through billing. can we take the service tax cenvat credit on insurance premium paid for marine policy.   manufacturer has warranty failed parts in their factory and again sending those warranty failed parts to original supplier for analysis purpose (Reason of failure). while sending those failed parts from our factory (Manufacturer) shall we need to pay excise duty on this. Please suggest on this. Regards RAMAPPA SOMAKKALAVAR RAMAPPA

    The number of questions have been raised in this query. We are replying in same order:- 1. The credit on free warranty bills of dealers can be taken as the definition of “input service” in Rule 2(l) of CCR,2004 clearly provides in exclusion clause the credit on repair and maintenance of vehicle will be available to manufacturer of vechile. 2. The same way the definition of input services allows the Cenvat credit of the credit of general insurance services availed for the vehicles can be taken by the manufacturer of motor vehicles. This is because the exclusion clause (BA) of the definition of input services does not apply on the manufacturers of motor vehicles and insurance companies. Therefore, they can take credit of the insurance and repairs and maintenance services pertaining to motor vehicles manufactured by them. 3. So far as the sending of warranty failed parts for testing purpose is concerned, manufacturer is not required to clear the same on payment of duty. When the same are received back in factory from dealer, he must not have taken the credit on the same as per Rule 16. These goods normally cannot be repaired, remanufactured then Rule 16 does not apply and the credit was not taken on the same. But if the credit is taken then he has to clear the same on payment of duty.
  • New office build-up in the factory premises.In this case is company is liable to pay service tax under works contract ( by considering partial reverse charge)? If yes then on which value as company paid him (service provider) step by step as work will progress? Yogesh Pawar

    If the construction of building is kind of original works i.e. new construction, erection, commissioning, installation then abatement of 60% of total amount is allowed and service tax is levied on the balance 40% amount. Hence, the service tax payable under the same is 4.944%. The reverse charge is also applicable in the work contract service. If the person providing the service is individual, partnership, HUF etc and service recipient is company ( as told by you in query) then 50% of the service tax is payable by service provider and rest 50% by service receiver. Therefore you are liable to charge 50% service tax in your bill and deposit the same. But if the service falls under finishing services then the rate of abatement is 40% and service tax will be payable on 60% of value. Hence the tax will be 7.42. Out of above, 3.71% will be payable by you under reverse charge mechanism and service provider will pay 3.71%.
  • Sir, my query is regarding amended rule 3(5)(b) w.e.f. 01.03.11. As per rule before amendment i.e. up to 28.02.11, if value of any input on which CENVAT Credit has been taken is written off fully or where any provision to write off fully made in the books of account, then the manufacturer was require to pay an amount equivalent to the CENVAT credit taken in respect of the said inputs. (i.e. cenvat reversal require when 100% written off) But as per amended rule w.e.f. 01.03.11, if value of any input on which CENVAT Credit has been taken is written off fully or partially or any provision made fully or partially then the manufacturer is require to pay an amount equivalent to the CENVAT credit taken in respect of the said inputs. (i.e. cenvat reversal require even partial write off of input). We have followed the amended rule and reverse the cenvat on input on which partial absolute or non-moving provision is made after 01.03.11. There was partial provision existed in our books on absolute stock as on 28.02.11 (before rule changed). In Excise audit, dept took stand that the amended rule 3(5)(b) w.e.f. 01.03.11 is also applicable to the partial provisions made earlier. They have asked to reverse the cenvat credit and pay an amount to Govt and take re-credit of the same in subsequent month. In our reply we have denied to reverse the cenvat on the provision made earlier 01.03.11 as rule is not having retrospective effect. Now we are waiting for reply from dept. Sir, can u guide whether the department’s stand is correct as per rule. Sachin Pawar

    Your stands seems to be correct. For detailed opinion on the subject, we will require the detailed documents and show cause notice.
  • Dear Sir, our firm is a contractor of govt. local body, employee engaged in this firm is 4 or 5. we have no PF & ESI no. as we have less than 20 employee but problem is that with out PF no. we cann't file tender in that local body. so what to do in this situation? mita mukherjee

    We are not dealing in PF and ESI act and hence will not be able to reply your query.
  • Dear Sir, One of my client is supplying trucks to a main contractor who has taken Road construction work for shifting of sand from one place to another he is issuing invoices as per the agreement on monthly basis Service receiver is a pvt. company and service provider is an Individual whether the service amounts to GTA service or whether the above service is taxable under supply of tangible goods for use. If it falls under GTA service then service provider is not liable to tax as the Tax is payable under RCM by the service receiver if it falls under supply of tangible goods for use then the service provider is liable for tax can you please clarify. nagendra

    Supply of dumps trucks without the transfer of ownership is covered under the scope of supply of tangible goods service whereas “goods transport agency” means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called Section 65 (50b)of the Finance Act, 1994. Here it seems that your client has transferred the right to use of truck to the pvt. Com and he is not operating transport of goods service. Therefore, in our opinion, it is covered under the supply of tangible goods service and service tax @12.36% must be charged by the service provider.
  • Our company is doing process [which is not amount to manufacture or production] on the material send by one excise exempt unit -[this unit is exempt on place basis]. After processes, processes material along with scrap is sent back to the excise exempt unit. For the processes, our company is charging job work charges and on that amount paying service tax. My question is: 1. Whether service tax is leviable on such job work charges in view of the fact that our company's customer is an excise exempt unit on the basis of its location?? 2. If our company is liable to pay service tax then can our company take cenvat credit of service tax on the labor charges hired for the processes [service tax has been paid under reverse charge]. atul jain

    For job work, there are two type of exemption from service tax. Firstly, if the process amounts to manufacture and secondly, the supplier further uses the goods and pays Central excise duty on his final product. But both the conditions are not fulfilled in this case. Hence the service tax is payable. Moreover, there is no area based exemption for service tax. Also,if the input servcies are used in providing the output services then the credit can be taken on the same.
  • ABOUT SAD REFUND condition is that the burden of 4% AD has not been passed on by the importer to the buyer and that the requirement to rule out unjust enrichment is fulfilled. Sir how it is possible because after import a importer sale this goods and charge sale tax from customer tarun

    The SAD is different from the sales tax. The sales tax is to be charged and its incidence is to be passed on to the buyer. The condition is that incidence of 4% SAD paid at the time of import should not be passed on to the buyer. This means that it should not be part of price of goods sold.
  • Dear Sir, Applicability of service tax - Renting of Immovable Property Services performed before 01/06/2007 when it was exempted from service tax, I need your valuable opinion regarding the applicability of service tax in the following situation. Situation -1: Billing to client and consideration received after 01/06/2007. Situation -2: Billing of the same to client done before 01/06/2007, whereas the consideration against such service received after 01/06/2007 Regards Rakesh Rakesh Kumar Singh

    During that period, the point of taxation was not applicable. The service tax was payable on receipt basis. But there was clearcut verdict of Gujarat High Court on this issue that the service is neither limked with billing or receipt of service but it is linked with provision of serivce.
  • Is filing of ST-3 compulsory for Transporter. Yash

    If he is registered with the department then return is to be filed. But if he providing services to seven categories of person only and there is no tax liabilty on him then there is no need to get registered with the department and file returns.
  • In case the vendor has wrongly billed full service tax in his invoice but his service is covered under the Partial Reverse Charge Mechanism and we had paid the full tax amount to him, so still our liablity stands to pay servicetax under RCM as we are a company. Kshitij khare

    The ultimate liability to pay tax is on you and you cannot shift this statutory liabiity by contractural obligation. We have seen that the department has issued demands in such cases. We can plead that the service tax has been paid to the Government and there cannot be double taxation on same transaction.
  • Dear sir, we are holding central excise certificate on readymade garments manufacturing on current budget the tax rate is zero rate. so we have to surrender the certificate and continue the business. is it possible to run the business. pls suggest RAVICHANDAR

    The query is not much clear. You can surrender and continue the business.
  • Respected sir Whether CT-1 form ( for a merchant exporter) can be used even after expiry of a period of one year when validity period of one year is specifically mentioned in CT-1. What is the solution if CT-1 is used beyond one year period with regards N.k.Joshi nkjoshi

    It can be used during the validity period. But when it is used beyond the period and proof of export has also been filed, then we can plead that the export has taken place, hence the demand should not be raised on this procedural lapse.
  • when & which transactions are debited / credited in B 17 Bonds by EOU units ANIL TIWARI

    B-17 bond is executed for these transactions:- 1. 25% duty forgone on capital goods whether imported or indigenous. 2. Custom or Central excise duty forgone on inputs; 3. Duty for the export of goods. The transactions relating to same are debited/credited in B-17 bond.
  • we are a professional member of Indian Energy Exchange Ltd .We provide the service to our clients by procuring power . In this connection we had paid admission fee and membership fee to Indian Engery Exchange on which service tax is collected by them. We charge to our clients Service charges on which Service Tax is collected. Now our question is whether we can claim the Service TAx paid on Admission and Membership Fee as input and set of the same against the service tax payable by us . Kindly Clarify radha sri krishna rao

    As per definition of input service given under Rule 2(l) of Cenvat Credit Rules, 2004, “input service means service used by service provider for providing output service”. Therefore if such service of membership is used for providing your output service then credit will be allowed.
  • i ve rented out commercial premise. i am now collecting service tax on it. can i take set off for srvice tax on maintenance bill(for that commercial premise which is rented out), my own mediclaim service tax,also whether service tax is to paid on gross rent of 20000 or after deducting municipal tax of 2000 and then be paid on 13000, kindly guide with ur experience rishi

    1. As per Rule 2(l) of Cenvat credit Rules, 2004 you can take the credit of those services which are used for providing output service of “Renting of Immovable Property”. The credit of maintenance charges will be allowed but if maintenance is in nature of work contract service, then credit will not be allowed as it is specifically excluded from the definition given under Rule 2(l). Further credit of mediclaim will not be allowed as it is personal nature expenditure. 2. Service tax will be levied after deduction of municipal tax paid. Further it is clarified here that renting of immovable property for residential purpose is exempt under negative list, so if you have rented the property for residential purpose, then you are not required to pay service tax.
  • Respected Sir, A foreigner stay in the hotel and paid the bill amount in Indian currency. whether that amount will be considered as foreign earning for redemption to EPCG license? NAVIN JAIN

    No, it will not be considered as payment in foreign currency.
  • Respected Sir, ABC P LTD got registered with excise department from 01.04.2012, however company is liable to pay excise duty from 01.04.2011, now company has paid excise duty from 01.04.11 to 31.03.2012. My question is can company file the return for the period 01.04.2012 to 31.03.2012 or what type of documents shall be submitted with department? Whether company is liable to pay any penalty other than interest? NAVIN JAIN

    You have to file the returns for the earlier period along with interest. But the penalty need not to be deposited. If it is levied by adjudciaiton officer after the show cause notice then the same is payable.
  • Sir, We installed in factory one capital goods last F.Y. thats time we have utilised cenvate 50% But Second year we not taken a cenvat credit. My Query is know possible on take the credit? bhairav kumar

    Yes, you can take now the remaining Cenvat credit (50%) of that capital goods.
  • dear sir, if my service provided in preceeding f.y is more than 10 lakh , and i m cover under mega exemption notification ,is there neccecity to get registration. ca vasib ansari

    No, you are not required to get the registration as the service itself is exempt. Registration is required to that person who is liable to pay service tax or any provider of taxable service whose aggregate value of taxable service in a financial year exceeds 9 lakh rupees.
  • what is last date of filing annexure 19 under excise act and what is the last date of submiting hard copy of er-1 in excise department???? vinay gautam

    The last date of filing of return in Annexure 19 is not prescribed but normally it is to be filed before next month. Secondly, there is no need to file manual ER-1 return in the department.
  • Dear Sir, Please suggest whether Service Tax to be deposited?? " The company has given a quotation of 100+12.36 to customer. Later the company found that the same was export of service and no liab. arise on the same, hence while billing they billed @ 112.36 for service only as no S.T. being shown any where on the invoice." Rahul

    If anything is recovered in the name of service tax then it is to be deposited to the department. It is clear from the agreement that you have recovered service tax though not specifically shown in inovice then the service tax is to be paid to the dpeartment.
  • Dear Sir, We have availed services from Bureau of certification for ISO 9000-2008. The reasons to become certified in ISO 9000 are that we are able to satisfy customer requirements, to be able to do business in Europe, to be able to advertise your certification, and to improve your company's operations. Whether we can avail cenvat credit on such certification charged by service provider Regards DM Dayal

    In our opinion credit of certification service will be allowed. As per Rule 2(l) Input service means any service used by manufacturer whether directly or indirectly in the manufacture of final product and clearance of final product upto the place of removal or services used by service provider for providing output service. Further this definition specifically includes services of Credit Rating, advertisement, business exhibition, share registry etc. The nature of certification service is also same as credit rating therefore in our opinion credit will be allowed. However department may raise the point that Certification service is not specifically mentioned in the said definition.
  • Our company has issued work order to a firm for arranging & acquisition of land after all necessary approvals from various governemnt bodies and also clearing/cleaning of the land for easy access/ transfer of title etc. For this the service provider shall give us the bill for professional service fees. This service shall come under which category from service provider point of view and also whether we as a company shall be covered under reverse charge mechanism. At present the service provider is regd under : erection/commissioning/intallation , Consulting enginnering service,Technical inspection and certification agency.Please clarify NILESH BHANDARI

    The service will be covered under “Real Estate Agent” service. Further you are not liable under reverse charge mechanism for the purpose of this because reverse charge mechanism is not applicable on this service.
  • Dear Sir, our firm is providing AC service we are providing it by AMC which is comprehensive[ with Material] then service tax should be on 70% amount.when we going to raise bill to our parental company.but whether we are liable to pay vat when we raise bill to our parental company?we are also trading company. Payal Thakkar

    We do not deal in VAT laws. However in our opinion VAT will be levied on material value because the State VAT laws are not linked with Central law of Service tax and it shall be levied on sale whether service tax is leviable or not. Further there is no effect of the fact that the buyer is a parent company as seller and buyer are two separate entities.
  • SIR WE ARE DEALING IN EXPORT OF TIMBER SO I WANT TO KNOW CAN I AVAIL ZERO CUSTOM DUTY UNDER EPCG SCHEME tarun

    The zero percent EPCG is not applicable to Chapter 44 (except plywood and allied product). Hnece we are of view that it is not applciable to instant case.
  • A section 25 Company is registered under Section 12AA of the Income Tax Act, 1961 and its main objects are : To collect information upon all topics of interest to members and act as press organization. Any fees received from it members will attract service tax?? Meeta

    In our opinion service tax will be levied on fees received from members as the service is neither covered under Negative List or Mega exemption Notification 25/2012 as amended. However the Sl. No. 28 of mega exemption notification exempts “services by a non profit entity to its members by way of reimbursement of charges or share of contribution for the provision of carrying out any activity which is exempt” but this exemption will not available in the instant case because the output service of press organization is not an exempted service.
  • Sir, In respect of amendments notified through Notn. No. 3/2013, whether exemption is available since the original Mega Exemption Circular, i.e., from 01-07-2012 or only prospective from 01-04-2013. Eg. Freight on Tea Kannan

    The notificaiton is applicable from the date of its publication. Hence, Notification 3/2013 will be effective from its date only.
  • We are a Firm and manufacture vermicelli. We pay freight to lorries for wheat and maida. We hope wheat was exempted as food grains / agri produce. But whether maida, a derivative of wheat, is also exempted from inception or only wef from 01-04-2013 - vide Notn. No. 3/2013 Kannan

    In our opinion transportation of Maida will also be exempt under Sl. 21(d) of exemption notification i.e. transportation in goods carriage of foodstuff including flours, tea, coffee, juggery, sugar, milk products, salt etc because maida is also a type of foodstuff similar to flour.
  • Sir ji.. In respect of Renting or properties to a Company by is Director is now taxable under RCM at the hands of Company; Can u pl. advise the Director can surrender his RC since the Director has no other taxable Service income other than renting of immovable properties What is the formalities.. in such cases..? visu iyer

    You can surrender your registration online and submit the print out along with original registration certificate to the department.
  • Sir, our unit is manufacturing and we are filling excise return ER-1 on monthly basis, on this return I have taken credit of Service tax of GTA and Input services, now I am am filling service tax return st-3 for 2nd qty (july-12 to sep-12), than should I credit of input service tax and gta in service tax return ST-3. Uttam

    As per our opinion, it is to be shown in ER-1 return only as you are taking credit as a manufacturer and not as service provider.
  • Sir. we had taken service tax registration under manpower supply and we are depositing service tax under this code but in actual, we are providing services under work contract we had deposited 2nd qtr and 3rd qtr of service tax under manpower supply. On february-13 we have taken registration under work contract and deposit service tax under work contract code for 4th Qtr. what are adjustement for 2nd qtr and 3rd qtr. and is there any penalty provision for late registration Pls suggest on above matter regards Dinesh dinesh negi

    You had registered under service tax but only the mistake was that the category of classification is wrong i.e. Manpower supply service instead of Work contract service. After introduction of negative list concept, classification is no more important and question of classification is arisen only in special cases i.e. reverse charge, abatement, exemption, valuation etc. and in general cases classification is not more important as service tax rate and valuation is same. Now in the instant case if you have correctly determine the service tax as per provisions applicable to “Work contract service” and only mistake was that you have deposited in wrong category then there is no problem. However, the classification is re-introduced in service tax. Hence, we should deposit the service tax under correct heading in future. Further the penalty should not be imposed for mistakes limited to wrong classification. But if service tax itself is wrongly determined by not following valuation rules for work contract service then interest and penal provisions will apply.
  • Dear sir, whether reverse charge mechanism on services provided by vastu consultant is applicable or not .If yes please advice me the apportionment of S.tax payable by receiver and provider .Sir answer as soon as possible .. 

    No RCM for such services.
  • Dear sir, whether reverse charge mechanism on services provided by vastu consultant is applicable or not .If yes please advice me the apportionment of S.tax payable by receiver and provider . Ankur K. Prince

    Already answered, No RCM for such services.
  • Dear Sir, We are doing Supply of Man Power Business & we pay service tax on this services. I have question if we are paid service tax on Labour/employee group mediclaim Policy & Group Personal Accident Policy then we are eligible to taken credit of service tax paid on this policy. Pravin Divate

    The definition of Input service specifically excludes services of life insurance, health insurance etc. primarily for personal use of employees. Therefore service tax on mediclaim will not be allowed. However, in our opinion credit of service tax on Group Personal Accident Policy may be allowed as it is not specifically mentioned in the exclusion clause. But department will raise the objection that the services referred in exclusion clause is only examples and similar services will also be included for the purpose of this exclusion.
  • dear sir, plz clarify on the export of goods issue" (shipping bill date is 26.03.13 & let export date 28.03.13) please tell export made under this shipping bill will be considered in export turnoner of year 2012-13 or 2013-14. also let export date can be considered as date of transfer of ownership or not. PARVEEN KAUSHAL

    Export is considered on the basis of Let Export Date and in the instant case, export will be considered in 2012-13. Further the transfer of ownership is not related to the Let export and Let export date may differ from date of transfer of ownership based on facts of each case.
  • Dear sir, One of our client is providing foreign language coaching and translation work service. After getting translation work from Non residents, they sublet/contract work to Non resident.(that means they are working as brokering) My query is whether the service provided outside India is export of service? Will the payment made to the sub letting person also attracts Service tax? Raghavender Upadhyay

    :- For the determination of leviability of service tax, it is to be decided whether the service in instant case is treated as Intermediary service as mention in Rule 9(c) of place of provision rules or not. Intermediary is a person who arranges a provision or service between two or parties but does not include a person who provides main services on his account. In the instant case assessee is not treated as intermediary as he is providing services on his account i.e. there is a principal to principal relationship and also consideration is not represented such as commission etc. As he is not treated as intermediary therefore place of provision will be determined as per Rule 3 and as per this rule place of provision shall be the location of service receiver. As place of provision is non-taxable territory therefore if in the instant case consideration is received in the Convertible foreign currency then it is treated as export of service in terms of Rule 6A of Service tax Rules and service tax will not be apply. Further input service received from non-resident will be taxable and liability will be on service received as it will be treated as import of service. As you have clearly not mentioned the facts therefore if the facts represent that it is an intermediary service then service tax will be levied because in such case place of provision will be location of service provider i.e. taxable territory and therefore it will not satisfy the conditions of Rule 6A of Service tax Rules, 1994.
  • If ABC ltd not paid service tax under reverse charge within 6 month of the date of invoice then service tax liability will be applicable from the date of invoice. Suppose abc ltd has paid service tax under reverse charge after 7 month with interest but not paid to value of input service to vendor then ABC ltd is eligible to take cenvat credit of such service tax paid under reverse charge. Query Related to service tax under reverse charge:

    The first proviso to Rule 4(7) of Cenvat credit Rules clearly says that the credit will be allowed only after payment.
  • Sir, Can a Chartered Accountant take CENVAT Credit of Excise duty paid on Computer/Laptop purchased in the Firm Name Vipul Kumar

    As all the services of CA are taxable, hence he can take credit on captial goods as per definition given under Rule 2(a) of Cenvat credit Rules.
  • Dear Sir, Whether Service Tax paid on Purchase of flat can be claimed while paying the Service Tax on professional Fees. Regards, Jinu Jinu Michael

    There is specific exclusion in defintion of input service given under Rule 2(l) of CCR, 2004 about works contract and construction service relating to building or civil structure.
  • sir, i am service receiver and paying reverse mechanizam on billing amount of 75 %, i used credit what ever i pay tax , sir now in st3 [july to sept 2013] where i show this credit utlized. asmita

    Firstly Service receiver can’t be utilize the Cenvat credit for payment of service tax under Reverse charge mechanism in term of Explanation to Rule 3(4). In case of credit utilized for output services, it is to be shown in Column D2 (service tax), E2 (Education Cess), F2 (SHE Cess) of part D, E and F respectively.
  • My client is into fabrication work. My query is that for service tax on GTA and labour it is registered at office address and it is taking setoff of service tax paid against its excise liability for which registration is at factory premises. Whether such setoff can be taken if premises are different. If no , what happens about setoff already taken . seema raisoni

    If both the registration are at separate premises then credit cannot be taken. If these are manufactured as well as servcie is provided from same premises then it is advisable to take registration from same premises.
  • dear sir what is the point of taxation inrespect of "construction of residential complex service" whether it is the date of receipt of advances or the date of registration of flat. please clarify. anil kumar m

    The point of taxation is advacne received, invoice raised or service provided whichever is earlier. If the invoice is raised within 30 days of service provided then the service tax will be payable on invocie basis. But if invoice is not raised within that period then it will be date of provision of service. Furhter, the point of taxation for the continuous service will be decided on the basis of terms and conditions of agreement.
  • Sir, we are build up Shiv Murti 350 fit and making parties charge us service tax, vat, CST etc. This is developing purely for general public therefore above taxes are exempted or not. arvind jain

    No, there is no any exemption in service tax in this regard. This type of service is not specified either in negative list or under mega exemption notification. However service tax will not be levied if the activity amounts to manufacture.
  • Respected Sir, We are manufacturer of Iron and Steel covered under Excise .After introducing of Reverse charge mechanism (RCM) we are facing some problem like. 1 we have labor contractors for bundling & bundling of Bars they don’t have registration in Service tax (bcoz amount is less than 10 lac).so, RCM should attract on them or not? Under head supply of Man power) 2. We have made construction in the plant, labor and material supply by the civil contractor should it cover under the works contract service in under RCM or not? We have suggested by range Superintendent that there is no clarification about it. So please take precaution about in these types of transaction .Dept Can Arise liability in near future. So sir Please Give your Suggestion Regarding in these transaction CA Rajat Jain 9166132638 Rajat jain

    If the control and supervision in case of manpower supply is in hands of manufacturer then the service tax under RCM is applicable. Moreover, the provider should individual, HUF, partnership and recipient should be company. In case of construction service, if the material and labour are used by contractor then it will fall under works contract. Hence the RCM is applicable provided all other conditions are satisfied.
  • Sir This query is reg ser tax applicability. Tractor driving by road by a contractor. We pay per tractor Rs.500/-. Driver not working under our co. Contractor gives bill for 500/-. Any ser tax liability?? D.S.MURTHY

    Under GTA service tax is on agency who issues consignment notes. As in such cases, the transporter himself is providing services and no consignment notes is issued, hence no service tax is applicable.
  • Sir, we are a C. Exc. regd. factory registered as a service receiver and have been filing ST3. Now in the new ST-3 meant for July - Sept.2012, in the drop down list for constitution, there is no word as PARTNERSHIP. instead there is one "Limited Liability Partnership" and another "A FIRM" we are partnership as per the deed; which one is now applicable for us to select out of the 2 new constitutions mentined in the format ; pls advise us Sir, 

    There is lot of problems in ST-3 return for July to September 2012. The last date of filing of return is extedned to April 30. Hope that the solution will come to all problems.
  • Dear Sir If any transportation company charge service tax on their bill then company (Service Receiver) have to pay service tax to transporation company or to Govt. gaurav

    In case transportation of goods by road service, if person liable pay is company then 100% liability of service tax is on company and not on transporter. Therefore company has to pay service tax directly to government and not to transporter.
  • Sir, Kindly clarify the following 1. whether service tax is payable under RC mechanism on sitting fees payable to whole time directors. 2.whether non employee director has to compulsorily issue invoice for sitting fees payable to him 3.whether service tax paid by the company under RC mechanism for sitting fees paid to non employee director could be availed as input credit. Regards, Nagarajan V nagarajan v

    Whole time directors are treated as employee of company and as per definition of service given under clause 44 of 65B Service not include “provision of service by employee to employer in course of or in relation to his employment” Further as Department Letter No. 3/1/90 CL-V, dated 18-07-1990 of MCA makes it very clear that sitting fee may be paid only to a director who is not whole time director or a managing director. i.e. sitting fees is to be paid to a non-executive director only. This letter makes it very clear that if sitting fees is paid to managing director or whole time director then it will be considered only as payment of remuneration to the directors. As the whole time directors is treated as employee of company and sitting fees paid to them is also a part of his remuneration therefore in our opinion service tax will not be levied on it. 2. In our opinion, non-employee directors are not required to raise the invoice because these services are covered under reverse charge mechanism. In case of RCM for directors, the 100% liability is on company. The input credit of these services is allowed to company on the basis of challan depositing service tax. 3. Yes credit will be allowed in respect of service tax paid on services of director as it covers under the definition of input service given under Rule 2(l) of Cenvat Credit Rules.
  • Sir, is it mandetory to make aggrement / contract on stamp paper under works contract service with service provider? Yogesh Pawar

    No, In service tax law there is no such type of requirement that agreement of work contract should be on stamp paper.
  • Dear Sir, Kindly advise the date of deposition for March'13 under reverse charge mechanism especially for service receiver component i.e. 75% security & manpower supply. Regards ATUL GAUR

    Service tax deposition date for March month (whether under reverse charge or otherwise) is 31st March. Service tax is to be deposited on the basis of Point of taxation i.e. if Point of taxation is in March then it shall be paid upto 31st march and if POT is in any other month then service tax is to be deposited upto 5th day of subsequent month of POT. In case of service receiver liable under reverse charge mechanism, point of taxation is the “date of payment”, subject to condition that payment of such input service is made within 6 month. But if payment is not made within 6 month then Point of taxation shall be the date of invoice/date of service provided.
  • pl guide me service tax exemption limit of i0 lac can avail if the company having excise turnover of rs 2 crore and 8lac in service in preceding year SOMNATH GHOSH

    Yes you can avail the threshold exemption of service tax. For claiming exemption under service tax, the turnover of taxable services of the previous is to be considered and not the excise turnover.
  • Dear Sir, If a broker ( registered service provider )purchases a property on which he pays service tax at the rate of 3.09%.Can he claim credit of the service tax paid on the property purchased against the service tax payable on the brokerage service provided by him? Please reply at your earliest convenience l

    As per Rule 2(l) of Cenvat Credit Rules 2004, input service means any service used by provider of output service for providing output service. i.e. credit will be allowed only on those services which is used for providing output service of broking. But credit of service tax paid on purchase of property will not be allowed even if it is used for providing output service because the definition of input service given under rule 2(l) specially excludes services “service portion in the execution of a works contract and construction services including service listed under clause (b) of section 66E of the Finance Act (hereinafter referred as specified services) in so far as they are used for construction or execution of works contract of a building or a civil structure or a part thereof” therefore credit will not be allowed.
  • Dear Sir, Whether Service Tax on GTA services is exempted in hands of consignor/consignee for carriage of tea as per recent budget 2013-14 Subhendu S Ghosh

    Notification no. 03/2013-ST has amended the entry no.21 of notification no.25/2012-ST. Through this amendment service tax on GTA has been exempted on the carriage of tea. Thus no service tax will be payable for the carriage of tea.
  • sir, one person(not company) done installation of ac work in my company and issued bill under heading "supply of labour for installation of ac" wether it attracks service tax under reverse charge mechanism under work contract pankaj kumar

    As you are saying that only labour work is done therefore it is not a work contract service (material not supplied) therefore reverse charge will not apply. Further it is also not “manpower supply Service” because it is a contract for work and not manpower supply(i.e. work is done independently and not in supervision of service receiver).
  • Dear Sir, CCTV CAMERA ARE CAPITALIZED GOODS FOR A/C PURPOSE. somnath

    We deal in service tax and excise matters only. Please ask queries related to them.
  • Dear Sir, when a commodity is subject to assessment on MRP basis as per sec 4A of CE Act, Is there any relevance between assessable value (MRP-abatement) and billed value ? Whether CE dept will rise question in case assessable value is lesser than billed value?. Kindly clarify. Thanking you. M.Rajendran

    If a commodity is covered under Section 4A of Central Excise Act, 1944, then MRP valuation will be applicable. Under MRP valuation, assessable value is determined by subtracting a specified percentage of Abatement irrespective of billed amount. Therefore department can’t raise the question. However, if MRP is incorrectly declared then penalty can be imposed by Central excise department [section 4A (4) (a) of Central Excise Act] and in such case department may consider, billed amount also.
  • we have been registered with central excise.Now excise duty has been withdrawn on readymade garments. we have balance of duty in hand. also have finished goods in hand. On adjusting the duty credit on finished goods still duty is recoverable. How to surrender the license along with claiming the refund. How to file the statement regarding reversal of duty include in finished goods? Thanks in advance sambhav Jain

    As per Rule 11(3) (ii) of Cenvat Credit Rules, 2004, the manufacturer of finished goods is required to pay an amount equal to Cenvat credit availed by him on inputs which is in stock or in process of final goods or is contained in finished goods if the such finished goods have been exempted absolutely under section 5A of the Act. Also, the exemption to garment industry is with the condition that no credit should be taken on input and input services. Hence, if we want to avail this exemption then the credit is to be reversed. Further the balance of Cenvat credit after deducting this reversal amount (amount of credit availed on inputs in stock, in WIP or contained in finished goods) will also be lapse. But if there is shortfall then it is to be paid in cash. Thus, in your case also manufacturer of readymade garments will have to reverse the balance of Cenvat credit of inputs of the said exempted finished goods as credit is available. For surrender of the Registration certificate, a declaration in prescribed format should be submitted to Superintendent.
  • Dear Sir, I have a quarry about 194C. If we are using contract labour and contractor gives two bills one for labour amount and second for service charge then on which amount we deduct TDS i.e. on whole amount/ on Service charge amount or on labour charges amount. please solve this query as soon as possible Saurabh Khandelwal

    We do not deal in Income Tax. Ask Queries related to Excise, Service Tax and Customs.
  • IN THE REPLYING OF QUERIES OF 1 PERSON, YOU ANSWERED :- QUES :-AMC given for Machine where sale of Property does not include, then, whether it is covered under works Contract OR Not? ANS :- For work contract service there should transfer of property in goods involved in execution of such contracts. Since you are saying there is not transfer of property in goods involved so the service will not be work contract service. SO, PLSE SUGGEST ME UNDER WHICH CATEGORY , IT IS FALL. THANKS DARPAN AGGARWAL

    As it is not covered under work contract service, therefore, for payment purpose, it will be covered under “Maintenance and Repairs Service” and accounting code is “00440245”.
  • Dear Sir, Pls. let me know the CVD on 100% Cotton readymade branded garment of children and other readymade garments in chapter 61-62 Brijesh Sharma

    As per Notification no. No. 11/2013-Central Excise the ready garment has been exempted from the payment of excise duty. Therefore no duty is payable on them.
  • Sir one of my client importing gift articles and remove the cover and sell the gift articles under their packing cover to the gift shop ( retailer). I just want to know whether packing and repacking is liable to excise under the mrp based valuation Thanks in advance Arun kumar

    You have not clarified that what type of products are imported i.e. product name or tariff head of product. Therefore we can’t say that whether it is liable to excise or not. If the article is classified under Third Schedule of Central Excise Tariff Act then packing or repacking will be amount to manufacture and duty will be payable under MRP based valuation.
  • How do we differentiate goods transport operator and goods transport agency? Seeing the current definition of GTA it seems that even goods transport operators are liable for service tax? Sweta Kalantri

    In case of Transport of Goods by road, service tax will be levied only if Service provider is either Goods Transport Agency or a Courier Agency. Goods Transport Agency means, “person who provides services in relation to transport of goods by road and issues consignment note, by whatever name called”. Therefore service tax is levied only when transporter issues consignment note or any other document by whatever name called otherwise it is exempt. So whether if a transporter issues consignment note (whether it is called as goods transporter operator or not), service tax will be levied.
  • Our private limited company has let out one residential flat. We have not charged any service tax as the this is residential flat. However, society is charging us service tax on maintenance. My query is whether I can get credit for this service tax against my service tax raised through consultation fees. We are not using residential flat as such Rajesh Shah

    Credit of Service tax paid on Maintance Service of residential flat will not be allowed. As per Rule 6 of Cenvat Credit Rules, 2004 credit of input services used for providing exempted service will not be allowed. As letting of residential flat is exempted service and maintenance service is exclusively used for providing this service therefore credit will not be allowed.
  • One partnership firm having agreemnet with an Individual for suppyl of Labour but contract is these labour shall work on Piece rate basis not on basis of their slary.At month end their remuneration is paid on basis of production of pieces. Industru is textile processing and these labour works at Factory of firm. My question is Is it manpower supply agreement or Works contract agreement? How much service tax is payable? Is reverse charge is applicable?. S.P.Gupta

    Firstly it is not work contract service. Whether it is covered under manpower supply service or not, reverse charge will not apply (as service recipient is a firm and not a body corporate). Further in our opinion prima facie the service in instant case is not treated as manpower supply service as consideration is represented on the basis of work and not on the basis of labour supplied and it shows that control & supervision of manpower is not with service receiver. However whether the service is manpower supply service or not is ultimately depend upon the terms and conditions of the agreement. In our opinion, the service is not covered under manpower supply service and therefore it is a Pure Labour Contract. As you are saying labours work at factory for textile processing and as per sl. No. 30(a) of Mega Exemption Notification 25, “any intermediate process relating to textile processing is exempt from service tax” therefore service tax will not be levied.
  • sir,we have manu. unit and registered excise unit exporting goods in nepal and domestic market availing excise exemption of 1.5 crore under ssi.now our turnover increased from 1.5 crore ie 1.25 crore in domestic market and 60lackh in nepal market.excise dept issue us a notice to pay excise because we have accross limit of 1.5 crore in total turnover(nepal+india).we are exporting goods under bond ut1 and are1.we are receiving payment in inr. so do we have to pay excise duty or we will be exempted from paying the duty? abhinav aggarwall

    No, excise will not be levied. The exemption of 1.5 cores is available for home clearance and aggregate value of 1.5 crores does not includes export clearance. Therefore you are not required to excise on home clearance. Now the goods exported to Nepal in Indian Rupee is also counted as export.
  • Respected Sir, I am newly passed out CA and require your valuable advice. One of my clients has raised a query on service tax which is as follows: - My client is in the business of Road Construction, Repair and Maintenance and is a Pvt. Ltd company. They are in the receipt of services for the maintenance of the road and as per the Reverse Charge Mechanism the service tax liability in respect of some services is to be discharged by the service recipient w.e.f 1st July, 2012. My client business was made exempt from the service tax by including them in the List of Exemptions under Mega Notification no 25/2012-ST dated 20-06-2012 which is as follows:- "Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a road, bridge tunnel, or terminal for road transportation for use by general public is exempt from service tax" They therefore being an exempt entity from service tax, whether they have to pay service tax under reverse charge Mechanism as service recipient or they will be exempt. Your professional guidance in this will help me a lot. Request you to also provide the reference for the above. Regards, Jayant Nahata jayant nahata

    The exemption is available in respect of service not to person providing service. The liability under reverse is independent from output service and therefore he will be liable under reverse charge, if applicable.
  • dear sir ,construction of bridges for government is exempt for main contractor.further if a sub contractor is providing work contract service to such contractor he is also exempt from service tax.please clarify that whether main contractor will deposit service tax under reverse charge since liability of recipient and provider are independent.. manish

    The exemptions contained in Mega exemption notification(either services provided by main contractor to government or provided by sub contractor to main contractor) is available in respect of “Service” and not in respect of “Person” i.e. ‘services’ provided by sub contractor to main contractor is exempt (if WC services provided by main contractor is exempt) and “Sub-Contractor” is not exempt. Therefore Main contractor will not be liable under reverse charge as services provided by sub-contractor are exempt.
  • Dear Sir, Some transporters are charging service tax @ 12.36% on their GR in spite of charging 3.09 %.My query is, Can we take the input of that full amount of Service tax charged by them? Thanks. Sudheesh K C

    Yes, You can take full credit. Availing of abatement is optional and if transporter charges @12.36, it means he has not availed the option of abatement. Further, there are number of decisions that the classification and valuation of supplier cannot be challenged at the end of receiver.
  • we are registered under service tax in faridabad and providing service in haridwar then we have to register there in yes then why? gaurav

    Already answered. Registrations are required to take in respect of premises from which service provider provides services and not the premises of service recipient. Therefore if organisation provides services from a premises other than its registered then it is required to take a separate registration. But if organisation provides services from registered premises then it is not required to take a separate registration even if receivers are located at different premises.
  • if any orgainsation provide service to their client which are located at another than registered area, then service provider have to registered at service receiver area under service tax or not. gaurav

    Registrations are required to take in respect of premises from which service provider provides services and not the premises of service recipient. Therefore if organisation provides services from a premises other than its registered then it is required to take a separate registration. But if organisation provides services from registered premises then it is not required to take a separate registration even if receivers are located at different premises.
  • Dear Sir, Kindly elaborate in line with para ((B) specified in sub-clauses), whether can we avail input service credit vehicles engaged for movement of goods within factory especially in cement industry from one place to another place (loading of Coal into conveyor belt). Sec. 2 (1) of the CENVAT Credit Rules, 2004 defines “input services” and states that “input service” means any service, – (i) used by a provider of taxable service for providing an output service; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to setting up, modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal; (A) specified in sub-clauses (p), (zn), (zzl), (zzm), (zzq), (zzzh) and (zzzza) of clause (105) of section 65 of the Finance Act (hereinafter referred as specified services), insofar as they are used for– (a) construction of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or (B) specified in sub-clauses (d), (o), (zo) and (zzzzj) of clause (105) of section 65 of the Finance Act, insofar as they relate to a motor vehicle except when used for the provision of taxable services for which the credit on motor vehicle is available as capital goods; or (C) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee;”. T.GOPALA KRISHNA

    Firstly, in case of transport of goods service, service tax will be levied only when services are provided by GTA (GTA- which issues consignment note). If service tax is levied and it is inward transportation of goods then credit of service tax on freight in relation to movement of goods will allowed as it is covered under the definition of input service.
  • Hello A trust regd under section 12aa runs a school It is a school which provides nursery and primary education .This is not recognized However they also corse which is not CBSE but recognized by MCD education deptt Not by CBSE because it does not cover class X and XII Whether classes of nursery and primary i.e fees charged is liable to service tax pradeep

    No it is not liable to service tax. As per Sl. No. (l) of Negative list as given under section 66D, “Pre-school education and education upto higher secondary school and equivalent is exempt”. Nursery course and primary education is covered under this clause, therefore it will be exempt.
  • Hello There is a trust regd under section 12 aa It gives a part of the premises on rent to ICWA institute Is the service taxable They also carry out some vocational courses like tailoring/beauty parlour etc ,for which they charge a fees .These courses are not recognized Are thses liable to service tax pradeep

    As per notification no. 25/2012-ST, “Services by an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) by way of charitable activities” is exempt from service tax. In our opinion Renting of Premises to ICWA is not a charitable activity, therefore service tax will be levied.
  • Prepared food supplied to outdoor Catrer like gravy, sauces etc will this attract service tax over and above value added tax of 12.5% tax ?? If yes how much and break up of both taxes ??& slab ?? Rahul Shah

    In our Opinion service tax will not be levied on supply of material to Outdoor caterers as it is a sale of goods and not a service.
  • Respected Sir, According to the knew budget, is there any change for the turnover limit of excise for the ssi units due to which they come in excise with effect from 01-04-13,as in the last budget it was Rs.4 crore mehul

    No there is no any change in the SSI exemption Limit. If the turnover in the previous year is lower than 4 Crores then exemption will be allowed upto Rs. 1.5 Crores in current financial year.
  • Rule 7 of CCR, 2004 prescribes manner of distribution of credit by Input Service Distributor. Credit of Service Tax shall be distributed on pro rata on the basis of turnover of the concerned unit to the sum total of turnover of all the units. In case non-clearances of a particular unit during a month, can we distribute the credit to the other units by excluding the said unit? A Ravindra Babu

    The Rule 7 of Cenvat Credit Rules 2004, describes that the credit is to be distributed in pro rata basis in the ratio of turnover. If a unit has no any turnover in a particular period then according to rule that unit itself not eligible for credit (as it has Zero Turnover) and credit will be distributed to other units only.
  • sir ministry of finance has imposed service tax on products transported through rail.some essential commodities like food grains , perishables, fertilizers have been exempted from service tax when transported through rail, but railways is charging/demanding service tax on demurrage amount levied on rakes which carried those essential commodities which have been exempted from service tax when transported through rail. is it justifiable on the part of railways? please guide us. thanks sukhjit singh

    The exemptions contained in the Mega Exemption Notification is allowed in respect of transportation services but demurrage charges are not a consideration for transportation service. Further it is specifically mentioned under Rule 6(1) of Service Tax (Determination of Value) Rules, that “the amount realized as demurrage for a service beyond the period originally contracted” should be included in the value of service. Therefore service tax will be levied on demurrage charges.
  • respected sir, We have digital photo printing and binding unit of wedding albums. Whether we have to pay service tax. samarth albums

    Yes, service tax will be levied as it is neither covered under Negative List Section 66D or under Mega Exemption Notification 25/2012-ST. Further it also not covered under Work Contract Service as the activity is not construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration activity. As this activity involves material also therefore valuation will be based on Dominant Nature Test. If material portion is dominant then service tax will not be levied otherwise service tax will be levied on 100% value.
  • Respected sir, I am a accountant in online portal.i have also a affiliation of online portal we sales through this web site but product dispatch through our place to customer but payment come through affiliation site. he deduct your commission than paid to us that is mean we sale the customer through website and payment come here.what is the sale entry in tally software. Manoj Singh

    We are dealt with service tax and excise laws. Ask the questions related to these matters only.
  • In case of outdoor catering services DVAT will be levied on gross value or on abated value under Service Tax? Manoj Jhanwar

    We do not deal with VAT Laws. Service tax will be levied on Gross amount charged excluding Vat and it is to be charged on 60% value of Gross amount excluding VAT.
  • Our Client is engage in the business of preparation of Advertisement Hording for the various companies. In this they do fabrication and printing work along with supplying the material. We are paying Vat on the entire bill amount. My question is that weather it attracts the Service tax or not ? SIMAL

    Yes service tax will be levied on this activity as it is neither covered under negative list nor under mega exemption notification. Further it is not covered under work contract service and service tax will be levied only on service portion not on material portion. However, if the value of material cannot be segregated then Rule of Dominant nature test will apply and accordingly value will be calculated.
  • When we need to file the II hly return for 12-13; Any new format of ST-3 for RCM workings..!! visu iyer

    Refer the Notification no. 01/2013-ST at http://www.new.capradeepjain.com/redirect_amdview_6311. The new format has been prescribed and also the last date is 25.03.2013 for filing of Return for period July to September 2012 but still the format is not ready on ACES for filing the return.
  • Respected sir, We are SSI unit manufacturing pvc tubing. We have crossed our turnover Rs. 90 lacs during the m/feb-13. Sir i want to know the whether we are liable to submit declaration to the excise department if us pl let me know under which format. KAILAS

    Yes, you are required to file a declaration to Deputy/Assistant Commissioner as prescribed under notification 36/2001-C.E. (N.T.) dated 26.6.2001 and as amended issued under Rule 9 of Central Excise Rules.
  • We are providing services of only labour work(without material) for electric fitting at Individual residence, new residential complex to be constructed new commercial complex to be constructed. My question is under which category my case will fall i.e. under which category i have to make application for service tax registration. LALIT GHIA

    You have to registered under category “services other than Negative List ( 00441480)”. The classification is only for statistical analysis only and it is no more important therefore classification should be done under more suitable category (because each service is not defined separately). However, the CBEC has required classification to be done in Registration also by notification number 48/2012 dated November 30,2012. You will fall under Residential complex service/ repair or maintenance service/ installation and commissioning service. You have to decide based nature of your contract.
  • How shall differentiate sponsorship and advertisement as both are categorised in revenue expenses under Publicity where sponsorship is taxable and advt is not taxable visuiyer

    Firstly it is clarified that all type of advertisements are not exempt. Only “Selling of Space and Time slot for Advertisement” is exempt. Further Sponsorship is an indirect advertisement and generally consideration is represented, other than by way of money e.g. organizing an event, distribution of prizes to winners. Sponsorship includes naming an event after sponsor, displaying the sponsor’s company logo or trading name, giving the sponsor exclusive rights etc.
  • Sir, our client is a SEZ unit in Noida and they are claiming refund for the Service tax payable to the service provider. Can the adjust their liability under reverse charge mechanism against the Service Tax claimed as refund or they have to pay?? CA Shweta Ojha

    No. Liability under reverse charge can’t be adjust against refund claim. Service tax liability under reverse charge should be separately discharged only in cash.
  • Sir If a company is constructing roads, gardens & other facilities in a residential complex or villas & receiving a certain percentage of the sale amt. of complex from the customer directly, whether it would be taxable. Mohit Jindal

    Yes it will be taxable as the activity is neither covered under negative list nor under mega exemption notification. Roads for general public are exempt. But road inside the residential complex cannot be termed as meant for general public.
  • Dear Sir, Service provided in India is just of identifying vendors for the parent company from where the vendors shall procure inputs directly. The inidian subsidiary shall receive the payment in foreign currency from parent company. As per Rule 6A read with POP rules, can it be called export of service. CA Irfat

    The service of identifying vendors for parent company, is not covered under definition of “intermediary service” as mentioned in Rule 2(f) of PPS Rules. Therefore Rule 9(C) of PPS will not be applied. As Rule 9(C) is not applied, Place of Provision will be determined as per general Rule 3 of PPS Rules. As per this rule, generally Place of Provision will be Location of Service Receiver. Hence in our opinion, in the instant case, place of provision will be non taxable territory (location of Parent company). As the place of provision of service is outside India and consideration is received in the convertible foreign currency,it will be treated as Export of service as per Rule 6A.
  • Dear Sir, We are aviling cenvat credit of service tax against premium paid towards marine insurance. This covers goods in transit as we have sales network across india. The premium is paid upfront for the entire financial year. Query is 1) whether cenvat can be availed towards service tax paid on such premium. 2) if affirmative then whether service tax credit can be taken upfront or on proportionate basis based on consumption only. Request your valuable views DM

    In our opinion, Cenvat Credit of Insurance premium towards marine insurance of final product is not allowed as the definition of input service as given under Rule 2(l) of Cenvat Credit Rules, 2004 defines input service as “any service used by manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal” This definition includes only services used ‘upto the place of removal’. Therefore, service tax credit on marine insurance of final product will not be allowed. However you may be eligible for refund under notification 41/2012-ST (effective after 1st July) if such service is treated as service used beyond the place of removal ‘for Export of goods’.
  • sir please clarify that if a service is covered by mega exemption list and is liable to reverse charge as well ,whether recipient would be liable to deposit service tax under reverse charge mechanism. Manish

    If service itself is exempt then no question of reverse charge arises i.e. reverse charge is applicable only when service is taxable.
  • we are a manufacturing unit in SEZ and use laundry Services. Factory uniforms used in production area are collected by laundry service provider from our sez location and delivered to us after washing. Washing activity is carried out outside sez. Please guide if Service Tax is payable on this activity in lights of notification No 40/2012 ST. naveen

    As per notification no. 40/2012-ST, services received by SEZ are exempt. The exemption is allowed by way of refund. However the direct exemption will be allowed if services are wholly consumed in SEZ.
  • Dear Sir, We are a small manufacturing concern (proprietorship)having turn over of below 2Cr. We are paying Cartage to transporters who is not charging any service tax on Gr. My query is, Does that create any liability for us to pay service tax? Thanks. Sudheesh K C

    If the “factory of manufacturer(Proprietor) is registered under or governed by the Factories Act, 1948 (63 of 1948)” then 100% liability of service tax on GTA service will on manufacturer otherwise no any liability. Secondly, the consignment note should be issued by GTA for levy of service tax. If it is local cartage only and the transporter is truck owner then service tax is not payable.
  • service receiver company engaged an professional firm of Corporate social responsibility to execute company's CSR Plan and provided a fund to incur it using his expert knowledge in the field of CSR. The firm is working as a pure agent and they will charge only professional fee and expenses incured in relation to CSR will be reimbursed by company or credited against advance deposited in a separate bank account. The firm further gives contracts to various contractor to execute different job like water pipe line, renovation of school etc. IN THIS CASE WHO WILL AVAIL CENVAT CREDIT FOR THE SERVICE TAX CHARGED BY SUCH CONTRACTOR ON THEIR BILLS. PRACTICALLY I THINK COMPANY SHOULD AVAIL THE CREDIT. BUT HOW COMPANY WILL AVAIL IF BILLS RAISED BY CONTRACTORS ON THE PROFESSIONAL FIRM. HOW THE PROCESS WILL WORK SO THAT CENVAT CREDIT CHAIN NOT BREAK AND COMPANY COULD AVAIL CENVAT CREDIT. PLEASE EXPLAIN jagmohan

    Pure agent has been defined in Explanation to sub-rule 2 of Rule (5) of the Valuation Rules as a person who- “1• enters into a contractual agreement with the recipient of service to act as his pure agent to incur expenditure or costs in the course of providing taxable service; 2• neither intends to hold nor holds any title to the goods or services so procured or provided as pure agent of the recipient of service; 3• does not use such goods or services so procured; and 4• receives only the actual amount incurred to procure such goods or services.” The above definition of Pure agent makes it clear that the invoice for services received as pure agent should be in name of principal not in name of pure agent and pure agent can’t use these service(point no. 2 & 3). In the instant case, If CSR Firm is covered under the definition of pure agent (i.e. the above 4 conditions satisfy) then credit of service tax will be allowed to the company on expenditure incurred by CSR Firm on behalf of company. In such case value of service provided by CSR firm will be equal to professional fess only and service tax will be charged only thereon i.e. service tax will not be charged on reimbursed amount. But if the above conditions not satisfied then CSR Firm will not covered under the definition of pure agent and service tax will be leviable on whole amount charged by CSR i.e. Professional Fees + Expenditure reimbursed and in such case credit of expenditure incurred by CSR will be allowed to CSR Firm and not to Company. However credit of service tax charged by CSR Firm on Total Amount (i.e. Professional Fees + Expenditure reimbursed) will be allowed to the company. As you are saying that bills of Contractors are raised in the name of CSR Firm therefore CSR Firm is not treated as pure agent and credit will not be allowed. The arrangement should be done as to that the CSR firm will cover under the definition of pure agent and then credit will be allowed to the company. Further in case of CHAMUNDI TEXTILES (SILK MILLS) LTD. [2010 (20) S.T.R. 219 (Tri. - Bang.)] it has been decided that credit of service tax levied on expenditure incurred by pure agent on behalf of principal, will be allowed if reference of principal is given in the invoice.
  • we award pure labour contract for radial gate painting,materias supplied by department.Are we liable to insist for 100%ST remittance proof from contractor as service receipent. ramananda rao

    You query is not clear. In case of pure labour contract, reverse charge does not applies and recipient is not required to obtain any evidence from service provider. Further, when the liability to pay tax is on provider, there is no liability on recipient.
  • Dear sir we are registered under erection commisioning and maintenance and doing work contracts i.e.(labour + supply) and seperate contracts also..However on our work contracts 4% WCt is deducted at source by Clent and submitted to State Governmnet as VAT.Then is there is any liability for Service Tax also or not.and also if we can bifurcate some contracts in labour and supply and cant bifurcate between some then what is the criteria of assesing the same upto Financial year 2011-12 DIVESH AGGARWAL

    Yes service tax will be levied as it is a work contract service. If you can bifurcate the labour portion then service tax will be levied on labour portion only @12.36%. But if the material and labour portion can’t be segregated then: “(A) in case of works contracts entered into for execution of original works, service tax shall be payable on forty per cent. of the total amount charged for the works contract; (B) in case of works contract entered into for maintenance or repair or reconditioning or restoration or servicing of any goods, service tax shall be payable on seventy percent. of the total amount charged for the works contract; (C) in case of other works contracts, not covered under sub-clauses (A) and (B), including maintenance, repair, completion and finishing services such as glazing, plastering, floor and wall tiling, installation of electrical fittings of an immovable property , service tax shall be payable on sixty per cent. of the total amount charged for the works contract”
  • Sir, We are in to manufacturing and does not provide any services.Can we take the input on service tax paid on Stock & Building Insurance premium? Thanks. Sudheesh K C

    As per definition of Input service as given under Rule 2(l) of Cenvat Credit Rules, 2004, input service means, any service used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal. Further the definition also include services in relation to accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services etc. Therefore credit of insurance premium of factory building and stack will be allowed as it is used for manufacturing and is not excluded from the above definition of input service.
  • Sir, we have procured a capital goods in April,2010 and availed in April, 2010. Balance 50% credit has taken by us next financial year 2011-12 i.e. in April, 2011. Now we intend to remove this captial goods after use. As per CCR we can claim 2.5% depriciation per quarter from April, 2010 onwards. In this regard, I want to know your valuable advise whether we should also consider April, 2011 for claiming depriciation 2.5% for balance 50% balance credit. As per my knowledge, 2.5% depriciation will be calculated on entire duty amount from April, 2010. Kindly confirm whether my understanding in order. Your immediate response in this regard, will be highly appreciated. Kamal

    As per Rule 5A of Cenvat Credit Rules, 2004, if capital goods removed after being used, the manufacturer or provider of output service shall pay a duty equal to the higher amount from following i.e. (1) or (2) whichever is higher:- 1. Cenvat Credit Taken minus 2.5% for every quarter or part thereof from the date of taking the Cenvat Credit. Or 2. Duty leviable on Transaction value (sale value) Further the depreciation of 2.5% under above point (1) shall be deducted from the date of taking the Cenvat Credit. In our opinion for the purpose of this deduction, the date of taking Cenvat credit first time should be considered.
  • Sir, in hotel industry. normally room are provided @ Rs.2000/- with breakfast and lunch free and they are paying service tax on lunch @ 500/- per plate and breakfast@150/- per plate as their decided price @4.944 and balance under accomodation service7.416%. This method is correct. Please provide legal position. CA Sanjeev Mishra Jaipur

    It is not a correct treatment. When two or more services are provided in a composite contract like this i.e. room along with breakfast and lunch are provided then it is naturally bundled service. In this case, the service which gives colour to whole transaction the service tax will be charged under that head. In this instant case, room stay is giving colour to complete service. Hence, it will be covered under Accommodation service. Thus, the service tax will be charged @ 60% under notification 26/2012-ST dated 20.6.2012.
  • Mr. A inaugurated office on 1st April 2013. Will he be eligible for SSP exemption (E/N 33/2012) in 2014-15 if his income in 2013-14 is as follows (each case is an individual case): Case 1. Receipts from fashion designing: Rs 4 lakhs; Receipts from service station with brand name of Maruti: Rs 8 lakhs Case 2. Receipts from fashion designing: Rs 4 lakhs; Receipts from GTA business: Rs 8 lakhs Case 3. Receipts from fashion designing: Rs 4 lakhs; Receipts as insurance agent: Rs 8 lakhs Case 4. Receipts from fashion designing: Rs 4 lakhs; Receipts from service of supply of manpower [to corporate clients]: Rs 8 lakhs Also, in case no. 4, on what amount will he be required to pay service tax in 2013-14 - entire Rs 8 lakhs or only Rs 2 lakhs(i.e., after availing balance exemption of Rs 6 lakhs (10 lakhs-4 lakhs)? Varun Verma

    Case 1:- Exemption will not be allowed as aggregate value of taxable services in the previous year exceed 10 Lakhs(service provided in the Brand name will also be included as per definition of “aggregate value” in the notification. Case 2:- In case of GTA business, value of service provided in which reverse charge applies(service tax is payable by receiver) shall not be considered for the purpose of calculating aggregate value of 10 Lakhs therefore from the value of Rs. 8 Lakhs if value of Rs. 2 Lakhs or more is payable under reverse charge then exemption will be allowed otherwise not. Case 3:- Exemption will not be allowed. Case 4:- Exemption will not be allowed. in 2013-14, service tax will be levied after availing crossing exemption limit as in 12-13 it has no any turnover therefore service tax will be levied on 2 lakhs.
  • Sir, I want to know - - how an Interior Decorator's service is chargeable to Service Tax in FY 10-11, FY 11-12 & FY 12-13? - Whether any abatement is available? - How to compute the assessable value? - Can we bifurcate it into Works Contract activity and the like and ID's Service? - Whether Reverse Charge Mechanism applies? - Please also clarify whether there is a difference between Interior Decorator and Interior Designer, which makes the difference in chargeability of Service Tax from their Client Kindly Reply, heavily confused please help me to get out of this...... Vishwanath

    Prior to introduction of negative list service tax was leviable on the services specified in Section 65(105) and each service had defined separately. Prior to negative list interior decorator service means, services by way of advise, consultancy, and technical assistance or in any manner, related to design or beautification of spaces. Earlier there was no any abatement for this service. After introduction negative list each service is not defined separately and a few services are defined. Now in service tax, definition of interior decorator service is not given and the service is also not covered under reverse charge mechanism. Further the service can only be categorized if the service is satisfied the definition of work contract service as given u/s 65B(54). Also, there is no any difference in treatment of service tax on interior decorating or designing. Under negative list concept, there is no any definition of interior decorating or designing. The same tax will be applicable to both of them.
  • We are manufacturers. we are paying to transporters, who are delivering the goods to our consumer place... For that we are collecting freight/carriage seperately in the sales bill. we are collecting more than we paid to transporters.... we are getting service from registered and unregistered transporters... tell me GTA impact in that .. Thanking You in advance... KEERTHANA

    At the time of payment to transporters you will be liable under reverse charge as service recipient. Further in case of collecting freight or extra freight from customer by adding freight separately in the bill, you will not be liable for excise or any service tax. Excise will not be levied as it is not a part of value of goods and service tax will also not leviable as services by way of transportation of goods by road is exempt unless it is provided by goods transport agency.
  • Sir, Our client is importing airtime and simcards from outside india and it is selling the same in india to distributor and customer(going outside) but simcard and airtime can be used only outside India not in India. So my querry is whether our client is falling in intermediary service provider and what would be application of place of provision rules Ashish Joshi

    Sl. No. 29(f) of Mega Exemption Notification Exempts “services by selling agent or a distributer of SIM cards or recharge coupon vouchers in their respective capacity”. Therefore service tax will not be leviable on the services provided by these agents.
  • Dear Sir, eeking your expert openion on following issues: Clent providing xerox per page @ Rs.1/- 1. Whether Xerox covered under Service Tax. 2. If cover, then pls specify Service Head 3. is any abatement for paper, ink used in Xerox. 4. Position before Negative list & After. Thanks, Waiting for your valuable reply. Thanks CA Radhesham Bhutada Pune Xerox Service

    Prior to Negative list it is not taxable because it is not covered under any of the service. After introduction of negative list, service tax is leviable on all the services. When the material and labour are together then it should fall under works contract. But xerox is not covered under Work contract service as scope of work contract in Service tax is limited to repairs, maintenance, construction, installation etc.The Xerox involved material as well as service portion also i.e. it is a composite contract but it is not repairs, maintenance, construction or installation etc . Hence Xerox service does not fall under “work contract”. Xerox contract involved material as well labour but it is not fall under work contract therefore we have to test dominant nature test. In our opinion, material potion is dominant in the Xerox contract therefore service tax will not be leviable.
  • Dear Sir, We have a manufacturing company with turnover of 14 cr. We have received SCN from excise regarding two issues. Firstly, Till 2011, we were only supplying locally. On 2012 onwards, we started exporting. When we applied for LUT, they put a seal on Bond, without mentioning the validity period. We thought that LUT doesn't require revalidation and exported using the same LUT no. in the ARE1, after 1 month of LUT expiry. later, Range Superintendent informed us to get new LUT. The new LUT has the validity period mentioned on it. Now, we have received a Show cause Notice,under rule 19 Central Excise Rules 2002, for exporting under expired LUT. In the first LUT, the validity was not mentioned and we were not informed of the same. Whereas, in the second LUT, the validity is clearly mentioned. Kindly advise on our defence in this situation. Secondly,they have imposed Penalty under Rule 27 Central excise rules 2002, for not filling triplicate copy of ARE1 within 24hrs. We usually export on Fridays. Saturday and Sunday, there is no facility for receiving the copies. Hence, we submit on Monday. Doesn't this account as within 24 'working' hours? please Advise... E N. Ramachandra

    Although it is clear that the LUT is valid for one year. But you can plead that when the export has taken place and the proof of the same has been filed then it is procedural lapse. Further, there was lapse on part of the department also and they should have informed you that the LUT is going to expire and we should get new LUT. Secondly, there is provision in General Clauses Act that when a particular act is to be done by a particular date and there is holiday on that date then it automatically taken as next working day. Hence, there is no delay and as such no question of imposition of penalty.
  • Dear Sir, We have a manufacturing company with turnover of 14 cr. We have received SCN from excise regarding two issues. Firstly, Till 2011, we were only supplying locally. On 2012 onwards, we started exporting. When we applied for LUT, they put a seal on Bond, without mentioning the validity period. We thought that LUT doesn't require revalidation and exported using the same LUT no. in the ARE1, after 1 month of LUT expiry. later, Range Superintendent informed us to get new LUT. The new LUT has the validity period mentioned on it. Now, we have received a Show cause Notice,under rule 19 Central Excise Rules 2002, for exporting under expired LUT. In the first LUT, the validity was not mentioned and we were not informed of the same. Whereas, in the second LUT, the validity is clearly mentioned. Please advise on defence of this situation. Secondly,they have imposed Penalty under Rule 27 Central excise rules 2002, for not filling triplicate copy of ARE1 within 24hrs. We usually export on Fridays. Saturday and Sunday, there is no facility for receiving the copies. Hence, we submit on Monday. Doesn't this account as within 24 'working' hours? please Advise... e N. Ramachandra

    Reply:- Although it is clear that the LUT is valid for one year. But you can plead that when the export has taken place and the proof of the same has been filed then it is procedural lapse. Further, there was lapse on part of the department also and they should have informed you that the LUT is going to expire and we should get new LUT. Secondly, there is provision in General Clauses Act that when a particular act is to be done by a particular date and there is holiday on that date then it automatically taken as next working day. Hence, there is no delay and as such no question of imposition of penalty.
  • sir please clarify me on the following situation:- in case of a pure labour contract, where the manpower works under the control of contractor and not under principal employer, are chargeable under which head of taxable service Rakesh

    After introduction of negative list concept, importance of classification of services are limited in some areas e.g. reverse charge, exemption etc and every service is not defined separately. As the contract is pure labour contract, the reverse charge will not be applicable. However, classification has been reintroduced by recent circular number 165/16/2012 by CBEC only for the purpose of payment only. The CBEC has introduced old list of 120 services for the purpose of payment by different accounting codes and if any service is not covered under list of 120 services then the payment of this type of service will be done under head “Service Not in Negative List”.
  • How do we calculate notional rent on security deposit? The security deposit was partly invested in saving account and partly used for repaying loan Suruchi Agarwal

    As consideration includes also Non- Monetary consideration therefore Service tax is applicable on Notional Interest of security deposit also. But in our view it is only if it has a substantial impact on main consideration of the service and terms of services.
  • Sir our Query is, We are a sez unit situated in zone (in Guajrat) , we purchase cotton yarn from a party in south and issue I form to them. Now they are asking us to issue them H form. They are claiming for refund from the sales tax department in their state (Andhra Pradesh) on input tax credit paid on purchase of Cotton as raw material to produce yarn. The officer from the department has informed them that they will be entitled for the refund only if they are able to produce H form to them, from the party to whom it has made deemed export. We look upon for your expert opinion/ advice , what is the correct procedure and what can be done in this regard. Ca Seema Saraogi

    We not deal with sales tax and VAT matters. Please ask queries related excise and service tax.
  • Whether name of the Job Worker can be included in the IEC of the Principal Manufacturer. RAHUL MANDAL

    No, when IEC is to be taken for Principal Manufacture then how the name of Job worker is included.
  • sir, our factory is under in GRAM-PANCHAYAT,so can we need SHOAPACT LICENSE, OR ANY OTHER DOCUMENTS, somnath

    We deal in service tax, excise and customs. ask queries related to these matters only.
  • The service provider of rent on immovable property died in sept, 2011. What is his liability with regard to rent from immovable property before his death and after his death? Arjun Sharma

    There is no separate provision in this regard. If there is any pending liability then legal heir of service provider will be liable for the same and thereafter if contract is continued then legal heir himself will service provider and liable for service tax.
  • Dear Sir, We are providing services of repairs and maintenance to Navy /Coast Gurard and had been enjoying exemption from service tax and the said notification was recinded by 34/2012. Now under the negative list can we still claim exemption under section 66D for service provided to Central government. Request your valuable views DM

    The exemptions related to services provided to Government is prescribed in Mega Exemption Notification 25/2012-ST and not in Negative list. Further Navy is covered under the meaning of Government. As you have not mentioned that what type of repairs or maintenance service is provided to Navy therefore we can’t say whether it will exempt or not. So you have to see the Notification 25/2012-ST that whether your service is covered under any of the clause of the mega exemption notification under services provided to government. You can see the Notification 25/2012-ST at -http://www.new.capradeepjain.com/redirect_amdview_5957_3
  • Sir ji.. IS CENVAT credit on sponsorhsip is eligible for availing input credit? As tax on SPONSORship service is payable by the service receiver. visu iyer

    Already answered. The sponsorship service is also of the nature of advertisement therefore credit will be allowed if it is used for providing output service or used in relation to manufacturing.
  • Dear Sir, We are Importer of Machinery. When we Imported a machine we contract with a shipping agency. My question is that can we take credit of Service tax if foreign shipping agency deliver the machinery and made a bill in the name of indian shipping agency and the amt. paid to foreing shipping agency by the indian shipping agency. and in bill we are mentioned as importer. Please solve it Sir. In above reference please tell me that can we take credit of the ST paid by indian shipping agency on our behalf if bill is raised in the name of shipping agency Saurabh Khandelwal

    Yes, you can take the Cenvat credit on bill of Foreign Shipping Company if your name is mentioned in the bill of foreign shipping company
  • Dear Sir,We were in a MOU with A government public enterprise to retrofit seats and berths in Coaches made available by the Railways to them. These Works Contracts were different for each Railway. The Railways issued Works Contracts on the Public Ent. and they back to back issued a works contract order on us.Sir we were supposed to assemble all items regarding berth fitment at the station itself,but due to space problem, we got the items related to making seat/berths in our factory premises.Earlier we paid Works Contract tax under Compensation Scheme on the entire work executed,but the Excise Auth. as a result of Search Seizure told us that the Seat Berths leaving from our Factory were excisable and hence we paid the entire duty on such berths and Seats available.but now they have again issued a show cause notice? demanding to pay duty on even bought out itms reqd. for fitmtnnt. Sir, pl advise if r lablle to such duty in totslity ? Ekta Agarwal

    If the activity of assembling the berth seats amounts to manufacture then excise duty will be leviable on this activity (as per rate prescribed for that tariff head) and then service tax will not be leviable on that portion. Because as per clause no. (f) of negative list as given u/s 66D exempts any process amount to manufacture. But if the process does not amount to manufacture then excise duty will not be leviable and service tax will be leviable on entire contract as per provisions applicable to work contract service.
  • Dear Sir, We have paid service tax for few heads twice on 6th of Feb,2013, Can we adjust against future payments or we need to go for refund claim? regards Dakshina Murthy DAKSHINA MURTHY

    As per Rule 6(4A) of Service Tax Rules 1994, "Notwithstanding anything contained in sub-rule (4), where an assessee has paid to the credit of Central Government any amount in excess of the amount required to be paid towards service tax liability for a month or quarter, as the case may be, the assessee may adjust such excess amount paid by him against his service tax liability for the succeeding month or quarter, as the case may be." Further Rule Sub Rule 4B of Rule 6 provide that “the adjustment of excess amount paid under sub Rule 4A shall be subject to the condition that the excess amount paid is an account of reasons not involving interpretation of law, taxability valuation or applicability of any exemption notification” So according to above provisions you can adjust the excess amount paid towards your succeeding month or quarter’s liability subject to the fulfillment of conditions mentioned in sub rule 4B. But the adjustment is allowed only for the succeeding month or quarter’s liability.
  • Sir, An Indian Company has sold and exported a machinery to a Gulf company. Before its warranty period is over, snags are reported and the Indian company with the consent of Gulf company informally arranges a local firm in Gulf to rectify it , The gulf company pay the charges and claim its refund form the Indian Company as it is under warranty.Whether it would be taxable (not an intermediary service I believe)? since both beneficiary and provider are abroad but payment made under contractual obligation? Kindly give your valuable opinion on this? subramanian

    In our opinion it is not taxable as no any service is received by the Indian Company. Local firm of Gulf is arranges by Foreign company itself, not by Indian Company and Indian company is not involved in this transaction. However, the department will not endorse this view and litigation is inbuilt.
  • Reversal of Wrong/excess cenvat credit taken in earlier Months where to show reversal of that amount in ER1 manjunatha

    The reversal of excess Cenvat credit has to shown in the column of “credit utilised for other payment” as given in 5th Sl. No. of ER-1 Return.
  • Dear Sir, My client is engaged in Manpower services.They pay Searvice tax @ 25%(as reverse charge mechanism is applicable in case of some cos.).the query is whether CENVAT credit can be availed agast the payment of 25% service tax. If allowed, do we have to calculate it on a Proportinate basis i.e. 25% CENVAT Credit. Smija

    For taking Cenvat Credit, we have to see the definition of input service as given in the Rule 2(l) of Cenvat Credit Rules, 2004. As per this definition, input service means any service used for providing output service. Therefore in your case, credit will be allowed on those services which used for providing output service of manpower supply service. Further the credit will be allowed 100% not 25% because under reverse charge payment of service tax payment (either wholly or partly) is made directly by service receiver but it does not mean that credit of that portion will not allowed.
  • Dear Sir, Our flat owners association has registered with register of companies under section 25 of Companies act 1956 as non-profit organisation. Is our association also has to registered with service tax as recipient of services from our vendors and applicable for reverse system payments. P.seth

    It depends upon the fact that which services you are receiving and what is the status of service providers. For example in case of security service, manpower supply service or work contract reverse charge will apply if service provider is individual, proprietor, HUF and receiver is body corporate. Similarly in case of legal services, reverse charge will apply if receiver is business entity. As you have not provided that which services you are receiving and what is the status of service provider, it is difficult to say that you have to registered or not. So ask query with complete detail.
  • Sir, we have installing cctv camera in our factory so can we taken installation service charges credit for excise utilization purpose & which notification under we are taken, SOMNATH BHAPKAR

    For taking Cenvat Credit of Input service, we have to see whether the this service is covered under the definition of ‘Input Service’ as given under Rule 2(l) of Cenvat Credit Rules, 2004 or not? As per this definition, input service means, any service used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal. Further the definition also include services in relation to accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services etc. As installation of CCTV cameras is a service in relation to security therefore credit is allowed. For more detail refer Rule 2(l) of CCR,04.
  • Sir ji.. Pl. advise.. Is CENVAT is available for SPONSORSHIP service. I un'stand the service tax is to be paid for Sponsorship service under reverse charge. Can we claim CENVAT also? visu iyer

    Cenvat credit of any input service is available if it covered under the definition of Input service as given Rule 2(l) of Cenvat Credit Rules, 2004. As per this definition input service means “any service used by a manufacturer whether directly or indirectly, in or in relation to the manufacture of final product and clearance upto the place of removal” or “any service used for providing output service”. Further the definition also includes services in relation to advertisement and sale promotion. The sponsorship service is also of the nature of advertisement therefore credit will be allowed if it is used for providing output service or used in relation to manufacturing.
  • Is service tax paid on insurance premium eligible for cenvat credit to works contractor? Liladhar Jhanwar

    Credit is allowed if the service is covered under the definition of Input service as given under Rule 2(l) of Cenvat credit Rules, 2004 i.e. if such insurance service is used for providing output service of work contract. However, this definition excludes services of insurance of motor vehicle or health insurance of employees.
  • Dear sir, My company has engaged an individual contractor, who fabricate scruber (includes civil work also). we are providing him materials like cement, steel, Bars etc. and contractor is providing sand, gitty as required. is this works contract service? if no, how much service tax should contractor charge? and if yes, on which value the service tax is payable by company? kindly reply. Regards, Parmeshwar Rathi

    I have already answer your earlier query but in earlier query you have not mentioned that contractor is also providing any material. So if the contractor is providing material also with labour then the service will be covered under definition of work contract and reverse charge will apply. In case of work contract service, under reverse charge 50% liability shall be on service receiver. Therefore you are liable for 50% liability of service tax. Further the service tax will be leviable on service portion (labour charges or total amount charged minus material value). But if the material and labour portion cannot be segregate then value of service portion will be determined as per Valuation Rule 2A. The free supply of material will also be added for calculation of service tax.
  • Dear Sir, A flat is allotted to a tenant in lieu of tenancy rights that he was holding in respect of that property. He is only charged for the following: 1.) Construction Cost 2.) Market Value for excess area allotted over and above his tenancy rights. Whether service tax would be charged to him on only construction cost & market value of excess area OR Stamp Duty Value at the time of transfer of property OR on value of flats sold to similar buyers at or about the same time. Secondly in case the building is 50% complete at the date of entering into an agreement, then whether service tax is leviable on 100% value of the agreement or only 50%. Rohan Jain

    Service tax is chargeable on value of service i.e. on consideration and as per Explanation (a) to section 67 of the Act “consideration” includes any amount that is payable for the taxable services provided or to be provided. Further consideration may be monetary or non monetary. As per clause (ii) of sub-section (1) of section 67 of the Act where the consideration received is not wholly or partly consisting of money the value of taxable service shall be the equivalent money value of such consideration. Therefore in the instant case consideration is “Amount charged from service receiver + Money value of Tenancy Rights”. If the same (i.e. money value of non-monetary consideration) is not ascertainable then the value of such consideration is determined under clause (iii) of section 67 read with rule 3 of the Service Tax (Determination of the value) Rules 2006 “On the basis of gross amount charged for similar service provided to other person in the ordinary course of trade”. For second question:- the service tax is leviable on value of service provided and value means consideration i.e. any amount that is payable for the taxable services provided or to be provided. Therefore there is no any effect of the fact that building is 50% completed or 100% and service tax will be leviable on value of service (the rules for determination of value is already discussed above).
  • please provide the time limit to isuue show cause notice under service tax laws by the departement if its issued after time is void ?? jignesh vora

    As per section 73, the time limit for issuing of Show cause Notice is “eighteen months”. But if there is fraud, collusion, willful mis-statement or suppression of facts etc. is involved then time limit for issue of Show Cause notice will be “Five years”.
  • Transfer of export licence granted by DGFT for export of sugar quota to other parties.The sugar unit receives quantity based consideration .Whether this amount is taxable and under which service tax category. Tariq

    In my opinion service tax will not leviable on transfer of export license because it is sale of Sugar Quota of export represented by license. But if the license is temporary transfer e.g. through rent (if allowed) then service tax may leviable
  • Respected Sir, We have applied refund of service tax on indian commission paid against export sale under notification no.17/2009 date 07.07.2009.But department is not allowing us refund on the contention that it is nowhere mentioned under notification no. 17/2009 dt 07.07.2009 that refund on indian commission on export sale is allowable refund.Please guide whether refund is allowable or not.If not then under which notification we can calim refund as we are paying the same to the concerned agents.Thanks Parveen Kumari

    The “Sale Commission Agent Service” was not specified in the Notification 17/2009-ST, therefore it is not eligible for refund under notification 17/2009-ST. However, the exemption of service tax was provided under Notification 18/2009-ST when the service was provided by foreign commission agent. Now the notification 17/2009-ST is not effective and refund of services used for export is governed by notification no. 41/2012-ST. As per this notification, the rebate shall be granted by way of refund of service tax paid on the specified services. ‘Specified services’ means, “taxable services that have been used beyond the place of removal, for the export of said goods”. Therefore it depends upon the interpretation that whether commission agent is covered under “used beyond the place of removal, for the export of said goods”. In our opinion, sale agent service is not covered under this definition of “specified services”. But in many cases, it has decided that sale agent service is covered under the definition of Input Service given under Rule 2(l) of CCR, 2004 so alternatively you may take credit of service tax for this service.
  • Dear Sir, I have been charging service tax on rental income from my industrial property and I purchased a residential builder flat & a commercial shop .On both the builder are charging service tax from me . Now I want to know that can i adjust my paid service tax to the builders from the service tax received on rental income Thanks Arun Kumar Sharma

    Definition of Input service as given under Rule 2(l) of Cenvat Credit Rules excludes work contract services and construction services used for construction or execution of work contract of a building. So the definition excludes work contract services and construction service related to building therefore credit will not be allowed to you.
  • Dear sir, we want to know about if packing charges charged on fabric packing in case of job work. whether service tax liviable on packing charges? if not tell me reason about it. pradeep

    Sl. No. (f) of Negative List given u/s 66D exempts “any process amount to manufacture” and sl. No. 30(C) of Mega exemption Notification Exempts “Carrying out an intermediate production process as job work in relation to any goods on which appropriate duty is payable by the principal manufacturer”. So if the packing activity is not amount to manufacture or appropriate duty is not payable by the principal manufacture then service tax will be leviable.
  • Dear sir, I want to know that ceiling of exemption turnover amount 1.5 crore in excise include vat and cst that we charge on turnover. or vat or cst amount excluded in 1.5 cr limit ravi khemka

    No VAT or CST is not considered in calculation of Turnover of Rs. 1.5 Crore for the purpose of Value based exemption(SSI exemption).
  • Dear Sir, Good Evening ! This is regarding Supply from DTA to SEZ Unit. Our company is the manufacturer, elligible for Cenvat Credit. Generally we purchase excisable goods from other manufacturer and sold to customer. In present situation, we are interested to sale the excisable goods from manufacturer to customer directly. The customer is SEZ Unit , elligible for excise exemption against ARE-1 & Cst against form-I. Since we have more modvat credit we don't want to purchase and again sale to SEZ unit. We want to sale dircltly from Manufacturer to SEZ. Is it possible ? If yes , please guide me? With Warm Regards, Prasanta Prasanta

    You can sale the goods directly from the premises of manufacturer to SEZ Unit. In such case all the procedure of ARE-1 should be followed and ARE-1 should be signed by both parties. The same rule relating to physical export applies to export to SEZ.
  • Wish to know if service tax is payable under reverse charge on upfront fees payable towards ECB Loan Whether as per place of provision this would fall under the taxable category of Banking and Other Financial Services and servaice tax would be payable by the borrower. Regards DM associatedm

    As you have not made clarification about the nature of Upfront fees, therefore it can’t be straight away possible for us to say that service tax will be leviable or not. Prima facie service tax will be leviable on these charges under reverse charge as General Rule 3 of Place Of Provision is provided that generally place of provision means location of service receiver. Further the Rule 9(a) of POP will not be applied here because this rule applies where “services provided by a banking company or financial institute to its account holders”.
  • Sir, we have engaged a carpenter contractor, for making furniture in our newly constructed building. he is to pay @ 35% of the total material purchased for his work. we are purchasing the material and he does the work on it. my quary is, can it be treated as "Works contract"? and we are liable to pay st (we = Public Ltd company; and Contractor = individual) Parmeshwar Rathi

    Work contract is defined in the section 65B, which reads as follows: “(54) work contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such properly” In the instant case, transfer of material is not involved and material is provided by service receiver therefore it is not covered under the above given definition of ‘Work Contract Service’. Hence, reverse charge will not be applicable.
  • We have mistakenly paid 100% gta service tax from april 2008 to december 2008 and the same take cenvat credit, then what we will do? subhas kundu

    As you have made the 100% payment therefore no problem will arise for taking credit 100%.
  • In case of Builders - 1. Whether Builder paying service Tax @3.09% will be able to get CENVAT Credit on Service Tax paid under reverse method or service tax paid on input services or excise on CG/Inputs etc In short whether he will get any type of credits against his service tax liability or not? 2. whether service tax is to paid on every installments received from customers or it is to paid once as per MVAT on agreement to sales RVB

    1. In case of construction services for claiming abatement of 75% the notification 26/2012-ST specifies the condition that, “CENVAT credit on inputs used for providing the taxable service has not been taken under the provisions of the CENVAT Credit Rules, 2004.” Therefore credit of inputs will not be allowed, however credit of input services and capital goods will be allowed. 2. As per POT Rules, in case of ‘continuous supply of service’ (as also in instant case) Service tax shall be payable on the basis of completion of each even in term of a contract, on which the receiver of service requires to make any payment to service provider, and not at the time of sale. You have to make payment of service tax from earlier of the (a) date on which installment received or (b) date of progressive invoice.
  • hello sir i want to know the detailed proovision of service tax relating to man power supply service akash gupta

    Rule 2(g) of Service Tax Rule, 1944 defines supply of manpower to means:- “supply of manpower temporarily or otherwise to another person under his superintendence or control”. The essential character of manpower supply service is that the manpower should work under the superintendence or control of service receiver. Further as per Notification 30/2012-ST, reverse charge is applicable under manpower supply service if “service is provided by any individual, Hindu Undivided Family or partnership firm, whether registered or not, including association of persons, located in the taxable territory to a business entity registered as body corporate, located in the taxable territory” If reverse charge is applicable then service provider will be liable for 25% service tax liability and remaining 75% service tax liability will be on service receiver.
  • our head office (Hyderabad) is registered as Input Service Distributor. Now,we have taken a consultancy opinion with regard to development of railway connectivity in karnataka. We have no any factory in Karnataka. the Invoice is on Head office name. can we take credit of service tax paid thereon and distribute to our units in AP and gujarat?? vijay kumar nandipati

    Yes you can take and distribute the credit of service tax paid for consultancy opinion.
  • We have mistakenly paid 100% GTA insteade of 25%. Out of 100% we have taken credit of 75% of the amount on CENVAT from the period of April 2008 to November 2008 and officialy reflected the matter in our corresponding return.As wrong utilization of cenvat the department has accused us under section 11AC and demanded 75% amount with equal amount of of penalty which seems to be illogical & unauthentic. what will be our stand against the demand of the department with specific laws. subhas kr kundu

    The Abatement scheme is optional and assessee can either avail the benefit of abatement or not. He can opt for no abatement and can make 100% payment and then credit will be allowed 100%. Further the penalty of 11 AC is levied only when duty is not paid or short paid with intend to evade payment of duty, but in the instant case there is no any evasion of duty because assessee has paid 100% duty and then has taken credit.
  • whether central excise duty/service tax attract on advance received by costmers in company shridhar m dixit

    Excise duty is leviable on invoice basis i.e. total excise duty is leviable when goods are removed from the factory of manufacturer. Hence , it is not applicable on Advances received from customer. Further in service tax law, if the advance is received for the provision of service, then service tax will be leviable.
  • Dear sir, Is job work receipt taxable for a registered dealer of plywood? santosh

    For job work to be taxable, following things is to be seen:- 1. Whether the process undertaken amounts to manufacture under Central Excise? if yes, then no service tax is payable. 2. If the answer of 1 is "no" then we have to see whether the process is a intermediate process and the supplier manfuacturer is paying excise duty on finsihed goods manufactured from such job work goods. If so, then no service tax is payable. There is hardly any effect on above position whether you are registred dealer with the department or not.
  • Dear Sir, we are a partnership firm receiving GTA services & paying service tax on its bill to GTA provider only are we allowed to do that as there is reverse charge in GTA services. thanking you in anticipation Nitin Sharma

    The reverse charge on GTA is applicable. If a person falls under seven catgories listed in Section 2(1)(d)(iv) then the service tax is payable such person. The partnership firm falls under the same. Hence the service tax is payable by you and not by the transporter. The contractual obligation cannot replace the statutory obligation. Hence the liability to pay tax is on you only. However, we can only plead before the department that the service tax is not payable twice if the service tax is paid by the transporter.
  • I wanted to know that whether place of provision of service rules apply to reverse charge mechanism too ??? i.e if X is providing export services and takes help of y ( a foreign entity), then will the reverse charge apply to bill of Y to X. And what will happen if X is importing service? (X is a packer mover in both the situation. Jayant

    Reply:- As per charging section 66B, service tax is leviable on the services provided or to be provided in a taxable territory and Place of provision Rules determines the place where service is provided and deemed to be provided. Further under reverse charge, liability to pay service tax is on service receiver(either wholly or partly) and reverse charge apply only when service tax is leviable i.e. service is provided or to be provided in the taxable territory as determined according to Place of Provision Rules. In the instant case, if place of provision (As per POP Rules) of service received from Y is taxable territory then service tax will be leviable. If service tax will leviable then 100% liability of service tax will be on X as service recipient under reverse charge(Sl. No. 10 of Notification 30/2012-ST). As per Rule 3, generally Place of Provision is the location of service recipient but in case of some specific services it is determined by other specific rules. As you have not mentioned that which service X is receiving from Y therefore it is difficult to say, whether service tax is leviable or not.
  • We are dealers registered under central excise. The warehouse is very small to accomodate goods such as trailer or concrete mixers. We recently got an order where the customer intends to availed cenvat credit as he is a service provider for leasing construction equipment. Since we do not have the space to keep the goods we intend to keep it at the transporter godown and effect delivery from the transporter godown. Our query is can we avail the cenvat credit without receiving the goods at our warehouse due to space constraint. We will raise the Excise (first stage dealer)invoice from our registered warehouse and clear the goods from the transporter godown. Do we need to seek permission for storing goods at transporter godown Kindly advise Associate

    As per Central Exccise Rules and rugulations, the goods should be received in dealer's premises and then move along with bill of dealer. The only exception is in case of hazardous oils where the CBEC has issued circular where the goods can move in same vechile from dealer's registered location. This exception is provided due to the fact that the pollution permission is required for the same.
  • Dear sir, Please explain the procedure for changing the constitution of an assessee being a private limited company which is being incorrectly shown in the service tax department's record as a public limited company. Also, please guide whether any authority in the form of Board resolution of the company is to be sent to the service tax department. Thanks Anubhav Wahee Anubhav Wahee

    Reply:- As per Rule 5A of Service Tax Rules, 1994 , when there is any change in information furnished by assessee in ST-1, such change shall be intimated in writing to the jurisdiction Assistant/Deputy Commissioner of Central Excise. Further there is no any separate rule in this regard. Therefore, if there is any incorrect information shown in the ST-1, you have to tell in writing to the department about such mistake. Further there is no board resolution required.
  • dear sir, i our company we have availed cenvat credit on capital goods when we are in central excise later on we have surrender our registration since the exemption limit was increased in the budget. as a result we have reversed the un availed cenvat credit in the books to profit and loss account later on few month after central excise audit came and they have noticed few irregularity in aviling cenvat credit on capital goods and raised demand notice now the query is can we adjust the demand against the unavailed cenvat credit which was revered in the books ? Ganesh

    As per our opinion, the unutlised balance lying on date of opting out of Cenvat scheme can be utilised for the demand of that period. Even there was a recent case law also on this issue only.
  • Dear Sir, Attention is drawn on Notification No.'s 24/2007 & 29/2012 Service Tax on Immovable Property.(a) what is the rule of property tax deduction from service tax liability when property tax is paid by landlord. (b)if property tax is paid by tenant. Ali Zain

    The exemption of service tax will be available to the extent, the amount of property tax paid by the service provider i.e. landlord. In my opinion, if tenant pays property tax directly (if it is allowed) then department may raise objection and exemption from service tax may not be allowed. However exemption will be allowed if the same is paid by landlord even if the same is recovered from the tenant.
  • Is it mandatory to charge Service Tax from clients after voluntary obtaining Service Tax Number and even turnover is below then the basic exemption limit. Ankit Singh

    Service tax is to charged only when it is leviable i.e. when value of service provided or to be provided, crosses the basic exemption limit and no any effect of the fact that service tax registration is obtained (before crossing exemption limit). However, if once we have started charging service tax and forgone the basic exemption list then we have to pay service tax on all transactions even in exemption limit. The threshold exemption notification is a optional notification.
  • Dear Sir, can a consultancy firm who is registered in service tax claim cenvat of excise duty paid on purchase of a machine for service providing purpose. If yes then please send any reference. Saurabh Khandelwal

    The cenvat credit of capital goods is allowed to a service provider. But one has to check the definition of "capital goods" given under Rule 2 (a) of Cenvat credit Rules to see whether the credit on such machine is allowed. Secondly, it has to be seen that you are not availing any abatement on such service. There is condition in certain abatement items that no cenvat credit of inputs, input service and capital goods should be taken. Since all the details are not provided by you, hence we cannot comment on the same.
  • Dear Sir, I have following quaries relating to Reverse Charge : (i) a Rent a Cab assesee is providing vehicles to University. is Reverse charge applicable? who is to charge ST and by what Rate? (ii) in my company, contractors are giving composite bills, i.e. "Per MT" and "Man Power Supply" by per Man Days". Quary : is Reverse charge is applicable on PMT (piece Rate?), and in this composit bill, on which portion, we are to deposit ST for Manpower Service? Parmeshwar Rathi

    (i) If the service provider is individual, firm or LOP and service recipient is service recipient then the reverse charge is applicable.Since these details are not available in query, you can judge from this. (ii) Where the supervision and control of manpower under the contract is with the company then the service tax will be payable on revese charge. This supervision and control is to be judged on the terms and conditions of each and every contract. However, normal inference is that when the rate is charged on piece basis then the control is with contractor. However, when the billing is done on man days basis then the control and supervision is with the company. But we reiterate that it is not applicable in all the situations and it is to be seen on the basis of terms and condition of each contract.
  • IF GOODS ARE DELIVERED AT VARIOUS GODOWNS IN THE CITY OF SERVICE RECEIVER AND PAYMENT OF FREIGHT IS MADE AT OFFICE,WHICH IS SITUATED AT DIFFERENT PLACE IN THE SAME CITY. ALL ACCOUNTS ARE MAINTAINED AT OFFICE. WHETHER TO GO FOR CENTRALISED REGISTRATION OR ONLY FOR OFFICE FROM WHERE PAYMENT IS MADE FOR SERVICE TAX SHYAM SUNDER

    Yes you can take centralized registration if centralized billing system or centralized accounting system is maintained in respect of such service (i.e. in respect of GTA service)
  • Sir, Will funding of an event of education institution amount to sponsorship?Would expenses incurred on the event (appart from sponsorship payment made) be trated as sponsorship? what is the demarkation line between sponsorship and donation. Sweta Kalantri

    Already answered. Donation means when the organizer (receiver) has no obligation to provide something in return, will not be taxable. But if there is Sponsor Company’s name or logo are displaying in the event or naming the event or giving the booking rights to sponsor or giving any other benefits, then it will be sponsorship service and service tax will apply.
  • Sir, in case of a construction company we have outsourced work to labour contractors. These contractors enggages their own labour and do the work.but before making the payment to these contractor we do veriy the wrok quality. whether the payment made to contractor will still amount to Manpower supply service or will it be treated as pure labour contract? Sweta Kalantri

    When the supervision and control of labour is in hands of the service recipient then it will fall undder manpower supply. This has to be judged on the basis of terms and conditions of each agreement. We cannot comment on the basis of information provided in the query. Secondly, whether a contract falls under works contract or pure labour contract, will depend on the fact that contract is along with material or not. If the material is inculded then it will be works contact. But if the material is not included then it will be termed as pure labour contract.
  • Sir, i need information about excise exemption for dairy equipments . SUPRIYA

    Your query is not complete. Please give the detail of product i.e. product name and tariff head.
  • DEAR SIR WE ARE A PROPRIETORY CONCERN MFG.AND EXPORTING GEOMETRY BOXES/ MATHEMATICAL INSTRUMENT BOXES, WITH TOTAL TURNOVER WELL BELOW 1.5.CRORE, HAVING TAKEN C.E.RGISTRATION ON 4.10.11,FOR MFG. BRANDED GOODS,DUTIABLE ON 1%/2%,WITHOUT CENVAT CREDIT(01/2011),WE TOOK LUT ON 19.10.11,PERSUMING THAT IT IS FOREVER AND DOE NOT REQUIRE REVALIDATION, AND EXPORTED UNBRANDED GOODS ON 08.12.12,UNDER ARE-1/LUT, WHEREIN WE HAVE BEEN SHOWCAUSED BY THE RANGE, DEMANDING PAYMENT OF DUTY (11A),INTEREST(11AB),PENALTY(11AC)& PP(RULE26),DUE TO EXPORT UNDER EXPIRED LUT,HEREIN IN DEFERENCE TO THE SCN WE HAVE IMMEDIATELY DEPOSITED DUTY+INTREST(REFUNDABLE)AND PROOF OF EXPORTS ALSO, BUT IN OUR OPINION,SCN IS NOT SUSTAINABLE,BECAUSE THE ISSUE OF EXPIRED LUT IS REDUNDANT SINCE GOODS HAVE BEEN EXPORTED AND THE PROOF OF EXPORTS SUBMITTED,NO DUTY IS CHARGABLE SINCE OUR TOTAL TUROVER IS WELL BELOW 1.5 CRORE,SCN BEING NOT SUSTAINABLE PENALTY UNDER 11AC AND PP UNDER RULE 26 ALSO SHOULD BE DROPPED AND FUTHER WE BEING PROPRIETORY CONCERN RULE 26 IS NOT INVOKABLE, KINDLY ADVISE YOUR VALUABLE OPINION. V K GUPTA

    When the export has taken place then there is need of demand only on the ground that the undertaking has expired. Moreover, the units operating under SSI exemption can follow the simplified export procedure also. Further, your agrument is totally right that if the department says that the goods are not exported then it will be included in aggregate value of clearacnes. The duty cannot be demanded in that case also.
  • A is providing engineering consultancy to B,a company in USA and earns foreign exchange.Export of service and no ST hopefully. Now if A also uses the services of C,a NRI in USA, to assist him in his engineering studies for B and pays him in foreign exchange does the fee attract ST on reverse charge basis? If C provides service to B directly and takes payment from A will that make a difference? All engg services are related to export only no conaumption in India. vis

    As per Rule 3 of Place of Provision Rules, generally place of provision shall be the location of service receiver. If C (outside India) is providing services to A then place of provision is the location of service receiver located in India i.e. taxable territory and as per charging section 66B, service tax is leviable on services provided in Taxable territory therefore service tax will be leviable. In such case, A will be liable for payment of service tax as per Section 68(2) because service provider is located outside India. If C provides services directly to B company then service is provided outside taxable territory(India) and in such case service tax will not be leviable.
  • Sir, Agricultural Produce market committee providing their shops/Godowns on rent to the traders / licencee and rent is chargeable to Service Tax. However, Traders/licencee, before taking shop or godowns on rent paid non-refundable deposit to the APMC. Whether this non-refundable deposit is chargeable to Service Tax? CA. Jaydeep Mehta

    If the security deposit is refundable then it will not be charged to service tax unless and until it is proved that it has influenced the rent. However, in our opinion, the non refundable deposit is a part and parcel of rent only and hence liable to service tax.
  • Sir, we have imported material from Australia through Air Cargo & the freight charges were borne by our Custom House Agent, who later charged it to us. Are we liable to pay Service Tax under GTA on this freight? Preeti Kalled

    According to Section 66B “Service tax will be leviable on all services provided in the taxable territory by a person to another for a consideration other than the services specified in the negative list”. Clause (p) of Negative List given u/s 66D exempts “services by way of transportation of goods by an aircraft or a vessel from a place outside India upto the custom station of clearance in India”. So service tax is not leviable on such service.
  • can we liable to pay service tax forklift use for unloading material. MAHESH

    Yes service tax will be liable, as it is neither covered under negative list nor under mega exemption notification. However loading and unloading of agricultural produce is not leviable to service tax as covered under negative list.
  • valuation of parts and accesories imported without payment of duty by EOU and cleared along with final product i.e. Tug in DTA AMIT KUMAR

    Your query is not clear. Please elaborate.
  • Dear Sir, I have a manpower service provider who has paid interest free loan to his staff operating at our location. He is recovering the loan amount in interest free EMI's from his staff's salary. At the same time he is charging Service Tax on the loan amount also when he submits the monthly invoice to us. Can you throw some light as to the applicability of STax on the loan amount. Pls. opine. GANESHKUMAR GK

    Your query is not understandable. If the manpower supply agency is recovering loan from his staff then how he is charging service tax from you. He will issue a bill to you for amount charged and service tax thereon. The recovery of loan has nothing to do with service recipient.
  • Dear Sir, As we know that reverse charge is not applicable if services are provided by a company or a body corporate to another body corporate. But if a company which is service provider charge only his part of service tax on invoice then what is liability of service tax receiver company. Whether he has to pay service tax only charge on invoice or whether there is a liability of remaining part of service tax payable to service tax department. For Example: There are two companies ABC Ltd (Security Service Provider) and XYZ Ltd. (Service Receiver). ABC Ltd. issue a invoice to XYZ Ltd. as follows: Services Charges 1000.00 Service Tax 3.09 % 30.90 Total Amount of Bill 1030.90 Now question is , whether XYZ LTD. is liable to pay only Rs. 30.90/- to ABC Ltd. or he has to pay remaining Rs. 92.70 (123.60-30.90) directly to Government. CA. Vipin Saini

    If reverse charge is not applicable when company is provider of service (as you also saying) then 100% liability will be on service provider. We are failed to understand why the provider company has charge part of the service tax only? The complete service tax is payable by provider company only and he will charge the complete service tax from buyer. If the service provider company is charging part of the service tax only then department will pursue him only for payment of full service tax. And service receiver can’t be liable for default by service provider.
  • Will servicing charges paid for servicing of vehicle be treated as works contract service? please note labour amt is separately mentioned in the bill. Sweta Kalantri

    Work contract means supply of material involved for execution of contract of installation, completion, fitting out, repair, maintenance etc (section 65B). The service is still work contract service even if labour and material amount is shown separately. Further as per Notification 30/2012-ST, in case of work contract service reverse charge shall applicable if service provider (i.e. contractor) is individual, HUF, partnership firm and service receiver is body corporate. So in the instant case if service is covered under the above definition of work contract and service is provided by individual, HUF or partnership firm and received by body corporate then reverse charge will apply and 50% liability will be on service receiver.
  • Donation made to events have the possibility of attracting reverse charge as sponsorship services - will have to confirm whether benefits received by the company or not.If received then service tax will apply plz confirm! Sweta Kalantri

    W.e.f. 01.07.2012, the ‘sponsorship’ has not been defined therefore we have to understand it on the basis of definition as given prior to 01.07.2012. The amount paid in form of donation to organizer when the organizer has no obligation to provide something in return, will not be taxable. But if there is Sponsor Company’s name or logo are displaying in the event or naming the event or giving the booking rights to sponsor or giving any other benefits, then it will be sponsorship service and service tax will apply.
  • what confirmation can i seek from the builder that he has paid the service tax to the government on my flat sudhir kaup

    There is no need of confirmation for service receiver that service provider has deposited the service tax to government. If he charges service tax from and does not pay to the Government then he will be liable for the consequences. The department will come to you for demand of service tax. However you can confirm it by checking service tax deposition challan and service tax records of service provider.
  • sir, can we claim CENVAT inputs on services before the date of ser tax registration as a service provider who is a builder: who receives the advances from buyers even before the ser tax registration J RANGANADHAM

    There is no provision available under the CENVAT Credit Rules to disallow such credit. In the case of IMAGINATION TECHNOLOGIES INDIA P. LTD. vs. COMMR. OF C. EX., PUNE-III, reported at 2011 (23) S.T.R. 661 (Tri. – Mumbai), that CENVAT Credit cannot be denied for the period prior to registration by an assessee. So Cenvat credit cannot be denied only on the ground that it relates to a period prior to registration subject to fulfillment of other terms and conditions of Cenvat Credit Rules. But the department will not accept this position and dispute may arise.
  • One of my client is practicing in Yoga. He receives fees either on a monthly basis or per lesson given to the candidate. He holds a Yoga's certificate issued by Iyengar Institute, Pune. Whether the fees received for services rendered would stand exempt as per Mega Notificiation No. 25/2012 of Service Tax. Kindly advice based on the definition given in the above notification, Your direction will enable us take a suitable action CAQ GANDHI KISHOREKUMAR D

    As per Sl. No. 2 of Notification 25/2012-ST, Health care services by a clinical establishment, an authorised medical practitioner or para-medics are exempt. Further as per definition given in the Notification 25/2012-ST, “(t) health care services includes any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any ‘Recognised System’ of medicines in India” ‘Recognized System of Medicines in India means Yoga, Naturopathy, Ayurveda etc. So, conclusion is that if we can prove that the yoga services by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy then it will be exempt under sl. No. 2 of Notification 25/2012-ST. But the department will not accept the aforesaid position.
  • Dear Sir, my client have arrangement with foreign customer that all warranty services for Indian customer is to be provide free of cost in india but bill for the same is raised to foreign customer in foreign currency. Whether service tax is payable by my client or not? If payable then whether any provision to take refund for the same by Indian party of foreign party? Prabhash Kumar

    Reply:- Your query is not clearly understandable, our understanding of the query as “an indian assessee is providing services in India on behalf of Foreign customer” and our answer is on that understanding. As per Rule 9 of Place of Provision, The place of provision of ‘intermediately services’ shall be the location of the service provider. As per rule 2(f) of these rules “intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the ‘main’ service) between two or more persons, but does not include a person who provides the main service on his account. As in your case, Indian assessee is also providing intermediately service, therefore, the place Your query is not clearly understandable, our understanding of the query as “an indian assessee is providing services in India on behalf of Foreign customer” and our answer is on that understanding. As per Rule 9 of Place of Provision, The place of provision of ‘intermediately services’ shall be the location of the service provider. As per rule 2(f) of these rules “intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the ‘main’ service) between two or more persons, but does not include a person who provides the main service on his account. As in your case, Indian assessee is also providing intermediately service, therefore, the of provision is in your case is the location of service provider i.e. India. Hence, the service is not treated as export of service and service tax will be leviable. The service tax will be payable by service provider (even if service is covered under reverse charge because service receiver is located outside India) and assessee can’t take refund of the same.
  • Dear Sir.., We have local purchase of "IBM Storage manager with annual software renewal" they charged double tax ( i.e.1)Vat on Net Amount & 2) Service on Net Amount)..,now my query is they wroghly chareged double tax calculation. As per my self ( Net Amt + Service Tax = total on Vat Calculate ) . can you please reply to me which is correct in double tax code calculation. Vivek Mudaliyar

    Your query is not clear therefore we can reply the same. However, the dispute is going in hotel industry also as to whether charge service tax on Vat amount also in case of Mandap keeper service.
  • dear sir, we got show cause notice for non filling excise returns on time is there any rule to escape form this penalty Umesh Bora

    No there is no any remedy for escaping penalty of non-filling of return. However, it is discretion of adjudication authority to impose penalty. If you are able to prove your bonafide then he may waive the penalty.
  • Sir, We have constructed a new hotel and launched it in January 2013. From 1-4-11 to January 2013, we have incurred service tax on professional fees, transportation, forex, hotel charges, etc. during the course of construction. Can we claim credit of these service tax payments against our future service tax payments arising through hotel renting, mandap services, restaurant service, etc. Thank you. Sethupaty

    Reply:- For taking Cenvat Credit, we have to see the definition of input service as given in the Rule 2(l) of Cenvat Credit Rules, 2004. As per this definition, input service means any service used whether directly or indirectly for providing output service. Therefore in my opinion credit will be allowed but the department may raise the objection and then you will have to prove that these input services are used for providing output service of Hotel Renting, restaurant service etc. The definition of input service clearly excludes the services relating to civil construction. However, if the credit is allowed then there will be dispute that the credit is not allowed in the period when you were not registered. There are certain case laws which says that the credit will be allowed even if the assessee is not registered because he will take registration when he starts paying tax.
  • whether circular no 967/01/2013-cx dated 01/01/2013 is applicable for excise matters only or service tax /custom matters area also covered please clarify Thanks in advance sanjay jain

    In our opinion, the circular is applicable only to excise matters only. But the department has issued letters in service tax matters also.
  • whether flavored milk will be treated as milk exempt from services under GTA services. Ankur Agarwal

    Sl. No. 21(a) of Notification No. 25/2012-ST grants full exemption from service tax to “transport of fruits, vegetables, egg., milk, food grain and pulses by road”. The word ‘milk’ is not clarified under the Law therefore it is the point of interpretation of intention of exemption. In my opinion exemption will not be allowed in case of Flavored Milk because the intention of exemption is to grant relaxation for raw articles of daily necessity and not the items commercially produced. The same has also held in case of Agro Dutch Industries v. CCE [2011] 32 STT 285/12(New Delhi CESTAT) it was held that commercially processed and canned mushrooms could not be brought under “vegetables” and exemption is also not allowed.
  • When output service on which service tax was discharged by the assessee held to be a exempted service in that case cenvat credit taken on input service can be denied? Whether there is any case law in assessee favour on said point? MANISH VORA

    Reply:- As per Rule 6(1) of Cenvat Credit Rules, 2004, “the Cenvat credit shall not allowed on such quantity of input service used for provision of exempted service”. When credit is not allowed then question of credit taken and denied? However, there are certain case laws which says that when the duty paid by assessee is accepted by the department then the input credit will also be allowed. But litigation is bound to happen.
  • sir, our company is fertiliser manufacturer and engaged various contractors on piece rate basis, i.e. for various activities like packing, shifting, loading unloading, on per MT basis.(all work performed by labours of contractor) My quary is whether these contractors are covered under manpower supply service(for reverse charge purpose) of job work (BAS)? further being the excisable product "Fertiliser" my company is paying appropriate excise duty as principle manufacturer, so WHETHER ST is exempted under Notification 25/2012 under serial no 30(C) ? job work is performed within the factory, not outside. pls advise. thanks and regards,(Parmeshwar Rathi) Parmeshwar Rathi

    Firstly the exemption of Sl. No. 30(C) is available only in respect of packing activity because shifting and loading-unloading is not an intermediate production process. Shifting and loading-unloading activity given on contract basis is not covered under manpower supply service. The essential character of manpower supply service is that the manpower should work under the superintendence or control of service receiver and consideration should be paid on the basis of no. of labour supplied. In the instant case shifting and loading-unloading work is given on contract basis and consideration is paid on the basis of quantum of work not on the basis of labour supplied.
  • sir please clarify me on the following situation:- in case of a pure labour contract, where the manpower works under the control of contractor and not under principal employer, are chargeable under which head of taxable service Rakesh

    After introduction of negative list concept, importance of classification of services are limited in some areas e.g. reverse charge, exemption etc and every service is not defined separately. As the contract is pure labour contract, the reverse charge will not be applicable. However, classification has been reintroduced by recent circular number 165/16/2012 by CBEC only for the purpose of payment only. The CBEC has introduced old list of 120 services for the purpose of payment by different accounting codes and if any service is not covered under list of 120 services then the payment of this type of service will be done under head “Service Not in Negative List”.
  • I have a coaching classes for which i have taken a single premises regn. number. I have different branches in mumbai but all accounting, depositing of fess, payment to vendors and service tax is done centralised. The cenvat credit for bills raised by vendors are for different branches. The Service tax supdt says it cannot be set off and now u have to pay those amounts for cenvat credit again with interest. It is just the regn number is for single premises and not centralised. Is he correct in his view. what can be the best option for me Naresh

    It seems that the department ‘s view is correct in the instant case and you have to reverse the Cenvat credit. You have to apply for Centralized Registration. In our opinion, after the centralized registration you can take this credit.
  • Dear Sir, One of my client is providing the service of " selecting candidates" for the company in UAE. He is conducting interview, spending on medical checkup, spending on lodging boarding, hireing place for interview etc. All the bills for sending are in the name of my client. All his spending is reimbursed by his overseas company. He is also getting x% of the reimbursable amount. Wether he should charge service tax on reimbursement and his commission or both? Can he raise debit notes for reimbursement and inovice for his commission. His invoice and payment both are in INR. Sir thank you very much for your early response. hetal

    The service mentioned in the query not satisfies the conditions as mentioned in the Rule 6A of Service Tax Rules. Therefore it is not treated as export of service. Further in our opinion service tax will be levied on total amount (i.e. Commission + Reimbursement) because expenses incurred during the course of providing service are also includible in taxable value and here the conditions of pure agent is also not satisfied.
  • What is the treatment of service tax on forfeited amount of refundable security against rent before 01.07.2012 and after 01.07.2012? Navin Jain

    You have not clarified that what is the reason for which security deposit has been forfeited. Before 01.07.2012:- If the forfeiture is due to non-payment of service charges or it is agreed by both parties that security deposit will be adjusted as service i.e. it is in nature of service charges then service tax will be levied. After 01.07.2012:--Service tax will be levied unless such forfeiture is in nature of reimbursement of any loss e.g. damage of asset, asset misplaced etc.
  • Sir, If we have paid service tax liability as per reverse charge mechanism in Mar'12 under Business Auxullery services. But this transaction not reported in ST-3 for the period Oct'11 to Mar'12. Now 90 days period for filing revised return is lapsed. In service tax audit, department has asked to pay amount for non filing of return. In fact we have filed NIL return for Business Auxullery services for the mentioned period. It is a case of careless ness in filing of return. Is department’s stand is correct ? we have paid all liability in time but not reported to ST-3. Please guide. Sachin Pawar

    As you are saying that you have correctly discharged your liability and return is also filled timely and only mistake is that you have forgotten to mention the details of reverse charge liability in the ST-3. In that case no any penalty is leviable and further there are many cases decided in favour of assessee in which technical lapses are condoned. Moreover, there is no revenue loss to the government and penalty can be waived as is being waived in case of non filing of nil returns.
  • sir in of my client who is service provider.Incurred hotel bill for the purpose of business only.But the hotel is issued the bill like "taxes" instead of service tax and also service tax number was not mentioned on the bill can we take input on that bill thankyou sir kishore

    If such tax is service tax and used in providing of output service or in manufacturing of final product then it will be allowed [Rule 2(l) of CCR 2004]. However department will definitely raise objections as most of the particulars that are required for taking credit on the basis of an invoice under Rule 4A of Service Tax Rules have not been mentioned. It might be difficult to justify the credit taken as service tax registration no. is also not mentioned, but there are many cases in which it has been held that Cenvat can’t be denied only on account of technical lapses.
  • We start production of inline drip irrigation systems from this year. I want to know DIS is exempt form excise duty, if yes under which notification kailas

    The tariff rate for drip irrigation system (84248100) is Nil. As the tariff rate itself is nil, hence it need not to be covered under any exemption notification.
  • How do we take cerdit of service tax on bank charges?In the bank statement it shows inclusive of service tax. RAJIV JAIN

    As per proviso to Section 4A, in case of service provider is bank invoice may not include serial no. and address of service receiver but it should contain the its name, address and registration no., description and value of service and service tax payable. Therefore credit will not be allowed if service tax registration no. and service tax is not mentioned in the document.
  • Sir,we have availed cenvat credit on capital goods.(on Electric panel) After three year during short circuit Electric panel has burnt out in fire incidence. does we have to required reversal of cenvat credit or not ? Rajat Jain rajat22jain@gmail.com Rajat jain

    In the case of CCE v. Tata Advanced Materials Ltd has addressed the issue of reversal of the CENVAT credit on the capital goods that were destroyed in fire. The Karnataka High Court has held that there is no provision, in law that provides for reversal of the credit, except when the credit has been illegally or irregularly availed of. So you are not required to reverse Cenvat Credit.
  • Sir, Want to know whether it is mandaoty on the servie provider's part to mention the PAN number,Service tax number &service tax Category in the invoice which he raises to clients to whom he provides various services Srinath

    As per Rule 4A of Service Tax Rules, 1994 “every assessee providing taxable service shall issue a bill, invoice or challan signed by such person or a person authorised by him in respect of such taxable service and such bill, invoice or challan shall be serially numbered and shall contain the following namely:- 1. The name, address and registration no. of such person 2. The name and address of the person receiving such service 3. Description and value of taxable service 4.The service tax payable thereon” Therefore it is mandatory to mentioned service tax registration no. and category of service.
  • dear sir , my client is builder and he is taking services of contractor which is a pure labour contract . so it will not fall under neither work contract nor supply of manpower services . so sir please tell me under which head of services it will fall  KISHOR

    After introduction of negative list concept, importance of classification of services are limited in some areas e.g. reverse charge, exemption etc. However, it has taken importance on reintroduction of classification by recent circular number 165/16/2012 by CBEC. As the contract is pure labour contract, the reverse charge will not be applicable.
  • as per rule 3 of deciding place of prov. of service does that applicable for goods. commission for goods sale how to decide exported or not?  bharat

    The place of provision of service in respect of intermediary who causes sale or purchase of goods or arranges goods will be determined as per General Rule 3 because any of the specific provisions mentioned in the Rule 4 to 12 is not applicable in this case. As per Rule 3, place of provision shall be location of service receiver. E.g. if a person procures order for supply of goods from person located in Mumbai and sends order to company in Germany, the service receiver is the person located in Germany and place of provision will be Germany. For export of service, conditions in Rule 6A have to be seen. One of the important condition in that Rule is that the payment should be received in foreign convertible currency.
  • can we claim cenvat credit of excise duty charged on machine repairs and maintenance chinna

    Yes, credit is allowed if it is our capital goods.
  • Hello Pradip Sir, In one of the bill 50% advance payment made before service started & 50%aftewords,then at the time of availing CENVAT can we take Service Tax on full amount. Thanks & I am eagerly waiting your answer Shilpa Shirke

    Firstly your query is not clear. As per Rule 4(7) of Cenvat Credit, Rules 2004, “the Cenvat Credit in respect of input service shall be allowed on or after the day on which the invoice, bill or challan as the case may, is received” So you can take credit after receiving invoice, bill or challan. But the payment is to be made within three months of issue of invoice
  • What is the rate of abatement in respect of works contract service if asseessee is engaged in the construction of residential complexes? And whether asseessee can take CENVAT if he claims abatement? Jenil Shah

    Your query does not provide complete details i.e. whether construction is a type of work contract or it is intended for sale. Therefore we are answering you for both types of constructions:- 1. Construction of a complex, building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly except where entire consideration is received after issuance of completion certificate by the competent authority – Service tax will be leviable on 25% of Value i.e. 75% abatement and Cenvat credit of inputs is not allowable see notification 26/2012-ST at http://www.new.capradeepjain.com/redirect_amdview_5958_3. This means credit on input service and capital goods will be allowed. 2. In case of work contract for execution of original works then one has to segregate the value of material and labour part. The service tax will be payable on labour part. If the service portion cannot be segregated then service tax shall be payable on 40 of the total amount charged for the works contract. The cenvat credit on inputs shall not allowed. See valuation rules and Notification 24/2012-ST at http://www.new.capradeepjain.com/redirect_amdview_5924_3. This means that the credit on capital goods and input service will be allowed. 3. In case of finishing work, again segregation of material and labour is to be done and the service tax will be paid on labour part. But if the same cannot be done, then service tax is payable on 60% of total amount charged. The cenvat credit on input service and capital goods will be allowed.
  • Sir please clarify on the following situation. 1. Sale consideration of residential flats for FY 2012-13 Rs. 42,42,000, after abatement i.e 25% value Rs. 1060500, this is my first year of operations can i claim SSP exemption under Notification No. 33/2012 and pay service tax on 60500 ? anil kumar

    As per SSP exemption Notification 33/2012-CE, “the threshold exemption (Small Service Provider Scheme) exemption of not exceeding Rs. 10 lacks of aggregate value of service provided is allowed if the aggregate value of taxable services rendered by a provider of taxable service from one or more premises, does not exceed ten lakhs rupees in the preceding financial year”. Since your aggregate value of clearances for last year is nil ( as told in query) then you are eligible for this exemption. Further as per explanation given with this Notification, “(B) aggregate value means the sum total of value of taxable services charged in the first consecutive invoices issued during a financial year but does not include value charged in invoices issued towards such services which are exempt from whole of service tax leviable thereon under section 66B of the said Finance Act under any other notification.” Hence, your first value of Rs. 10 Lakh will be exempted. But there is a dispute i.e. whether sale value of Rs, 42,42,000/- or abated value of Rs. 10,60,500/- will be considered. There are different opinions about the same. But on safer side, we suggest that that the value of Rs, 42,42,000/- should be considered
  • One of the employee in the company takes his salary in the form of consultancy charges.Last year his salary was below 9 lacs but during the year in January there was a hike in his pay and accordingly it will cross 10 lacs. So he is liable to Service Tax but the query is whether service tax has to be paid retrospectively or prospectively i.e. after increment? Vinay Jhawar

    Service tax is not applicable when the services are provided by an employee to the employer in the course of or in relation to his employment (exclusion clause of definition of service). But in the instant case salary is taken in form of consultancy charges therefore Service tax will be leviable on it. Further in last year the value of service provided is less than 10 Lakhs therefore SSP exemption is allowed in current year also upto Rs. 10 Lakhs and service tax is leviable on amount in excess of Rs. 10 Lakhs.
  • A Two weeler dealer who trades in vehicle as well as servicing for the same nad pay service on servicing part. how can dealer take input credit on input service received ? Nilesh Pitliya

    In the instant case there are two types of services are providing by the dealer the first one is taxable (i.e. servicing of vehicles) and the second one is exempted service (trading activity). For Cenvat in such case when taxable as well as exempted service is provided, Rule 6(3) of Cenvat Credit Rules 2004 should be followed. As per this Rule 6(3), when a service provider provides taxable as well exempted services and receives common input services then he shall follow any one of following options:- 1. Maintain separate records for receipt and use of input services used in taxable service and in exempted service and take credit of services used for providing taxable service only. 2. Take credit of all input services Pay an amount equal to 6% of value of exempted service. 3. Take credit of all input services and make proportionate reversal as determine under sub-rule (3A) of Rule 6.
  • Plz guide on the applicability for issuance of C-Form for interstate job work (coloring process), %age of material portion for Sales Tax purpose in Maharashrtra & %age for service tax applicability on the same (material is to be moved for job work from Himachal to Maharashtra ) Renu Arora

    We donot deal in VAT matters. Hence, we will not able to solve your VAT query. However, for service tax purpose, we require some more details to see whether the process undertaken by you amounts to manufacture or not. Please provide the detailed procedure undertaken by you as well as material used.
  • sir,in the case of builders cum flat promotoers the exemption from service tax for residential projects of not more than 12 residential units or independant houses meant for sale is available after 1st july 2012 need clarification j ranganadham

    As per Sl. No. 14(b) of mega exemption Notification 25/2012-ST, “Services by way of construction, erection, commissioning, or installation of original works pertaining to a single residential unit otherwise than as a part of a residential complex” is exempt. No exemption such as residential project upto 12 residential units is available now which was available earlier. The exemption is available only for a single residential unit.
  • Is there any penalty for Late filing of EXP 2 return? shayan

    As per proviso of Notification 31/2012-ST, “(c) the exporter availing the exemption shall file the return in Form EXP2, every six months of the financial year, within fifteen days of the completion of the said six months” The above provision makes it mandatory to file EXP-2 within time period and not clarify about non-filing or late filing. Therefore, it means if EXP-2 is not filed within time period then exemption will not be allowed. However there are many case laws which allow benefit to assessee even if there are procedural lapse by the assessee.
  • hlo sr. my brother is contracor and installing sub stations, transformers under sub contractor of nbcc. since nbcc is exempted from s.tax, same vl be applicable to sub contractor sunil mehla

    As per sl. No. 29(h) of mega exemption notification 25/2012-ST following service is exempt:- “(h) sub-contractor providing services by way of works contract to another contractor providing works contract services which are exempt” Hence, if the main contractor providing the services of works contract is exempt then the subcontractor also providing services of works contract will also be exempt so service tax will be exempt in the instant case.
  • Dear Sir, the person is doing the work of clearing of containers of import and export. My question is he doesnt hold the license of CHA and he take the CHA licence on rent. So while filing ST-1 for registration under which service he need to be categorised . ANIT AGGARWAL

    You have to registered under category of CHA service because under negative list concept, each service not defined separately and only some services are defined. CHA service is also not defined and earlier definition is not applicable now. However, recent circular has reintroduced classification. Therefore it will be appropriate to take registration under CHA under the instant case.
  • Dear sir, please explain the procedure for amending the ST-2 online for the purpose of adding new services. Also,please clarify if any physical documents are required to be submitted in the department's office after online amending the ST-2. Anubhav Wahee Anubhav Wahee

    Firstly you have to add new service online on ACES system. Thereafter, you have to give revised ST-1 application along with old original registration certificate in form ST-2 to the department.
  • We are in hotel business with certain brand, it is some time required to sent our personnel to different cities where same brand is operating to impart training. as a normal course invoice with service tax will be raised for the duration he will be there. pls advice whether is will be covered under manpower service and whether we can adjust the output laibilty against input. SAMIR AGARWAL

    Rule 2(g) of Service Tax Rule, 1944 defines supply of manpower to means:- “supply of manpower temporarily or otherwise to another person under his superintendence or control” So the essential character of manpower supply service is that the manpower should work under the superintendence or control of service receiver. So if your employees work under control of service receiver then it is manpower supply and such case reverse charge will be apply. Further as per Explanation given with Rule 3(4) of Cenvat Credit Rules, “Cenvat Credit cannot be used for payment of service tax in respect of services where the person liable to pay tax is the service recipient”. So you can’t use Cenvat credit for payment of service tax under reverse charge. However Cenvat credit can be used for payment of liability of an output service.
  • sir can we take credit of service tax paid to caterers on occasion of opening of booking of flats in case we are providing output service of builders kalpesh

    As per Rule 2(l) of Cenvat Credit Rules, 2004 input service" means “any service, used by a provider of taxable service for providing an output service but excludes services such as those provided in relation to Outdoor Catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee” In instant case catering service is received on occasion of opening of booking of flats therefore credit is allowed but if catering service is received primarily for consumption of employee then it will not be allowed.
  • Raw Material is supplied to us on excisable challan 4(5)(a) for doing the machining work as per there drawings. Please confirm the service tax applicability? sandip

    Your query is not clear that what type of job work are doing on machinery i.e. the activity is amount to manufacture or not? Therefore service tax is applicable if the activity is not amount to manufacture. However, since you have received the material under 4(5)(a) challan then the material will be used by supplier in manufacture of final product and it will be removed after payment of duty. If this is the position then there is no need to pay the service tax.
  • dear sir , if the service provider give service of maint & rep.of railways,wagon,tracks to its client public sector company the it would exempted or taxable . pls clarify a b mohan

    Under new concept of negative list, service tax will be leviable when an activity is covered under definition of ‘service’ and not covered under the negative list and mega exemption notification. ‘Service’ has been defined in clause (44) of the new section 65B and means – “any activity carried out by a person for another for consideration and includes a declared service.” Hence the above mentioned activity in query covers under the definition of Service. Further your activity is neither covered under Negative list nor under Mega exemption Notification 25/2012-ST therefore service tax will be leviable. However entry no. 14 of mega exemption notification specifies “(a) Services by way of construction, erection, commissioning, or installation of original works pertaining to an airport, port or railways, including monorail or metro” as exempt but this entry is not applicable in the instant case as in instant case there is an activity of repair and maintenance and not an activity of i.e. erection, commissioning or installation of original work.
  • duty is paid after audit objection but before SCN. Question : can assessee availe cenavt credit on duty paid? (for example duty paid for GTA expenses and Cenavt is elegible under inpuyt service) hemant

    Cenvat credit of service tax paid on services is available if it is covered under the definition of input service as defined in Rule 2(l) of Cenvat Credit Rules, 2004 i.e. eligible for input credit. There is no effect of the fact that duty is paid after audit objection or after issue of invoice.
  • Dear Sir, In Apr'11 to Sept'11 half yearly return we had taken CENVAT credit but we forgot to mention the same in the return and uploaded by mistake. Now we have received a show cause notice to pay the differential amount. Now we can't even revise the return as the time limit is over. Kindly advise. Megha

    As per Rule 7B, revised return can be filled within a period of ninety days from the date of submission of return under Rule 7 to correct a mistake or omission. Therefore you can’t file the revised return and you have to reply the SCN that you are not liable to pay the differential amount because there had been a omission in filling ST-3 and you have not shown the Cenvat Credit amount.
  • If GTA recovers octroi ,loading and unloading charges in the freight challan i.e. consigment note them what will be service tax liability whether all has to be included? Vinay Jhawar

    Service tax liability will be on gross amount charged in consignment note i.e. if Octroi, loading and unloading etc. are included in consignment note then service tax will also be leviable on these recoveries.
  • Sir, What is the service tax liability on sub-contractor (prop. firm)doing shuttering work on labour rate(without material) for a contractor(pvt. ltd. co.) and when service tax introduce on sub-contractor dinesh negi

    With effect from 01.07.2012, Service tax will be leviable on all services provided in the taxable territory by a person to another for a consideration other than the services specified in the negative list or otherwise exempted. The service as mentioned in the query is not covered in negative list nor under mega exemption notification 25/2012-ST. Therefore it will be leviable to service tax. Further there is a threshold exemption (Small Service Provider Scheme) in service tax under which assessee is eligible for exemption upto Rs. 10 lacks of value of service provided. The basic condition for claiming this threshold exemption is that “the aggregate value of taxable services rendered by a provider of taxable service from one or more premises, does not exceed ten lakhs rupees in the preceding financial year”. If you are eligible to claim this exemption with all other terms and conditions then you can claim the same. Further, the reverse charge will not be applicable as it is pure labour contract and the material is supplied by main contractor. Hence, the complete service tax liability, if any, will be on sub-contractor only.
  • Sir,wanted to know do we have to pay service tax in reverse charge in cash ,if yes why govt. is demanding it in cash & can we claim credit of such reverse charge service tax paid. NITIN SHARMA

    You can’t pay this service tax liability by utilizing Cenvat credit because as per Explanation given with Rule 3(4) of Cenvat Credit Rules, “Cenvat Credit cannot be used for payment of service tax in respect of services where the person liable to pay tax is the service recipient”. Further Cenvat credit is available on these services if these services are covered under the definition of Input Service as given under Rule 2(l). So if the services are covered under the above definition then credit is allowed to you.
  • Sir iam having a client who are co-owners of a commercial property. the rental income of the property exceeds Rs.10Lakhs in aggregate, but individual share in the property is below the thresh hold limit. the co-owners are having undivided share in the property and are entering into lease agreements with tenants jointly.the rental cheques are isuued by the tenants in the individual names of co-owners. we had applied for service tax registration in the individual names of coowners mentioning the same building adress, since the tenants were willing to pay ST. the depatment rejected the application stating that only one registration can be given for one building. i would like to know the positionin this regard. i also requets you to suggest the forum within the department to whom i should raise this issue. sajusreedhar

    In our opinion, each co- owner is eligible for separate exemption of Rs. 10 Lakhs. As you are saying that building (co-ownership) is rented then registration can’t be taken on this premises. Further the registration should be apply separately in individual names.
  • Does the amount reimbursed by the service receiver should also be calculated in total amount to charge Vat i maharashtra? Saurabh Bothra

    We do not deal with VAT. Please ask queries related to Excise Duty and Service Tax.
  • Dear Sir, What is cut off date for excise invoice.Whether excisable goods have to be removed on the same day of invoice or it can be removed on next day. any problem will arise. Pl explain. K.K.Srenivasan

    As per Rule 11 of Central Excise Rules, 2002 “no excisable goods shall be removed from a factory or warehouse except under an invoice signed by the owner of the factory or his authorized agent” Further this rule not clarifies about time limit of maintaining invoice before removal of goods. Therefore goods can be remove on next day of invoice but cannot be removed without invoice. Also, the time of issue of invoice and time of removal is to be mentioned on the invoice. Hence, there can be difference in issue and removal.
  • As per legal provisions, Service Tax is payable on gross amount charged for renting of immovable property less property tax actually paid to Municipality. For the half year ended on 30.09.2012, gross rent receivable is Rs. 30,00,000/- on which Service Tax @ 12.36% comes to Rs. 3,70,800/- which has been received / claimed from the tenant. But after taking rebate of Rs. 10,00,000/- on account of Property tax paid to Municipality from gross rent of Rs. 30,00,000/- , ‘A’ paid service tax of Rs. 2,47,200/- (i.e. 12.36% of Rs. 20,00,000/-) for the period under consideration. In other words, an amount of Rs.1,23,600/- is received in excess of actual service tax liabilities. You are request to kindly clarify the treatment of Service Tax received/ receivable in excess of ‘A’’s liability in books of account. Moreover, if the assessee has to pay excess service tax, what will be the treatment in future ?? MEETA SUKHIJA

    You have to charge service tax after deducting property tax from service receiver and not on gross amount i.e. in invoice service tax should be charged on Rs. 2000000/- As per section 73A(2) of Finance Act,1994 “where any person who has collected any amount, which is not required to be collected, from any person, in any manner as representing service tax, such person forthwith pay the amount so collected to the credit of the Central Government.” So the above provision makes it clear that any amount collected from service receiver has to be paid in the credit of the Central Government. So in the instant case you have collected service of Rs. 370800/- instead of Rs. 247200/- but as per provision of Section 73A, you have to deposit service tax of Rs. 370800/- to government.
  • We are manufacturer of sugar (Say –MS Ltd.) & selling sugar through Commission Agents. Now we want to start selling of specialty sugar (cubes, sachets, consumer pack etc.) through our group’s Company (say- MF Ltd.), not registered with Excise Deptt. The MF Ltd. wants to start invoicing of specialty sugar in the premises of MS Ltd. Can MF Ltd start the business in such manner as explained above or not and what are the legal formalities before the start of business? Kindly give yours expert legal advice. mukeshsharma

    The premises is registered with the Central Excise department and not the person. Hence, this premises is registered in the name of manufacturer and hence the agent cannot operate from the same premises. Further, there is clarification that even if the manufacturer intends to starts trading of same commodity which is being manufactured by him then he has to get the permission from the commissioner.
  • I want to know that in case we have rented a shop to an MNC, so are we as a landlord, liable to pay service tax or it's the MNC who's liable to pay it. Also, is there a way that we can track the payment status through the service tax assessee code online. Manish

    “Renting of Immovable Property Service” is not covered under reverse charge machanism therefore 100% service tax has to be paid by service provider. For second query:- there is no system to track online payment status, however you can make the payment online.
  • Sir, I have filed the qtr REturn for April-June'12 on Automobile Service - S.tax Return, let me know the July-Sept'12 Return filing date,i.e. when to submit the same, kindly give details ASHOK D CHOWRIWAR

    The date of filing of return for the period from July to September is not notified yet. The number of changes has been made by negative list regime. But these are not incorporated in the returns. Hence this amendment has come. So wait for CBEC Notification in this regard.
  • Dear Sir,Please tell me Is tds adjusted on payment of GSP Charges? mukesh chauhan

    We do not dealt with Income tax. Please ask queries related to service tax and Excise.
  • Dear Sir, We are Pvt. Ltd. Co. we received security service from agent who is not registered under service Tax as Turnover is below 10 Lacs .They provide us bill with out charging any service tax.Whether we have to deduct service tax and how much i .e 12.36% on bill or 9.27% on the bill they provided Santosh Kumar Singh

    Under security service reverse charge is applicable if service provider is individual, firm or HUF and service receiver is body corporate and therefore reverse charge is applicable in the instant case. Further as per Notification 33/2012-ST(Threshold exemption Notification), the threshold exemption of Rs. 10 Lakhs is not applicable in a case service receiver is liable under reverse charge. Therefore you are liable to pay service tax under reverse charge. In security service, liability of service receiver is 75% under reverse charge. Hence, you are liable to pay 9.27%.
  • hisir,price of one of the items in excise invoice has wrongly been mentioned on higher side and the materials have already reached the customer.The whole transaction completed within a span of 2 days.Please guide us what is the remedy to correct this. Ramesh

    Reply:- You can issue the Debit Note for differential amount i.e. excess amount with excise impact. But to take the excise portion back, you have to apply for refund.
  • Whether re-packing and re-labeling and putting MRP of Imported products falling under chapter 3808 amount to manufacture or not and Is Excise Duty applicable or not for the same. HN Manjunatha

    Chapter note 9 of chapter 38 says “In relation to products of Chapter 38 (except products of chapter 3808), Labeling or relabeling of containers intended for consumer or repacking from bulk pack to retail packs or adoption of any other treatment to render the product marketable to the consumer shall amount to manufacture”. Since your product falls under Chapter 3808 then this chapter note will not apply. However, chapter 3808 is chargeable to MRP based valuation by virtue of serial number 45 of Notification 49/2008-C.E.(N.T.) dated 24.12.2008 and as amended. For goods covered under third schedule (MRP based valuation), the above mentioned processes also amount to manufacture as per Section 2(f)(iii) of Central Excise Act. Therefore, excise will be leviable on products falling under chapter 3808 if the processes mentioned in query are undertaken by you.
  • whether the value of ancillary to be included in the value of manufacture. prakash

    Your query is not clear. Please ask query clearly with complete detail.
  • Dear Pradeep Sir, One of my client is giving commission on his manufacturing sales sales amount and receiving the bill of service tax by commission receiver so please guide us that my client should be claim service tax against his manufacturing liability central excise duty in manufacturing return ER-1. Waiting for your early response in this regard. Thanks & Regards, Kalpana Singh kalpana Singh

    As per Rule 2(l) of Cenvat Credit Rules, 2004 Input service means “any service used by a manufacturer whether directly or indirectly, in or in relation to the manufacture of final product and clearance upto the place of removal” further it also include service used in relation to ‘sales promotion’. In 'Commissioner of Central Excise, Raipur V. Bhilai Auxiliary Industries' - 2009 (14) STR 536 (Tri. Del) held that the services provided by the commission agent, which are nothing but the services of sales promotion, are covered by definition of 'input service' and therefore the service tax paid on the commission received by the commission agents as Cenvat credit. Further the second part of definition is inclusive and includes services like sale promotion, market research; advertisement etc. which are only example and services similar to these services is also treated as input service. As the definition is inclusive, Cenvat credit on commission will be sales promotion and hence the credit should be allowed.
  • dear sir, good afternoon....we are in the manufacturing of salt. we are having many labour contracts such as labour contract for loading,stacking , bharati,liner filling, shifting, packing etc. query is can we come under the reverse charge mechanism of manpower supply service. and we have to pay service tax on 75% of amount charge in bill.... thanks in advance sir abhishek agarwal

    Rule 2(g) of Service Tax Rule, 1944 defines supply of manpower to means:- “supply of manpower temporarily or otherwise to another person under his superintendence or control” So the essential character of manpower supply service is that the manpower should work under the superintendence or control of service receiver. In instant case, it is mentioned that there is contract for loading, filling, Packing etc. If there is a contract for these works and consideration is related to quantum of work and not related to number of laborers supplied then it cannot be treated as manpower supply. It is just a contract for work. Therefore, reverse charge will not be apply. But if there is simply contract for labour supply and labour is work under the superintendent and control of service receiver then reverse charge will apply if service provider is individual, HUF or Firm and service receiver is body corporate.
  • There is a company XYZ Ltd. Which has subsidiary company ABC Ltd. XYZ Ltd incurs advertisement expenses for advertisement of their own products & simultaneously also promotes the products of its subsidiary co. ABC Ltd. The advertisement expenses bills are on the name of XYZ Ltd & which in turn pays the same. Now our query is (i) Whether That Proportionate amount of advertisement exps. recovered by raising debit note by XYZ Ltd from ABC Ltd are liable for Service Tax if the recovery of advertisement exps. are on actual proportionate amount of advertisement exps? (ii) What if the XYZ Ltd issues debit note to ABC Ltd with addition of same markup on such advertisement exps.? In our view if the recovery by XYZ Ltd from ABC Ltd is on actual basis then there should not be any service tax since the element of consideration is missing and further the advertisement services are covered under negative list so ABC Ltd can claim exemption under the same. Pls. guide Hemant

    Under the negative list, only the service by way of “selling of space or time slot for advertisement” is exempt from service tax. Whereas, in the instant case, XYZ Ltd. is not selling the space or time slot to ABC Ltd. Further, the bill is issued in the name of XYZ Ltd. Therefore, it also not satisfies the condition of Rule 5 of Service tax (Determination of Value) Rules for claiming benefit of Pure Agent. Therefore in our opinion, service tax will be levied on amount reimbursed from ABC Ltd whether such reimbursement is on actual basis or with some margin.
  • Dear sir, in case of GTA service there should be 2 parties(consignor and consignee) is required to become liable under GTA. or if company use transporter for carrying goods from factory to site is liable under GTA service attract reverse charge. Naveen Kumar K T

    Your query is not clear. Under Transport of Goods service, 100% liability of service tax will be on the person who is liable for paying freight subject to the exemption upto Rs. 750/1500
  • Dear sir, gta services received and invoice received in june 12 but payment made in nov. 12. whether abatement can be claimed under 13/2008 or 26/2012 with no claim cenvat certificate from SP p s pawar

    Yes you can claim the abatement of 75% because there is no any change in the rate of abatement i.e. in 13/2008 and 26/2012, rate of abatement is same. Further you can also take the credit (if not disallowed otherwise) of service tax paid on GTA service as service recipient because the restriction of non-availment of credit is only for service provider and not for service receiver.
  • is piecemeal worker contract like Rs.2/bag for unloading a manpower supply ? VIDUR

    Rule 2(g) of Service Tax Rule, 1944 defines supply of manpower to means:- “supply of manpower temporarily or otherwise to another person under his superintendence or control” So the essential character of manpower supply service is that the manpower should work under the superintendence or control of service receiver. In instant case, it can’t be treated as manpower supply as there is contract for unloading work for which consideration is related to quantum of work and not related to number of laborers supplied. However, the terms and conditions of the agreement are important.
  • Dear Sir, when we open the ammend in service tax registaration should we tick also on service receipent under payment of service tax under reverse charges as we have alraeady mentioned in prevoius query that we are registered as service provider .will the registration amend with service provider along with service receipnt .please advise sir Alok Gupta

    If you are liable to pay service tax as service recipient under reverse charge system, you should amend your service registration accordingly and should also tick on “service recipient liable to pay service tax under reverse charge”.
  • Dear Sir, We are Importer of Machinery. When we Imported a machine we contract with a shipping agency. My question is that can we take credit of Service tax if foreign shipping agency deliver the machinery and made a bill in the name of indian shipping agency and the amt. paid to foreing shipping agency by the indian shipping agency. and in bill we are mentioned as importer. Please solve it Sir. In above reference please tell me that can we take credit of the ST paid by indian shipping agency on our behalf if bill is raised in the name of shipping agency Saurabh Khandelwal

    Yes, you can take the Cenvat credit on bill of Foreign Shipping Company if your name is mentioned in the bill of foreign shipping company.
  • Dear Sir, we have registered with service tax department as service provider. we are paying service tax on reverse charge being service receipnt. we would like to know should i chnage or amend the registration or it is not required. further if we are liable for amend then is there any time lime for amend in registration for service receipnt alok gupta

    On introduction on negative list, it was said that the registration will be under the head "other than negative list"only. But recently the CBEC has reintroduced the classification of services. Even the registration is to be taken in this category. Therefore, the registration is to be done in that category for which you are paying service under Reverse charge method.
  • We r running a hotel and paying service tax regularly. Can we claim cenvet of input like management fees paid for running hotel, amc of plsnt and machinery etc.. Pl advise Haresh Raithatha

    There are number of abatements available to Hotel industry viz. for accomdation service, restaurant service, Mandap keeper service, rent-a-cab service etc. The Cenvat credit has been allowed even with abatement of accomdation, restaurant and Mandap keeper service. But the credit is not admissible if you are availing rent-a-cab service. Hence, one has to see the conditions attached to abatements. If you are availing only abatement on three services then credit is available.
  • Sir ji.. Service tax on builders is applicable from July 2010. What is the status on the liability if the agreement is entered into before and the amount received after July 2010 visu

    At that time, the Government has exempted the amount received prior to July 2010. But the Gujarat High Court has held that the service tax is not linked with invoice raised or payment received but it is linked with the provision of service. Hence, following the ratio of this decision, one can say that the service provided till July 2010 will also be exempted. But the work undertaken after that date will be taxable. However, the litigation is inbuilt. But it has nothing to do with the agreement entered prior to this date. It is only linked with service provided. It is worthwhile to mention here that the current Point of Taxation Rules were not prevailent at that time and service tax was payable on receipt basis.
  • Sir ji.. Pl. clarify on the interest is taxable for a clearing and forwarding agent; who deposit Rs.50 lacs as deposit to the principal for the stock of Principal as security deposit. The servie tax on commission earned by the assessee is discharged. Do the interest on the deposit as per agreed rate is taxable? Since the amount of deposit is part of the business service visu

    The interest on deposit is exempt under the negative list. But however, it has to be proved that the same has not influenced the value of taxable service.
  • Sir ji.. The client is providing printing on aluminium foils where the ink and the foils were given by their principals. the client is paying VAT will there is a service involved and taxable under service tax.? visu

    Since you are undertaking the job work, the process undertaken by your client amounts to manufacture then there is no liabilty of service tax. Supposing this process does not amount to manufacture then also, if the supplier has given the job work Challan under Rule 4(5)(a) of Cenvat credit Rules or under notification number 214/86 then it implies that supplier will be using further the same in manufacture of final product then also no service tax is payable. Furhtermore, the process of printing is also exempt under point 30 (a) of megha exemption notification. Hence no service tax is payable on the same.
  • Dear Sir, We are Importer of Machinery. When we Imported a machine we contract with a shipping agency. My question is that can we take credit of Service tax if foreign shipping agency deliver the machinery and made a bill in the name of indian shipping agency and the amt. paid to foreing shipping agency by the indian shipping agency. and in bill we are mentioned as importer. Please solve it Sir. Saurabh Khandelwal

    It seems that Indian shipping agency has paid the amount on your behalf. CHA normally makes many payment on behalf of importer or exporter like fork lift charges, loading and unloading charges etc. and reimburse the same form them. The department invariably objects the same. Normally, the name of exporter and importer is not mentioned in service tax invoice. But if your name is appearing in the service tax invoice, then we donot forsee any problem in taking the credit. Even if the department raises the objection then it can be very well established that the shipping line has paid the amount on our behalf and we have reimbused the same.
  • Dear Sir, We are manufacturing Unit of steel (Scrap to TMT).during the last year we made sale of some raw material (Scrap) means in terms Input removal as such (trading) now during audit by excise department they remark it and they want to reversal of input service credit (on carriage inward and other services) in Proportnate basic on apply Rule 6 (3) of Cenvat credit rules 2004. And charged interest on it. Can they do this? According to me Trading is not a part of Service Supporting By case Laws 1. 2010(17) S.T.R. 517 (Tri.-Del.) in the CESTAT PRINCIPAL BENCH New DELHI, J S KHALSA STEEL (P) LTD V/s COMMISSIONER OF C. EX. CHANDIGARH. 2.2010 (256) E.L T 420(Tri –Del) in the CESTAT PRINCIPAL BENCH New DELHI, A R CASTING (P) LTD V/s COMMR. OF EX. & S TAX CHANDIGARH. Please Provide Correct Solution. CA RAJAT JAIN 9166132638 rajat22jain@gmail.com Rajat jain

    Under the new regime of negative list, the trading has been referred under the negative list and if we go by the defintion of "Exempted service" given under the Act, then it says that items mentioned in negative list will also be treated as exempted service. Hence, the trading activity will be exempted service only. Hence provision of Rule 6 will apply. Even Rule 6 also gives the method to compute value of trading activity as sale price minus purchase price or 10% of cost of goods sold, whichever is higher. Hence, the department will ask for the reversal of credit. But most of consutlants are of the view that the trading activity is sale and it cannot be referred as exempted service or rather service itself. But for this purpose, this provision is to be challenged in High Court.
  • What is the margin line which demarcates Works Contract Service and Construction Service??? This query has been raised because both the mentioned service have the provision of construction of immovable property. Manoj Khatri Advocate Kanpur. Manoj Khatri

    When the title in the goods also transfers along with service then the service will fall under works contract. But pure labour contract where no material is involved then it will fall under construction service.
  • Dear Sir, I am associated with a autonomous body which is regulated by Central Government.This body is taking manpower services from an agency for office staff and all. My query is can we claim exemption from paying service tax on the aforesaid service as per the below circular. [TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] Government of India Ministry of Finance (Department of Revenue) Notification No. 25/2012-Service Tax New Delhi, the 20th June, 2012 G.S.R……(E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Act) and in supersession of notification number 12/2012- Service Tax, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 210 (E), dated the 17th March, 2012, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the following taxable services from the whole of the service tax leviable thereon under section 66B of the said Act 12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of - a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958); a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment; akash

    The exemption as mentioned in this circular or under Mega Exemption Notification is available only in respect of services e.g. construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation etc. and this exemption is not allowed in respect of Manpower Supply service. Therefore you are not eligible for this exemption.
  • In the hotel industry we have booked the conference room and provide high tea to all members. Now my question is whether high tea also covered under Supply of food as a part of function for renting and whether in that case we are liable to pay service tax 8.65 under abatement ( Taxable value of 70%) or liable to pay service tax @12.36%? Navin Jain

    Under the Negative list regime, if there are two or more services are provided then the service tax will be paid under that category which gives colour to overall services. Since the service was taken for conference, hence the service tax will be charged under this head and abatement @ 70% is correct.
  • We are manufacturing co. and we have a contract of transport of our staff from railway station to factory and back. The operator is not in service tax as his limit is under 10 lacs. in this case whether we are liable for service tax and whether 100 % or 40% and further under which cod ewe have to pay servic etax ANIL KUMAR

    Firstly the service tax will not be levied if it is treated as “Contract Carriage” because it is exempt under notification 25/2012-ST. The essential characters of contract carriage are as follows: 1. The vehicle should be engaged under a contract - whether expressed or implied. 2. The use of such vehicle as a whole for the carriage of passengers mentioned therein. 3. The contract is either on a time basis (whether or not with reference to any route or distance) or it is on destination basis (from one point to another) 4. The vehicle does not stop to pick up or set down passengers not included in the contract anywhere during the journey. As your query is not clearly show the contract description, so you are not able see that your contract is covered under the above definition of contract carriage or not. If this contract is not treated as Contract carriage, then reverse charge will apply. It will be applied only if service provider is individual, HUF or Firm and receiver is body corporate. In such case, if abatement of 60% is not claimed (abatement is option) then 40% liability will be on service receiver but if abatement is claimed then service tax will be levied on 40% of value and 100% liability of service tax will be on service receiver.
  • Our client is in Oilfield services providing Drilling & Workover rigs to ONGC & others. They use Bunk house for stay of employees at Rig site which is generally located at remote area. They purchase readymade Bunk House, whether CENVAT on bunkhouse can be claimed as credit against payment of service tax on oilfield service ? Further, they also use services of outside caterers there, whether service tax thereon can be claimed as credit ? CA. Vijaysinh Chauhan

    As per definition of Input service given under Rule 2(l) of Cenvat Credit Rules, 2004 “input service means any service used by a provider of output service for providing an output service and includes services used in relation to modernisation, renovation or repairs of premises of provider of output service or an office relating to such premises, advertisement, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security etc. Further the definition excludes:- Such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee Therefore input credit of services related to bunk houses can be allowed. But outdoor catering service may not be allowed because it is used primarily for personal use of employees which is excluded from the definition.
  • we have received services from a caro handling agency on 01.07.2011 but paid him on 29.03.2012. We already filed refund claim, is it tenable? S.Bagchi

    Your query is not clear.
  • Booked flat in 2009(building yet incomplete consideration paid). And builder is asking for service tax. But i found various article that personal use can be exempt but not very clear. Need your expert input whether any exemption available or I have to pay service tax. and i paid vat as WCT but builder saying for service tax its construction services that's alos confusing me. what exectly status for this? Need quidence as laymen person not in legal terms Bharat

    The service tax on builders have come from 1.7.2010. If the flat is sold and the payment is received in installment while the projec is under implemtation then the service tax is applicable. During that period if a residential complex had more than 12 units then the service tax is applicable. The buidling is made from material and labour, the VAT is paid for material part and service tax is payable for service part. Hence both are payable on construction of buidling.
  • Dear Sir, Our co. is using Manpower supplying Agency's service & has taken credit of service tax charged by manpower supplying agency, but this agency has not deposited the service tax collected from its clients to govt. deptt, so Department has issued showcause notice to our company & asked for the reversal of credit already taken, So can u plz suggest me what should we do & whether Deptt. can take such action against service receiver & plz give some legal supporting or any case law -- Thanks & Regards CA Neha Neha

    As per Rule 4(7) of Cenvat Credit, Rules 2004, “the Cenvat Credit in respect of input service shall be allowed on or after the day on which the invoice, bill or challan as the case may, is received” Further the service receiver cannot be liable for default of service provider in respect of non-payment of service tax. As per Explanation II of Rule 4(7), “if the manufacturer of goods or the provider of the output service fails to pay the amount payable under this sub-rule, it shall be recovered under the manner as provided in rule 14”. Further Rule 14 provides that the service tax along with interest shall be recovered from provider of output service and provision of section 73 and 75 of the Finance Act apply mutatis mutandis for effecting such recoveries. The above provisions make it clear interest and penalty will be leviable on defaulter. Further there are many cases in which held that credit cannot be denied due to default by service provider when amount in invoice already paid to supplier. e.g. 2010 (19) S.T.R. 772 (Tri. - Bang.) COTTON COUNTY RESORTS & ESTATES PVT. LTD. Versus COMMISSIONER OF C. EX., BELGAUM
  • Dear Sir, Greetings of the day..... We are in to manufacturing industry and do not provide any services.my query is can we take the credit of service taxes that we paying?...like in phone bills, transportation of raw materials etc... Thanks in advance. Sudheesh K C

    The Cenvat credit of input services is also allowed to manufacturers. The credit taken on input services can be utilised for payment of excise duty on final product.
  • Sir a company have received a bill for man power supply on which service provider is liable to pay 25% of the servicetax but he have charged 100% of the servicetax in invoice and the company had paid to the service provider the full amount. My question is whether still the service receipient the company is liable under reverse charge to pay the 75% of the amount of tax by GAR7 challan when whole of the tax is paid by service provider? Vinay Jhawar

    The statutory liability to pay service tax is on the company and it cannot be shifted to other person. Hence the department will object the same. But it can be successfully pleaded that when the service tax is already paid then double service tax cannot be demanded on same transaction. But the litigation is inbuilt.
  • Sir, We are a heat treatment processing unit. We receive gears/ other automobile components from our clients on which we carry out the process and sent them back. Majorly we receive the material on challans as per rule 4(5) of cenvat credit rules. and very few on non exciseable challans. I have 2 questions. 1)Do we need to apply service tax on material received on challans as rule per 4(5)? 2) For the exemption of upto 10 lakhs of turnover for labour charges, do we need to take into consideration the turnover for material received on challans as per rule 4(5) of cenvat credit rules. Akshay Chhajed

    First of all, when the material is received on job work challans under Rule of 4(5)(a) then it implies that the supplier is using this material in his factory in further manufacture and paying Excise duty on the same. Hence, there is no need to pay the service tax. But if the material is received without chalans then we have to see whether the process employed by us amoounts to manufacture or not.If it amounts to manufacture then no service tax is payable. In other case also, threshold exemption of Rs. 10 Lakhs under notificaiton 8/2003 is available. There is no need to add the value of exempted services in the same. Hence, the material supplied under rule 4(5)(a) will not be added.
  • is deduction for amount paid to subcontractor is available to builders & developers if they opt for composition @ 5% ? chaitanya

    Although your query is not much clear. However, the service tax paid by subcontractor is available to developers even if they pay service tax. The abatement available to buider is 75%.
  • Sir, We are manufacturer of machine we have some bills of CENVAT of may,12 of which credit was not taken by us. Can we take now of These bills in Nov,12 return? Saurabh Khandelwal

    If the excise duty is paid on your final product then you can take the cenvat credit on inputs. There is no time limit is fixed in the Cenvat Credit Rules. It only says that the credit can be taken immediately. There are decisions which says that the credit can be taken even after period of six months.
  • My query is about transport of goods by road services. One of my client is providing services to companies(companies paying Service tax. he is not filing returns(NIL) from the registration date i.e from april 2005. my query is whether Late Fees and penalty Attracted or not? If yes how can we escape from late fee and penalty proceedings? Whether we have to show total service amount provided to company in ST-3? Raghavender Upadhyay

    There are decisions which says that the late fee is not to be paid for non filing of nil returns. Even the Section 70 prescribing late fee starts with words "Every person liable to pay the service tax.......". When no service tax is payable then it can be pleaded that the service provider is not a person liable to pay tax and as such these provisions does not apply to him. Thus, there is no need to pay the late fee.
  • In R/o Renting Service there is common practice of receiving security deposit from service receiver. Whether Notional interest accrued on said security deposit is required to be added in taxable value. & What will be the rate of interest to be considered. Manoj Khatri Advocate Manoj Khatri

    The department is demanding service tax on this notional interest. They take normal bank interest for the same. This concept has been borrowed from the Central Excise. But the decisions on this issue says that nexus has to be proved that the security deposit has influenced the assessable value. If the same is not proved then the duty can be demanded. Similarly, if one can prove that the security deposit has not influenced the rent, then there is no service tax.
  • Sir,The client is claiming CENVAT credit on due basis. While filing the Service Tax Return for QE June, 2012, total CENVAT credit taken during the period is Rs. 100. However, CENVAT credit reversed during the period is Rs. 500/- as the client has not paid the bills for more than 90 days. Now, there is no suitable column in the CENVAT credit details where the amount reversed as CENVAT may be shown in the return. I tried to show the CENVAT credit taken during the period as net amount after adjusting reversed CENVAT, but as the figure became negative, the software is showing error while validating the XML file. Therefore, I am looking forward to your advise in such a case so that the ST-3 may be filed. CA Sandeep Jain

    If the amount paid is more than credit available then it has to be paid in cash. In EXcise also, if the credit to be reversed (say on audit objection) is more than credit taken then credit is reversed to the extent balance available in register and rest is to be paid in cash.Similar treatment is to be given here also and negative balance cannot be shown.
  • Dear Sir We are an SSI unit claiming exemption on clearances upto 150 lacs and have never claimed cenvat. Recently we exported to Nepal and not knowing about the change in rules did not have a bond or LUT and sent goods without paying duty as we thought our sale is only at 70 lacs so duty is not applicable. Now department is asking for duty to be paid even though we are still in our limit? do we pay this duty on export?? K P Singh

    This case can be defended very well. Although we have not followed the procedure yet there is no doubt about the export of goods. The technical and procedural breaches should not come in the way of extending substantial benefits. Also, if we have not followed the procedure then it should not be trreated as export, hence should be treated as home consumption and added in total overall limit of Rs.1.5 crore.
  • Sir, this is construction company service tax under WCT and here wrongly taken cenvat credit in previous ST3 returns, now we want to removed those figures and where we removed those figures in current ST3 returns. Can you please advise us. Vijay

    The ST-3 return can be revised in three months. Secondly,the same figures cannot be amended in current ST-3. You can only reverse the excsee credit taken in current ST-3 return.
  • Sir, We, a private ltd Co, have entered into annual maintenance contract with a private firm for the maintenance of 7KVA UPS System installed in our office premises and Rs.12,000/- paid towards AMC charges at the time of execution of the AMC. The service provider has not claimed service tax in his bill. As per the terms of AMC the service provider will undertake periodical maintenance service consisting of preventive and corrective maintenance of the system and will supply and replace parts wherever required. The parts so removed shall be the property of the service provider. However replacement of defective batteries is not covered under the scope of the AMC. It may pl. be clarified whether we as service receiver do pay any service tax under reverse charge provisions on this AMC. Regards, Nagarajan V nagarajan v

    Since the AMC includes the replacement of parts, hence this will be covered under works contract. If the service provider is individual, HUF, partnership or AOP then the reverse charge mechanism will be applicable in your case as you are a private Limited company.
  • A service provider taken St regd in May 12 and his total receipt is <10 lac and not paid any service tax ,will he is livable to file St 3 for June 12 and cir no under which exempted ajay

    Yes, he has to file the service tax return. Even the nil return has to be filed.
  • Sir ji.. I have a doubt on GTA wrt renting of trucks to Goods transport agency which is exempted or are taxable. If taxable there shall be double taxation lorry owner and service proider pl. clarify visu iyer

    The transportation of goods by GTA and courier service are only taxable. Hence the transporatation of goods by lorry owners is not liable to service tax.
  • please clarify wither printing school magazine for school children on science subjects to aid their studied (not guilde)are taxable as business activity under the amended provision of section 2(15) of the income tax act, 1961 P.J.JOSEPH FCA

    We only deal in Central Excise, Service tax, DGFT and Customs. Hence we are unable to reply related to Income tax. Sorry for the inconvenience.
  • we r the associate of gati ltd.can we avail SSI Exemption. departments argument is you r using brand name hence u r not entitle for ssi exemptionn. please suggest nilesh jain

    If you are using brand name of any other person then you are not eligible to claim threshold exemption of Rs. 10 Lakhs.
  • electricity distribution company has given contract to a co-op bank to collect costmer bills,bank raised bill including service tax, my query is The company have to pay service tax? if yes, how to calculate and pay? swaraj

    Service tax will be leviable as the service is neither covered under negative list nor under mega exemption notification 25/2012-ST. The service tax will be leviable @12% on the consideration given to said bank.
  • Sir, Can you pl. guide me how to answer the audit query from the ST department? We have availed (import) services from our parent company Canada, during the period from 01st April 2004 to 31st March 2006. We have remitted the amount to our parent company in the month of July 2007, and accordingly we have remitted ST amount calculated @ 10.24%. Now the department is demanding to pay the differential amount of 2.12% ( 12.36% - 10.24%), since the rate is applicable during that period and also demanding interest for the differential amount up to today. Is that right or we can pay and go for appeal? Regards, S Ramakrishnan, S Ramakrishnan

    The service tax on import of service cannot be imposed prior to 18.4.2006 as per Apex Court decision in case of Indian Shipowners Association [2010(17)STR J57]. When you have provided the services prior to this date, then service tax is not payable at all.
  • sir, in the period from apr june 12 the service tax is to be paid /charged on 2 rates i:e 10% and 12% as some bills are issued before 31/3/12 but there us no provision of 2 rates in the ST 3 for issued by the department for this period ajay

    This seems that you are paying service tax on receipt basis ( this is applicable if the total taxable value in preceeding financial year is below Rs. 50 Lakhs). Then the CBEC has clarified that if the receipts are after April 1, then the service tax is to be paid @ 12% only. Although this has been challenged in High Court but outcome of the same is still awaited.
  • One of my client are doing packing of oil for a company. They fill the oil in various marketable size, pack them,label them and pack into cartoons. Company is paying us the charges on the basis of packed items. like 25 paisa per bottle. Now I want to ask whether this service is taxable or not. Company is saying the service is exempt due to it is a manufacturing process. Please clarify. Ashok Agarwal

    CBEC has power to declare certain processes as "manufacture". In some chapter notes as well as for the MRP based valuation, packing, repacking from bulk to retail as well as labelling and relabelling will amount to manufacture. Hence the excise duty is payable on the same. Since you are doing job work of packing and if the excise duty is being paid on the same, then the service tax is not payable as per clause (f) of negtive list in Section 66D.
  • one of my client paid excess service tax for the quarter April To June , whether he will get credit for the same in next quarter if yes then in ST-3 Return sin which column it has to be writtern of credit available for next quarter bhavesh k mehta

    As per Rule 6(4A) of Service Tax Rules 1994, "Notwithstanding anything contained in sub-rule (4), where an assessee has paid to the credit of Central Government any amount in excess of the amount required to be paid towards service tax liability for a month or quarter, as the case may be, the assessee may adjust such excess amount paid by him against his service tax liability for the succeeding month or quarter, as the case may be." Further Rule Sub Rule 4B of Rule 6 provide that “the adjustment of excess amount paid under sub Rule 4A shall be subject to the condition that the excess amount paid is an account of reasons not involving interpretation of law, taxability valuation or applicability of any exemption notification” So according to above provisions you can adjust the excess amount paid towards your succeeding month or quarter’s liability subject to the fulfillment of conditions mentioned in sub rule 4B. But the adjustment is allowed only for the succeeding month or quarter’s liability.
  • Dear Sir, When services (security & manpower supply ) are provided prior to 31st March’12 & bill is also raised on 9-March @ 10.3% Service Tax and outstanding provision is also created. Kindly clarify service tax rate for release of payment. Regards Atul Gaur atul gaur

    As per Rule 4 of Point of Taxation Rules (as applicable in relevant period), in case of change in effective rate of tax:- If Service has been provided before the change in effective rate and also invoice is issued before the change then point of taxation will be date of invoice. Therefore in the instant case Point of taxation is 9th March and rate will be applicable as 10.3%.
  • Sir, does reverse charge applies, if the service recipient is a hospital registered as charitable trust Charanjeet

    Under all the points as given in the Notification no. 30/2012-ST (reverse charge mechanism) there is common essential character for service receiver is that, it (service receiver) should be business entity or body corporate. But normally entities registered under section 12AA do not work as a business entity. Also, trust does not fall under Business corporate.
  • we are excise registered dealer and mfg branded goods. as this is first there is no other sales except branded goods sale. this is first year of company and turn over is 50lacs. But excise is payable on branded goods so return will be monthly or quarterly. is there in clarification regarding this from department Bharat

    As per Rule 12 of Central Excise Rules 2002, (Filing of return) "(1) Every assessee shall submit to the Superintendent of Central Excise a monthly return in the form specified by notification by the Board, of production and removal of goods and other relevant particulars, within ten days after the close of the month to which the return relates i.e. Monthly Return ER-1." Further proviso 3 of the above rule 12(1) provides: “Provided further that where an assessee is eligible to avail of the exemption under a notification based on the value of clearance in a financial year (i.e. SSI), he shall file a quarterly return in form specified, by notification, by the Board, of production and removal of goods and other relevant particulars within ten days after the close of the quarter to which the return relates. i.e. ER-3. Explanation 1 – For the purpose of this proviso, it is hereby clarified that an assessee shall be eligible, if his aggregate value of clearance of all excisable goods for home consumption in the preceding financial year computed in manner specified in the said Notification did not exceed rupees four hundred lakhs. As per above explanation company is eligible for SSI exemption as its first year there it has to file quarterly return.
  • Sir.. I am in construction business..we hire motor vehicles for commutation of employees at sites..Can we claim cenvat credit against the service tax paid on renting of motor vehicles? Sk

    According to Section 2(i), Input service excludes “(B) service provided by way of renting of motor vehicle, in so for as they relate to a motor vehicle which is not a capital goods” And according to section2 (a) Capital goods includes, “Motor Vehicle design to carry passenger including their chassis, registered in the name of provider of service, when used for providing output service of- (i) transportation of passenger; or (ii) renting of such motor vehicle; or (iii) imparting motor vehicle skills” It means input credit on taxi hire is allowed only to those which are provider of output service of transportation of passenger or renting of motor vehicle or imparting motor vehicle skills. Therefore credit is not allowed in instant case.
  • Sir, our companyis into manufacturing of textile fabrics. has job work contracts with our matetials supplied to them. Will it attract service tax Haridu Hussain

    Your query is not clear that what activity is involved.
  • IN SERVICE TAX RETURN FOR APRIL TO JUNE 2012 FOR TRANSPORT OF GOODS BY ROAD SERVICE WHICH NOTIFICATION NO. IS TO BE FILLED FOR CLAIMING ABATEMENT OF 25%, AS 1/2006 IS NOT TAKING IN THE RETURN CA ANAL MAROTI

    In ‘Transport of Goods by Road’ service there is exemption of 75% and not abatement. Therefore Notification 13/2008-ST has to be filled for claiming this exemption and not notification no. 01/2006-ST.
  • Sir, Time and again your interpretation of cases is very helpful. We are in the garden development and maintenance services. many times we buy flowering and other indoor plants from nurseries. Then, we use these plants in our ongoing projects. We add our profit and raise the bill for these plants. So, in the first instance we buy plants from nursery (which is without any taxes), use it in projects and then adding our profit we raise bill to our client. Question is whether service tax is applicable when we prepare bill having plant items for our client? Kindly help. naresh pancholi

    We understood from your query that if we are purchasing and selling the plants then no service tax is applicable. But if we are not purchasing but maintaining the plants then service tax will be applicable.
  • Dear Sir, Our co. has engaged a contractor for regular maintenance of garden within the plant premises.Saplings,manure are be supplied by him and tools/tackles are provided by co. My question is- Does this contract come under reverse charge mechanism or to be treated as normal rep/mtce chargeable to serv tax @12.36% to be paid by contractor ? Regards, Sumanta Nag S,Nag

    Work contract is defined in the section 65B, which reads as follows: “(54) work contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such properly” As in instant case transfer of material involved for maintenance of garden, therefore it will be work contract service. As it is work contract service therefore valuation rule 2A will be applicable and as per Clause (ii)(c) of this rule 2A, when value of material portion and service portion can’t be determine then service tax shall be leviable on 60% of total amount charged in case of work contracts relating to immovable property. Reverse charge will be applicable if service provider (i.e. contractor) is individual, HUF, partnership firm and service receiver is body corporate. Liability to pay service tax under reverse charge in case of work contract service is 50% on service receiver and 50% on service provider---…Notification 30/2012-ST. As you are saying that service provider is company therefore reverse charge will not be applicable and liability to pay service tax is on service provider only.
  • My query regarding to the remuneration to the partners of firm u/s 40(b). There is a case in the beginning of the year partners assume that there would be profit of Rs. 10 lac during the for example FY 2012-13 and withdraw the remuneration as per the limit u/s 40(b), however at the year end firm came to the conclusion there would be a loss, in this case whether remuneration given to the partner (which exceeds from the limit u/s 40(b))would be allowed under IT Act, if no then what are the ramification. Bhavana Agarwal

    Your query is related to Income Tax law and we do not deal with Income Tax Law. You can ask query related to Excise, Service Tax and Customs Laws.
  • Sir, my company have sold some old and used machineries and i want to know that whether sale invoice should be raised on sale of such old and used machineries. Ganesh Yadav

    Rule 3(5A) is related to treatment when “capital goods are removed after being used”, which is as follows:-- “(5A) If the capital goods, on which CENVAT credit has been taken, are removed after being used, whether as capital goods or as scrap or waste, the manufacturer or provider of output services shall pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of taking the CEVAT Credit, namely:- (a) for computers and computer peripherals: ---- for each quarter in the first year @ 10%, for each quarter in the second year @ 8%, for each quarter in the third year @ 5%, for each quarter in the fourth and fifth year @ 1%. (b) for capital goods, other than computers and computer peripherals @ 2.5% for each quarter: Provided that if the amount so calculated is less than the amount equal to the duty leviable on transaction value, the amount to be paid shall be equal to the duty leviable on transaction value.” The above provisions mandate payment of excise duty (calculated as per these provisions) on removal of capital goods. As per Rule 11 of Central Excise Rules, 2002 ---(1) No excisable goods shall be removed from a factory or a warehouse except under an invoice signed by the owner of the factory or his authorized agent and in the case of cigarettes, each such invoice shall also be countersigned by the Inspector of Central Excise or the Superintendent of Central Excise before the cigarettes are removed from the factory. Therefore if excisable goods are removed from factory then invoice should be raised.
  • Does reverse charge apply in case of service provided before 1.7.2012 but bill booked after 1.7.2012 rohit singh

    Applicability of reverse charge is based on point of taxation. As per Rule 7(b) provides that in case of person required to pay service tax as recipients under reverse charge mechanism, the point of taxation will be the date on which payment is made to service provider. In instant case you have not mentioned the date of payment. So if date of payment is after 1.7.2012, reverse charge will apply otherwise not.
  • Sir, I got the bill from our firm of lawyers, they havent charged any service tax because service receiver needs to pay service tax. can I pay the service tax after deducting the cenvat credit that is available with my company? Also, I wanted to know how much payment I should made to the lawyer for the service i.e. after deducting tds only or after deducting tds and servicetax? Please clarify both my doubts. Meenu Agarwal

    You can’t pay this service tax liability by utilizing cenvat credit because as per Explanation given with Rule 3(4) of Cenvat Credit Rules, “Cenvat Credit cannot be used for payment of service tax in respect of services where the person liable to pay tax is the service recipient”. Further it is clarified that here service tax is not like TDS and service tax is leviable on value of service (i.e. value excluding service tax) therefore you have to make gross payment i.e. before deducting service tax.
  • Please confirm whether, Service tax reverse charge applicable or not on import of software kalpesh patel

    Import of software is not a service and sale therefore service tax is not leviable but if there is service involved then service tax will be leviable(if other conditions satisfy).
  • Sir, Thanks for reply my query..! my client taken Cash loan on Credit card in which Bank Charged Service tax on interest portion. he talk to bank regarding Service tax charged on interest portion, they reply that service tax is chargeable on Cash Loan on Credit card, whether it is correct or not...? Anup Moondra

    As per clause (n) of negative list given u/s 66D following is exempt from service tax:- “(i) services by way of extending deposits, Loans or advances in so far as the consideration is represented by way of interest or discount” Credit cards can’t be treated as loans or advances. Loans and advances are meant to signify amounts contractually negotiated as such (loan or advance) and not merely failure to pay an amount at the due date. In case of credit cards the exorbitant charges have also no relationship with the prevailing interest for the same class of creditworthiness and are in the nature of consideration for the services rendered for using the convenience of using the services by way of a credit card and can not be treated as interest of loan or advance. Therefore credit cards are not covered under above exemption hence it will be taxable.
  • Sir, we are Merchant exporter, based on Kutch Gujarat. My question is: whether Service tax paid on THC Charges used for exoport of goods (service provider is registered under BAS & BSS) be available as refund vide notification no 17/2009 & 52/2011 as department denied to grant refund on ground that service provider registered under BAS & BSS, is department correct in rejecting refund? plz reply ASAP awaiting your positive reply with regards, CA Akshay Joshi Akshay Joshi

    There are many cases in which department has disallowed the refund because service provider is registered under BAS/BSS service. In JOLLYBOARD LTD Vs COMMISSIONER OF CUSTOMS & CENTRAL EXCISE, AURANGABAD refund had been allowed even in invoice it is mentioned as “Documentation Charges” but service provider is actually registered under “C&F service”. Therefore category of service under which service provider is registered is important to claim refund.
  • Sir , we have a query , our firm is supplying stone ballast to the railways , now railway is asking us that they had received a letter from serevice tax department and our work falls in the scope of service tax from 1 april 2012.kindly resolve our query. vineet dave

    Your query is not clear. Supply of stone ballast is not a service and sale only then how service tax will be applicable. Please clarify which service you are providing?
  • Sir, if loan is taken from Bank and repayment by instalment, interst charged thereon is chargeable @12.36%. Anup Moondra

    No service tax is not leviable on Loans as it covers under Negative list as given under section 66D. As per clause (n) of said negative list following is exempt from service tax:- “(i) services by way of extending deposits, Loans or advances in so far as the consideration is represented by way of interest or discount”
  • Sir, We hare engaged in providing garden development services wherein we carry out certain agricultural operations to grow lawns (grass) and ornamental plants. For this we procure manures, fertilizers, plants, grasses, etc and use our team of labours and supervisors to execute the work. In one of our projects, client has deducted Works contracts Tax at the rate of 3.6% on advances. Still final bill is not raised. Our questions are: (1) Does garden making fall under the purview of Works Contracts Tax at all? (2) If yes, then is the rate at which it is deducted correct? (3) It is deducted on the total amount of advances, true? Your expert views are sought for this issue. Thank you. Regards, Naresh Pancholi naresh pancholi

    Work contract is defined in the section 65B, which reads as follows: “(54) work contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such properly” As in instant case transfer of material involved for maintenance of garden, therefore it will be work contract service. As it is work contract service therefore valuation rule 2A will be applicable and as per Clause (ii)(c) of this rule 2A, when value of material portion and service portion can’t be determine then service tax shall be leviable on 60% of total amount charged in case of work contracts relating to immovable property. Reverse charge will be applicable if service provider (i.e. contractor) is individual, HUF, partnership firm and service receiver is body corporate. Liability to pay service tax under reverse charge in case of work contract service is 50% on service receiver and 50% on service provider---…Notification 30/2012-ST. As in instant case you have not clarified the status of service provider and service receiver, therefore we assume that reverse charge is applicable in instant case. As discussed above that the service tax is leviable on 60% of gross amount. 50% liability out of total tax will be on service receiver. Therefore, amount to be deposited service receiver on advance will as follows:- [100 X 60% X 12.36% X50%] = 3.708 You have said that the service receiver is deducting the service tax. But this is not to be deducted. You will charge your portion of service tax, if any in your invoice and deposit the same with the exchequer. The service recipient will calculate his portion of service tax and deposit the same with the Government. Hence, there is no question of deduction of service tax from you.
  • My client is running a photo processing colour lab(no photo taking only processing-printing photos). He purchses a new printing machine for photo printing. The input is photos given by studios, individuals etc., in CDs, Pendrive or even via internet. We are printing the photos using HP machine. No chemicals are used. What we are doing is only printing photos and documents using inkjet macine with various media.These photos are binded and making albums and given back to the customer. Please advise this activity attracts service tax. P.J.Joseph

    As per Sl. No. 30 of Notification 25/2012-ST, “30(a) Carrying out an intermediate production process as job work in relation to agriculture, printing or textile processing is exempt” The exemption is applicable to printing process but in instant case there is additional process of binding and making albums is also done by the service provider. Therefore now question arise whether the service in instant case is exempt under above clause as printing process? As per section 66F (3):- “‘(a) If various elements of a bundled service are naturally bundled in the ordinary course of business, it shall be treated as provision of a single service which gives such bundle its essential character” The above provision will apply here in instant case as the service are naturally bundled in ordinary course of business and printing process gives it bundle character. Therefore it is treated as single service i.e. printing. As the service is treated as printing service therefore it is exempt under sl. No. 30(a) of mega exemption notification 25/2012-ST as discussed above.
  • rent paid to an individual by a company in excess of 12lakh per annum does it attract servicetax s.ramamurthy

    You have not clarified what kind of rent has paid, we assume that it is for immovable property. Negative list given under 66D exempts following services relating to immovable property:- “(m). Services by way of renting of residential dwelling for use as residence; (d). Renting of vacant land, with or without a structure incidental to its use, relating to agriculture.” If your service is covered in above clause then it will be exempt. Otherwise:- There may be two conditions:- 1. Assessee availing SSI exemption under Notification 33/2012-ST will be eligible for Rs. 10 Lakh provided all the terms and conditions of this notification are fulfilled. 2. Assessee not availing SSI:- Service tax from beginning i.e. no value based exemption will available and service tax will be leviable on whole amount.
  • Sir, I have sent a querry about the exemption limit of Rs. 10.00 LAKH AND ENQUIRED WHETHER THIS EXEMPTION IS APPLICABLE FOR US ALTHOUGH WE ARE SERVICE RECEPIENT FOR TRANSPORTATION OF GOODS BY ROAD ; KINDLY HELP ME SIR Unnikrishna Menonj

    We have already answered your query and once again answering the same. According to Notification No. 33/2012-ST, SSI exemption is not available to: “(ii) Such value of taxable services in respect of which service tax shall be paid by such person and in such manner as specified under sub-section (2) of section 68 of the said Finance Act read with Service Tax Rules,1994 (i.e. payment of service tax under reverse charge mechanism)”. Since your case is covered under sub-section (2) of section 68 of the said Finance Act i.e. person liable under reverse charge so the SSI exemption is not available.
  • In the new ST3 format for April to June 2012 after filling up and validating the whole return when submitted one message appeared that a file has been created at C Documents but I coukld not locate the file for uploading; is there any easy way to brose and reach the data file saved ???? Kindly help me sir, Unnikrishna Menonj

    First you should download the XML file and save the same at Desktop and then fill data. At time of validation i.e. “validate return and submit” then the new file will be generated by the ACES system at desktop. At the time of generation of new file write the file name completely on a paper then search the same at time of uploading. The format of name of new file will as under:- “Registration No._Date&Time” you can easily search by this name.
  • IF CENTRAL EXCISE INVOICE IS CANCELLED DUE TO SOME CLERICAL ERROR ON INVOICE, THEN WHETHER WE HAVE TO INTIMATE THE SAME TO DEPARTMENT OR NOT, IF YES UNDER WHICH PROVISIONS PLEASE GUILE CA ANAL MAROTI

    As per Chapter IV of Supplementary Instruction 2005of CBEC’s Excise Manual:----- When an assessee is compelled to cancel invoice, the following actions should be taken:- 1. Intimation of a cancelled invoice should be sent to the range Superintendent on the same date, whenever possible. However, in case of exceptional circumstances beyond the control of assessee should this not be possible, the intimation should be sent on the next working day; 2. Along with the intimation of the cancelled invoice sent to the range Superintendent the original copy of the cancelled invoice should also be sent. 3. Triplicate copy of the cancelled invoice may be retained by the assessee in the invoice book so that the same can be produced whenever required by audit parties, preventive parties and other visiting officers.
  • Sir, We Lost original Invoice of Service Provider,Tell me what is the procedure of taking cenvat credit of service tax on the basis of duplicate copy of invoice and whether any approval of Central Excise Officer is required or not. Hitesh karwa

    As per rule 9(1) of Cenvat credit rules 2004, the Cenvat credit shall be taken by the provider of output service on the basis of “(f) an invoice, bill or challan of input service”. The above rule mandates invoice, bill or challan for taking credit of input services. However there are many cases in which it is held that Cenvat credit can’t be disallowed only on technical ground that original document is not there but burden to prove that service is received will be on assessee. But you can’t avail Cenvat Credit straightway and you must apply to Jurisdiction officer and produce acceptable proof in order to satisfy him that service is actually received.
  • sir pl let us know whether the service charge will be levied or not,on the demurrage amount accrued on wagons containing chemical manures or agricultural produce like commodities which has been exempted from levying of service tax. thanks sukhjit singh

    As Rule 6(1) of the Valuation Rules, the following must be included in value of service:- “(x) the amount realized as demurrage or by any other name whatever called for the provision of service beyond the period originally contracted or in any other manner relatable to the provision of service” Further the exemptions given in mega exemption notification is for 25/2012-ST is for transportation of agriculture produce by rail and not for demurrage as demurrage charges is separate from transportation service.
  • Dear Sir, Kindly give your views on the service tax issue: We, a CA firm, undertake unit inspection and stock audits of borrowers on behalf of a bank. As per Notification No.45/2012 dated 7.8.12 which is adding additional list of services under RCM vide notification No.30/2012 dt 20.6.12. As per the Notification in Sl.No. 8, in the entries under the heading ‘Description of a service’, after the words “manpower for any purpose”, the words “or security services” ha been be inserted. The definition of Security services has been inserted vide Notification No. 46/2012-ST dated 7-8-2012 as Rule 2(1)(fa) of Service Tax Rules, 1994 which is given below: "Security services" means services relating to the security of any property, whether movable or immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity. In view of the above now the bank is asking us to raise bill under RCM basis of 25:75. Kindly give your views. CA. R. Velu

    “(fa) “security services” means services relating to the security of any property, whether imovable or immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity;” The above definition covers security of any property, in any manner and also includes investigation, detection or verification of any fact or activity. Therefore this definition is very wide and inspection of stock or stock audit will also be covered this definition and accordingly reverse charge will be applicable.
  • We have engaged manufacturing paper and paper board our major raw material is wood,bamboo etc. for procurement of raw material we do planttation of plants and we also give clone to farmers and later on we received wood from farmers. My question is all the activity is considered related to agriculture ? shelendra

    Agriculture’ has been defined in the Act as cultivation of plants and rearing or breeding of animals and other species of life forms for foods, fibre, fuel, raw materials or other similar products but does not include rearing of horses. In the instant case upto plantation it will be covered under “agriculture activity” and subsequent activity of making paper and paper board will not be treated as agriculture activity and will be treated as “manufacturing activity” and will leviable to excise. Hence no service tax will be applicable.
  • A company is having annual maintenance contract in which the contractor sometimes has to replace faulty hardware by new one. Will this contract fall under reverse charge mechanism. Jilesh

    Work contract is defined in the section 65B, which reads as follows: “(54) work contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such properly” As in instant case transfer of material involved for maintenance, therefore it will be work contract service. Hence it will fall under Reverse charge mechanism provided all other conditions are satisfied.
  • whether service tax is applicable on complimentary services provide by hotel to guest at free of cost? Navin Jain

    Complimentary services are free of cost and part of main service. As per definition of ‘service’ given under clause 44 of section 65B “Service means any activity carried out by a person for another for consideration”. For complementary service, there is no separate consideration involved in addition to main service. Therefore, no service tax will be leviable and it will be treated as part of main service only.
  • Is there any circular or Notification forthcoming which mandates that after crossing the turnover limit of Rs. 9 Lakhs the service provider has to apply within 30 days for service tax registration??? Manoj Khatri

    Original Notification No. 26/2005-ST as amended by 05/2007-ST and 09/2008-ST. As per this notification “any provider of taxable service whose aggregate value of taxable service in a financial year exceeds Nine lakh rupees” shall make an application for registration under the provisions of sub-section (2) of section 69 of the Finance Act, 1994.
  • Dear Sir,Greeting of the Day My query is regarding availment of credit. can we take credit of input services (e.g. hiring of Manpower, Advertisement Etc.) against any output service (e.g. renting or commissioning services). Actually we are engaged in providing exempted services but we are also registered under service tax for providing renting and commissioning services. can we take credit against these services by manpower hiring services or advertisement prior to 01st July , 2012 anuj

    As per Rule 2(l) of Cenvat Credit Rules, 2004 “(i) input service means any service used by a provider of output service for providing an output service”. Further as per Rule 6(1) of Cenvat Credit Rules, 2004, Cenvat credit of input service used for providing exempted services shall not be allowed. Therefore if the services input services e.g. hiring of Manpower, Advertisement are not used for providing taxable services then Cenvat will not be allowed. But if these services are used for providing both exempted as well as taxable services then Rule 6(2) and Rule 6(3) will be apply. As per these rules, where provider of output service avails of Cenvat Credit in respect of common input services and provides taxable as well as exempted output services, then provider of output shall maintain separate accounts for inputs and input services used in exempted and taxable services. Cenvat credit shall be allowed on input services used for providing taxable services. Further Rule 6(3) will apply when provider of output service opting not to maintain separate records. As per this rule, you can do proportionate reversal as per formula prescribed or you can reverse @ 6% on the value of exempted services.
  • If my value of Works Contract is Rs.1000 (Material 400 + Labour 600). Can we pay service tax on total Rs.1000 and claim excise credit of input goods or is it compulsory to follow 2A of the Valuation Rules??? Manoj Khatri Advocate Manoj Khatri

    Firstly it is clarified that determination of work contract service is done according to Service Tax (Determination of Value) Rules, 2006, not from abatement notification and therefore it is mandatory. Service portion of Work contract should be determined as per Rule 2A of Determination Rules. Further as per Explanation 2 of Rule 2A of Service Tax (Determination of Value) Rules, 2006, “For the removal of doubts, it is clarified that the provider of taxable service shall not take CENVAT credit of duties or cess paid on any inputs, used in or in relation to the said works contract, under the provisions of CENVAT Credit Rules, 2004.” Therefore assessee is eligible to take Cenvat credit of Inputs used for work contract service.
  • A new building construction is being carried on. Electrical contractor does the internal wiring for this building. With reference to the work carried out by the Electrical Contractor, can the work by Electrical Contractor be treated as against "Original Works" and pay service tax on 40% of the total value of the Contract? Manoj Khatri Advocate Manoj Khatri

    It can’t be treated as original work and will be covered under clause (c) of Rule 2A(ii) i.e. 60%, because clause (c) specifically includes installation of electric fitting of immovable property therefore it is considered separately..
  • Dear sir, We have been to client for signing of Diesel Bills for payment States that since the vendor is not charging the service taxes on the bills we are not suppose to charge the Service taxes also on our Service Charges. Please clarify asap so that we could explain client . Mukesh Jha

    your query is not clear that what you want to ask?
  • Is reverse charge mechanism applicable to the cooperative housing societies. Samir Kapadia

    Yes, reverse charge can be applicable to the cooperative societies for example if service provider is goods transport agency and person liable to pay freight is cooperative society then reverse charge will applicable and liability to pay service tax will be on cooperative society. Another example:- if cooperative society receive services from abroad and service provider has not any establishment in India then reverse charge will applicable and cooperative society will be liable to pay service tax. For more detail refer notification no. 30/2012-ST at http://www.new.capradeepjain.com/redirect_amdview_5962_3
  • For Example, M/s A Ltd has taken on rent on hourly basis a Town Hall owned by Municipal Corporation. The said Town Hall is equipped with pre-fixed chairs, air-conditioners, projectors, pre fixed stage, washroom facilities & parking facilities. Further the infrastructure equipped with the Town Hall cannot be dissected from it and all such infrastructures are pre fixed. The rent charged by the municipal corporation is on hourly basis and there is no bifurcation of the charges for using such immovable property and other infrastructure. In more simple language it can be said that the said Town Hall cannot be rented without infrastructure embedded with it i.e. letting of one is not acceptable without letting of other. Now our questions are as follows; 1. Can it be classified as Infrastructure Support Service as distinguished from Renting of Immovable property service? 2. Who is the person liable for service tax in respect of the transaction enumerated hereinabove? Ajay Karia

    No it can’t be treated as Infrastructural Support service and it is just only renting of immovable property service. The reverse will also not applicable herein as sl. no. 6 of Notification No. 30/2012-ST(in respect of services provided or agreed to be provided by Government or local authority by way of support services) excludes “renting of immovable service”. Therefore Municipal Corporation will be liable to pay service tax. Even if it is termed as two different activities viz. renting of town Hall and other is infrastructure services. These are naturally bundled services. Now, the service which gives color to these bundled services will be classified under that category. Since the renting of immovable is the main service as the person comes for taking Town Hall on rent. Hence the service tax is payable under Renting of immovable property.
  • What are the new provisions of Clubbing under Excise. We have 2 firms with common partners where each firm is below the excisable limits. CA. R. Velu

    There is no state forward rule for clubbing of clearance. The grounds on which clearance value is normally clubbed are absence of independent existence of manufacturing unit, lack of machinery or facilities for the entire manufacturing process and interdependence or interrelationship of units with financial and/ or management control being exercised by one unit or its owner over the other. The question whether different partnerships having common partners are treatable as separate manufacturers or the same manufacturer, would be a question of fact in each case to be determined on the basis of such factors among other, like composition of the partnership, existence of the factory, licence, nature of goods manufactured etc.
  • Sir, Some transporters are still using the old format of service tax like "ST/CENT/SE01/GTA/32/2005/XXXX/XX/0X/0X" and "GTR/MI/XXX", so Can we take input credit on this bills? Tkanks joseph

    According to Rule 4A of Service Tax Rules 1994, provider of output service shall issue invoice, bill or challan and the such invoice, bill or challan shall contain registration number. Currently PAN based registration no. is mandatory. Therefore invoice should contain PAN based registration number. However there is many case laws wherein it has held that Cenvat Credit can’t be denied only on such technical mistakes.
  • is service tax applicable on construction work of gujrat tourism board done by contracctor . like development of lake,construction of entrance gate of hill station,costruction of tourist information centre , development of heritage station. vedraj agarwal

    As per sl. No. 12 of Mega exemption notification no. 25/2012-ST, following is exempt from service tax:- “12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of - (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession” The essential characteristics of above exemption are as follows with comparing facts of instant case:- 1. Service should be provided to Government, a local authority or a governmental authority:- Here government includes Central Government as well as state government:- See whether Gujarat Tourism Board is part of State government or not. 2. There should be construction of civil structure or any other work which is predominantly use other than for commerce, industry, or any other business or profession:- See whether the construction work of Gujarat is for commerce, industry, or any other business or profession purpose. So if Gujarat tourism board is treated as part of state government and the construction work is not for the purpose of commerce, industry, or any other business or profession purpose then it will be covered under the above exemption otherwise will be taxable.
  • Sir Please clarifying which tax is applicable on printing and designing of magzines of our institute. vishal

    As per serial No. of Notification 25/2012-ST following service is exempts: “Carrying out an intermediate production process as job work in relation to- (a) Agriculture, printing or textile processing as job work” So the service tax will not be leviable as it is exempt under the notification No. 25/2012-ST. Further as told in query that you have not providing any material, hence it is not job work but a sale of good. Hence, no service tax is payable.
  • Sir, may you please guide on the issue in respect of value of the material utilised during the construction or repairing and hence deducted under noti 12/2003 in the light of the recent deicion of Aggarwal Colour (larger betch). Thanks CA B R Oza

    It is clarified that Notification No. 12/2003-ST has been deleted and it has ineffective from 01.07.2012. The Larger bench of the Hon’ble Tribunal has held in the case of Agrawal Colour Advance Photo System Vs CCE, Bhopal (2011-TIOL-1208-CESTAT-DEL-LB) that as per notification 12/2003 ST, the value of “deemed sale” cannot be excluded for the purpose of levy of service tax and in the absence of definition of the term “sale” in the Finance Act, 1994, only the definition of the term under Central Excise Act, 1944 should be referred to, which, according to the Tribunal, does not cover such deemed sale. By introducing negative list concept from 01.07.2012, definition of the term “service” has been given and the effect of the said decision has been nullified.
  • Sir,Under renting of immovable property service,municipal tax paid is to be reduced from the rent recd.what about service tax collected on the rent on monthly basis.Can it be retained by the land lord or is to be passed on to the tenenant.pl clarify with reasons.Regards venkat

    1. If property tax is already paid:- As per Notification 29/2012-ST---- “Provided further that wherever the period for which property tax paid is different from the period for which service tax is paid or payable, property tax proportionate to the period for which service tax is paid or payable shall be calculated and the amount so calculated shall be excluded from the gross amount charged for renting of the immovable property for the said period, for the purposes of levy of service tax” i.e. if property tax is paid for whole the year and rent is collected on monthly basis then proportionate amount related to that month will be adjusted for calculation of service tax of that month. 2. If property taxes are paid subsequent to the payment of service tax (i.e. property tax to be paid on annualize basis at the end of year):- In such cases, the property taxes paid can be adjusted while arriving at the service tax liability for the future in accordance with Rule 6(4c) of the Service Tax Rules, 1994. Further the claim can be made within one year from the date of payment of the property tax. The details of such adjustment shall be intimated to the concerned Superintendent of Central Excise in writing within 15 days of such adjustment.
  • I have been a registered dealer for VAT in Maharashtra since 2005. The sales/business activity continued till June 2009. Now I want to deregister. Can you please tell me the procedure for deregistration. S V Lalye

    Query is related to VAT and we do not deal in VAT.
  • In hotel Industry, suppose we have booked the room against advance payment of Rs. 10000 and service tax of Rs. 582 (50% Abatement on Room Rent) has been deposited on adavnce payment. Rs. 10000 is forfeited due to cancellation of room booking. From 01.04.2012 service tax is also applicable on advances forfeited for cancellation of an agreement to provide a service, now my question is whether hotel is liable to pay service tax 12.36% on forfeited amount or liable to pay service tax under abatement scheme? NAVIN JAIN

    The advance is received towards renting of room and amount is forfeited because of cancellation of agreement towards renting of room and also service tax have collected on 50% amount from service receiver. Further there is no any service provided separately and consideration is only for renting of room service. Therefore it is nothing and only renting of room service. Hence service tax will be leviable on 50% amount only.
  • Sir, we are company undertaking works contract services,after 1 st july 2012 can we charge the service tax on the full value of contract @ 12.36% and take cenvat credit on Inputs, Input Servies. 

    Firstly it is clarified that determination of work contract service is done according to Service Tax (Determination of Value) Rules, 2006, not from abatement notification and therefore it is mandatory. Service portion of Work contract should be determined as per Rule 2A of Determination Rules. Further as per Explanation 2 of Rule 2A of Service Tax (Determination of Value) Rules, 2006, “For the removal of doubts, it is clarified that the provider of taxable service shall not take CENVAT credit of duties or cess paid on any inputs, used in or in relation to the said works contract, under the provisions of CENVAT Credit Rules, 2004.”.
  • whether service tax is levied on Xerox work under work contract service Rahul

    As per Sl. No. 30 of Notification 25/2012-ST, “30(a) Carrying out an intermediate production process as job work in relation to agriculture, printing or textile processing is exempt” Therefore service tax is not leviable on Xerox as it is nothing and printing process only.
  • The service provider of rent on immovable property died in sept, 2011. What is his liability with regard to rent from immovable property before his death and after his death? Arjun Sharma

    There is no separate provision in this regard. If there is any pending liability then legal heir of service provider will be liable for the same and thereafter if contract is continued then legal heir himself will service provider and liable for service tax.
  • our company procures manufactured products and pays excise duty on it. It Uses these products on composite works contract( material + service) and collects service tax from its client. Can service output liabilty be adjusted from excise duty( cenvat credit.??? Navin Jain

    As per explanation given with Rule 2A of Service tax Rules for Determination of value of service portion in the execution of a works contract(Notification 24/2012-ST):- “Explanation 2.--For the removal of doubts, it is clarified that the provider of taxable service shall not take CENVAT credit of duties or cess paid on any inputs, used in or in relation to the said works contract, under the provisions of CENVAT Credit Rules, 2004.” So the above explanation make it clear that provider of work contract service is not eligible to take Cenvat of ‘Input’ used in or in relation to the said work contract. For more detail refer notification no. 24/2012-ST at:- http://new.capradeepjain.com/redirect_amdview_5924_3
  • Message in the ACES says it will take time for arranging the new ST-3 format for filing returns. Also refer to Noti.No.47/2012-ST which says "provided that the Form ST-3 required to be submitted by the 25th day of October, 2012 shall cover the period between 1st April to 30th June, 2012 only". This has some ambiguity; doubt arise (1) what about July to Sept period (2) If Quarterly return is going to come, then why can't both quarters ST-3 be filed. Kindly throw some light on the subject Sir. Regards... Menon Unnikrishna Menonj

    The last date of filing of return for the period from April to September 2012 is October 25, 2012. The date of filing of return for the period from July to September is not notified yet. The number of changes has been made by negative list regime. But these are not incorporated in the returns. Hence this amendment has come. Even the return for the period April to June cannot be filed as the ACES site says that it is incorporating the changes and it will take few weeks. Please take up this matter with the association that there is a gap is between CBEC and software company ACES and they are not able to incorporate the changes. But the poor service providers have to repent for the same. They have to file two returns as well as that too on last days only.
  • Dear Sir, Kindly let me know if we sale handicraft item so shall we charge services tax & vat on handicraft items (like marble sculptures). We will have to pay services tax & vat to government? RENU SINGH

    your query is not clear. There is no service tax on sale of goods.
  • hlo sir. plz tl me whethr shops given on rent by religious body attracts service tax before & aftr budgt. shops on rents are givn to diffrnt persns doing diffret business i.e garments, kitchn, electronics etc sunil mehla

    Before Budget:- It was not taxable, as the definition of renting of immovable property given under (90a) of section 65 had excluded:- “(i) renting of immovable property given by a religious body or to a religious body” After Budget:- Taxable, as neither covered under Negative list given u/s 66D nor under Mega Exemption Notification No. 25/2012-ST.
  • Please advise whether a unit holding S.S.I. registeration certificate and manufacturing chewing tobacco bearing own brand name falling under chapter heading 24039910 will be entitled to small scale exemption of Rs. 1.50 crores (General exemption no. 1, notification no. 8/2003 of central excise dt. 01.03.2003 as amended. CA J. K. Choudhary (Mumbai)

    Annexure of Notification 08/2003- CE dated 1/03/2003 prescribes the description of goods to which SSI exemption is available. As per this annexure, All goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985, other than specified in the annexure will be eligible for SSI exemption. Sl. No. (iv) specify the following description of goods which is not eligible for SSI exemption:- “(iv) all goods falling under Chapter 24 of the said First Schedule (other than unbranded chewing tobacco, preparations containing chewing tobacco and tobacco extracts and essences, falling under heading No. 24.04 )” The above sl. No. (iv) makes it clear that all goods of Chapter 24 is not eligible for SSI exemption but unbranded tobacco is eligible for SSI exemption. As in instance case there is manufacturing of chewing tobacco falling under chapter 24 which have brand name therefore SSI exemption will not be available.
  • NOTIFICATION NO 33 DATED 9.7.12 questions remain on whether the goods cleared without duty payment but upon debit to duty credit scrips should be treated as duty paid or exempted ' KINDLY CLARIFY DILIP SHAH DILIP SHAH

    This excise notification is for import under SHIS scheme. Further, it will be treated as duty paid only. As per Clause (l) of notification, the importer is eligible for cenvat credit also of the amount debited in this scrip.
  • sir, my question is if we have received the service upto 30.06.12 and bill dated is 07.07.12 and we have made the payment after bill date then have we to pay reverse charge as it is applicable wef 01.07.12 SACHIN GOYAL

    Reverse charge will be applicable if point of taxation under POT Rules (here POT Rule for reverse charge is not considered) is after 30.06.2012. Firstly you have not provided information completely i.e. which service involved. As per Rule 3 of POT Rules, when invoice is issued within the stipulated time(30 days) and no payment is received before the time of issue of invoice, POT will be ‘Time of Issue of Invoice’. Rule 4 of Point of taxation rules:- In case there is change effective rate (including change in abatement also):--- When service has been provided before change in effective rate of tax, invoice is issued after such change and also payment is received after the change then point of taxation will be ‘date of payment or date of issuing invoice whichever is earlier’. As you are not provided description of service and Rule 4 of POP applicable also when abatement rate is changed or any other change in effective rate so you have to see what Rule will be applicable in your case. However in both the case POT will be ‘date of issue of invoice’ i.e. 07.07.2012. As POT is after 30.06.2012 therefore reverse charge will be applicable. As the reverse charge is applicable so now the POT for receiver liable under reverse charge will be determine as per Rule 7 of POT i.e. POT will be Date of Payment.
  • Food supply by the contractor at the factory for lunch etc for employees at factory premises , weather Abatement of 40% allows or not ajay jain -

    Yes abatement of 40% will be allowed. When supply of food involved for outdoor catering, valuation Rule 2C will be applicable which is as follows:- “Service portion in outdoor catering wherein goods, being food or any other article of human consumption or any drink(whether or not intoxicating) is supplied in any manner as a part of such outdoor catering :- 60% of Total amount”. However, firstly you should see whether this activity falls under negative list or mega exemption notification. If it falls under the same, then there is no service tax at all.
  • Sir, whether wef april 2011 under the amended rule 2(l) of Cenvat credit Rules, 2004 , the service tax paid on (a) rent paid for factory or an office, (b)overriding commission paid to dealers, (c)sales commission paid, (d) annual maintenance contract service given to customers (either by the manufacturer or his dealers), (e) courier, (f)tours & travels, (g)rent a cab, (h)factory bus service, (i)factory canteen service eligible for cenvat credit for the manufacturer suresh makhijaney

    The services mentioned in your query will be eligible for Cenvat credit if it satisfy the definition of input service given under Rule 2(l) of CCR. Hence, you have to decide in the context of your unit.
  • can a assessee can clain of credit of input service tax if he avail abatment antima jain

    It depend’s upon the conditions of abatement(given under respective notifications i.e. Notification No. 26/2012-ST) that whether the credit of input service is available or not. For example there is no conditions in case of abatement taken under ‘Services in relation to financial leasing including hire purchase’. Whereas in case of ‘services by way of renting of hotel meant for residential or lodging purposes’ the CENVAT credit on inputs and capital goods, used for providing such taxable service, is not allowed but credit of input service is allowed for the same. So it depends upon the type of service being provided, as you have not mentioned the type of service being provided, it is difficult for us to give the specific answer. You’ll have to see the type of service in question and then corresponding conditions given in the Notification. For more detail see notification no. 26/2012-ST at http://new.capradeepjain.com/redirect_amdview_5958_3
  • We are hiring cold storages from individual and from private limited companies for storing our food product produced by us. kindly suggest is service tax applicable on rent paid by us for cold storages??? Manoj Khatri

    Yes, service tax will be leviable as neither covered under Negative list (section 66D) nor under Mega exemption Notification 25/2012-ST.(ST will not applicable if there is storage of an agricultural produce)
  • Dear Sir, I need your expert guidance on the following query: A company has liability to pay under Reverse Charge Mechanism. Can the company take credit for Service Tax Paid for financial services against liability under reverse charge mechanism i.e. can the company adjust the service tax paid on financial services against payment liability under Reverse Charge Mechanism. KULBHUSHAN LAL, FCA

    The liability of service receiver under reverse charge mechanism is for Input services only. Secondly, input service (financial service) can’t be used for payment of liability of another input service under reverse charge mechanism. Even input service means “services used by provider of service for providing output services”. Hence input service can only be used for payment of liability of output service only not for input service. Even there is amendment that the payment under reverse charge is to be paid in cash only.
  • Sir, please advice whether service tax is applicable on demurrage collected by port railway from consignors on account of exceeding free period allowed for unloading of wagons? patne purnima - paurnimakiran@gmail.com

    As Rule 6(1) of the Valuation Rules, the following must be included in value of service:- “(x) the amount realized as demurrage or by any other name whatever called for the provision of service beyond the period originally contracted or in any other manner relatable to the provision of service” So service tax will be applicable on demurrage.
  • If a service provider is able to exclude the value of materials on which he pays VAT @ 5 or 14.5, he has to charge service tax on value of service. Whether this can be treated as one contract for sale of materials which is trading and is excluded as per negative list and balance as a service contract and charge ST @ 12.36? Or it has to be classified as WCT under Clause(i)of Rule 2A? Whether reverse charge will apply for this if Service provider is Ind or HUF or Firm or AOP.? Bharath Kumar

    Work contract is defined in the section 65B, which reads as follows: “(54) work contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such properly” It may possible that service provider is able to segregate the material value and service value but still it will covered under work contract service if it satisfy the above definition i.e. there is transfer of material. Secondly, it will be for the type of service specified in this definition. When the activity is covered under “work contract service” then valuation Rule 2A of Service Tax (Determination of Value) Rules, 2006 will apply and according to this rule:- “(i) Value of service portion in the execution of a works contract shall be equivalent to the gross amount charged for the works contract less the value of property in goods transferred in the execution of the said works contract.” So ultimately service tax will be leviable on service portion under work contract service if service provider is able to segregate the value of material supplied. Further if activity is covered under work contract service, reverse charge will apply if service provider is Proprietor, Partnership, HUF or AOP and service receiver is body corporate.
  • Dear Sir, Please clarify the amount agreed to be paid as labour charges to electrican, plumber, technician of fax m/c, DG set will it fall under manpower supply? AK Gaur atul gaur - atulgaur_67@rediffmail.com

    Rule 2(g) of Service Tax Rule, 1944 defines supply of manpower to means:- “supply of manpower temporarily or otherwise to another person under his superintendence or control” So the essential character of manpower supply service is that the manpower should work under the superintendence or control of service receiver. As electrician, technician or plumber normally provides services independently and not supply any manpower which work under supervision of service recipient, hence it is not manpower supply service. But you have to assess on the basis on agreement on hand.
  • D/Sir, Annual maintenance charges of desktop/ printer has covered under work contract service where contractor also charging VAT. Kindly confirm.... Nitesh Kumar

    Work contract is defined in the section 65B, which reads as follows: “(54) work contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such properly” As you are saying that contractor is charging VAT, it means there is supply of material involved for execution of repairs hence the service is covered under the above definition of ‘work contract service’.
  • We are registered as a Service receiver for Transportation By Road and have been making remittance of Service Tax In A/c Code No 00440262 . Are we to make remittances from 1st July 2012 onwards in the new All Taxable Services code : 00441089 ??. Kindly guide me Sir. With Regards Unnikrishna Menonj

    Yes, from 1st July 2012 you are suppose to make all the remittances related to service tax payable in Accounting Code 00441089. As per Circular No.161/12/2012 –ST accounting codes for the purpose of payment of service tax under the Negative List approach, with effect from 1st July, 2012 and common for all the services, is as follows: Basic Service tax: 00441089 Primary Education Cess: 00440298 Secondary and Higher Education Cess: 00440426
  • Hello, Kindly let me know the service tax rate applicable for sole proprietorship or for women entrepreneur Regards, Anu Anupama Krishnan

    In terms of the charging provisions contained in Section 66B, service tax is levied @ 12.36% on the value of taxable services. Irrelevant of the nature of concern or owner’s identity (whether male/female) rate of service tax applicable will be same for all. However there are some services which cover under the definition of ‘Service’ but are exempt from payment of service tax but that depend upon the nature of service provided.
  • when we sold capital golds where we have show excise duty of the capital goods in ER-1 Return. Please advice savita mishra

    When Capital goods are sold, it is treated as “as such removed” so its duty should be reversed. In ER-1 under point no. 5 (Details o Cenvat Credit taken and utilized) it is to be shown in column of “credit utilized when capital goods are removed as such.
  • Is service tax payable by the authorised service centres on the commission earned on the insurance offered to the their customers. Tariq

    Under new concept of negative list, service tax will be leviable when an activity is covered under definition of ‘service’ and not covered under the negative list and mega exemption notification. ‘Service’ has been defined in clause (44) of the new section 65B and means – “any activity carried out by a person for another for consideration and includes a declared service.” Hence the above mentioned activity in query covers under the definition of Service. Further your activity is neither covered under Negative list nor under Mega exemption Notification 25/2012-ST therefore will service tax be leviable.
  • Sir, Whether curing of coffe beans on job work charges will attract Service Tax in the new Service Tax regime in view of the fact that plantation is also included as agriculture produce tks krishnas krishnadas

    The services relating to agriculture or agricultural produce that are specified in the Sl. No. (d) in the negative list are services relating to – • agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or seed testing; • supply of farm labour; • processes carried out at the agricultural farm including tending, pruning, cutting, harvesting, drying cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter essential characteristics of agricultural produce but makes it only marketable for the primary market; • renting of agro machinery or vacant land with or without a structure incidental to its use; • loading, unloading, packing, storage and warehousing of agricultural produce; • agricultural extension services; • services provided by any Agricultural Produce Marketing Committee or Board or services provided by commission agent for sale or purchase of agricultural produce; The activity ‘curing’ is covered under the 3rd sl. No. of above exemption but the essential character of this exemption is that “operations which do not alter essential characteristics of agricultural produce but makes it only marketable for the primary market”. If the process undertaken by you falls under above category (i.e. essential character of agriculture produce will not change), the service tax will not be applicable.
  • Sir, As per our contract, the client will deduct 10% amount from our RA Bill and release it after successfully completed of JOB. My Quaries are: 1. Whether the Service tax Will be charged on Gross Amount of Bill or After Deducting Retention amount? Regards, CMA Utpal Kumar Saha CMA Utpal Kumar Saha

    Service tax will be leviable on gross amount charged i.e. including retention charges because retention charges is also part of value of service. Morever, service tax is payable on invoice raised or payment received whichever is earlier. We have to pay the tax on complete invoice amount.
  • We are authorized service station service provider. we provide repairs and maintenance service to vehicles. my question is: 1. can we take cenvat credit of service tax paid on rent paid on workshop and showroom. 2. when we repair the vehicle we also use new/replace spares parts. how to charge service tax in our invoices? whether 2 separate bills to be raised? one for spares parts + vat and another for repairs + service tax. Please help. alfa

    1. As per Rule 2(l) of Cenvat Credit Rules, 2004 “(i) input service means any service used by a provider of output service for providing an output service”. Further the renting of immovable property is also not covered under any exclusion clause of definition of ‘input service’. As renting of workshop and showroom is an input service used for providing output service therefore Cenvat credit will be available. 2 & 3. Work contract is defined in the section 65B, which reads as follows: “(54) work contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such properly” The above definition makes it clear when there is transfer of property in goods involved in execution of such contract, it will be work contract service. Further separate bill is raised or not it will still remain ‘work contract service’. As your service is covered under the definition of ‘work contract service’ therefore it’s treatment will be done as per Rule 2A of Service Tax (Determination of value) Rules, 2006. According to (i) of Rule 2A: “(i) Value of service portion in the execution of a works contract shall be equivalent to the gross amount charged for the works contract less the value of property in goods transferred in the execution of the said works contract” As in your case, the value can be determined according to above (i) i.e. value of material portion can be separated from gross amount charged, therefore this will be applicable and you can charge bill according to this Rule i.e. in the invoice, show the gross amount charged and then deduct the value of material supplied, then charge service tax on net amount (i.e. on service portion). For more detail you can refer Notification No. 24/2012-ST at following link:-- “http://www.new.capradeepjain.com/redirect_amdview_5924_3”
  • Respected Sir, whether builder(who pay service tax on 25% of total sale value)can availed CENVAT of inputs, input services & Capital Good used for construction ? Manoj Khatri

    As per conditions given under Sl. No. 12 of Notification 26/2012-ST :- “(i) CENVAT credit on inputs used for providing the taxable service has not been taken under the provisions of the CENVAT Credit Rules, 2004. (ii)The value of land is included in the amount charged from the service receiver” Hence service tax on input services and capital goods is allowed.
  • Whether the contract of making furniture, comes under purview works contract and if yes what is the rate under composition scheme?? Manoj Khatri

    1. If service provider uses his own material in job work and it relates to immovable i.e. fitting out:-It will be work contract service and service tax will be leviable on 70% of total value, if segregation of material potion and labour portion is not possible. [Rule 2A of Service Tax (Determination of value) Rules] 2. If service provider uses his own material and it relates to movable property :- If the process undertaken by job worker amount to manufacture then it will be exempt [sl. no. (f) of Negative List] 3. If service receiver provide material:- It will only labour contract and service tax will be leviable on @12.36% on total value.
  • Sir, Please provide practical illustration on Rule 3(5A) of CCR,2004 for removal of c. goods.it will applicable on only as such removal or all removal of C. goods after being used. yateenvyas

    Rule 3(5) is related to ‘as such removal of input or capital goods’ which is as follows:-- “(5) When inputs or capital goods, on which CENVAT credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products or provider of output service, as the case may be, shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in rule 9” e.g. a machinery is purchased on 30th April and 50% credit of Rs. 5000 is taken immediately but machinery is removed as such on 2nd May without any use. Now according to the above the manufacturer or provider of output service is required to reverse an amount equal to credit availed i.e. Rs.5000. Rule 3(5A) is related to treatment when “capital goods are removed after being used”, which is as follows:-- “(5A) If the capital goods, on which CENVAT credit has been taken, are removed after being used, whether as capital goods or as scrap or waste, the manufacturer or provider of output services shall pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of taking the CEVAT Credit, namely:- (a) for computers and computer peripherals: ---- for each quarter in the first year @ 10%, for each quarter in the second year @ 8%, for each quarter in the third year @ 5%, for each quarter in the fourth and fifth year @ 1%. (b) for capital goods, other than computers and computer peripherals @ 2.5% for each quarter: Provided that if the amount so calculated is less than the amount equal to the duty leviable on transaction value, the amount to be paid shall be equal to the duty leviable on transaction value.” The above can understand by following example:-- Suppose capital good (other than computer) of Rs. 50000 is purchased on 1st April 2011 and immediately taken 50% credit of Rs. 2575 (@10.3%) and remaining 50% of Rs. 2575 is credit taken on 1st April 2012 and capital goods is removed after being used on 15th Oct. 2012 at Rs. 40000. The above Rule 3(5A) will be applicable and manufacturer or output service provider will have to pay higher of following amount:-- [5150- (5150 x 2.5% x 6 Quarters) = 4377] or 40000*12.36% = 4944 For more detail you can refer Notification No. 18/2012-CE (N.T) at following link: --- “http://www.new.capradeepjain.com/redirect_amdview_5691_1”
  • Sir ji.. Pl. clarify, the service tax liability in case of sub-contractor, where the principal contractor is paying service tax. visu iyer

    The services provided by sub-contractor to contract will be taxable unless otherwise specified in Negative list as given under section 66D or under mega exemption notification 25/2012-ST. As per sl. No. 29(h) of mega exemption notification 25/2012-ST following service is exempt:-- “(h) sub-contractor providing services by way of works contract to another contractor providing works contract services which are exempt” Hence, if the main contractor providing the services of works contract is exempt then the subcontractor also providing services of works contract will also be exempt.
  • Sir ji... Here is a query on MRA services. supply of labour for a company located at Dubai. but Salary paid from India. In turn service charges receipt from Dubai company in foreign currency. a) what is the applicability of service tax liability in case dubai company is at FTZ (Free trade zone) b) in case dubai company is the associate enterprise. visu iyer

    Under Section 66B, a service is taxable only when, inter alia, it is “provided (or agreed to be provided) in the taxable territory”. Thus, the taxability of a service will be determined based on the “place of its provision”. If place of provision is taxable territory then service tax will be leviable otherwise not. As salary is paid from India, it means the service provider is located in India and supply the manpower to the company located at Dubai. As per Rule 3 of Place of Provision Rules, 2012 “Generally the place of provision of a service shall be the location of the recipient of service” i.e. if the service is not covered under any of specific rule of POP then Rule 3 will be apply. As you are saying that service is “manpower supply”, it means control and supervision of labour will be with service recipient. The manpower supply service is not covered under any of the specific rules of POP therefore basic Rule 3 will apply and place of provision will be ‘location of service receiver’ which is not in taxable territory hence service tax will not be applicable. There is no impact on taxability whether service receiver is in FTZ or associate enterprise.
  • Dear sir, a CA is a director in a company and the company is paying monthly fees to the proprietorship concern(CA)of the Director. Whether the payment made to the proprietorship concern attracts Service tax under Reverse charge mechanism?. I hope, if paid to CA proprietorship concern, it is not attracted, due to 1) a proprietorship concern is not a director of the company. 2. the payment is made in his professional capacity, not to carry any work of directorship, 3. The term "director" does not include his proprietor concerns(being a separate business entity) Am I correct?? Pls clarify NSS

    “In respect of services provided or agreed to be provided by a director of a company to the said company:----100% liability to pay service tax is on company under reverse charge mechanism”. The above provision makes it clear that 100% liability on company on services of director. Further service tax is levied on such services of directors which are not treated during the course of his employment e.g. renting of director’s building to company, services of independent or professional director etc. Chartered Accountant holding a valid certificate of practice, can act as a director of company provided he has taken specific permission as per code of ethics for CA. As you are saying that CA is working in his professional capacity as well, it means he is working as professional director and any payment made to a CA as a director or to his proprietorship concern shall be deemed to made to CA himself. The director and proprietor are one and same person. So any payment made to him will be covered under reverse charge mechanism.
  • Dear Sir, we have to deposit service tax under reverse charges on account of Legal Fees Services ( payment to advocate) i would like to know which accounting code will be applicable for depsoiting service tax ? Alok

    According to Circular No.161/12/2012 –ST accounting codes for the purpose of payment of service tax under the Negative List approach, with effect from 1st July, 2012 and common for all the services, is as follows: Basic Service tax: 00441089 Primary Education Cess: 00440298 Secondary and Higher Education Cess: 00440426
  • Sir, Annual maintenance charges of transmission lines is also covered under the electricity transmission or electricity distribution service or not ? Kindly get your valuable advice. Rashmi

    Section 66D specifies negative list of services and sub section (k) of Section 66D Covers following service. “Transmission or distribution of electricity by an electricity transmission or distribution utility” But your service is maintenance of transmission line towers, not transmission or distribution of electricity as mentioned in negative list and further the above exemption available to an electricity transmission or distribution utility. So service provided by way of maintenance of transmission line towers is a taxable service.
  • Sir, Indeed comments and thought provoking articles from you are very helpful. We are engaged in garden development and maintenance work. We have our own team of gardeners, supervisors and experts and take contracts to develop and maintain garden plants, trees, lawns, flowers, etc. Since July 2012 these type of services seem to be covered under service tax. Though a negative list has agriculture in it. Your expert comments would throw light on: Whether garden maintenance is covered under service tax? Thank you. Regards, Naresh Pancholi naresh pancholi

    Negative list given under section 66 exempts “services related to production of any agriculture or agricultural produce by way e.g. supply of farm labour, agricultural operations directly related to production of any agricultural produce etc. The exemption is available to agricultural related services and according to section 65B (3) “agriculture means the cultivation of plants and rearing of all life-forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products” The garden maintenance is not a agricultural activity therefore will not be covered under the negative list, hence will be taxable.
  • Dear Sir, One of my client is providing web designing facilities to the companies involved in advertisement through internet. Whether the person providing services of web design or modules of advertisement on the net will be exempted? Wether the exemption can be claimed from FY 08-09? hetal

    Sl. No. (g) of negative list as given under section 66D exempts follows: “(g) selling of space or time slot for advertisements other than advertisement broadcast by radio and television” The above exemption will be available when there is service of selling of space or time slot but in your there is service of web designing for advertisement and not selling of space for advertisement. Further the service is not covered under any entry of mega exemption notification or under negative list therefore will be taxable.
  • sir, whether road construction in tourist complex will attract service tax under previous provisions and after new budget sunil mehla

    Under new negative list concept service tax will be leviable if activity is covered under the definition of ‘service’ as give under clause 44 of section 65B and not covered under Negative List and Mega Exemption Notification. “Service means any activity carried out by a person for another for consideration and includes declare services.” Your service i.e. construction of road is clearly covered under the above definition. Further Sl. No. 13 of Mega exemption notification 25/2012-ST exempts the following service: “13(a) Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a road, bridge, tunnel, or terminal for road transportation for use by general public” The above exemption will be available when service is use by general public. The term General public is defined in Serial No. (q) of para 2 of notification 25/2012-ST dated 20.6.2012 as follows: “‘general public’ means the body of people at large sufficiently defined by some common quality of public or impersonal nature.” In this query it is not clarify that what type of tourist complex is there whether it is for general public or used by some specific person e.g. which purchase the ticket for this. So if the road is used by GENERAL Public, it will be exempt and if it is used by some specific community or section of persons, the exemption under this entry will not be available. For the earlier period, the exemption was available on road construction under “Commercial or industrial construction”.
  • A company is incorporated in 2011 from the date of incorporation the client has only service tax input but no output so he doesn't registered for Service tax and all the service tax input shown in profit & loss as an expense but in current year the company started charging service tax from his customer from June 2012 so he get registered for service tax in the month of June 2012.But question is whether company can take service tax input of the current year i.e., from April 2012 to set off with output or not? NAVIN JAIN

    The ‘input service’ means any service used by a provider of output service for providing an output service. This definition makes it clear that the service provider can take the credit of those services only which is used for providing output service. This is also supported by Rule 6 which says that the credit of input or input services used for exempted product or exempted service will not be allowed. Further the condition as given under small scale threshold exemption notification no. 33/2012-ST (threshold exemption) is as follows: “The provider of taxable service shall avail the CENVAT credit only on such input or input service received, on or after the date on which the service provider starts paying service tax, and used for the provision of taxable services for which service tax is payable” As your company started charging service tax from customer from June only, hence the above provision will apply. Thus, you can take the credit of services received on or after the date from which company has started charging service tax i.e. in June.
  • Whether there is no cenvat credit possible when the service provided is 'Renting of Immovable Property' Kindly clarify. kunal reshamwala

    Under negative list, every such activity which falls in the definition of “service” as given in clause 44 of section 65B of the Finance Act are taxable unless otherwise exempted. The exemptions to certain services have been given in the negative list and also in notification no. 25/2012-ST DT 20.6.12. The following exemptions are related to renting of immovable property services as given in negative list and mega exemption notification:- Under Negative list:- •At clause no. (m) of section 44:- Renting of residential dwelling for use as residence. Under mega exemption notification:- •At entry no. 5:- Renting of precincts of a religious place meant for general public. • At entry no. 9:- Services provided to or by an educational institution in respect of education exempted from service tax, by way of,- (a) auxiliary educational services; or (b) renting of immovable property; • At entry no. 18:- Renting of hotels, inn, guest house, club, campsite or other commercial places meant for residential or lodging purpose, having declared tariff of a room below rupees one thousand per day or equivalent is exempt. Since the above referred services are totally exempted under service tax law, no Cenvat Credit is available if the service provider is SOLELY providing these services. However, concept of declared service has also been introduced in the negative list era where certain activities are declared to be a service for the purpose of levying the service tax. The list of declared services has been prescribed in section 66E which reads as follows:- “66E. The following shall constitute declared services, namely:- (a) renting of immovable property; (b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration is received after issuance of completion certificate by the competent authority. Explanation.- For the purposes of this clause,- (I) the expression "competent authority" means the Government or any authority authorised to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, from any of the following, namely:- (A) architect registered with the Council of Architecture constituted under the Architects Act, 1972; or (20 of 1972.) (B) chartered engineer registered with the Institution of Engineers (India); or (C) licensed surveyor of the respective local body of the city or town or village or development or planning authority; (II) the expression "construction" includes additions, alterations, replacements or remodelling of any existing civil structure; (c) temporary transfer or permitting the use or enjoyment of any intellectual property right; (d) development, design, programming, customisation, adaptation, upgradation, enhancement, implementation of information technology software; (e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; (f) transfer of goods by way of hiring, leasing, licensing or in any such manner without transfer of right to use such goods; (g) activities in relation to delivery of goods on hire purchase or any system of payment by installments; (h) service portion in the execution of a works contract; (i) service portion in an activity wherein goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity.” Thus, the list of services prescribed under “Declared services” includes the “Renting of immovable property services”. Thus, all the types of renting of immovable property services are taxable undoubtedly other than those prescribed under negative list and mega exemption notification as discussed above. Further, Notification no. 26/2012-ST dated 20.6.2012 prescribes the abatement of 40% in case of "6. Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes." Thus, the abatement of 40% is allowed in case of renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes. Further, where the abatement is claimed for these services, the credit is not allowed on ‘Inputs’ and ‘Capital goods’. As such, where these services are provided; the credit of “Input services” is allowed alongwith abatement. In respect of all the other types of immovable properties (which are taxable beyond any doubt by virtue of section 66E); the service tax is payable to the full applicable rates. Further, no specific prohibition has been imposed regarding the allowability of Cenvat Credit on these services. As such, we are of opinion that the Cenvat Credit is allowed on all the other types of renting of immovable property services. However, if the various types of immovable property services are provided, some exempted and some taxable, provisions of rule 6 of Cenvat Credit Rules, 2004 will apply accordingly. Lastly, in context of service tax by way of positive list, circular no. 98/1/2008-ST dated 4.1.2008 was issued regarding Cenvat Credit on renting of immovable property service. The relevant portion of this circular is as follows:- Reference Code- 096.01 / 04.01.08 Issue:- Commercial or industrial construction service [section 65(105)(zzq)] or works contract service [section 65(105)(zzzza)] is used for construction of an immovable property. Renting of an immovable property is leviable to service tax [section 65(105)(zzzz)]. Whether or not, commercial or industrial construction service or works contract service used for construction of an immovable property, could be treated as input service for the output service namely renting of immovable property service under the CENVAT Credit Rules, 2004? Clarification:- Right to use immovable property is leviable to service tax under renting of immovable property service. Commercial or industrial construction service or works contract service is an input service for the output namely immovable property. Immovable property is neither subjected to central excise duty nor to service tax. Input credit of service tax can be taken only if the output is a ‘service’ liable to service tax or a ‘goods’ liable to excise duty. Since immovable property is neither ‘service’ or ‘goods’ as referred to above, input credit cannot be taken. Thus, in the above referred circular, it was clarified that the credit on input services is not available if the services provided by the assessee are renting of immovable property services. However, now the immovable property has been specifically declared as taxable service under section 66E. Further no specific restriction has been imposed regarding the availment of Cenvat Credit on these services in context of negative list. Thus, we can say that the above circular will not hold good now under negative list scenario. We hope the above will satisfy your query. Disclaimer: This opinion is given to best of knowledge and belief. The service tax is a complicated law and interpretations of the law keep on changing based on judicial discipline and Board’s clarifications. Our opinion is also subject to the same.
  • i have property on rent for which i pay service tax i also own commercial vehicles can i claim service tax rebate on insurance premium on these vehicles raman kumar khosla

    As per Rule 2(l) of Cenvat Credit Rules, 2004 “(i) input service means any service used by a provider of output service for providing an output service”. It means credit of input services can only be available when input service is used for providing output service. As in your case input service i.e. insurance premium of vehicle is not used for providing output service i.e. renting of property, therefore credit can’t be taken. Also, the Cenvat credit on insurance of motor vehicle is allowed only when it falls under the definition of capital goods or to the manufacturer of motor vehicle.
  • Assessee entered a contract with UPPCL for repair of transformers using his own HV/LV leg coils and charges service tax on labour as per contract.The balance sheet reflects outward freight incurred on transportation of the same through his own regd truck.Please clarify whether service tax is payable on the freight charges which is not charges from his customers separately. Tariq

    According to section 66D following service is exempt:- “(p) Services by way of transportation of goods- (i) by road except the services of – (A) a goods transport agency; or (B) a courier agency” And according to section 65B: “(26) goods transport agency means any person who provides services in relation to transportation of goods by road and issues consignment note, by whatever name called.” So service tax is applicable when service is provided by a person covered under the above definition of GTA. In the instant case, when you are not goods transport agency who issues consignment note. You are using your own trucks for transportation. Hence the service tax on GTA is not applicable in the instant case.
  • Sir, we are having centralized registration of service tax at Mumbai. We are receiving GTA service at various C&F locations all over India. C&F agents make payment on our behalf as pure agent and later reimbursed by us. our query is should we register each c&f location under centralized registration for payment of service tax on GTA service when these locations are not our property. Raju

    No, you are not required to register in each location. Even according to rule 4(2)(ii) of Service Tax Rules, 1994:---- Where a person, liable for paying service tax in the case of taxable services, receive such service in more than one premises or offices, and has centralize billing or centralize accounting system, he may opt for centralized registration.
  • Dear Sir Hello !! Please take note of Rule 7C of Service Tax Rules, 1994, which prescribes the amount to be paid for delay in furnishing the prescribed return, subject to the maximum amount provided under Section 70 of the Finance Act, 1994. Now if we go to Section 70 of the Finance Act, 1994, it prescribed 20000/- rupees as the upper limit. Sir my question is that one of my assessee has late deposited two returns on the same day and as a late fee they have deposited only 20000/- rupees for both the returns. Would this amount be sufficient for both the returns or my assessee has to pay an additional sum of rupees 20000/- for second return, filed belatedly. Manoj Khatri Advocate Manoj Khatri

    According to section 70(1), “where returns are filled after due date, late fees not exceeding Rs. 20000(w.e.f. 08.04.11) is payable for delayed filling of return”. It is mentioned that the delay filing of return and not delay filing of returns. Hence it will be for each return.
  • Sir, My doubr is whether Entity being Trust under section 12 of IT , is liable to reverse charge mechanism of srvice tax? as a service recipient? ( Entity is not registered under service tax ) manjur alad

    With reference to point no. 4 of Service tax Notification No. 25/2012 dated 20 June’ 2012 Service Tax is exempt on “4. Services by an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) by way of charitable activities” The above exemption is available when service is provided by entity registered under section 12AA and the above sl no. 4 does not exempt when entity registered under 12AA receives service and liable under reverse charge. So according this entity liable under reverse charge will not be exempt. Under all the points as given in the Notification no. 30/2012-ST (reverse charge mechanism) there is common essential character for service receiver is that, it (service receiver) should be business entity. But normally entities registered under section 12AA do not work as a business entity. So if the entity works as business entity and liable to pay service tax as a service receiver under reverse charge then it will be required to take registration under service tax and pay service tax.
  • Res.Sir, we have executed EPC contract with IOCL-Orissa in which , recently IOCL has directly made payment to our sub contractor on behalf of us. work completion is prior to July-12 , bill raised in Sep-12 in which his classification of service is construction service and he is proprietor. Pls guide me the service tax implication if material and labour both are involved Rupang J Desai

    Firstly you have not provided information completely. The date of payment is missing. Secondly, all are dependent upon point of taxation i.e. which rate is applicable; category of service etc will be depend upon point of taxation. According to Rule 4 of Point of taxation rules:- In case there is change effective rate (including change in abatement also):--- When service has been provided before change in effective rate of tax, invoice is issued after such change and also payment is received after the change then point of taxation will be ‘date of payment or date of issuing invoice whichever is earlier’. As in your case there is change in effective rate i.e. changes under work contract service. Therefore point of taxation will be date of payment or date of issuing invoice whichever is earlier. Accordingly service tax will be computed as per provisions of work contract service.
  • Dear sir In case of trust (assume income is morethan Rs 25 Lakhs) registered u/s 12AA, whether Service tax is payable on donations collected. If it is a specific purpose donation, I admit, it can be termed as service for a consideration. In case of voluntary donation, it cannot fit into the definition of "Service". And if need to be paid for all donation, whether service tax for the first 25 lakhs need not be paid?? Pls clarify by N.S.Sivakumar N.S.Sivakumar

    ‘Service’ has been defined in clause (44) of the new section 65B and means – “Any activity carried out by a person for another for consideration, and includes a declared service” The essential character of ‘service’ is that the activity should be carried out by a person for a ‘consideration’ Donation to charitable trust (whether it is general or for specific purpose), is not a consideration for service as charitable trust is not obligate for donor. So donations to a charitable organization are not consideration unless charity is obligated to provide something in return e.g. display or advertise the name of the donor in a specified manner or such that it gives a desired advantage to the donor. If charitable trust is liable for pay service tax it can avail the threshold exemption upto 10 lakh subject to the conditions of the threshold exemption i.e turnover in the last financial year is less than 10 Lakhs rupees.
  • Sir ji, Pl. clarify, services rendered to Government is taxable or exempted. It is find that the phrase Government is not defined in the Finance Act. visu iyer

    under mega exemption notification there two clauses which exempt some service provided to government. The first one is sl. No. 12 which exempts some services provided to government, local authority or governmental authority e.g. construction of civil structure, construction or repair of dam etc. The second one is Sl. 25 which exempt the services i.e. repair or maintenance of a vessel or an aircraft, any activity in relation to any function ordinarily entrusted to a municipality in relation to water supply, public health etc. So if service is covered under above referred serial number, the same will be exempt. Otherwise it will be taxable. Further, these exemption covers service provided to government as well as governmental authority. Since the meaning of government is not defined in the Act, therefore, according to education guide on service tax the meaning given under clause (23) of section 3 of the General Clauses Act, 1897 will be taken. According to this ‘Government’ includes both Central Government and any State Government. “Central Government means the President and the officers subordinate to him while exercising the executive powers of the Union vested in the President and in the name of the President.” “State Government means the Governor or the officers subordinate to him who exercise the executive power of the State vested in the Governor and in the name of the Governor” Further essential character of Governmental authority is as follows: • set up by an act of the Parliament or a State Legislature; • established with 90% or more participation by way of equity or control by Government; and • carries out any of the functions entrusted to a municipality under article 243W of the Constitution. For more detail of exemption related to services provided to government or governmental authority, you can refer the sl. no. 12 and 25 of notification no. 25/2012-ST at following link: http://www.new.capradeepjain.com/redirect_amdview_5957_3
  • Sir ji, Pl. share the notification of exemption for letting out of lorry/truck to lorry agencies. visu iyer

    According to Item No. 22(b) of Mega Exemption Notification 25/2012-ST dated 20.06.2012 following service is exempt from service tax: “22(b) services by way of giving on hire to a goods transport agency, a means of transportation of goods” i.e. hiring of motor vehicle to a goods transport agency for transportation of goods will be exempt.
  • Dear Sir Hello !! Please take note of point no. (v) of Notification No. 30/2012-ST dated 20-06-2012, wherein in reference to manpower supply and works contract service it has been mentioned that in order to pay service tax on reverse charge mechanism the service receiver has to be "a business entity registered as body corporate". The word "body corporate" has not been defined anywhere in this negative based service tax regime. But if we go through the deleted Section 65 of the Finance Act, sub-clause (14) of Section 65 stated that body corporate has the meaning assigned to it in section 2(7) of the Companies Act, 1956. When we see the definition of body corporate in companies act the picture still remain unclear on the issue whether an HUF, Society, LLP, Firm (Partnership or Proprietorship), AOP comes under the definition of body corporate. Please evaluate the aforesaid position and let me know whether HUF, Society, LLP, Firm (Partnership or Proprietorship), AOP comes under the definition of body corporate?? Manoj Khatri Advocate Manoj Khatri

    The definition of body corporate as given under Company Act, 1956 is as follows: “Sec. 2 (7) Body Corporate or corporation includes a company incorporated outside India but does not include – a. A Corporation Sole b. A Co-operative Society registered under any law relating to co-operative societies and c. Any other body corporate (not being a Company as defined in this Act), which the Central Government may by notification in the Official Gazette, specify in this behalf” The concept of Corporation Sole is not defined anywhere in the Act. But concisely, apart from those excluded specifically, a body corporate means any entity that has its separate legal existence apart from the persons forming it. It enjoys a completely different legal status apart from its members. So, a body corporate shall include: a company, a foreign company, a corporation, a statutory company, a statutory body, an LLP, etc. and such bodies that have separate legal existence and exclude proprietorship, partnership, HUF, AOP and Society (already excluded under the above definition).
  • Dear Sir, as per the Notification NO. 45/2012-ST dated 07-Aug-2012, in respect of services provided or agreed to be provided by a director of a company to the said company, the company has to pay 100% of service tax under reverse charge method. My query is a Director is charging rent for immovable property occupied by the company. Under the old provisions he is charging service tax on the rent amount. Now what would be the status after the above notification? CA. R. Velu

    The CBEC has been introduced reverse charge mechanism on services provided by directors through the Notification No. 45/2012 dated 07/08/2012. The relevant Para is as follows: “5A in respect of services provided or agreed to be provided by a director of a company to the said company” The notification does not specify that which services provided by directors are covered under the reverse charge mechanism? The interpretation of above Para makes it clear that every services provided by director of company will be covered under the Reverse charge mechanism and company is liable to pay 100% service tax in respect of services provided by directors under the Reverse charge mechanism. For example, even rent payment to director is also covered under the reverse charge mechanism and 100% liability will be on company to pay service tax.
  • Dear Sir Hello and thanks for posting replies to my query. Today i want to ask a question with regard to Notification No. 33/2012-ST dated 20-06-2012, which provides exemption upto Rs. 10 Lakhs to small service providers. My question in this regard is that while calculating this 10 Lakh, whether non abated amount would be taken into account? Like in the case of a Outdoor Catering, abatement of 40% of gross amount is provided for payment of service tax. would only 60% amount would be taken while calculating the threshold exemption of Rs. 10 lakhs or would the entire gross amount be taken for calculating this threshold exemption? Manoj Khatri

    Notification 33/2012-ST, exempts “taxable services of Aggregate Value not exceeding ten lakhs rupees” in any financial year from the whole of the service tax leviable thereon. According to explanation (B) of this notification: “(B) aggregate value means the sum total of value of taxable services charged in the first consecutive invoices issued during a financial year but does not include value charged in invoices issued towards such services which are exempt from whole of service tax leviable thereon under section 66B of the said Finance Act under any other notification.” The above explanation makes it clear that aggregate value means “sum total of value of taxable services” i.e. for calculating aggregate value of Rs. 10 Lakhs, total value of taxable service will be considered and not only non abated value. But value of wholly exempt service will not be considered for calculating aggregate value of Rs. 10 Lakhs.
  • Dear Sir, one of my client is a private limited company and availing the services of Manpower supply. In the bill of August 2012, service tax to the tune of 12.36% was added and due to ignorance of new service tax provisions my client paid the entire billed amount with total service tax to the service provider. Now my client has come to know that under RCM they were liable to pay 75% of the service tax but due to 100% payment of service tax to the service provider they are unable to decide what to do in the matter. Please evaluate the situation and let me know what my client should do in this situation. does 100% payment of service tax by the service provider gives relief to the service receiver to pay the service tax portion under RCM ? Manoj Khatri Advocate Manoj Khatri

    There is no provision in Service Tax Law as well as in Cenvat Credit Rules, 2004 which provide e.g. payment of service tax by service provider gives relief to service receiver when liability to pay service tax is on service receiver. However, at the same time, it is basic principle that the service tax cannot be paid twice on the same service. But to avoid litigation, we will suggest you to ask service provider to refund the excess service tax and then you deposit the service tax with the department. If the same is not possible then you have plead in light of above case laws.
  • Sir, Cenvat credit on Service tax paid by the dealer to manufacture,Can manufacturer take cenvat credit particularly after the notification no. 28/12 dated 20-jun-12 and exclusion clause made availbe therein Rasik Patel

    your query is not clear, please explain how a dealer can pay service tax to manufacturer and under what service?
  • Sir, For having installed centralised A.C system the contractor had furnished bills for material and labour separately. It may please be clarified that even in such cases the service receiver is obliged to pay service tax under the provisions of partial reverse charge on the labour bill of the contractor. Whether splitting up of bills for material and labour is justifiable to avoid the liability of service tax by the service receiver. Kindly clarify early. nagarajan v

    Work contract is defined in the section 65B, which reads as follows: “(54) work contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such properly” The activity of installation of Centralization AC System involve transfer of property in goods i.e. material also hence covered under the above definition of Work contract service. Now the question arises whether the nature of service and service tax liability can change with change in style of billing when the facts are clearly show the nature of service as defined under the Act. According to our opinion the style of billing can’t change the nature of service and treatment, therefore it will be covered under the work contract service and accordingly treatment will be done. Moreover, the valuation rule of works contract also say firstly to deduct the material portion from the works contract amount and then pay service tax on labour charges. If this is not possible then the service tax is payable on 40% of total value. Thus, if the material is billed separately also then it will fall under works contract and reverse charge will also be apply. Only in case of pure labour contract, the service tax is payable on labour charges only.
  • Dear Sir, in second proviso to Notification No. 33/2012-ST dated 20-06-2012, it has been mandated that "such value of taxable services in respect of which service tax shall be paid by such person and in such manner as specified under sub-section (2) of section 68 of the said Finance Act read with Service Tax Rules,1994.". My query is that what is the practical applicability of this proviso clause. What if the service provider is getting any kind of abatement on the gross value. an explanatory example in this regard would be highly useful for every member of your forum. Manoj Khatri Advocate Manoj Khatri

    The Notification No. 33/2012-ST states about the threshold exemption for small service providers of 10 Lakh rupees, if the conditions contain in this notification is satisfy. Further the Sl. 1(ii) of this notification states: “Provided that nothing contained in this notification shall apply to such value of taxable services in respect of which service tax shall be paid by such person and in such manner as specified under sub-section (2) of section 68 of the said Finance Act read with Service Tax Rules, 1994” The meaning of above para is that the provisions of this notification will apply to “such value of taxable services in respect of which service tax shall be paid by such person and in such manner as specified under sub-section (2) of section 68”. The Section 68(2) is meant for service tax payable by receiver under reverse charge mechanism. This has been mentioned under notification No. 30/2012-ST. So effectively it means threshold exemption of 10 lakh will not be available to the service receiver liable to pay service tax under reverse charge mechanism.
  • Dear Sir,Sec. 66F(1)of the Finance Act, 1994, states that, "unless otherwise specified, reference to a service (hereinafter referred to as main service) shall not include reference to a service which is used for providing main service." My query is that, what exactly this phrase means?? An explanatory example in this regard would be appreciable. Manoj Khatri Advocate Manoj Khatri

    It simply means input service for providing output service will be considered as separate service and will not be covered under main service i.e. if output service is exempt from service it does not mean that input service used for providing that service will also be covered under the exemption. We can understand this by following example: ‘Provision of access to any road or bridge on payment of toll’ is a specified entry in the negative list in section 66D of the Act. Any service provided in relation to collection of tolls or for security of a toll road would be in the nature of service used for providing such specified service and will not be entitled to the benefit of the negative list entry.
  • Whether service tax liability is attracted in case of commission received from outside India. The commission is received for finding buyers for the goods sold by the foreign principal. Please respond with reference to Export of Services Rules. Anubhav Wahee

    Firstly your service is covered under the definition of ‘service’ as given under clause 44 of section 65B and not covered under any of the entry of negative list and exemption notification, so service tax will be applicable if it satisfied the provision of charging section 66B i.e. service tax will be applicable when service is provided or deemed to be provided in the taxable territory. With effect from 1.7.2012, the export of service rule has been deleted. The new Place of Provision of Service Rules has been made applicable. These rules determine “the place where a service shall be deemed to be provided” and Section 66B provides that “a service is taxable only when it is “provided or agreed to be provided in the taxable territory”. Thus, the taxability of a service will be determined based on the “place of its provision”. The Rule 9 (c) of Place of Provision Rules reads as follows:- “The place of provision of ‘intermediately services’ shall be the location of the service provider.” As per rule 2(f) of these rules “intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the ‘main’ service) between two or more persons, but does not include a person who provides the main service on his account. As your case is covered under the above referred intermediately services, therefore the service is deemed to be provided at location of service provider i.e. in taxable territory. It satisfied the provision of charging section 66B that service tax is applicable when provided or agreed to be provided in the taxable territory, hence service tax will be applicable.
  • Dear Sir, as per Notification No. 30/2012-ST dated 20-06-2012, vide Sl.No. 8, reverse charge mechanism has been mandated on manpower supply services and 75 Percentage of service tax is to deposited by the person receiving the service. My question in this regard is that, now how will be the Invoice/Bill be issued by the service provider in this regard. whether the service provider will show 100% service tax amount (12.36%) or will he show only 25% service tax amount (3.09), which he is liable to deposit to the government exchequer. A detailed answer in this regard would be highly appreciated. Manoj Khatri Advocate Manoj Khatri

    Under the reverse charge mechanism, service provider and service receiver both are liable the service tax. The service provider is liable only to extent of liability of service provider of his liability under service tax. Hence, he will charge the service tax only to the extent of his liability in his bill i.e. 3.09%.
  • Dear Sir, Section 66F of the Finance Act, 1994, makes provision for bundling of services. Sub-section 3 of the said section in clause (a), uses the word, "naturally bundled in the ordinary course of business" and in clause (b) it uses the word, "not naturally bundled in the ordinary course of business". I would be obliged, if your good self provides an explanation, with an example, on the difference between both clause (a) & (b), wherein naturally bundled and not naturally bundled has been used. Manoj Khatri Advocate Manoj Khatri

    The clause (a) contains the treatment of bundled services when service is naturally bundled and according to this “‘If various elements of a bundled service are naturally bundled in the ordinary course of business, it shall be treated as provision of a single service which gives such bundle its essential character” It means when bundled service provided is natural bundled service then it will be treated as single service which have dominant in those bundled services. We can understand this by following illustration: A hotel provides a 4-D/3-N package with the facility of breakfast. This is a natural bundling of services in the ordinary course of business. The service of hotel accommodation gives the bundle the essential character and would, therefore, be treated as service of providing hotel accommodation. The clause (b) contains that “If various elements of a bundled service are not naturally bundled in the ordinary course of business, it shall be treated as provision of a service which attracts the highest amount of service tax”. We can understand this by following example: A house is given on rent one floor of which is to be used as residence and the other for housing a printing press. Such renting for two different purposes is not naturally bundled in the ordinary course of business. It will be treated as a service comprising entirely of such service which attracts highest liability of service tax. In this case renting for use as residence is a negative list service while renting for non-residence use is chargeable to tax. Since the latter category attracts highest liability of service tax amongst the two services bundled together, the entire bundle would be treated as renting of commercial property.
  • Dear Sir, as per the Notification NO. 45/2012-ST dated 07-Aug-2012, in respect of services provided or agreed to be provided by a director of a company to the said company, the company has to pay 100% of service tax under reverse charge method. my question is that, in many cases remuneration to director is given on annual basis, but the liability of the company to pay service tax to the government exchequer arises the subsequent month, when payment of said remuneration to the director is made. Please clarify the situation of service tax payment by the company when there is provision of annual payment of remuneration to the director. Manoj Khatri

    Firstly it clarified that service tax is not applicable when the services are provided by an employee to the employer in the course of or in relation to his employment (exclusion clause of definition of service). As Managing directors/ directors are treated as employee of company, the service tax is not applicable on their remuneration. The service tax will be applicable on those amounts paid to director/MD which is not in course of employment e.g. sitting fees paid to independent/non-executive director, service provided by a managing director by way of renting of immovable property. Secondly, Rule 7 of Point of Taxation Rules provides that: “The point of taxation for the service receiver liable under reverse charge is the date on which payment is made to the service providers”. Further the proviso to Rule 7 provides that in cases “where such payment is not made within a period of six months of the date of invoice, the point of taxation shall be determined as if rule 7 ‘does not exist’.” So under the reverse charge mechanism, the due date of deposition of service tax is 5th/6th day immediately following the month in which payment is made. But if the payment is not made within six months of raising of bill then the point of taxation shifts to date of invoice (i.e. determined as if rule 7 ‘does not exist’). Consequently, service tax has to be paid along with interest.
  • Dear Sir, My Pvt. Ltd. company having the business of running hospital, promoters of the company are paid director remuneration in their professional capacity as practicing doctors in the hospital itself. Is these payment are also exempt as Health Services ? and please also explain the applicability of reverse charge on the above issue? Akash Jain

    Definition of ‘service’ (clause 44 of section 65B) excludes: “a service provided by an employee to an employer in the course of the employment” Further the directors (managing director/executive directors/managers) of company are employee of company therefore the services provided by employee during the course of employee will not be taxable as not covered under the definition of ‘service’. Further if director is not treated as employee of company i.e. which work independently as a professional practitioner or a provision of service which is not in the course of employment e.g. independent directors, non executive directors then the same will be covered under the definition of service. But will be covered under the sl. No. of 2 of mega exemption notification no. 25/2012-ST relating to health care service.
  • Dear Sir, Hello. First of all i would like to appreciate the pain which you and your team is taking in making the members aware of the new service tax structure. My query is that, as w.e.f. 02-07-2012, the new definition of service has came into effect and as a result the person who was earlier paying service tax only on GTA services on reverse charge method, now has also to pay service tax on other services also, under reverse charge method. Now please let me know that whether there need to make any amendment in the existing Registration Certificate. If the answer is yes, than please quote the legal provision and if not, than the basis on which the answer is in negative. Manoj Khatri, Kanpur Manoj Khatri

    No, you are not required to amend your existing registration. Now the negative list has been effective and accordingly classification of services is not there. The form for service tax registration i.e. has also been amended and in service classification column of new form of ST-1, the only one entry is shown for all the services as follows: “Service other than in the Negative List” and it is common for all the assessees. So the above description of service will common for all assessees and there is no requirement of amend the service tax registration.If you want to be particular, file application electronically for amending registration certificate. Now only option available is ‘All taxable Services other than in Negative List’. Click and add. Get print out of the amended registration certificate and send copy to department
  • Sir, we are in the business of buying vacant land and subdividing into smaller plots. for this we take the approval of local municipal / panchayat authorities by paying necessary fees. please advice us on whether we are liable for service tax on the plots sold. CA. R. Velu

    Applicability of service tax on Approval from Local Authority: Section 66D specifies negative list of services as non-taxable and Sl. No. (a), specifies services provided by Government and Local Authority as non-taxable. Further Panchayat/Municipality is covered under definition of local authority and the service i.e. approval fees is covered under the above clause of negative list, therefore it will be non-taxable. Applicability of service tax on sub-dividing of vacant land into plots: ‘Service’ has been defined in clause (44) of the new section 65B and means – “Any activity carried out by a person for another for consideration, and includes a declared service” The above definition states “carried out any activity by a person for another” but in your case, you are purchasing vacant land, subdividing and selling these plots to the buyers. Your business is not an activity by a person for another as mentioned in the definition of service i.e. you are not providing a services of subdividing the land to any person but doing the business of selling the plots. Further ‘service’ excludes “(a)(i) an activity which constitutes merely a transfer of title in goods or immovable property, by way of sale, gift or in any other manner”. So selling of plots is covered under this exclusion clause. Hence, selling of plots is not covered under the definition of ‘service’. Therefore, no service tax is payable. But if you are doing any activity for a person as sub diving the land into plots and charges for this work i.e. you are not purchasing the land and selling the plots then it will be covered under the definition of service.
  • Sir, we are in the field of construction of roads in the premises of power company since 01.01.2012, Kindly let me tell about service tax applicability on road construction services SUNIL ARORA

    Under new negative list concept service tax will be leviable if activity is covered under the definition of ‘service’ as give under clause 44 of section 65B and not covered under Negative List and Mega Exemption Notification. “Service means any activity carried out by a person for another for consideration and includes declare services. Your service i.e. construction of road is clearly covered under the above definition. Further Sl. No. 13 of Mega exemption notification 25/2012-ST exempts the following service: “13(a) Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a road, bridge, tunnel, or terminal for road transportation for use by general public” The above exemption will be available when service is use by general public. The term General public is defined in Serial No. (q) of para 2 of notification 25/2012-ST dated 20.6.2012 as follows: “‘general public’ means the body of people at large sufficiently defined by some common quality of public or impersonal nature” In your case road is constructed in the premises of Power Company and the use of this road is limited to the power company and by those people which are related to Power Company. The road will not be used by general public as mentioned in the exemption, so this exemption will not be available and service tax will be leviable.
  • My company has made an agreement with individual regarding to horticulture services and in the agreement, its defined that service provider provide the services through 1 supervisor and 6 unskilled worker. Now my question is whether its covered under reverse charge mechanism as manpower hiring or not covered under RCM as maintenance services of plantation/ green area. Navin Jain

    The Notification No. 30/2012-ST provides the reverse charge mechanism in some services and it covers Manpower Supply Service also. In your case applicability of reverse charge mechanism will be based on “whether the service is covered under Manpower Supply service or not. Rule 2(g) of Service Tax Rule, 1944 defines supply of manpower to means: “supply of manpower temporarily or otherwise to another person under his superintendence or control” So the essential character of manpower supply service is that “the manpower will be worked under the superintendence or control of service receiver. In your case there is a contract for horticultural services and the manpower will work under supervision and control of service provider so it is not covered under manpower supply service and reverse charge mechanism will not be applicable. But if the manpower will work under supervision of service receiver, the service will be covered under manpower supply service and subjected to reverse charge.
  • Our company is located in a rented premises. Besides payment of monthly rent to the owner of the premises, we are paying maintenance charges towards general and upkeeping of the building. This amount is being paid to the wife of the owner of the premises. Under the circumstances it may please be clarified whether we have to pay service tax under partial reverse charge provisions on the maintenance charges being paid to the wife of the owner of premises. She is not charging service tax in the bill raised for such maintenance charges. nagarajan v

    Your Company is paying service charges to wife of owner of building towards maintenance and up keeping of the building. It shows wife of owner of building is providing maintenance services to your company and reverse charge will be applicable if it is covered under the work contract service. Work contract is defined in the section 65B, which reads as follows: “(54) work contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such properly” As in your case there is a service of maintenance, which also covered under the above definition of work contract service but the essential character of work contract service is that “there should be transfer of property in goods involved in execution of such contract. So if your service is covered under above definition of work contract, reverse charge will be applicable.
  • GTA is raising the combined bill of fright and his commission for arranging the transport and Service tax is paid by the Service recipient @25% abatement . is he is lay able to pay service tax on commission separately under 65(105(ZZb) ca ajay jain

    Under the new system of negative list of services, section 66F lays down the principle of interpreting specified description of services and bundled services. According to section 66F- “(3) (a) if various element of such service are naturally bundled in the ordinary course of business, it shall be treated as provision of the single service which gives such bundle its essential character.” Further “Bundled service” means a bundle of provision of various services wherein an element of provision of one service is combined with an element or elements of provision of any other service or services. The above rule will apply here as in your case services are provided combined i.e. bundled service. Further under Goods Transport, normally the agency charges both commission as well as freight so the services are naturally bundled. Further the above rule make it clear that bundled services shall be treated as provision of single service which give such bundle its essential character i.e. the service will be treated as single service which is dominant in nature. So here Goods transport is dominant and the whole service will be treated as GTA service and service tax will be chargeable on 25% value of service.
  • our company has hired motor vehicles on contract from individuals for commutation of employees between their residence to factory. The contrators are not registered with service tax deptt. hence nobody is charging service tax. Whether abatement of 60% of Gross amount charged can be availed for determination of value of taxable service and as a service receiver only 40% of service tax is payable on 40% of the gross amount charged ? Manoj Agrawal

    Mega Exemption Notification no. 25/2012-ST dated 20.6.2012 exempts Contract carriage. The relevant clause reads as follows:- “23. Transport of passengers, with or without accompanied belongings, by - (b) a contract carriage for the transportation of passengers, excluding tourism, conducted tour, charter or hire; or” As per clause (m) to definitions given in the mega notification, definition of Contract carriage will be borrowed from Section 2(7) of Motor Vehicles Act, 1988 which reads as under:- "contract carriage" means a motor vehicle which carries a passenger or passengers for hire or reward and is engaged under a contract, whether expressed or implied, for the use of such vehicle as a whole for the carriage of passengers mentioned therein and entered into by a person with a holder of a permit in relation to such vehicle or any person authorised by him in this behalf on a fixed or an agreed rate or sum (a) on a time basis, whether or not with reference to any route or distance; or (b) from one point to another, and in either case, without stopping to pick up or set down passengers not included in the contract anywhere during the journey, and includes- (i) a maxicab; and (ii) a motorcar notwithstanding the separate fares are charged for its passengers;” So for availing exemption, the essential characters of contract carriage are as follows: 1. The vehicle should be engaged under a contract - whether expressed or implied. 2. The use of such vehicle as a whole for the carriage of passengers mentioned therein. 3. The contract is either on a time basis (whether or not with reference to any route or distance) or it is on destination basis (from one point to another) 4. The vehicle does not stop to pick up or set down passengers not included in the contract anywhere during the journey As your query is not clearly shows the contract description, so you have to see that your contract is covered under the above definition of contract carriage. If covered, it will be exempt from levy of service tax. If your contract is not covered under the above exemption, service tax will be payable on 40% of gross amount charged (Sl No. 9 of Abatement Notification No. 26/2012-ST) and 100% liability to pay service tax on service receiver under reverse charge mechanism as service provider is an individual and receiver is a company (sl. no. 7(a) of notification no. 30/2012-ST).
  • Sir, for cleaning of our factory a contract is being to a man power supply agency owned by an individual and he deputes 18-20 persons on regular basis who works under his control and guidance but cleaning material is provided by us. After recent amendments instead of 12.36% now he is charging only 3.09% service tax whether we have to pay balance service tax @9.27% under reverse charge base? Manoj Agrawal

    As you are saying that the labour is worked under the control of service provider, therefore, it will be not covered under definition of “manpower supply service” as given under section Rule 2(g) of Service Tax Rules, 1994. The essential character of “manpower supply service” is that the labour should work under supervision and control of service receiver. But this is totally absent in instant case. Further the supply of cleaning material by you does not imply that the labour is working under your control and supervision. (i.e. of service receiver). Thus, the service is not covered under the definition of “manpower supply service”. Therefore, reverse charge mechanism will not be applicable and 100% liability of deposition of service tax is on service provider only.
  • We are a manufacture clearing goods under excise, we are availing the services of a labour contractor who engages labour that work under his supervision and control. Therefore service tax will not be applicable under reverse charges. Will the contractor have to charge service tax on the full amount of the bill after availing exemption of 10.0 lakhs, iif yes under which category of service? Further, since we are paying Excise on goods manufactured we can avail Cenvat Credit on the Service Tax or is there a provision for exemption from service tax as the services are being used for manufacturing goods on which excise is being paid? Bharath Kedia

    You are correct that reverse charge will not be applicable as service is not covered under the definition of “Manpower Supply Service” because the labour is work under the supervision and control of contract not under the supervision of service receiver. Further the exemption of 10 Lakhs is not applicable in case of service tax is paid by service receiver under reverse charge mechanism. In your case reverse charge mechanism is not applicable and 100% service tax is deposited by the service provider i.e. contractor. So contractor can avail the threshold exemption of Rupees 10 Lakhs, if he is eligible for the same (i.e. contractor’s turnover in the last financial year is less than 10 Lakhs rupees). By introducing negative list of services, the importance of categorizing the service has been limited to some issues e.g. reverse charge, valuations. Even the in new format of ST-1(service tax registration form) and ST-3(service tax return) the category of service is mentioned as “services not in negative list”. So category of service is not important here as there is no system present which defines each service separately as existed earlier. In your case, in the invoice contractor can mention as “Labour Contract or Contract for Work”. Availment of Cenvat Credit: There is no provision in Cenvat credit Rules, 2004 which provides exemption from service tax as services are used in manufacturing of excisable goods. Further you avail the service tax credit on this service if it is covered under the definition of ‘Input service’ as given under Rule 2(l) of Cenvat Credit Rules and can utilize the same against your excise liability.
  • Respected sir, my question is weather services provided to Gujarat Sickle Cell Anemia Control Society under society registration act 21 of 1860 considered services provided to government? My client is providing blood sample testing to above mentioned society. Kindly let me know your opinion. Thanks alfa

    According to Notification no. 25/2012-ST following is exempt: “25 services provided to Government, a local authority or a governmental authority by way of --- (a) carrying out any activity in relation to any function ordinarily entrusted to a municipality in relation to water supply, public health, sanitation conservancy, solid waste management or slum improvement or up gradation” The above exemption is allowed when service is provided to Government, local authority or a governmental authority. The meaning of government is not defined in the act and going through the meaning as given under the education guide of service tax, a society i.e. Gujarat Sickle Cell Anemia Control Society is not covered under the meaning of Government or Local Authority. Further essential character of Governmental authority are given below • set up by an act of the Parliament or a State Legislature; • established with 90% or more participation by way of equity or control by Government; and • carries out any of the functions entrusted to a municipality under article 243W of the Constitution. So you have to see what is the structure of society for meaning of governmental authority.
  • Sir, Bank Guarantee commission received by a company from another is chargeable to ST before budget 2012, if yes , under which service. Second, what is the status of taxability after 01.07.2012. SANJAY GUPTA

    Normally bank charges commission for bank guarantee and it was covered under the “Banking and Financial service” prior to introduction of Negative list concept. It is not clear how the bank guarantee commission is received by a company from another. Hence we request you to clarify this point.
  • if the employer pays the service tax instead of recovering from the employee for employer-employee related service, can he avail the cenvat credit on this amount as the circular of July states that cemvat credit can be availed on this service. Secondly, from which date this employer-employee related service is applicable since the circular came in July end-is it also 1st July manish joshi

    Your question is not clear as there is no service tax on: “(b) a provision of service by an employee to the employer in the course of or in relation to his employment” [Exclusion clause No. (b) of ‘service’ as defined under section 65B(44)]. Hence, your contention that the service tax is applicable on the same is totally erroneous.
  • we are related to real estate service and we make a booking in last f.y but receently it is cancelled. than provide me solution reagarding Service tax issues gaurav

    As per Rule 6(3) of Service Tax Rules, 1994: “Where an assessee has issued an invoice, or received any payment, against a service to be provided which is not so provided by him either wholly or partially for any reason or where the amount of invoice is renegotiated due to deficient provision of service, or any term contained in a contract, the assessee may take the credit of such excess service tax paid by him, if the assessee,- (a) has refunded the payment or part thereof, so received for the service provided to the person from whom it was received; or (b) has issued a credit not for the value of service not so provided to the person whom such an invoice had been issued.” So if you received any payment against this service which is now cancelled, you can make refund of amount received from service receiver and take the credit of excess amount of service tax paid(i.e. already deposited) related to this cancellation. Further if you had issued the invoice then you can now issue a credit note and can take the credit of excess amount paid. if service is not provided, service provider can make the refund of amount earlier received or can issue a credit note if invoice is issued earlier and can take the credit of excess service tax paid by him due to this cancellation.
  • Sir, we are the manufacuture of Zinc Sulphate agriculture grade and registered with excise dept. we want to purchase Sulphuric Acid without payment of duty.pl let us know the excise formalities Prem Shanker Gupta

    The entry for this product is as follows in the Notification 12/2012-CE: “Sl No. 86 -- Sulphuric acid, oleum, oxygen and ammonia used in the manufacture of fertilizers” ---Condition No. 2 should be followed. The Condition No. 2 is as follows: “Where such use is elsewhere than in the factory of production, the exemption shall be allowed if the procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, is followed” Hence, you have to follow the procedure laid down in above rules. These rules are inserted by Notification No. 34/2001-CE (N.T.) and as amended to the date.
  • We are providing consulting Engineering service to SEZ. Our client says that he is SEZ Unit, hence do not charge service tax on our invoices as per SEZ latest notification no 40/2012 dt. 20.06.2012 applicable from 01.07.2012. Sir, Please suggest me what document/forms should we have obtained from DLF Limited to satisfy our service tax authorities at the time of our service tax assessment? Ranbir Singh

    As per notification 40/2012-ST : “Provided that where the specified services received in SEZ and used for the authorised operations are wholly consumed within the SEZ, the person liable to pay service tax has the option not to pay the service tax ab initio instead of the SEZ unit or the developer claiming exemption by way of refund in terms of this notification” Thus, it is clear from above, if the service is totally consumed in SEZ then there is no need to pay the service tax. Otherwise, the service tax is to be paid and then the refund should be claimed by SEZ unit. Now, you have to decide whether the service is wholly consumed in SEZ or not. Further notification does not states about the document obtained by the service provider in case of SEZ opt an option to not pay the service tax instead of availing exemption through refund. So for your record you can take the declaration from the SEZ unit that this service is wholly consumed in SEZ only.
  • Sir Please clarifying which tax is applicable on printing and designing of magzines of our institute. We do not provide them any material. vishal Pawar

    As per serial No. of Notification 25/2012-ST following service is exempts: “Carrying out an intermediate production process as job work in relation to- (a) Agriculture, printing or textile processing as job work” So the service tax will not be leviable as it is exempt under the notification No. 25/2012-ST. Further as told in query that you have not providing any material, hence it is not job work but a sale of good. Hence, no service tax is payable.
  • Respected Sir, One of my clients is taking the benefit of noti.no.08/2003 in excise of turnover limit now in this financial yr he has come in excise in the month of august-12 in the second qtr. as now he will be liable to file ER-3 RET. in the month of Oct-12, after can he file ER-1 or ER-3 or it is compulsory to file ER-3. mehul

    As per Rule 12 of Central Excise Rules 2002, (Filing of return) "(1) Every assessee shall submit to the Superintendent of Central Excise a monthly return in the form specified by notification by the Board, of production and removal of goods and other relevant particulars, within ten days after the close of the month to which the return relates i.e. Monthly Return ER-1." Further proviso 3 of the above rule 12(1) provides: “Provided further that where an assessee is eligible to avail of the exemption under a notification based on the value of clearance in a financial year (i.e. SSI), he shall file a quarterly return in form specified, by notification, by the Board, of production and removal of goods and other relevant particulars within ten days after the close of the quarter to which the return relates. i.e. ER-3 Explanation 1 – For the purpose of this proviso, it is hereby clarified that an assessee shall be eligible, if his aggregate value of clearance of all excisable goods for home consumption in the preceding financial year computed in manner specified in the said Notification did not exceed rupees four hundred lakhs. Explanation 2- the filling of returns as specified in this proviso shall be available to the assessee for the whole financial year” The provisions make it clear that when an assessee having turnover of not more than rupees four hundred lakhs in the preceding financial year, he should file the quarterly return i.e. ER-3. Further the above explanation 2 stated that the filling of returns as specified in this proviso shall be available to the assessee for the whole financial year. So if an assessee comes under levy of excise in the month of August ( i.e. till now he is filing ER-3), still he should file the ER-3 in the remaining whole year.
  • We are having MFS unit we are enhancing our building but contractor is not registered under service tax, (service Like Fabrication, civil Work). We offered to do the labour job only. Any service tax is applicable? what is the percentage? if st applicable not to take the input service tax Kindly help me Thanks With Regards Halaswamy K M 9844362179 - HALASWAMY K M - vcpl98@gmail.com 28/08/2012 

    Applicability of Service Tax: ‘Service’ has been defined in clause (44) of the new section 65B and means – “any activity carried out by a person for another for consideration, and includes a declared service” The Labour Job Contract is clearly covered under the above definition of “service”. Further this service is also not covered under the Negative List as given under section 66D or under Mega Exemption Notification 25/2012-ST, therefore service tax will be leviable. Service tax Rate and Reverse Charge Since you have given only labour contract only, the service is not covered under the definition of “Work Contract Service” as given under section 65B (54) because there is no any transfer of property in goods involved which is the essential character of work contract service. Further the service is also not covered under the definition of Manpower supply service as given under section Rule 2(g) of Service Tax Rules, 1994 because it is contract for labour job and manpower will not work under superintendence or control of service receiver, which is essential character for manpower supply service. So the service is not covered under any of the service given above i.e. work contract or manpower supply service therefore reverse charge (where service receiver is also liable) will also not apply. Further the service is not covered under work contract service therefore valuation rule will not apply and service tax will leviable @ 12.36% (including cess). Credit of Input service: For input credit we have to see whether the above mentioned service is covered under the definition of Input Service as given Rule 2(l) of Cenvat Credit Rules. According to definition input service includes “services used in relation to modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises” Further input service excludes “construction of a complex, building, civil structure or a part thereof”.
  • Respected sir Garden Maintenance is covered under service tax -Krishnmaurthy - krishna.prakash@ymail.com 

    ‘Service’ has been defined in clause (44) of the new section 65B and means – “any activity carried out by a person for another for consideration, and includes a declared service” Garden Maintenance Contract is covered under the above definition of service. Further the above service is also not covered under the Negative List as given under section 66D or under Mega Exemption Notification 25/2012-ST, therefore service tax will be leviable.
  • sir,please tel us GTA calculation from 1.07.2012,pay on 25% & rs.750/-(nil) OR 100% paid on transporter bill. somnath

    Notification No. 25/2012-ST exempts: “21. Services provided by a goods transport agency by way of transportation of - (b) Goods where gross amount charged for the transportation of goods on a consignment transported in a single goods carriage does not exceed one thousand five hundred rupees; or (c) Goods, where gross amount charged for transportation of all such goods for a single consignee in the goods carriage does not exceed rupees seven hundred fifty” Further Sl. No. 7 of Notification no. 26/2012-ST, provides that service tax will leviable of 25% of total value of service in case of “Services of goods transport agency in relation to transportation of goods. So 1. If GR is below Rs. 750/- it will be exempt. 2. If material is send on Full Truck Load basis (i.e. only one consignment), it will be exempt if transportation cost shall not exceed Rs. 1500. 3. If not covered under above 1 & 2 i.e. GR is more than 750/1500, service tax will be leviable on 25% of total value of service (i.e. 75% abatement)
  • Budget Proposal : -Basic customs duty to be reduced from 7.5% to 2.5% on plant and machinery imported for setting up or substantial expansion of iron ore pellet plants or iron ore beneficiation plants. Sir please give reference under which chapter heading it will fall and what is basic custom duty. Thanks Pankaj Bardia Pankaj Bardia

    “Capital goods/ equipments required for setting up or substantial expansion of iron ore pellet plants & iron ore beneficiation plants” is fall under chapter heading 9801 (project import) and the Rate of Basic custom duty is 2.5% as per sl. No. 506 of Notification No. 12/2012-CUS.
  • IN HOTEL INDUSTRY WHETHER INPUT CREDIT OF EXCISE DUTY OF BEVERAGE CAN AVAIL AGAINST THE SERVICE TAX LIABILITY? Navin Jain

    Sl. No. 4 of Abatement Notification No. 26/2012-ST provides 30% abatement in case of “Bundled service by way of supply of food or any other article of human consumption or any drink, in a premises (including hotel, convention center, club, pandal, shamiana or any other place, specially arranged for organizing a function) together with renting of such premises” Further Rule 2(c) of Service (Determination of Value) Rules, 2006 specifies service portion as 40% of Total Amount (i.e. 60% abatement) in following case: “an service wherein goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner at a restaurant” For both the above services there is a condition that “CENVAT credit on any goods classifiable under Chapters 1 to 22 of the Central Excise Tariff Act, 1985 (5 of 1986) used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004” Further the “Beverages” is covered under the Chapter 22 of the Central Excise Tariff Act, 1985. Therefore the credit of beverages is not available to Hotel Industry. So the question of availing this credit does not arise.
  • If the GTA is a company, whether a factory still has to pay service tax on reverse charge basis if transport charges is paid to a GTA which is a body corporate. K K Daruka

    Applicability of reverse charge under the service provided by GTA is not dependent on type of service provider and depends upon the type of service receiver (who pays or is liable to pay freight by himself or through agent is treated as service receiver under Notification No. 30/2012 i.e. reverse charge). As per clause (2) of Notification 30/2012-ST, service tax is payable by the recipient of service in respect of services provided by goods transport agency for transportation of goods by road where the person liable to fright is any of following: (a) any factory registered under or governed by the Factories Act, 1948 (63 of 1948); (b) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India; (c) any co-operative society established by or under any law; (d) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder; (e) any body corporate established, by or under any law; or (f) any partnership firm whether registered or not under any law including association of persons; So if the payment is made by person specified in above list then service tax is payable by him otherwise the service tax is payable by provider of service.
  • Whether a "Franchisee Restaurant" while claiming abatement & charging Service Tax on the 40% portion of the Bill, can claim Cenvat Credit in respect of service tax paid on the "Franchisee Fee" and "Rent" for the restaurant premises.Your valuable inputs would be greatly appreciated. Naresh Dhamija Naresh Dhamija

    Rule 2(l) of Cenvat Credit Rules, 2004 and it is as follows: “input service” means any service, – (i) used by a provider of taxable service for providing an output service; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal. Further the Notification 24/2012-ST (Determination of value rules, 2006) provides value of service portion as 40% of total value under Restaurant service and explanation given in this Notification in respect of Restaurant service is as follow: “Explanation 2.- For the removal of doubts, it is clarified that the provider of taxable service shall not take CENVAT credit of duties or cess paid on any goods classifiable under Chapters 1 to 22 of the Central Excise Tariff Act, 1985 (5 of 1986).”. Moreover, the rate of abatement has been reduced from 70% to 60% and taxable portion is increased from 30% to 40% with a view to extend cenvat credit to Hotel industry. Hence the Hotel can also avail the cenvat credit. So credit is available in respect of input services i.e. "Franchisee Fee" and "Rent" for the restaurant premises, will be allowable as covered under the definition of input as well as there is no restriction in the above explanation given in the Notification No. 24/2012-ST.
  • 1) Under the Reverse Mechanism of Service Tax whether Service Provider should compulsorily have ST number if not then should the service provider is liable to make the payment of its liability as a service receiver even though the service provider does not have ST number. 2) Under advertisement the rent paid for exhibition attracts ST under reverse mechanism or not. Kindly clarify. Thanks 

    1. According to Rule 4 of service tax rules 1994, “(1) Every person liable for paying the service tax shall make an application to the concerned Superintendent of Central Excise in Form ST-1 for registration within a period of thirty days from the date on which the service tax under section 66B of the Finance Act, 1994 is levied.” So if service provider is liable to pay service tax then he should make a registration within the thirty days. Further if earlier service provider has not taken the service tax registration as he is not liable to pay service tax but now he is liable to pay service tax under reverse charge as a receiver then he should now required to grant service tax registration as he is now “a person liable to pay service tax” as a service receiver. 2. Clause (g) of section 66D specifies selling of space or time slot for advertisement other than advertisement broadcast by radio or television as a non-taxable service. Therefore service tax will not be leviable on rent paid for advertisement space or time slot.
  • is repairing of machinery consider as works contracts -ahadev - sahadevpatel@hotmail.com 

    Work contract is defined in the section 65B, which reads as follows: “(54) work contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such properly” So repairing of machinery is considered will be considered as work contract service, if there is transfer of property in goods involved (i.e. material should be used in such repairing) in execution of such repairing.
  • We have agency of cement. V r supplying cement to builder from ultratech and annually v are getting annual incentive based on qty sale achieved by us. Is incentive received is taxable as service tax? And as discussed earlier there are some transaction where cement directly delivered to builder by company & we get commission on and we are paying service tax but some company giving cash discount to us & also incentive based on quantity sale achieved for this direct billing transactions. (in this case billing of sales is directly done by company to builder v keep deposit with company for the this transactions and as and when builder pay to company we get deposit refund from company). is cash discount & incentive received for this type of transactions taxable as service tax? Bharat Mange

    The nomenclature of amount paid does not decide the service tax liability. The nature of transaction decides the service tax liability. If you are purchasing material from Ultratech and then selling to builder then it is a trading activity. Any incentive received in such type of transaction is discount only and not service tax is payable on the same. “Service” has been defined in clause (44) of the new section 65B and means – “any activity carried out by a person for another for consideration, and includes a declared service” Further ‘service’ does not include – “Any activity that constitutes only a transfer in title of (i) goods or (ii) immovable Property by way of sale, gift or in any other manner" In the first case the incentive is not a consideration for service (as service does not include “activity constitutes only a transfer in title of goods”) and in nature of discount on sale. Therefore service tax is not leviable. If Ultratech is supplying the material directly to builder and commission is paid to you then you are a service provider. For this transaction either you receive commission or cash discount or incentive, service tax should be leviable as you are not selling the goods and only works as commission agent.
  • Under the revere charge, my company has made the payment to service provider in the month of August hence compay deposited service tax under reverse charge on 05.09.2012, now my question is whether company can avail the input service crdit (Reverse Charge) against the service tax libility of the month of August or against the ST liability of the month of September-12? Navin Jain

    The relevant proviso of Rule 4 (7) of Cenvat Credit Rules is reproduced below: “Provided that in case of an input service where the service tax is paid on reverse charge by the recipient of the service, the CENVAT credit in respect of such input service shall be allowed on or after the day on which payment is made of the value of input service and the service tax paid or payable as indicated in the invoice, bill or, as the case may be, challan referred ion Rule 9” So you can take Cenvat credit when payment of value of service and as service tax thereon will be paid. However, it is to be noted that the service tax liability under reverse charge is to be paid in cash only. If you have any service tax liability as service provider or central excise duty payment as a manufacturer then you can take and utilize this credit.
  • Prior to coming to force the negative list w.e.f. 1.7.12 the item "rice" comes under Agricultural produce, as was specifically mentioned in the definition. However in the negative list it has not been clearly specified. Therefore you may kindly clarify whether "Rice" comes under Agricultural produce or not. Ch Bhaskara Sarma - cbsarma53@gmail.com 

    Section 65B(5) defines Agricultural Produce as follows: “Any produce of agriculture on which either no further processing is done or such processing is done as is usually done by cultivator or producer which does not alter its essential characteristics but make it marketable for primary market” So rice will also covered under the definition of ‘agricultural produce’ but only upto when there is no any further processing is done or processing is done for making it marketable in Primary Market by cultivator.
  • Dear Sir, We are getting water supply from "SIDCUL" (this is a Government of Uttarakhand Enterprise, was incorporated as a Limited Company in the year 2002,) not charging any service tax, Could you please Confirm whether we have to Pay service tax based on reverse charge mechnasim, notification number 30 as government support services as stated under serial number 6. Raj Anand 

    Sl. No. 6 of Notification No. 30/2012-ST provides reverse charge in respect of support services provided by Government or Local Authority as follows: “in respect of services provided or agreed to be provided by Government or local authority by way of support services excluding,- (1) renting of immovable property, and (2) services specified in sub-clauses (i), (ii) and (iii) of clause (a) of section 66D of the Finance Act,1994 Further meaning of government is not defined in the Act or Rules related to service tax. Therefore meaning of ‘Government’ as given in General Clauses shall be adopted for this purpose (as also given in CBEC,s education guide on service tax). Going through the meaning as given in Section 3 (23) of General Clauses Act, 1897 we conclude that: • ‘Government’ includes both Central Government and any State Government. • The Central Government means the President and the officers subordinate to him while exercising the executive powers of the Union vested in the President and in the name of the President • The State Government means the Governor or the officers subordinate to him who exercise the executive power of the State vested in the Governor and in the name of the Governor. The manpower of Company does not become officers subordinate to the President under article 53(1) of the Constitution and similarly to the Governor under article 154(1). Therefore a company is not covered under the definition of Government. Further a company is also not covered under the definition of Local Authority. So, reverse charge will not be leviable in the instant case.
  • We are service receivers for Transportation by Road and have been paying Service tax. A Govt.Undertaking order for goods with transportation charges to be paid by them (The Govt.Undertaking)includes Service tax and we have to furnish money receipt of the whole amount from the transporter; so we had to pay the Service Taxes on Freight also to the Transporter and liability to pay lies on them; are we doing it correctly although we are the Service Receiver liable to pay the Service Tax to the Govt.; please clear my doubt Sir Unnikrishna Menonj

    Firstly your question is not clear that what you want to say. Secondly, since your question is related to reverse charge under GTA service, so we are stating here the related provisions. Notification No. 30/2012-ST (Reverse charge mechanism) provides that “in respect of services provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road, 100% service tax is payable by service receiver”. Further the explanation given in the said notification in respect of GTA service is as follows: “Explanation-I. - The person who pays or is liable to pay freight for the transportation of goods by road in goods carriage, located in the taxable territory shall be treated as the person who receives the service for the purpose of this notification”. So effectively liability to pay service tax under services provided by Goods Transportation Agency will be on the person who pays or is liable to pay freight.
  • Dear Sir, What is the present abatement rate for the Insectisides and pesticides,fungicide. which notification applicable, is still the 49/2008 is applicable as and when it is amended or is it supperseeded. Regards, HN Manjunatha Manjunatha

    There is no change in rate of abatement in respect of products i.e. Insecticides, fungicides, herbicides, weedicides and pesticides of chapter Head 3808 and the current rate of Abatement is 30% of Retail Sale Price.
  • Dear sir, please advise whther installation charges on purchase of new split AC would be cover under the new definition of work contract service as it includes supply of material (i.e AC) and labour charges (i.e installation). Vikash Sharma

    Work contract is defined in the section 65B, which reads as follows: “(54) work contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such properly” So the purchase and installation of AC is covered under the above definition of work contract because there is transfer of property in goods involved in execution of such contract for the purpose of carrying out installation. And according to provision of Rule 2A of service tax (determination of Value) Rules 2006, “(i) value of service portion in execution of a work contract shall be equivalent to the gross amount charged for the work contract less the value of property in goods transferred in the execution of the said work contract” So effectively value of service portion in execution of work contract shall be equivalent to Installation charges i.e. Gross Amount Charged (excluding VAT/Sales tax) – Value of AC. But if it is not feasible to divide the material and labour charges then the service tax will be payable on 40% of complete value.
  • Hi, We are a ltd concern and we have many transporter for sending a goods of various locations in India through Truck. He has been charged the amount of bill on monthly basis against GR Notes. So kindly guide me for deposit of service tax in some condition mentioned below :- 1. If GR is below Rs.750/- 2. If GR is above Rs.750/- and material send on Full Truck Load basis. So, Please given the solution. Gurpreet Singh

    Notification No. 25/2012-ST exempts following: “21. Services provided by a goods transport agency by way of transportation of - (a) Fruits, vegetables, eggs, milk, food grains or pulses in a goods carriage; (b) Goods where gross amount charged for the transportation of goods on a consignment transported in a single goods carriage does not exceed one thousand five hundred rupees; or (c) Goods, where gross amount charged for transportation of all such goods for a single consignee in the goods carriage does not exceed rupees seven hundred fifty;” So 1. If GR is below Rs. 750/- it will be exempt. 2. If material is send on Full Truck Load basis (i.e. only one consignment), it will be exempt if transportation cost shall not exceed Rs. 1500.
  • Respected Sir, Under the reverse charge, the due date of deposit to service tax is 5th/6th of the following month or the date when we make the payment? NAVIN JAIN

    Rule 7 of Point of Taxation Rules, provides that: “The point of taxation for the service receiver liable under reverse charge is the date on which payment is made to the service providers”. Further the proviso to Rule 7 provides that in cases “where such payment is not made within a period of six months of the date of invoice, the point of taxation shall be determined as if rule 7 ‘does not exist’.” So under the reverse charge mechanism, for receiver due date of deposition of service tax is 5th/6th day immediately following the month in which payment is made. But if the payment is not made within six months then date shifts to date of invoice. Consequently, service tax has to be paid along with interest.
  • Dear Sir, What is the Current % of abatement in case Civil Construction. Regards 09997190077 Raj Anand - rajkumar_anand@rediffmail.com 

    If the civil construction is along with material then it fall under “works contract”. Thereafter, the service provider should bifurcate the value of material and labour charges. The service tax is payable on labour charges. If he is not able to divide the contract price in labour and material charges then taxable value in case of original work will be 40% and 60% in case of finishing work. The service tax is to be paid on such value. Now, if the service provider is individual, HUF or partnership firm and service recipient is a body corporate then reverse charge mechanism will apply. The service provider has to pay 50% of tax and rest of 50% is to be paid by the recipient.
  • Dear Sir, We have 1 pvt ltd co and 1 propriter concern we received service f0r Manpower and security and having Amc for Computer what percentage of tax to be paid to service receiver Kindly Help Halaswamy K M 

    Reverse charge on Manpower supply service and security service is applicable when: ““service is provided or agreed to be provided be any individual, HUF or proprietary firm or partnership firm, whether registered or not including AOP located in the taxable territory to a business entity registered as body corporate” So if the reverse charge is applicable (i.e. above condition fulfilled) the portion of service tax payable by service receiver is 75% of service tax i.e. 12.36*75% = 9.27% effectively.
  • dear Sir, whether Houskeeping/loading-unloading contract given by Company to Individual is covered under Manpower recruitment(PRC)? Vinay Arwade - sv.arwade@gmail.com 

    Rule 2(g) of Service Tax Rules, 1994 defines supply of manpower to means: “Supply of manpower temporary or otherwise to another person under his superintendence or control” So under the manpower supply service, service provider shall only be responsible for supply of manpower and the manpower will work under the supervision and control of service receiver. Since in your case there is a contract for Housekeeping/loading-unloading and manpower is not under the control of service receiver (i.e. company) therefore it is not covered under the Manpower supply service and only a contract for work, hence reverse charge is not applicable. Further if the service provider (i.e. individual) is only supply the manpower and manpower is worked under the control or supervision of service receiver (i.e. company) then it will be manpower supply service and reverse charge will be applicable.
  • AMC given for Machine where sale of Property does not include, then, whether it is covered under works Contract OR Not? vinay Arwade - sv.arwade@gmail.com 

    Work contract is defined in the section 65B, which reads as follows: “(54) work contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such properly” For work contract service there should transfer of property in goods involved in execution of such contracts. Since you are saying there is not transfer of property in goods involved so the service will not be work contract service.
  • whether job contract ( No maretial involved, work done throgh manpower)is covered under reverse mechanism. 

    Vide notification 30/2012, reverse charge have been applied on manpower supply service, work contract service and other services. Further rule 2(g) of Service Tax Rules, 1994 defines supply of manpower to means: “Supply of manpower temporary or otherwise to another person under his superintendence or control” So under the manpower supply service, service provider shall only be responsible for supply of manpower and the manpower will work under the supervision and control of service receiver. But under the job work where no transfer of goods involved, the manpower is worked under the control of job worker i.e. service provider, therefore it is not covered under manpower supply service and reverse charge will also be not applicable.
  • Thanks for your timely clarification Sir. From the definition of works contract it would be clear that all contracts involving the supply of materials and labour in respect movable or immovable property payment of service tax on service portion of such contracts will attract under reverse charge. Pure labour contracts where supply of labour only is involved will not cover under reverse charge. Nagarajan V - nagarajan@rjpinfotek.com 

    Pure labour contract is not covered under the definition of work contract as given under section 65B. Further we have to see whether the above referred pure labour contract is covered under the definition of manpower supply service or not. If it is manpower supply service, reverse charge will be applicable. Rule 2(g) of Service Tax Rules, 1994 defines supply of manpower to means: “Supply of manpower temporary or otherwise to another person under his superintendence or control” Therefore if pure labour contract is not covered under the manpower supply service ( i.e. manpower will work under the supervision and control of service receiver and the service provider shall only be responsible for supply of manpower) then reverse charge will not be applicable otherwise applicable.
  • As per Notification 30/2012, reverse charge mechanism for payment of service tax is applicable for manpower services provided by individuals, partnership firms, AOP and received by Companies. Does this mean, manpower services provided by a Company to other business entities is exempt from reverse charge mechanism and that Company will include entire service tax liability in the invoice R Ramesh - ramesh75@vsnl.net ? 

    yes, reverse charge under Manpower supply service is applicable when “service is provided or agreed to be provided be any individual, HUF or proprietary firm or partnership firm, whether registered or not including AOP located in the taxable territory to a business entity registered as body corporate located in taxable territory”. There if service provider is company, reverse charge will not be apply and 100% liability to pay service tax will be on company.
  • In case of companies running multiplaxes, significant expense incurred on printing of leaflets for movie schedule. In such case vendor design leaflets as per specification of multiplex company. and uses paper, ink etc. to design leaflets. My question is that whether it is work contract services new definition of work contract, if yes, how the valuation of service tax will be made in following two conditions: 1. if vendor charges VAT on full amount of invoice, 2. if vendor charges VAT on partial value of invoice. Vikash Sharma

    Work contract is defined in the section 65B, which reads as follows: “(54) work contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such properly” Under the contract with company there is transfer of property in goods involved and contract is leviable to tax as sale of goods. Further the definition stated that the contract should be “for carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such properly” Designing of leaflets is not an activity given under the definition of work contract e.g. construction, erection, commissioning, installation etc. therefore it is not a work contract service under the service tax law.
  • Sir, a) a whole time director has let out a building to the Company , which is used by an employee . Would this rent payment would be within the purview of reverse tax introduced recently (b) Similarly a director charges for his professional services (as CA ) to the Company .Would this be covered under Reverse charge if the bill is inclusive of service tax claimed by him? subramanian

    (a) The CBEC has been introduced reverse charge mechanism on services provided by directors through the Notification No. 45/2012 dated 07/08/2012. The relevant Para is as follows: ““5A in respect of services provided or agreed to be provided by a director of a company to the said company” The notification does not specify that which services provided by directors are covered under the reverse charge mechanism? The interpretation of above Para makes it clear that every services provided by director of company will cover under the Reverse charge mechanism and company is liable to pay 100% service tax in respect of services provided by directors under the Reverse charge mechanism. So rent payment is also covered under the reverse charge mechanism. (b) In case of services provided by directors to company, 100% liability on company to pay service tax on company under the reverse charge mechanism. The reverse charge is mandatory not an option. If the bill is inclusive of service tax and it is mentioned on the face of invoice then calculation can be done on cum-price basis and service tax will be paid accordingly. Also, the payment will be made to director after deducting service tax.
  • Sir, Some of my friends formed a private ltd., Co for imparting commercial training and coaching in computer net working. This service is already covered under Service tax net. Besides training they are also purchasing and selling Microsoft online exam vouchers whereby the students who purchase the vouchers shall appear computer online exams conducted by Microsoft. Microsoft releases these vouchers as prepaid exam fee vouchers. Kindly advice whether the purchase and sale of these vouchers would be classified as sale or service after introduction of negative list of services from 1.7.12 as prior to that the transactions were regarded as sale only Nagarajan V

    Firstly your question is not clear that coaching institute is worked as agent of Microsoft and charge commission or providing any services relation to this e.g. carried out online exam in their institute or only trading the prepaid voucher and earns profit. Secondly: ‘Service’ has been defined in clause (44) of the new section 65B and means – “any activity carried out by a person for another for consideration, and includes a declared service” Further ‘service’ excludes “any activity that constitutes only a transfer in title of (i) goods or (ii) immovable property by way of sale, gift or in any other manner”. So trading of goods is exempt from service tax. Further activities of commission agent who sells goods on behalf of another will not be included in trading of goods. The purchasing and selling Microsoft online exam vouchers is a trading activity but if coaching institute work as a agent and consideration is commission not profit then it will be taxable and commission charges will be value of service Further from the Microsoft point of view, since it provides service i.e. carried out online exam or online course will be taxable.
  • Sir, we are labour contractor engaged in plant operation but we billed on Tonnage Basis. What should be our rate of service tax G P Nanda

    Whether Manpower Supply Service or not service tax will leviable @12.36% (including cess). For reverse charge applicability (where service receiver is also liable for payment of service tax) we have to see whether service is manpower supply or not because under manpower supply service reverse charge is applicable. Rule 2(g) of Service Tax Rules, 1994 defines supply of manpower to means: “Supply of manpower temporary or otherwise to another person under his superintendence or control” Thus the essence of the service is that the service provider shall only be responsible for supply of manpower. The manpower will work under the supervision and control of service receiver. Since you are billed on Tonnage basis and also not fulfilled the essential condition of manpower supply service i.e. “the service provider shall only be responsible for supply of manpower and the manpower will work under the supervision and control of service receiver” So your case is not a manpower supply service and is a contract for work only therefore reverse charge will not be applicable.
  • kindly clarify whether service potion of works contracts mentioned in Notification No 30/2012-ST dt 20.06.12 refers to civil and construction contracts only or otherwise for payment of service tax under reverse charge mechanism. Nagarajan V

    Notification 30/2012-ST prescribes reverse charge “in respect of services provided or agreed to be provided in service portion in execution of works contract”. The notification prescribes reverse charge for work contract service and work contract is defined in the section 65B, which reads as follows: “(54) work contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such properly” So if the activity is covered under the above definition of work contract, reverse charge will be applicable.
  • Dear Sir, whethere PRC ( Manpower recruitemnent) is applied If a company given a contract for housekeeping/loading/unloading /material handling contract to individual? vinay Arwade

    Notification no. 30/2012-ST prescribes reverse charge in respect of manpower supply service when “Service is provided by individual, HUF, Proprietary Firm or partnership firm and received by company or body corporate” Whether reverse charge is applicable in your case or not will depend on whether the service provided by individual is covered under the definition of manpower or not: Rule 2(g) of Service Tax Rules, 1994 defines supply of manpower to means: “supply of manpower temporary or otherwise to another person under his superintendence or control” Thus the essence of the service is that the service provider shall only be responsible for supply of manpower. The manpower will work under the supervision and control of service receiver. So in your case if service provider (individual) only be responsible for supply of manpower and that manpower is worked under the supervision or control of company, then it will be manpower supply service and reverse charge will be applicable and otherwise it is only a contract for work. Therefore it depends on whether the manpower is worked under the supervision or control of company or not.
  • Whether Drilling work for coal exploration comes under the perview of 'Works Contracts' under service tax? KUMARI PRATIBHA

    Work contract is defined in the section 65B, which reads as follows: “(54) work contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such properly” Thus, it is necessary that the transfer of property in goods takes place if a contract has to falls under works contract. Under the drilling work there is not transfer in property of goods involved so it will not be covered under the work contract service. But if there is any transfer of property in goods in such drilling process then the service tax will be applicable.
  • dear sir,please specify the portion of service tax deposited by the service provider will be borne by the service receiver or the same will be borne by the service provider out of his own pocket? KUMARI PRATIBHA

    Service tax is collected by service provider from service receiver on value of service so it will be born be service receiver. Further according to section 67 (2), “Where the gross amount charged by a service provider, is inclusive of service tax payable, the value of such taxable service shall be calculated by back calculation so that with addition of service tax payable, the total amount is equal to the gross amount charged”. So in case where service tax is not collected or not paid be service receiver it will be deemed as included in gross amount charged and will be computed by back calculation and according payable by service provider.
  • Dear sir, Under reverse charge Notification no. 30/2012 who will bear the actual liability of service tax? for example :-under works contract 50% of srevice tax will be paid by service provider and 50% by service receiver. now my query is whether service provider will pay the 50% share to govt. out of his own poket or by taking it from his service reciver's poket? KUMARI PRATIBHA

    whether reverse charge or not the liability ultimate liability to pay tax on service receiver only. Under the above case service provider will charge 50% service tax from service receiver and will deposited the same to government and remaining 50% amount of service tax will directly be deposited by service receiver.
  • Dear sir, whether educational trust imparting and running religious teaching school will attract service tax. Onali modi

    ‘Service’ has been defined in clause (44) of the new section 65B and means – “any activity carried out by a person for another for consideration, and includes a declared service” Further Notification 25/2012-ST exempt “services by an entity registered under section 12AA of the Income-Tax Act, 1961 by way of charitable activities” And charitable activities includes “k(ii) advancement of religion or spiritually” So if education trust is registered under section 12AA of the Income tax Act, 1961 it is exempt otherwise attract service tax.
  • SSI Exemption Limits of Rs.10 Lakh; is it applicable for SSI Units regd as Service Receiver and paying Service Tax on Transportation of Good By road on 25% of the Transport Bill ; kindly adise us Sir Unnikrishna Menonj

    According to Notification No. 33/2012-ST, exemption is not available: “(ii) Such value of taxable services in respect of which service tax shall be paid by such person and in such manner as specified under sub-section (2) of section 68 of the said Finance Act read with Service Tax Rules,1994” Since your case is covered under sub-section (2) of section 68 of the said Finance Act i.e. other person liable under reverse charge so the exemption is not available.
  • One of my client is Providing Labour manpower in manufacturing plant but service tax number not available and also tunover only 8 lacs so manufacturing plant's liability applicable or not and also accounting what done please explain. Ramesh Uplana

    The provisions of reverse charge should be applicable when: “The service shall be provided by individual, HUF, proprietary firm or partnership firm including association of person and received by business entity registered as body corporate” As per Item No. 8 of Notification 30/2012-ST, the service tax in respect of manpower supply service is payable: By Service Provider 25% By Service Receiver 75% Under the reverse charge mechanism (when recipient is also liable) exemption of Rs. 10 Lakhs would not be available to service recipient. So manufacturing plant will liable whether provider’s turnover is more than 10 lack or not.
  • Dear sir, Namashkar ! I have a small properietorship firm registered with central excise department as tour operator -service provider. We mostly provide services to some of Delhi/Mumbai/bangalore based tour operators. Till date we had been raising our invoice on the service receipant (Delhi-Mumbai etc based ) Agents and depositing service tax locally. We now understand that the service tax will now be paid by Service recipant and we do not have to file the same locally. May I request you to clarify on this. The service recipant say that i will continue to raise the invoice the way i have been doing but the tax will now be deposited by them. How do we file our return. Regards Satya 

    Firstly your question is not clear. Secondly under reverse charge mechanism (where receiver is liable ) only some service are covered e.g work contract, hiring of motor vehicle design to carry passenger, supply of manpower, sponsorship etc. The Tour operator service is not covered under the reverse charge mechanism. So service tax is to be paid only by service provider if covered under the tour operator service.
  • Vide Noti No. 45/2012 dtd 07.08.2012 , now company is liable to pay service tax under reverse charge on services received from Directors of the company. Your Expert views are solicited to enlighten us that which services provided by directors are taxable to the company? Type of services for consideration 1. Amount paid as Remuneration to directors 2. Amount paid as commission / incentive to directors which is a part of total remuneration 3. Amount paid as commission / incentive to directors which is not a part of total remuneration 4. Amount paid on behalf of directors in kind like their personal insurance prem, vehicle prem, medical prem other perquisites 5. Other considerations paid Further, please confirm that can the company avail cenvat credit of service tax paid on aforesaid service for payment of service tax? MANISH THAKKAR

    1.Applicability of service tax on Directors Section 66(b) defines “Service” as follows “Service means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include- (a) An activity which constitutes merely, (i) A transfer of title in goods or immovable property, by way of sale, gift or in any other manner; or (ii) Such transfer, delivery or supply of any goods which is deemed to be sale with the meaning of clause 29(A) of article 366 of the Constitution; or (iii) A transaction in money or actionable claim; (b) a provision of service by an employee to the employer in the course of or in relation to his employment; (c) fees taken in any Court or tribunal established under any law for the time being in force.” Accordingly the services performed by a director (other than a provision of service by an employee to the employer in the course of or in relation to his employment) of a company fall within the ambit of taxable services with effect from 1st July, 2012. It means service tax would be applicable on Services provided by Independent/Non-Executive Directors of the Company (NEDs) because Managing Director/Executive Director/Whole time Director is the employee of company. But if any amount paid to Managing Director/Executive Director/Whole time Director which is not covered under “a provision of service by an employee to the employer in the course of or in relation to his employment” will be taxable. Therefore for in case of independent directors service tax will be applicable and for Managing Directors/Executive Directors, service tax may be applicable if amount paid other than “in the course of employment”. Managing Director/Executive Director/Whole time Director: 1. Amount paid as Remuneration to directors (excluding those amount which is not in course of employment):- will not be taxable. 2. Amount paid as commission / incentive to directors(whether included in remuneration or not):- Since it is amount not covered under the above mentioned exclusion (i.e. not covered under “during the course of employment) will be taxable. 3. Other consideration:- Taxable if not treated as charges during the course of employment. So the taxability will be dependent on whether there is “a provision of service by an employee to the employer in the course of or in relation to his employment” or not. 2.Input credit of service tax on service provided by directors Rule 2(l) defines “input service” and according to this company can take the credit of service tax paid on services provided by directors but input service excludes “services used primarily for personal use or consumption of any employee”. So service tax on director’s personal expenditure (paid by company) e.g. insurance premium, vehicle premium, medical premium etc. will not be eligible for credit.
  • Dear sir, Can we take cenvat credit on our employees hotel stay and food bills during their official visit to projects/Sites Ranbir Singh

    The definition of input service is given in the Rule 2(l) of Cenvat Credit Rules, 2004 and it is as follows: “input service” means any service, – (i) used by a provider of taxable service for providing an output service; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal; Further input service excludes: Services such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee;”. So Cenvat credit of services of employee’s hotel stay and food bills during their official visit to projects/Sites will be allowed as input service because the above exclusion is extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee.
  • Construction Sir under old regime ,Prime location charges, car parking construction, transfer charges and other allied charges are liable to tax @ of 10% ( full rate), now w.e.f 01/07/12, new concepts of bundled service introduced. So can these charges be treated as construction service (bundled) and accordingly liable to pay abated scheme i.e tax on 25% (with land) even if charged separately shown in agreement and in invoice. Thanks ram

    Section 66F (3) is follows: “(a) If various elements of a bundled service are naturally bundled in the ordinary course of business, it shall be treated as provision of a single service which gives such bundle its essential character (b) If various elements of a bundled service are not naturally bundled in the ordinary course of business, it shall be treated as provision of a service which attracts the highest amount of service tax.” The section 66F does not make any difference whether charges billed separately or together. So the above question will be depended on that whether the service are naturally bundled in the ordinary course of business or not? Manner of determining if the services are bundled in the ordinary course of business Whether services are bundled in the ordinary course of business would depend upon the normal or frequent practices followed in the area of business to which services relate. Such normal and frequent practices adopted in a business can be ascertained from several indicators few of which are listed below – • The perception of the consumer or the service receiver. If large number of service receivers of such bundle of services reasonably expect such services to be provided as a package then such a package could be treated as naturally bundled in the ordinary course of business. • Majority of service providers in a particular area of business provide similar bundle of services. For example, bundle of catering on board and transport by air is a bundle offered by a majority of airlines. • The nature of the various services in a bundle of services will also help in determining whether the services are bundled in the ordinary course of business. If the nature of services is such that one of the services is the main service and the other services combined with such service are in the nature of incidental or ancillary services which help in better enjoyment of a main service. For example service of stay in a hotel is often combined with a service or laundering of 3-4 items of clothing free of cost per day. Such service is an ancillary service to the provision of hotel accommodation and the resultant package would be treated as services naturally bundled in the ordinary course of business. • Other illustrative indicators, not determinative but indicative of bundling of services in ordinary course of business are – • There is a single price or the customer pays the same amount, no matter how much of the package they actually receive or use. • The elements are normally advertised as a package. • The different elements are not available separately. • The different elements are integral to one overall supply – if one or more is removed, the nature of the supply would be affected. No straight jacket formula can be laid down to determine whether a service is naturally bundled in the ordinary course of business. Each case has to be individually examined in the backdrop of several factors some of which are outlined above.
  • How much Service Tax amount to be Charged / paid on Man Power Supply Bill as per Service provider and Service Receiver. Suppose A Bill amounting Rs. 1000/- then what would be the Service Tax calculation basis vide Notification 30/2012 Service Tax. Please clarify. S. K. Roy

    As per Item No. 8 of Notification 30/2012-ST, the service tax in respect of manpower supply service is payable: By Service Provider 25% By Service Receiver 75% The above provisions of reverse charge should be applicable when: “The service shall be provided by individual, HUF, proprietary firm or partnership firm including association of person and received by business entity registered as body corporate” So if value of service is Rs.1000/ and above condition is fulfilled (i.e. provided by be provided by individual, HUF, proprietary firm or partnership and received by business entity registered as body corporate) the service tax payable by service provider and service receiver will as follows: Service provider (1000*12.36%)*25% = Rs. 31 Service Receiver (1000*12.36%)*75% = Rs. 93
  • Imported goods under CETSH 84 in India on payment of Customs duty, after import it’s quality get check, change the packing, put fresh label, as per Section 2(f)It is amount to manufacture or otherwise? 

    Section 2(F) manufacture includes any process: (i) incidental or ancillary to completion of manufactured product; (ii) which is specified in relation to any goods in the Section or Chapter notes of the first schedule to the Central Excise Tariff Act, 1985 as amounting to manufacturing or (iii) which in relation to goods specified in the Third Schedule involves packing or repacking of such goods in a unit container or labeling or re-labeling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods render the product marketable to the consumer Thus, the process undertaken by you will amount to manufacture if the goods falls under Third schedule. The Third schedule relates to goods falling under MRP based valuation under Section 4A of Central Excise Act.
  • Respected Sir, I want to Know that if invoice including service tax only whether it will be fall under work contract service also or not and whether both vat and service tax must be mentioned for the judge of work contract? NAVIN JAIN

    work contract is defined in the section 65B, which reads as follows: “(54) work contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such properly” Thus, it is necessary that the transfer of property in goods takes place if a contract has to falls under works contract. In the invoice it may be possible that VAT is not shown because of there is an exemption under the VAT Act or otherwise. So it is not a test for identify work contract service that VAT is shown in the invoice or not. The real test, as narrated above, is transfer of property in goods.
  • Sir One of my client is printing books on job work basis. The purchaser of books provides us the paper and we perform the printing part. Are we liable to service tax ? Neeraj Agarwal

    we have already replied in your earlier query that service tax is not applicable on the job work of printing of books. The Mega exemption notification provides a clause for the printing industry, which is reproduced below:- “30. Carrying out an intermediate production process as job work in relation to:– (a) agriculture, printing or textile processing;” Thus, if the process undertaken by you is intermediate process then no service tax is applicable on the same.
  • In the case of WCT like an AMC contract where the vendor is not charging VAT which might be because his turnover is less than exemption limit and also not charging service tax because of exemption limit or supplying free materials and services though the service receiver is aware that is a WCT.Can the SR take the shelter of the fact that the SP is not charging VAT and not pay ST under new RCM though the word used in 'levied' and not 'paod and 'payable' view response Manish K Joshi

    According to definition of work contract as given in section 65B(54), there should be transfer of property in goods involved in execution of the contract which is leviable to tax as sale of goods. The leviable of tax only means that as per charging section of VAT Act shall be leviable on transfer of property. However it may be exempt by any notification and the exemption by any notification does not mean that the tax is not leviable. Further the service receiver should independently examine that there is his liability or not and not take the shelter of fact that service provider is not charging Service tax or VAT. For example, service provider may be claiming threshold exemption of Rs. 10 Lakhs under Notification 6/2005 but the benefit of the same is not available to service recipient when ST is payable under Reverse charge method.
  • my Query is, can registered dealer forward cenvat credit to some customer not all customers or full cenvat forward. SOMNATH

    The dealer can pass on the Cenvat credit to his buyers. He cannot pay the duty. If a consignment is entered in RG 23 D register and it is sold into various consignments then central excise invoice is to be prepared. This is irrespective of the fact that the credit is passed on or not. The duty details are required to be shown as the same are essential for return filing also.
  • whether Cheque return charges" is taxable or not. Actually it is 'tolerating an act or situation' which is declared service. Once an activity is specified as 'declared service' (deemed service) then the arguement that there is no service cannot stand. deepak

    Yes, once an activity is specified as declared service then argument that there is no service cannot stand. Further cheque return charges is not a fine or penalty for violation of any law and it is just a fines or penalty levied during the course of business and are taxable.
  • i am company given a contract to x for digging of canal for a total consideration of say 10lacs for which i am not supplying any thing i.e me material etc., is this falls under works contract or manpower supply contract p madhava

    Work contract is defined in the section 65B, which reads as follows: “(54) work contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such properly” There should be transfer of property in goods involved in execution of the contract which is leviable to tax as sale of goods. Thus, under the digging contract, if there is no transfer of property in goods involved then it will not fall under works contract. But if involved then it will be work contract service. This will not fall under man power supply as the total digging contract is given for Rs. 10 Lakhs and not manpower is supplied to do this job under the supervision of client.
  • Concept of naturally bundle service in hotel Hotel has a package i.e Room rent : 2800/day Dry clean : 100/day Health club : 200/day Food : 800/day Total : 3900/day Hotel is taxable @ 60% of value i.e effective rate is 7.2% Is hotel is liable to pay 7.2% on whole 3900/- or item wise as dry clean & health club at full rate deepak

    According to clause 3(a) of section 66F, ”if various element of such service are naturally bundled in the ordinary course of business, it shall be treated as provision of single service which gives such bundled essential character;” Since it is told in the query itself that it is naturally bundle service, then the person comes in a hotel for stay in rooms. Hence the room service is single service which gives the bundled service its essential character. Therefore service tax is leviable on 60% value on whole amount of Rs. 3900/- as “renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes” service.
  • I have a query regarding basic exemption limit in service tax. My client is a proprietor earning commission income of Rs.6.00 lakhs from ABC company. He has entered into partnership and is earning commission income of Rs.8.00 lakhs from same company ABC. My question is weather for calculating basic exemption limit of proprietorship concern Rs.10.00 lakhs, his share of income from partnership will be taken or not? alfa

    Partnership is separately eligible for threshold exemption limit of Rs.10 lakh and while calculating basic exemption limit of Rs. 10.00 lakhs for proprietorship, share of income from partnership will not be considered. Further according to notification 33/2012, in case of service provided from more than one premises, the aggregate value of all the premises should be considered for the purpose of availing the exemption of Rs. 10 Lakh.
  • One of the company is manufacture Ready mix concrete from march 2011. As excise duty on RMC was applicable from March 2011 itself. Company start production in finacial year 2011-2012 & raise invoice (Manufacture) of Rs. 2.3 Cr. in financial year 2011-2012. I suggest that excise duty should pay on Rs. 0.8 cr (2.3-1.5 cr.) @ 1% with no cenvat credit. But other view is that company is not liable to pay excise duty in financial year 2011-2012 as company got benefit of SSI upto 4 Cr. Pls clarify deepak

    A manufacturing unit is considered Small Scale Industry (SSI) in excise when “total value of clearance of excisable goods for home consumption does not exceed Rs. 4 Crores during previous financial year”. In such case “the unit is not required to pay excise duty till its clearance value reaches Rs. 1.50 Crores.” The above provisions make it clear that the identification of SSI is based on previous year’s turnover not on current year’s turnover. Further if previous financial year turnover is less than 4 Crores than the unit is eligible for exemption upto 1.5 Crores only, not 4 Crores. So if your turnover of 2010-11 is less than 4 Crores than you are eligible for exemption upto 1.5 Crores. You are correct that the Excise duty should be paid on 0.8 Crores.
  • Noe that the Negative list in Service Tax has become effective, are we to again reregister: we are regd as a SERVICE RECEIVER for transportation of goods by Road availing 75% abatement and paying serv. tax on bal. 25%; Kindly guide Sir Unnikrishna Menonj

    No, you are not required for re-registration or to amend your existing registration. Now the negative list has been effective and accordingly classification of services is not there. The form for service tax registration i.e. has also been amended and in service classification column of ST-1, the only one entry is shown for all the services as follows: “Service other than in the Negative List” So the above description of service will common for all assessees and there is no requirement of amend the service tax registration
  • Dear Experts, As per the notification no. 30/2012-Central Excise Tariff, we understand that we can procure the excisable goods from the domestic market without payment of Excise duty by using the Focus Market scheme duty credit scrip but, there is a confusion about the utilization of the said FMS for the Excise duty payment on finish goods. In other words, can we adjust our Excise duty liability on final product against the said FMS rather tan paying the said excise duty by cash or by cenvat credit & if the case is like this then what would be the mechanism to utilize the FMS as there is no change in the form ER-1 yet to taking the effect of this notification?. pls. provide your experts advise in this. Regards Sanjay Sharma Sanjay Sharma

    Accordingly, to Para 3.17.5(C) of FTP, stated as under:- “Duty Credit Script can also be utilized for payment of Excise Duty on domestic procurement of such items as permitted to be imported under respective scheme.” The objective of duty credit is only to provide benefit on procurement of input and this duty credit scrip can’t be use for payment of excise duty on finished goods. Further the notification no. 30/2012-CE also provides the procedure for that duty credit scrip which is as follows: • The said scrip is registered with the Customs authority at the port of registration (hereinafter referred as the said Customs authority); • The holder of the scrip, who may either be the person to whom the scrip was originally issued or a transferee-holder, presents the said scrip to the said Customs authority along with a letter or performa invoice from the supplier or manufacturer indicating details of its jurisdictional Central Excise Officer (hereinafter referred as the said Officer) and the description, quantity, value of the goods to be cleared and the duties leviable thereon, but for this exemption; • The said Customs authority, taking into account the debits already made and shall debit the duties leviable in these licences, but for these exemptions in or on the reverse of the said scrips and also mentions the necessary details thereon, updates its own records and sends written advice of these actions to the said Officer; • At the time of clearance, the holder of the scrip presents the said scrip debited by the said Customs authority to the said Officer along with an undertaking addressed to the said Officer that in case of any amount short debited in the said scrip he shall pay on demand an amount equal to the short debit, along with applicable interest; • Based on the said written advice and undertaking, the said Officer endorses the clearance particulars and validates, on the reverse of the said scrip, the details of the duties leviable, but for this exemption, which were debited by the said Customs authority, and keeps a record of such clearances; • The manufacturer retains a copy of the said scrips, debited by the said Customs authority and endorsed by the said Officer and duly attested by the holder of the scrip, in support of the clearance under this notification; and • that the said holder of the scrip, to whom the goods were cleared, shall be entitled to avail the drawback or CENVAT credit of the duties of excise leviable under the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), against the amount debited in the said scrip and validated at the time of clearance. So the above procedure should be followed and duty credit scrip will not be shown in ER-1.
  • S. No. Date of completion of service letter/Invoice for demanding advance money Date on which payment recd. Point of Taxation 1. 12 Oct-2012 10 Aug-2012 20 SEP-2012 ? Sir which date is considerd for POT. Thanks Deepak Gupta deepak

    According to rule 3 of Point of taxation rules, Point of taxation rules will be earlier of Date of invoice, Payment Received or Completion of provision of service Therefore point of taxation is Time of issue of invoice i.e. 10 Aug. 2012 (Here invoice means invoice/challans/bill under rule 4A).
  • Dear Sir, My company is working as 100 % EOU & exports software services hence not registered under the Service tax up to date but S.T.dept. recently made new changes with negative list. we have paid rent,Insurance charges, Internet services manpower services so is it compulsory to get registration with ST Dept & act as non exporter business. Or any other suitable way to deal with ST dept. Kindly suggest us. Thanks Durgesh S durgesh S

    According to section 69(1) “every person liable to pay service tax must mandatory make an application for registration to the designated Superintendent of Central Excise”. By notification no. 30/2012-ST, government notifies some service under reverse charge i.e. where service receiver is also liable to pay service tax (partially or wholly). For example in respect of services provided or agreed to be provided by individual advocate or a firm of advocates by way of legal services to a business entity, the 100% liability to pay service tax is on business entity (i.e. service recipient ) and in that case service receiver is required to service registration. So if your company is liable to pay service tax either as service recipient under reverse charge, required to service tax registration. The service of manpower supply is one of such service quoted in your query. Hence you have to get registered and pay service tax.
  • Sir, My query relates to Service tax liability on export of services. in case if payment is not received within 6 months OR the period as specified by RBI from the date of invoice then we have to pay service tax as per POT 2011. Please tell me now, as on date what is the time period limit according to current provisions of export of service rules or as per RBI ?. Ranbir Singh

    If payment is not received within the statutory time limit as allowed by RBI, the Point of taxation will be determined as per Rule 3 (i.e. earlier of Advance received, Invoice issued or Completion of provision of service). According to the RBI, current time limit for receipt of payment is 6 months.
  • Sir, i have a query related to service tax input credit on "Rent a Cab Service". We are providers of Consulting Engineer Service. we are taking taxi services on monthly basis for village inspections, for providing project mgnt. consultancy services etc. that is directly related to our output service then can we take cenvat credit on taxi hire services?. Ranbir Singh

    We have already answered in the earlier query you have asked that the input credit of service of hiring of motor is allowed to limited assesses. We once again explain the provision in this regard: According to Section 2(i), Input service excludes “(B) service provided by way of renting of motor vehicle, in so for as they relate to a motor vehicle which is not a capital goods” And according to section2 (a) Capital goods includes, “Motor Vehicle design to carry passenger including their chassis, registered in the name of provider of service, when used for providing output service of- (i) transportation of passenger; or (ii) renting of such motor vehicle; or (iii) imparting motor vehicle skills” It means input credit on taxi hire is allowed only to those which are provider of output service of transportation of passenger or renting of motor vehicle or imparting motor vehicle skills. And here is not important that this input service is directly related to your output service.
  • Respected Sir, please can u tell me that Annexure-19 has to be filled monthly or quarterly.Please guide me in this matter. mehul

    Annexure- 19 (statement regarding export of excisable goods without payment of duty) should be filled monthly not quarterly.
  • As earlier Development charges, to the extent they are paid to State Government or local bodies, was excluded from the taxable value levy. But after 01-07-2012 when the concept of service tax is changed then a builder who charged EDC/IDC from buyer although it is statuory liability of builder.Sir what is law on this point. pls clarify Thanks deepak

    Yes, the EDC/IDC to the extent they are paid to State Government or Local Bodies was specifically excluded from the levy of service tax (D.O.F. No.334/1/2010-TRU dated 26th February 2010). The EDC/IDC charges to the extent they are paid to State Government or Local Bodies is only a statutory liability of builder. According to section 65B service means – “Any activity carried out by a person for another for consideration and includes declare services.” Further there should be “direct” and “immediate” link between activity and consideration. The EDC/IDC to the extent the are paid to state government/local Bodies, is not a “consideration for service” and only the statutory liability and there also no direct and immediate link between activity and consideration (i.e. EDC/IDC). The intention of government for specifically exclude this EDC/IDC was only that this charge is not the consideration for service and only a statutory liability of builder only. So there is still no liability of service tax on EDC/IDC charges to the extent paid to government.
  • Sir,As per partially reverse charge mechanism w.e.f.01.07.2012, we are taking sevice Tax credit of Rs. 4.944 as mention in Taxi hire bill.i.e. (Basic Value 100 Service tax after abatement@4.944% Rs.4.944, Bill Value Rs.104.94/-. can we take again service tax input credit after payment of ST as per PRC. Ranbir Singh

    Firstly credit of input service of hiring of taxi is allowed to some limited assessees and the provision in this regard is as follows According to Section 2(i), Input service excludes “(B) service provided by way of renting of motor vehicle, in so for as they relate to a motor vehicle which is not a capital goods” And according to section2 (a) Capital goods includes, “Motor Vehicle design to carry passenger including their chassis, registered in the name of provider of service, when used for providing output service of- (i) transportation of passenger; or (ii) renting of such motor vehicle; or (iii) imparting motor vehicle skills” It means input credit on taxi hire is allowed only to those which is provider of output service of transportation of passenger or renting of motor vehicle or imparting motor vehicle skills. Secondly there is no any Rule or Provision in Service tax and Excise which allowed Cenvat credit at twice on same bill.
  • while calculating gross value on taxi hire service, ABATEMENT OF 40% can be availed or not? weather ST on office premises lies with service recipient? PHANI KUMAR

    1. Entry No.9 of Notification 26/2012-ST dated 20.6.2012, provides for abatement for “Renting of any motor vehicle designed to carry passengers Service”. According to this abatement of 60% of Gross amount charged for determination of value of taxable service. Thus service tax is payable on 40% of the gross amount charged. The abatement is allowed subject to the following condition: “CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.” 2. Rent of office premises (renting of immovable) is not covered under reverse charge mechanism so Service on office premises rent should be paid only by the service provider.
  • Client is processing raw milk into pasteurized one, packing milk in pouches and refrigerating the same before despatch on behlaf of Mother Dairy. Whether such activity is Negative Service of Manufacture/Production ? PRAVIN SARASWAT

    The clause (f) of section 66D(Negative list) reads as follows:- “any process amounting to manufacture or production of goods” Hence if processing amount to manufacture then no service tax is payable. The expression “process amounting to manufacture or production of goods” is defined in the section 65B(40) as follows: “a process on which duties of excise are leviable under section 3 of Central Excise Act, 1994 or any process amount to manufacture of alcoholic liquors for human consumption, opium, Indian hemp and other narcotics drugs and narcotics on which duties of excise are leviable under the state Act for the time being in force.” Chapter 4 of Central Excise Act Tariff specifies Dairy products and includes milk and Note No. 6 of Chapter 4 provides: “In relation to products of this chapter, labeling or relabeling of containers or repacking from bulk pack to retail packs or the adoption of any other treatment to render the product marketable to consumers, shall amount to manufacture” Analysis of above provisions makes it clear that the process you are stated in the query i.e. pasteurization, packing, refrigerating are amounting to manufacture. Hence it is covered under the clause (f) of the negative list and no service tax is payable.
  • Dear sir, In case of transport of goods by road, ST payable only if such services provided by courier or GTA Query: Whether Individual truck owners/operators coming under service tax net?? Regards Ilayaraja

    According to section 66D following service is exempt “(p) Services by way of transportation of goods- (i) by road except the services of – (A) a goods transport agency; or (B) a courier agency” And according to section 65B: “(26) goods transport agency means any person who provides services in relation to transportation of goods by road and issues consignment note, by whatever name called.” So service tax is applicable when service is provided by a person covered under the above definition of GTA and not applicable to individual truck owners.
  • sir, we are manufecturing mixture of micronutrients and we are registred with central excise in chepter 31.Now We want to manufecture agriculture grade zinc sulphate which is exempted under chepter 2833 29. we have to add chepter 28 in our registration? Secondally we want to purchase sulphuric acid against CT-2 (duty free)for manufecturing of agriculture grade zinc sulphate now question is that can we purchase sulphuric acid against ct-2 as we will manufecture exempted agriculture grade zinc sulphate. REENA

    1. According to registration procedure, “The same application form is to be used for intimating any change in the information furnished originally at the time of applying for registration certificate. Manufacture of new and additional products need not to be intimated”. So you are not required to intimate for additional/new product manufacture, however it is appropriate to intimate regarding this through a letter for reference to department. 2. Procurement of Sulphuric acid against CT-2 (duty free) for manufacturing of agriculture grade zinc sulphate:- The entry for this product is as follows in the Notification 12/2012-CE: “Sl No. 86 -- Sulphuric acid, oleum, oxygen and ammonia used in the manufacture of fertilizers” ---Condition No. 2 should be followed. The Condition No. 2 is as follows: “Where such use is elsewhere than in the factory of production, the exemption shall be allowed if the procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, is followed” So if the above condition is fulfilled you can procure the goods against CT-2.
  • sir I want to know whether printing of school books alongwith cost of paper will come under the category of job work or manufacture, if editorial expenses and royalty to writers of such books are paid by the purchaser of such books. CA Neeraj Agarwal

    Firstly your question is not clear that you want to know from the point of view of service tax or otherwise. We presume that the above query relates to new service tax regime of Negative list applicable from July 1, 2012. The service tax is not applicable if any process amount to manufacture or production of goods. The relevant entry in Section 66D containing Negative list reads as follows:- “(f) any process amounting to manufacture or production of goods.” If the process undertaken by you amounts to manufacture or production then no service tax is applicable on the same. Moreover, the Megha exemption notification also provides a clause for the printing industry, which is reproduced below:- “30. Carrying out an intermediate production process as job work in relation to:– (a) agriculture, printing or textile processing;” Thus, if the process undertaken by you is intermediate process then no service tax is applicable on the same. Since the facts of the case is known to you only, please see your reply in guidance of above.
  • SIR, FIRSTLY THANKS FOR UPDATING US WHICH HELP A LOT. MY QUERY - W.E.F.01.07.12 BOTH SERVICE PROVIDER & RECEIVER HAS TO PAY SERVICE TAX. THEN HOW SERVICE PROVIDE SHALL PREPARE INVOICE BY ADDING 100 % OF SERVICE TAX OR ONLY HIS LIABILITY OF SERVICE TAX, ADVICE ANAL

    Under the reverse charge mechanism, service provider and service receiver both are liable the service tax. The service provider is liable only to extent of liability of service provider of his liability under service tax. Hence, he will charge the service tax only to the extent of his liability in his bill.
  • R/Sir,as per latest notifiacation, can we avail Input tax credit ag. ST liability in respect of residential and commercial construction services on which we have taken exemption benefit 75%? (2)whether covered car parking and power backup charges is taxable under above said services? CA Hawan Kumar Pandey

    1. Input Tax Credit As per the Serial No. 12 of Notification 26/2012 ST issued by the Central Board of Excise and Customs, the following abatement and their respective conditions are there for availing benefit of 75% abatement in case of “Construction of a complex, building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly except where entire consideration is received after issuance of completion certificate by the competent authority”: Conditions: i) CENVAT credit on inputs used for providing the taxable service has not been taken under the provisions of the CENVAT Credit Rules, 2004. (ii)The value of land is included in the amount charged from the service receiver. It is clearly evident from the 12th point where it is said that cenvat credit is not allowed on the inputs used in construction of residential and commercial complexes when abatement of 75% has been already availed. But it does not say anything about the Cenvat credit of input services and the capital goods used in the same. So therefore it can be inferred from the above that Cenvat credit on input services and capital goods can be availed against the service tax liability. 2. Parking facility: The negative list exempts the following from service tax liability: “Services by way of vehicle parking to general public excluding leasing of space to an entity for providing such parking facility” Item no. 24 of notification 25/2012, dated 20.6.2012 provides exemption to service of parking of motor vehicles provided to general public. The term General public is defined in Serial No. (q) of para 2 of notification 25/2012-ST dated 20.6.2012 as follows: “‘general public’ means the body of people at large sufficiently defined by some common quality of public or impersonal nature” In the residential society, normally the parking area is allotted to individual members of the society and monthly charges are recovered from them. Such parking facility is not open to general public, but is limited to the members of the society. Similarly, in commercial buildings also, parking area is allotted to the members of the building. Such parking is not open to general public and hence exemption from payment of service tax will not be available to the society collecting the parking charges. Further, the amount of parking charges will be not be included in the amount of construction services. Therefore the parking charges will not be eligible for the abatement and service tax is chargeable @ 12.36%. 3. Power Back up Charges: The Guidance Note on Service Tax clarifies the point on distribution of electricity: Electricity transmission or distribution utility is exempt from service tax when the same is provided by: --- The Central Electricity Authority --- A State Electricity Board ---The Central Transmission Utility (CTU) ---A State Transmission Utility (STU) notified under the Electricity Act, 2003 (36 of 2003) ---A distribution or transmission licensee licensed under the said Act ---Any other entity entrusted with such function by the Central or State Government If charges are collected by a developer or a housing society for distribution of electricity within residential complexes then such services are not covered under this. The developer or the housing society would be covered under this entry only if it is entrusted with such function by the Central or a State government or if it is, for such distribution, a distribution licensee licensed under the Electricity Act, 2003. Therefore, the power back up charges is taxable to service tax @ 12.36%. The same will also not be included in the value of construction services to avail the abatement.
  • Sir, If Ltd.company have its owned transporation vehicle and freight is recovered from custmer(shown in Invoice), whether we have to pay service tax on such freight. MAHENDRA MODI

    The clause (p) of section 66D (negative list) reads as follows:- “Services by way of transportation of goods- (i) By road except the services of- (a) a goods transport agency; or (b) a courier agency;” Hence service tax is payable on road transportation if the service is provided by GTA or courier agency. All other services of road transportation are not chargeable to service tax. It means services provided by goods transport agency are taxable and according to section 65B(26), goods transport agency means: “any person who provides services in relation to transport of goods by road and issue consignment note, by whatever name called” The service tax is not applicable on Ltd. company have its owned vehicle as it is not covered under the definition of “Goods transport agency” as well as it does not issues consignment notes.
  • Dear Sir, Could you pls clarify on the below mention query: Can a job worker clear/despatch the finished goods on behalf of the Principal Manufacturer? If yes what will be the procedure. If you could pls throw some light on the above mentioned query. kavita thanvi

    Kindly refer Rule 4(6) of Cenvat Credit Rules, 2004. You can dispatch the goods under this Rule. The supplier of goods on job work basis has to apply to Deputy/ Assistant Commissioner for the permission for clearing goods from job work basis. The procedure told by the authority has to be followed.
  • Whether ST on RENT for office premises, generator is to be paid by service provider/ receiver PHANI KUMAR

    Use of Tangible Asset service (Rent of Office Generator) is not covered under reverse charge mechanism. So Service tax on rent of Generator is to be paid by service provider.
  • Whether existing reg is to be amended as per changed ST notification. We are reg under GTA (service recepient) and Input serv distr (recepient), now we have to pay for various servises received via. Taxi , legal charges etc. PHANI KUMAR

    No, you are not required to amend your existing registration. Now the negative list has been effective and accordingly classification of services is not there. The form for service tax registration i.e. ST-1 has also been amended and in service classification column of ST-1, the only one entry is shown for all the services as follows: “Service other than in the Negative List” So the above description of service will common for all assessees and there is no requirement of amend the service tax registration
  • Sir, Pls inform us whethere Reimbursable Expenses[ Maximum of Rs 8000 ] to Customs House Agent is covered under service tax . Pls give us Recent Notification to my mail id K Elango

    According to Rule 5(2) of Valuation of Taxable services, Reimbursement of expenditure on behalf of service receiver is not includible in value of service provided. So Reimbursement of expenditure by custom house agent is not covered under service tax. In Alvares & Thomas v. CCE (2009) 20 STT 466 (Bang.-CESTAT), it was held that payment made by CHA on behalf of client such as Statutory levies and various reimbursable expenditures are not to be included for computing service tax.
  • Sir ,Pvt ltd co paying freight to Individual truck owners – whether co liable to pay ST… as many CESTAT held that services red from them not liable to ST… reply asap Ilayaraja

    No only service tax is to be paid only when it is paid to GTA, moreover under the new service tax regime the same may be taxable. However there will no liability on the assessee, since service is not provided by GTA but by Individual truck owners.
  • Where we are paying service tax to the vendor & claiming the same from the client, the clients are not ready to pay the service tax on the amount we pay to the vendor . In such cases what are the remedies available For. E.g Rs. 100 forklift Service Tax Rs. 12.36 Total Amount Rs. 112.36 Paid to vendor Billed to the client Rs. 112.36 Service charges Rs.100 Total Amount Rs. 212.36 Service tax Rs. 26.24 Billed Amount Rs. 238.60 In the above case client is not ready to pay service tax on the amount we pay to the vendor.He is ready to pay Rs. 100 of forklift Rs. 100 service charges & Rs. 12.36 service tax on on service charge , that means he is ready to pay only Rs. 212.36 to us. Please revert what to so in such cases. Mukesh Jha

    First of all, your question is not clear, which service you have received and provided? Secondly, whether you are acting as agent or as an principal to principal basis? According to section 67 (2), “Where the gross amount charged by a service provider, is inclusive of service tax payable, the value of such taxable service shall be calculated by back calculation so that with addition of service tax payable, the total amount is equal to the gross amount charged”. So if your client is ready to pay only Rs. 212.36, you can charge this amount (Rs. 212.36) as inclusive of service tax and in that case service tax will as follows: (212.36/112.36)*12.36 = Rs. 23.36
  • We are availing the following services 1.Taxi (not reg under ST act as T.O is less than 10 lacs) 2.Man poweer service ( not reg as t.o is less than 10 lacs) 3. Legal consultancy (not claiming s.T., SERVICE ENDED ON 30.06.12 but bill given paid on 02.07.12) PHANI KUMAR

    As per the new reverse charge mechanism, service tax is to be paid by service recipient even if the service provider is availing the exemption based turnover. The liability of service provider and service recipient are different and therefore the service recipient has to pay the service tax on reverse charge mechanism from the first bill raised by service provider itself.
  • is service tax payable on photocopy and digital printing done by photocopiers. M.Malik

    Yes service tax is payable since the same is not specified in the negative list.
  • dear sir, pl. advice - CUSTOMS -EXEMPTION FROM SAD -21/2012 DT.17.3.2012===32/2012 DT. 8.5.2012Basis of this notification, if we declare Maharashtra as the State where the goods are immediately taken after importation for distribution on stock transfer basis, can we avail S.A.D. benefit? SANJIV JOSHI

    For availing the exemption from SAD as per Notification no.21/2012, you need to declare state where the goods are to be SOLD after being imported, and not to declare state where goods are to be TAKEN after importation. Thus for availing exemption following conditions are to be fulfilled simultaneously (i) the State of destination where such goods are intended to be sold for the first time after importation on payment of value added tax; and (ii) his value added tax registration number in that State.
  • we are the manufacturers of sugars. we have some dumpers tippers etc which is are capital goods by virtue of the notification. we would like to take cenvat credit on the insurance premium paid on such vehicles. can we take cenvat credit of the same p madhava

    No. CENVAT credit of the same can’t be taken, since motor vehicle insurance is specifically excluded.
  • I have amended our RC incorporating another name of Authorised signatory but the RC not yet issued on line after so many weeks; what shud I do now ? Pls advise Unnikrishna Menon

    First you should check online that whether the same has been filed properly or not, if filed properly that, than you should contact your Superintendent / Assistant commissioner for getting solution of the problem
  • Now that C Ex. Tariff Noti. No. 18/2012 has been rescinder which Noti. No. is to be given in the ER-1; please advise me. unnikrishna Menon

    This notification prescribed the rate of duty at 12%. But after enactment of Finance Bill, tariff rate itself is 12%.
  • Dear Pradeep Ji, pls update the Service Tax Liabilities on In Room Dinning Service of Hotel Industry and also inform the service tax rate for the same. CA Ravikant Tibrewal

    Earlier when the service tax on Air conditioned Restaurant with liquor was imposed, it was clarified by CBEC vide circular number 139/8/2011-TRU dated 10th May 2011clarified that the food and beverages taken in room is not taxable. Since the service tax under negative list contains the same position and hence the in room dining will be exempt. But the department may say that the circular was applicable for old rules, hence the service tax under negative list is payable on in room dining.
  • Dear Sir, Whether as per place of provision Rules 2012, wherein sample has been provided for doing testing situated on non taxable territory and finally report is sent to taxable territory, under this situation whether service tax is payable as a receipient of service? Rahul bhatt

    The shall fall under Rule – 4 Place of Provision of Performance based service i.e Service provided in respect of goods that are required to be made physically available by the recipient of service to the provider of the service. Thus the place of provision would be in Non – taxable territory and no service tax shall be payable.
  • Dear Sir, Facts: We are having registered office at A State, Corporate office at B State and Site is situated in State C. Now we had received invoice(copmosit) with service tax @4.944%, for the work done at site(State C) office in the address of Registered office(State A).The invoice value is more then 1 Cr. and total contract value is 3 Cr. According to me, It is also liable to WCT-TDS provision under Sales tax law, But confused about the applicability of State Act, Can you guide which state vat act will be applicable State-A or State-C? Thanks in Advance Arpit Patel

    We are deal only in Excise,Customs,DGFT and Service tax laws. Hence we are unable to answer your query.
  • Respected Sir, can debit note can be considered as valid for taking of the excisable cenvat credit.? mehul.m.ashar

    No debit note shall not be considered as valid document for taking CENVAT credit, since it is not mentioned in Rule – 9 of CCR. However in many judicial rulings it has been held that debit note is a valid document for taking CENVAT credit provided it contains details as mentioned in Rule – 9 of CCR’04. Thus you make credit, but department shall object it.
  • Respected Sir, Your advices and guidance are very much useful to the industry. It is amazing the response time for any type of query with clear explanations in line with the current law and rule. Now, can you please confirm that is there any special notification is issued by customs/excise relating in the import of agriculture power tiller. What is the present Import duty structure for Agricultural Power Tiller please vedachallam

    Agriculture power tiller is classifiable under Chapter heading no.87.01 as per Customs circular no. 45/2001 dated 07.08.2001 and it is leviable to BCD at 10% and CVD at 4%, there is no Special additional duty leviable on the same
  • My client has removed finished product & empty packages and given to packers/repackers (without ED) and then got back packaged goods and finally paid excise upon removal (on sale invoice). Is he liable to take excise permission while goods are sent to packers (without ED) ? Debasish Das

    This can be done under job work procedure. There are many alternatives for doing job work under Central Excise like Notification 214/86, Rule 4(5)(a) etc. You can opt for any one of them seeing the terms and condiitons of each one of them.
  • Can value base exemption is applicable in case of service wherein service provider and receiver are made liable for payment of service tax rahul bhatt

    The liability of the service provider and service recipient are different and independent of each other. Thus in case the service provider is availing exemption owing to turnover being less than Rs 10 lakhs, he shall not be obliged to pay any tax. However, the service recipient shall have to pay service tax which he is obliged to pay under the partial reverse charge mechanism.
  • Dear Sir, I would like to know whether VAT and Service tax is applicable to Service Charge forming part of Banquet bill. If yes then would like to know reason as Service Charge collected from guest is not revenue of the Hotel. res

    If food is served with Banquet/Mandap, than the same is Composite transaction and both VAT and service tax is chargeable on the same.Abatement of 30% is available, thus taxable portion is 70% and effective rate of tax is 8.65%. All credit of Capital goods,Specified Inputs (Other than chapter 1 to 22 i.e. food and beverages) and input service shall be available
  • In case of rejection of exported material by overseas customers, what formalities are required to be completed? Amit Jain

    If the AC/DC of customs is satisfied about identity of goods then goods can be reimported without payment of duty if these are to be exported. (REF: Notification 158/95-cus). If these are not to be exported then the benefits availed at the time of export to be paid back but the satisfaction of AC/DC about identity of good is also mandatory here (REF: 94/96-Cus). The third situation when the AC/DC is not satisfied about the identity of goods then full cusotm duty is to be paid. But at the time of re-export the drawback can be claimed.
  • We sent some items to sri lanka under CT-1. Items are rejected by customer. material reached back at our plant. what is required to be done under excise laws? Documentation, intimation or any other formalities. Amit Jain

    The procedure for re-import of goods can be done in the following situations 1. The goods shall be re – exported after repair, reconditioning, remanufacturing than applicability of notification no.158/95 shall be there. 2. The goods shall not be re – exported than applicability of notification no.94/96 shall be there. On re-import of indigenously manufactured goods under duty Drawback/rebate claims, export under bond or under other claim of export incentives, essentially the duties equivalent to the export incentives etc. availed have to be paid, on re-importation. Thus, if the goods were exported on payment of Central Excise duty, without claiming any rebate, and without claiming any export incentives such as Drawback or benefits of the duty exemption schemes, EPCG/DEPB schemes, and where the indigenously manufactured goods are being returned then no Customs duties are leviable. The benefit is available if the Assistant/Deputy Commissioner of Customs is satisfied that the goods are the same which were exported earlier and certain other conditions as laid down in the said notification are fulfilled. After importing the same, the procedure under excise is as follows 1. The assessee shall give intimation of the re-entry of each consignment in Form D-3 within twenty-four hours of such re-entry 2. Such goods are to be stored for separately at least for 48 hours from the time intimation is furnished to Range Office or shorter period if verification is done by the Superintendent of Central Excise in the manner mentioned subsequently ; and 3. The assessee shall record details of such goods in the daily stock account and taken in the stock in the factory
  • Sir, our company gives training in beautician course and provide certificate but not affiliated to any institute,whether we are required to pay service tax? monika

    According to Section 66B “Service tax will be leviable on all services provided in the taxable territory by a person to another for a consideration other than the services specified in the negative list”. According to Section 66D(l) following service is in Negative List: “Services by way of- (i) Pre-school education and education up to higher secondary school or equivalent; (ii) Education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force; (iii) Education as a part of an approved vocational education course” But service as your company provides is not covered under the above specify services and also neither covered under any other entry in negative list nor covered under Mega exemption. So service tax will be leviable on service as provided by your company
  • Dear sir pl guide us that erection comm and install of transmission line towers falls under negative list or taxable service Manish Thakkar

    Section 66D specifies negative list of services and sub section (k) of Section 66D Covers following service. “Transmission or distribution of electricity by an electricity transmission or distribution utility” But your service is installation and commissioning of transmission line towers, not transmission or distribution of electricity and you are also not an electricity transmission or distribution utility. So service provided by way of erection, commissioning and install of transmission line towers is a taxable service.
  • Dear Sir, We Would like to inform you that one of the our client is dealing in the export business. he has exporting some of kerosine stove items . We are consulting them to getting the CT-1 Bond (Export Without Payament of Duty) , we getting CT 1 Bond Certificate from the Assistant Commissioner of Income tax . But then After , In the Client has Fill the Form ARE 2 from the Port in which the Goods are Export from the India. Question is that : When we submitting the proof of Export to the department then department has refuced to accept the ARE 2 as proof of Export ? ( Department has Accept only ARE 1 ) Sir give response what to do in above mention problems ? Sir , Please give reply as early as possible so we can consulting the ours Client ? Thankig You Dinesh Maru

    The query is not clear, however as per our understanding of the query, ARE – 1 has to be given, since export is against CT – 1. ARE – 2 is to be given only for export against CT - 2. Moreover following is to be submitted as POE: 1. Duly attested photocopy of shipping bill (Export Promotion Copy) bearing the particulars and date of clearance document under which the goods are cleared from the factory of production, having endorsement on its reverse by the Customs of the particulars of mate's receipt no. (wherever applicable), name of the ship/ flight no., of the aircraft, vehicle no. - by which the goods were exported out, date of export, and EGM Number/ Airway Bill Number (wherever applicable); 2. Duly Custom's attested copy of Bill of lading; and 3. Foreign Exchange Remittance Certificates.
  • Sir, Can we avail cenvat credit on the 4% spl.addl duty (SAD) paid on our imports who are into the manufacturers of engines and agri implements please. Our imports on agri-implements will not come under central excise (CVD are not paid) vedachallam

    CENVAT credit of SAD can be taken only, if the parts are used by your firm in manufacturing excisable goods only. Thus if you are importing the part for manufacture of excisable goods, credit of SAD can be taken.
  • We are engaged in manufacture, supply of Transmission Line towers. We also provide service of Erection, Commissioning & Installation of transmission line towers for setting up of Transmission Line for various Govt and private companies. We have a query that whether this service falls under negative list of exempted service or taxable service as Govt companies asks us not to charge Service Tax considering that such service is essential for transmission and distribution of electricity and very well fall under the negative list viz. transmission and distribution of electricity. Hence no service tax is leviable. Awaiting for your valued reply. MANISH THAKKAR

    Yes the same would be liable to service tax as the same doesn’t falls under Negative list of service tax. The exemption has been granted to Transmission or distribution of electricity by an electricity transmission or distribution utility and not to any service provided for the same. Moreover the same shall be regarded as Works contract service if it involves supply of goods which are liable to VAT and tax shall have to be paid as per reverse charge mechanism.
  • Can 100% EOU cleared export goods on payment of duty if duty balance available last three years. Because assessee fild refund current year of accumulated credit which is hit by Commr.(A) on time bar. Pls.give advice to way for in cash of accumulated credit of eou. UNMESH V. KASHIKAR

    The accumulated credit can be utilized for payment of duty on DTA clearances or can be claimed as Refund. Moreover, as per Board's circular no. 799/32/2004-CX, DT. 23/09/2004 reproduced as follows: It has been observed that EOUs are entitled to avail CENVAT Credit Scheme w.e.f. 06.09.2004 vide notification No. 18/2004-CE (N.T.) dated 6.9.2004. Thus, the EOUs who receive duty paid goods can avail input credit for the duty paid on such goods and utilize the credit for payment of duty on DTA clearances and if for some reasons, the credit cannot be utilized, the same can be claimed as refund under rule 5 of CENVAT Credit Rules. Thus accumulated balance can be encashed by DTA clearance by EOU.
  • Respected Sir, one of my clients had sold the machinery in the previous month,alongwith the sale of machinery,the total duty of sale has been Rs.440000.00 & I have the total credit of excise duty of Rs.100000.00,then how to show in the ER-1,in the cenvat page as if I show then the cenvat balance can become negative,so please guide me as soon as possible. mehul

    Since you have only Rs.100,000 balance in your CENVAT a/c, remaining duty payment has to be done through PLA a/c only.
  • Honourable President of India has Given its Assent to Finance Bill 2012 or Budget 2012-13 on 28.05.2012. FINANCE ACT, 2012 [Act No. 23 of 2012] An Act to give effect to the financial proposals of the Central Government for the financial year 2012-2013 In view of this and notification Service Tax 12/2012 dt 17March2012(S.No.29(c)), hope, any brokerage released from 28th May2012 onward by mutual fund to its agents will be without deduction of service Tax. Please give your opinion. RAJENDRA KUMAR PHOPHALIA

    Though the president has given the assent to Finance Bill 2012 on 28.05.2012, however the date of amendments relating to Indirect taxes has not been notified yet by the government. We will update the same on our website when the same comes into force.
  • sir, our company is engaged in construction of residential and commercial complexes. sir i just want to know how i should calculate and pay service tax according to the new point of taxation rules suchit shah

    As per Point of taxation rules, 2011 service tax is to be paid on raising of Invoice or on happening of event specified in the agreement. Thus if in the agreement it is mentioned that 30% is to be paid on completion of first slab, than it will be regarded as a event and as per POT rules invoice shall have to be issued within 30 days of that event with service tax amount. Moreover service tax will have to be paid on the amount of amount to be received as per the agreement. Moreover, the construction service is regarded as continuous service under point of taxation.
  • Whether INPUT TAX (BED&C) of Manufacturing can be claimed /adjusted against Output Tax ( Service Tax) on Freight paid in the case of SSI UNIT availing exemption of 1.5 Crore ,which does not claim Cenvat credit of Input Excise Duty against Output Excise Duty payment ? CA RAKESH PRASAD

    As per notification no. 08/2003, whenever the manufacture is availing SSI exemption he cannot avail credit on Input on raw material. Thus you can't claim Input duty credit for payment of Outward GTA. Furthermore, the GTA service is specifically excluded from the definition of “output service” under Rule 2(p) of Cenvat Credit Rules, 2004 w.e.f. 1.3.2008. Hence, the credit cannot be taking of GTA service and it has to be paid in cash only.
  • Dear sir,Our company which is 100% EOU is engaged in the business of manufacturing of medical Molded components . Now we are in the process of doing some DTA sales. Pls let me know what is excise duty we need to charge to the items apart from the VAT. Also let me know any other duty needs to be charged in this regard Thanks Madhuraj

    You have to obtain the permission from development commissioner for DTA sale. The clearance from 100% EOU is chageable to aggregate of custom duty if cleared in India. A part of Basic Custom duty is exempted if it it sold within the permissilble limit with the permission of development officer. If we sale above the permissible limit then full custom duty is applicable. Also, if there is no imported input is used in manufacture of your final product then excise duty will be chargeable on the same. If the final product is totally exempted from excise duty then also certain excise duty is charged on the same.
  • Sir,Can a 100 % EOU export goods on payment of duty and claim rebate? please guide with authority. UNMESH KASHIKAR

    No, a 100% EOU cannot export goods by paying duty and later on claiming rebate. They are required to export under bond without payment of duty under Rule 19 of the Central Excise Rules, 2002. They can claim refund of unutilized credit under Rule 5 of Cenvat Credit Rules, 2004.
  • Sir,We are manufacturer, since service has been rendered before 31.03.12 and bill has also been raised before 31.3.12, only the transporter bill i.e post of delivery (LR)and payment received after 1.4.2012,and In the customer Invoice charge service tax 10.3%. kindly advice the effective rate of tax will be 10.30%? neeraj srivastava

    The query is not clear. We understood the query as under:- You are manufacturer and getting services of GTA. LR raised as well as goods delivered before 31.3.2012. But payment made after 1.4.2012. What will be rate of service tax? If this query then the answer is:- The service tax on GTA is to be paid by you i.e. service recipient. The POT says that the service tax is to be paid in such cases (where recipient is liable) on receipt basis. If the payment is made after 1.4.2012 then service tax will be payable at new rates. Even the CBEC circular 158/9/2012 dated May 8, 2012 has also clarified the same.
  • Sir, We are selling space or time slots for advertisments thru internet (Portal), as we come under Negeative List of Service tax . I want to know from when we can stop collecting ST, from 01.04.12 or from the date of finance bill passed. Can you mentione the finance bill passed date. Regards, Balaji P

    The Negative list will be effective after passing of finance Bill. It has three steps:- 1. Pass by loksabha, 2. pass by Rajyasabha; and 3. president assent. First two steps are completed and third has to take place. Hence the Finance bill is not enacted till today i.e. on 21.5.2012.
  • Dear Sir, Supplier has dispatch the material with Original and Duplicate for Transporter copy of Excise invoice but, in transit the transporter missed both the documents i.e . Original Invoice and Duplicate for Transporter copy of the Excise invoice, pls. tell us what to do to avail the Cenvat Credit of the same with supporting rules, case law etc. in this situation. Regards Sanjay Sharma Sanjay Sharma

    Normally, the credit is allowed on "Original for Buyer" or "Duplicate for Transporter" copy of invoice. When the basic fundamentals of Cenvat credit scheme is fulfilled like receipt of material, use of inputs in manufacture of final product and clearance of final product on payment of duty then there are certain case laws which says that the credit will be allowed on xerox copy or extra copy of invoice. A few of them are as under:- 1. Commissioner of Central Excise, Coimbatore v/s M/s Bilt Industrial Packaging Co. Ltd [2009-TIOL-66-CESTAT-MAD 2.Hero Cycles Ltd v/s Commissioner of Central Excise, Chandigarh [2002 (149) E.L.T. 648 (Tri. - Del.)] 3.- J. V. Strips Ltd v/s Commissioner of Central Excise, Delhi [2004 (175) E.L.T. 589 (Tri. - Del.)] 4.Heea Steels Ltd v/s Commissioner of Central Excise, Raipur [2005 (191) E.L.T. 1102 (Tri. - Del.)]
  • Sir, we are the dealers and authorised service providers of cars. Can we take input credit of service tax paid on house keeping and security service on a common invoice for both show room and workshop. Alternatively should we take separate invoices for show room and workshop. Thanking You. with regards. Srinivas. M.V.S.Srinivas

    The better option is to have a separate billing. If the common inovice for showroom and workshop comes then the sale in showroom will be termed as "trading activity". This is defined as exempted service. When you take the credit on common input service and use it for taxaable and exempted service then three options are available to you. First is to go separate inventory which is impossible in your case. Second option is proportionate reversal, which is best option for you but the formula for calculating the same is very difficult. The third and last alternative is to reversal @ 6% on exempted service. This will be more than the credit taken by you. Hence this is also not feasible. Hence the best alternative is to go for separate billing.
  • Dear Sir, We are supplying the automobiles parts to an automobiles co. we had supplied some parts during the time of Jan- 2012 to March-2012, now automobile company has increased & amended the purchase order retrospectively the price of our parts supplied to them from our co. Now, we have to raise the supplementary invoice due to the rate revision for duty difference but, the rate of excise duty has been change from 10% to 12% from 17.03.2012., So if today, I want to raise the Excise invoice what should be the rate of Excise duty i.e 10 or 12%. Pls. give your opinion on the issue with supporting rules, regulation, case law etc. Regards, Sanjay Sharma Sanjay Sharma

    The rate of duty is payable on the date of clearnace of goods from the factory. Hence the duty is payable @10% in instant case. However, the interest will be payable on the same as per Apex Court decision in case of SKF bearings Limited.
  • Query The Assessee is a News Paper publishing Company and prints and sale its own newspaper. It has spare printing capacity and at times does printing of News Papers as Job work (above Rs. 10 Lacs) for other small newspaper vendors / Other Publishers. 1. Whether the assessee is liable to charge Service Tax on this Job work? 2. Whether considering the notification No-8/2005, it would be liable to charge Service Tax? 3. Whether this job work of printing can get Service Tax exemption considering the Notification no-14/2004? Please advice. Sanjay Mittal

    No service tax is required to be collected for jobwork done of printing as the Notification No. 14/2004-ST dated 10.09.2004 clearly exempts service provided in relation to printing done for another person as Business Auxiliary Service.
  • After 01.04.2008 on which situation service tax credit on outward fright is allowed UNMESH V. KASHIKAR

    As per clarification given in Board Circular no. 97/8/2007 dated 23-8-2008, the Credit of Service Tax on Outward freight will be allowed if the following 3 conditions are fulfilled: 1. The sale takes place at the buyer’s door or the property in the goods remains with the seller till the goods reaches buyer in an acceptable condition; 2. The risk of damage to goods during the transit is borne by the seller/manufacturer; and 3. The freight charges are integral part of the price of the goods.
  • Since service has been rendered & estimate has been given before 31.03.12 but final bill has not been raised till 22nd April 2012. At which service tax rate the invoice should be raised? Nisha

    This question relates to point of taxation when there is change in rate of duty. It has two replies depending upon the category of service provided by you:- a. If one is falling under six categories on which service tax was payable on receipt basis then the service tax is payable on receipt of amount. If the amount is received in April then the service tax @ 12.36% otherwise the service tax is payable @ 10.3%. b. However, if the person is paying service tax under normal point of taxation then the service tax is payable under two situations viz. when the service is provided before change in rate of duty and secondly, when the service is not provided before change in rate of duty. Since your query says that the service is provided then the invoice or payment received before the date of change in rate then the service tax is payable on old rate. But you are telling that the invoice is raised afterwards and there is no mention of payment in query. In such situation if the payment is received before 31.3.2012 then the service tax is payable @ 10.3% (old rate). But if the payment is also received after the date of change in rate of duty i.e. 31.3.2012 then the service tax is payable on higher rate i.e.12.36%.
  • Respected Sir, Can proceedings of sending show cause notice for levy of service tax, interest and penality be initiated on Legal Rep's after the death of Proprietor. Your expert advice and help shall be highly appreciated. Jasbir Singh

    There is no provision in the Central Excise law or the rules framed there under for such an action. No action can be taken against the Legal representative after the death of the Proprietor.
  • I manufacture gold jewellery on gold issued from jeweller(Exporter). My anual labourrecieved is 15 lac.My personel stock is 20 lac&annual sale is 9 lac.Am I liable to servicetax or exciseduty Parveen kumar bhola

    The manufacture of Gold is on jobwork basis and for this the supplier is required to obtain registration. The excise duty liability is on the supplier of goods only. As you are only doing jobwork then it will not be liable to service tax under BAS service, as the process undertaken by you amounts to manufacture. This is the reason excise duty is being charged on the same. If any process amounts to manufacture under Central Excise then there is no service tax on such process. Hence, no excise duty or service tax is payable by you.
  • Dear Sir, whether zinc sulphate is classified under heading 283329 (Agriculture grade zinc sulphate ordinarily used as micronutrient) or under heading 31(All goods, other than those which are clearly not to be used as fertilizers). MOHAMMAD MUSLIMBHAI SHAM

    The classification of Zinc Sulphate will be under heading 283329 if it is of agriculture grade and is ordinarily used as a micronutrient. Chapter 31 does not cover goods other than fertilizers but covers fertilizers, therefore, Zinc sulphate will not be covered under Chapter 31. The Chapter Note 1 (b) to Chapter 31 clearly provides that this chapter does not contain separately chemically defined compounds [other than those answering to the descriptions in Note 2(a), 3(a), 4(a) or 5 below]. And the compounds given in Note 2(a), 3(a), 4(a) or 5 do not include Zinc Sulphate. Further, serial number 103 of Notification number 12/2012-C.E dated 17.3.2012 also exempt Agricultural grade Zinc Sulphate ordinarily used as micronutrient from payment of duty. The tariff heading mentioned in above serial number is also 2833 29.
  • Sir we purchase Pig Iron from a Unit which is Export Oriented Unit on domestic sale has to pay BCD and CVD their is changes in budget regarding exemption of cess, pls clarify which cess exempted and which is still leviable and can be take credit of the cess. Pankaj Bardia

    The educaiton cess and SHE cess on CVD is exempted but the custom educaiton cess and Custom SHE cess is still applicable. But the credit was available of cess paid on CVD. Hence, it will not be available henceforth.
  • Dear Sir, We are exporting the Automobiles parts on payment of Excise duty and subsequently claiming the rebate of excise duty paid at the time of Export and while procuring inputs we are claiming the CENVAT credit of the excise duty paid on Inputs. There is no domestic sales, it is 100% export. Questions need to be answered— 1. In your view, is it appropriate to deposit the Excise duty and then claim the same as rebate? , 2. Should we stop the export on payment of duty and subsequent claiming of rebate, because in this scheme we are getting only our hard earned money back which we deposited as excise duty from the excise department after a considerable time, no value addition? 3. Alternatively, and most importantly, should we opt Export without payment of Excise duty under LUT and then claim (i) Refund of CNVAT credit accumulated on account of non-payment of duty on export, (ii) claim Duty Draw Back under All Industry Rate? Pls. give us your valuable opinion about above situation and guide us which scheme we should go for. Thanks and Regards, Sanjay Sharma Sanjay Sharma

    The claiming of rebate is simplest way of getting the money back from the department. Yes, the other option of refund of unutilised credit is cumbersome as department insists on corelation of raw material and finished goods. Although this budget has proposed to give the same on proportionate basis but it will be seen how field formation interpretate the same. The other alternative of taking drawback is also good but then you need to take the cenvat credit. As logic given for opting out of the option by you is that you pay the duty first on Raw material then take cenvat credit. Utilise the same in payment of duty and then take rebate. It is taking back your hard earned money. In all the options quoted by you, you pay the duty first on your RM and then get it back from the department.Hence there is no difference in earlier option and last two options. Lastly, if you do not intend to pay the duty of Raw materials first then you opt for procurement of duty at nil rate of duty under Rule 19 of Central Excise Rules.
  • Dear sir, we are registered dealer in central excise. We import scrap and sell it to local excise dealer. While importing scrap we are levied Basic Custom Duty (BCD), CVD, Cess and HCess on above. As a registered dealer in central excise we are passing on the CVD, Cess on CVD and HCess on CVD to our dealers. I just want to know whether BCD, Cess on BCD and HCess on BCD paid by us at the time of import can be get back as refund or drawback or by any other mode.? Thank You. MOHAMMAD MUSLIMBHAI SHAM

    There are no provisions in customs law for refund of basic customs duty, however there is provision to get duty drawback on import portion of BCD, but it is applicable only if you are exporting. Since you are not exporting, the same shall not be applicable to you.
  • My client was purchased duty paid item which is falling under central excise tariff heading no.69032010 It is used to melting of brass for manufacturing of excisable goods, whether can we treat as a capital goods under Rule 2 of CCR,2004 or not and take the cenvat credit 50% as per terms of rule 4 of Cenvat credit rule 2004 Rai Singh

    The goods falling under Chapter 82,84,85 and 90 falls under the definition of "capital goods". However, the refactory materials are also covered under the definition. Hence, if the goods falling under 69032010 is silicon carbide crucibles are refractory material then the credit on the same will be available.
  • Dear Sir, We are exporting the Automobiles parts on payment of Excise duty and subsequently claiming the rebate of excise duty paid at the time of Export and while procuring inputs we are claiming the CENVAT credit of the excise duty paid on Inputs. Questions need to be answered— 1.In your view, is it appropriate to deposit the Excise duty and then claim the same as rebate? , 2.Should we stop the export on payment of duty and subsequent claiming of rebate, because in this scheme we are getting only our hard earned money back which we deposited as excise duty from the excise department after a considerable time, no value addition? 3.Alternatively, and most importantly, should we opt Export without payment of Excise duty under LUT and then claim (i) Refund of CNVAT credit accumulated on account of non-payment of duty on export, (ii) claim Duty Draw Back under All Industry Rate? Pls. give us your valuable opinion about above situation and guide us which scheme we should go for. Thanks and Regards, Sanjay Sharma. Sanjay Sharma

    There are many options which you can explore, however which is most beneficial depends upon your entity only. Moreover you can also go for refund of accumulated CENVAT credit under Rule 5 of CCR'04 , since the scheme has been changed in the current budget and refund is allowed on the basis of export turnover.
  • when I fill er-1 month of march-12, add new column of Tariff Notification availed (what does fill in it) Arun Sharma

    In this column you have to add the Notification prescribing the present rate of duty for your product
  • One promoter acquired land in his name and divided it in 100 plots and sold them to individual buyers. The buyers register their respective plots in their name. Now each buyer gives a contract individually to contractor (who was the previous land owner) to construct a single residential unit for his personal use. Therefore 100 individual residential units are constructed for 100 individual customers. I wanted to know whether service tax will be applicable on it or not? Can the individual buyers claim that this residential unit is for personal use and exempt from service tax? Gokul Chand Baid

    If the individual buyers themselves had undertaken the construction, then only they could have claimed that the residential flat was for their personal use. However, the buyers have hired a contractor to build their house. Therefore, exemption from service tax cannot be claimed. Moreover in a recent judgement in case of Isha Homes (I) Private limited {2012 – TIOL – 424 – CESTAT – MAD} tribunal in the similar case has ordered pre – deposit of the amount of service tax.
  • Sir, can u tell me any notification to charge excise duty for neepal export. kindly send me a copy in my mail id. i shall always thanks for you sir. JITENDRA KUMAR TIWARI

    The notification for export to Nepal has been changed from March 1, 2012. The rebate of duty paid on the export to Nepal will be done under normal export procedure contained in Notification number 19/2004-C.E.(N.T.) dated 6.9.2004 as amended by Notification number 24/2011-C.E. (N.T. ) dated 5.12.2011 effective from 1.3.2012.
  • dear sir i am engaged in manufacturing of gold ornaments on job work whether i am liable to pay service tax P.RAJESH JAIN

    Since the manufacture of unbranded jewellery has been brought under excise net from the current budget, you shall not be required to pay service tax on the same, as the person who gets the goods manufactured on job work basis has been made liable for payment of duty. Hence the principal manufacturer will be liable for payment of the excise duty on the same.
  • Dear Sir, We are manufacturer of excisable as we as exempted goods, we are taking cenvat on the inputs and paying the 5% (now 6%)amount on the finish goods clearance. I want to know whether we have to pay the 5% amount on goods cleared for export as the the notification No.24/2010-CE (NT) dt 26.5.10 specifically exclude the exempted goods from exporting under Bond. Pravin Deokar

    As per point no. (v) of Rule 6(6) of Cenvat Credit Rules’04 the provision of Rule – 6(1), 6(2), 6(3), 6(4) shall not be applicable in case excisable goods are removed without payment of duty for export under bond in terms of provisions of Central excise rules,2002. Thus, you shall not be required to reverse credit on the same. But if you manufacture totally exempted goods then you will not be allowed to take the credit. However, if you are manufacturing excisable and exempted goods then you are allowed to take the credit on common input and input services.
  • since service has been rendered before 31.03.12 and bill has also been raised before 31.3.12, only the payment has been received after 1.4. 12, the effective rate of tax will be 10.30%? kavita thanvi

    The Chartered Accountants are paying service tax on receipt basis as per Rule 7 of Point of Taxation Rules. As per the recent amendments in budget 2012, the amendment has been made vide Notification No. 04/2012-ST, dated 17/03/2012 in Rule 2 of Point of Taxation Rules, in which the following rule has been inserted:- ‘2A. Date of payment.—For the purposes of these rules, “date of payment” shall be the earlier of the dates on which the payment is entered in the books of accounts or is credited to the bank account of the person liable to pay tax: Provided that — (A) the date of payment shall be the date of credit in the bank account when — (i) there is a change in effective rate of tax or when a service is taxed for the first time during the period between such entry in books of accounts and its credit in the bank account; and (ii) the credit in the bank account is after four working days from the date when there is change in effective rate of tax or a service is taxed for the first time; and (iii) the payment is made by way of an instrument which is credited to a bank account, (B) if any rule requires determination of the time or date of payment received, the expression “date of payment” shall be construed to mean such date on which the payment is received;‟. Hence, in case of change in rate of duty, date of payment will be point of taxation and consequently, in case referred by you the service tax is payable on rate applicable on the date of payment. It will be after April 1, 2012. Further it is also clarified by Circular No. 154/5/2012-ST, dated 28/03/2012. It clarifies that the Notification No. 04/2012-ST, dated 17/03/2012 has amended Point of Taxation Rules as well as Rule 7 which applied to the individuals or proprietary firms or partnership firms providing specified eight services taxable services of section 65 of the Finance Act, 1994 which also includes the services provided by practicing chartered accountants. Rule 7 determined the point of taxation in such cases as the date of receipt of payment. The issue has been examined for invoices issued on or before 31st March 2012, the point of taxation shall continue to be governed by the Rule 7 as it stands till the said date. Thus in respect of invoices issued on or before 31st March 2012 the point of taxation shall be the date of payment. Following the same, the service tax will be payable @ 12% as the payment is after April 1, 2012. We hope that the above will satisfy your query.
  • Sir, we are 100% eou. we filed refund claim for the quarter of july 10 to Sept. 10 on 30.09.2011 for unutilised credit under rule 5. But department rejected our claim on time bar. Pls. guide. UNMESH V. KASHIKAR

    The time limit under Section 11B of the Central Excise Act, 1944, does not apply to refund of accumulated credit. This has been held by the CESTAT in many cases. The Board has also clarified in Circular No. 120/01/2010- ST, DT. 19/01/2010 that even for opening balance in Credit Register, refund can be filed. It was said that “As regards the quarterly filing of refund claims and its applicability, since no bar is provided in the notification, there should not be any objection in allowing refund of credit of the past period in subsequent quarters. It is possible that during certain quarters, there may not be any exports and therefore the exporter does not file any claim. However, he receives inputs/input services during this period. To illustrate, an exporter may avail of Rs.1 crore as input credit in the April – June quarter. However, no exports may be made in this quarter, so no refund is claimed. The input credit is thus carried over to the July-September quarter, when exports of Rs.50 lakh and domestic clearances of Rs.25 lakh are made. The exporter should be permitted a refund of Rs.66 lakh (as his export turnover is 66% of the total turnover in the quarter) from the Cenvat credit of Rs.1 crore availed in April-June quarter.”
  • I could not submit some of the input credit invoices before adjudicating authority as a result i was asked to pay service tax with interest and penalty, whether I can make appeal to commissioner appeal showing all the input credit documents which i have misplaced. k.venkata rao

    Yes. Appeal can be filed before the Commissioner (Appeal) submitting the additional documents and the reasons for non-submission before the Adjudicating Authority. You can submit for setting aside/modifying or annulling the Order-in-Original. The Commissioner (Appeal) can quash the order or modify the order but cannot remand the matter back to the Adjudicating Authority as he is not empowered to remand the case.
  • We are paying service tax on receipt basis, being ca, and servixe provided before 31.03.2012, bill raised before 31.03.2012, payment received after 31.03.2012. Pl inform what rate will be charged ca akhilesh narayna

    As per recent amendment in POT as well as CBEC clarification, you have to pay the service tax @ 12.36%. It is clarified that if the payment is received after March 31 ( not within four working days) then service tax at higher rate is to be paid.
  • Respected Shri Jain, Sir, We are an EOU and sell part of goods to DTA. Could you please guide us on Excise Duty Calculations for DTA sales by an EOU (especially after Budget 2012-13) or any Notification No. where the method of calculation can be referred to . Thanking you in advance. Vipul Adhvaryu

    There is no clarification on this issue by CBEC also. When the education cess and SHE cess is not charged on CVD at the time of import then it should not be charged by EOU. Let us wait for the clarification.
  • Respected Sir, As you know the excise rate has been changed from 10% to 12%,till feb-2012 I was typing in the payable sheet of finished goods in the tariff notification availed column in the ER-1 02/2008,then when I will show the 12% duty of the sale on the seprate sheet then I have to write 02/2008 or any other notification. mehul

    You have to show two separate enteries for each product. One showing duty @ 10% from 1.3.2012 to 16.3.2012 and other showing duty @ 12% from 17.3.2012 to 31.3.2012.
  • what is the maharashtra state excise duty structure for sugar which has to be calculated in CT-1 balasaheb

    We are dealing in Central Excsie, Service tax, DGFT and Customs. But we are not dealing in State Excise Duty. Hence, we cannot reply your query.
  • We are Selling of space or time slots for advertisements in internet. As per negative list are we exempted from service tax. Regards, Balaj.P Balaji.P

    Yes, you are covered in Negative list of Service tax. Sale of space for advertisement in internet is non-taxable and no service tax will be payable.
  • Respected Sir, One of my clients is about to cross the turnover of Rs.4 crore,then does he becomes permanently excisable to issue excisable invoices compulsorily or if his turnover remains below rs.4 crore then can he take the benefit of Rs. 1.5crore till which no duty is charged. mehul

    If your client has crossed the limit of 4 crore then he will be liable to pay duty in the next financial year and he will not be entitled to benefit of 1.5 crore in that year.
  • Respected Jain Sir, we would like to draw your honours kind attention on the fact that one of the our client is service providing a business axuliary services and problem is that assessee has providing services after the 17.03.2012 and completion of providing a service is 20.03.2012. The invoice has been used on after 31.03.2012 & Payment received after 31.03.2012 and on 01.04.2011 service tax rate has been changed to 10.3% to 12.36 %. Sir , I would like to ask ? 1. wether assessee has charges service tax on 12.36 % or 10.3 %. 2. assessees services liable to tax on old rate or new rate,please give details as per the service tax point of taxation rules in brief ? 3. If above mentioned Question , payament of services received before the 31.03.2012 and bill invoice is issued on after 01.04.2012 ? Dinesh Maru

    As per point of taxation rules, service tax shall be payable by earlier of the following dates- 1. Provision of service 2. Payment received 3. Invoice issued Therefore, whether service tax received before 31.03.2012 and invoice issued before 31.03.2012, service tax shall be chargeable @ 10.3%. But if the payment is received after 31.03.2012 then the rate of service tax shall be 12.36%.
  • vat rate of haryana debender parhi

    We are dealing in Service tax, Excise, DGFT and Custom. We donot deal in VAT. Hence, we cannot reply your query.
  • Respected sir, Can I take 100% credit of addl.duty of the machinery imported this year or I have to take 50% credit compulsorily. mehul m ashar

    A unit eligible for SSI exemption can take 100% credit on capital goods otherwise 50% credit is available.
  • Respected Sir, IF 50% credit of addl.duty on imported parts on machinery is been taken in february-2012 & remaining I want to take in March-2012. mehul m ashar

  • Kindly clarify that service rendered till 31.03.2012 and bill raised on 01.04.2012 then what will be service tax rate. sukhvinder kaur

    If the bill is raised on 01.04.2012 for service rendered till 31.03.2012, the service tax will be charged @ 12% i.e. the assessee will have to pay extra 2% tax. This is as per the newly enacted Rule 2A in Point of Taxation Rules, 2011 in case of new levy or rate change, the date of payment will be either the date of entering payment in the books of Accounts or date of credit in bank account of person liable to pay service tax.
  • What is the rate of service tax under composition scheme from 01.04.2012? sukhvinder kaur

    The rate of service tax under Composition scheme from 01.04.2012 will be 4.8%. Earlier it was 4%.
  • Dear Sir, Kindly advise whether a non excisable unit needs excise registration for Factory Stuffing permissions for exports. Pawan Kothari

    A non excisable unit cannot take registration in Central excise except when the exporting units intends to bring the inputs at nil rate of duty to be used for exports. The stuffing of non excisable goods is normally done by service recipient.
  • Respected Sir, How to sale the goods if it is received as sales return from a government Enterprise in excise. mehul

    It has to be sold under central Excise invoice. Rule 16 of Central Excise Rule will apply. It should come back with duty paying document. The unit can take credit on returned goods on basis of such duty paying document. If the same is returned after repairing then credit is to be reversed and if the same is returned after manufacturing process then duty is to be paid.
  • Respected Sir, Is there any surety of GST Implementation from 01-08-12 as declared by FM in the budget 2012-13. mehul

    he has not said about implementation of GST but for computer software for the GST.
  • We are dealing in unbranded jewellery and issuing tax invoice, sales invoice and cash memo as per up vat act. What procedure we have to follow for excise purpose ca akhilesh narayna

    only one invoice can be used for clearance from a factory under Rule 11 of Central Excise Rules. If you require more than one invoice then permission from Deputy Commissioner/ Assistant Commissioner of Central Excise is to be taken.
  • Respected jain sir, We would like to draw your kind attention on the fact that one of the our client would want to CT Certificate from Assistant Commissioner of Central excise. Sir, we consulting them and getting CT - 1 certificate from the department of certral excise ( Assistant commissioner ) but we asking you after that certificate granted by assistant Commissioner which proof we have to submitted please give information? 1). After getting CT-1 Certificate which export proof assessee has to submitted ? 2). How many time limit to submission of proof of export to assistant commissioner ? 3) Give list of document in details which can be submitted to the assistant commissioner ? 1). Dinesh Maru

    CT-1 certificate is used for export through merchant exporter. The merchant exporter has to obtain the CT-1 certificat. You have to execute a bond with AC/DC and then CT-1 certificate will be issued by Range superintendent. The liability to submit proof of export will be on you and not on manufacturer. The time limit of submission of proof of export is six months. You have to submit original and duplicate copy of ARE-1, Self attested copy of EP copy of shipping bill and Bill of lading.
  • Respected sir, i want know that is new service tax rate applicable on service provided in Feb -12 and invoice raised on april -12. Please answer me mita

    It depends on service provided by you. As per POT, if the tax is payable on the basis of invoice raised, service provided or payment received, whichever is earlier then the assessee pay the tax in March itself. But if the POT says that the tax is to be paid on receipt basis (as in case of lawyers) then the service tax is to be paid @ 12% as the payment is received in April 2012.
  • Respected Sir, how to sale goods which are received as sales return from a non-excisable manufacturer mehul

    The seller can sale the sales-returned goods as a normal sale because the buyer is non-excisable manufacturer (Either buyer is dealer or manufacturer of exempted goods). The point which is to be kept in mind is that whether we (seller) are excisable manufacturer or not. If yes, then first see that the buyer is charging excise duty (amount of duty as mentioned by the seller) or not. If the buyer is charging then seller will entitled to take credit (at the time of removal) and then reversed the same (at the time of return).
  • Respected Sir, AS rate of excise duty has been changed,and If a ct-3 in which 10.3% duty is there and a part qty has been sold of that ct-3 before 16-03-2012,now as the rate has been changed now what is the procedure we have to do to cancell that ct-3 or we have to send back to the eou customers of ours. mehul m ashar

    In this case, the supplier has to cancel that ct-3 for the remaining quantity (i.e.40) because amount of duty will be short in case of non-cancellation of ct-3. The supplier of the goods has to apply to Range for the issuance of “Non-utilisation certificate”.
  • Sir, We are doing Job Work of Processing slitting & pickling of duty paid (excise) Coiles. All the material comes under 54 FC Challans. Our Services comes under business auxillary Service. We were covered under notificatin no. 8/2005 of Service Tax up the year ending 31.03.2012. Is there any amendment to this notification in the budget 2012-13. S D DOKE

    No, there is no change in the Notification no. 08/2005-ST.
  • Respected Sir, Is there any change in the turnover limit of Excise according to the budget 2012-13,or it is 1.5 crore as it is. mehul m ashar

    No, there is no change in the turnover limit of excise according to the budget 2012-13 and the limit of Rs.1.5 crore is retained.
  • Respected Sir, is there any change regarding interest on late payment of Excise duty according to the budget 2012-13. mehul m ashar

    No. There is no change regarding rate of interest on late payment of Excise duty as per the Finance Budget for the year 2012-13. The existing rate of interest on late payment of excise duty is 18% p.a.
  • Can I have Central Excise Notification of change of rate from 10 to 12% Jagdish Hoti

    In the Finance Budget for the year 2012-2013 the prime amendment in the field of Excise is the increase in the rate of Excise duty. The rate of Excise duty has been increased from 10% to 12% except on few items vide Notification no. 18/2012-CE dated 17/03/2012. You can download the above mentioned notification from our website- capradeepjain.com from Central Excise Section in Tariff Notification Section.
  • Can their be any saving on freight charges if a manufacturer opts for Work Contract Tax? swasti purohit

    If the vehicle is owned by the manufacturer then there may be saving on freight charges.
  • Respected Sir, How to take credit on the goods received as sales return from a government enterprise. mehul

    The credit on sales return will be available if the goods are brought to the factory of seller for being re-made, refined, re-conditioned or for any other reason and if the process undertaken by the seller amounts to manufacturing process as per Rule 16 of the Central Excise Rules, 2002. In case of sales return by a Government Enterprise, either Govt. enterprise should send Original invoice of the seller or issue a Debit note to the seller then only the seller can take credit proportionately.
  • Respected Sir, if an excisable unit has one or more registered unit on the same name then it will be considered as a LTU.? or it would on the basis of taxes paid. mehul

    Eligibility of LTU is on the basis of taxes paid in cash or from account current and not on the basis of excisable units. For a unit to become a Large Taxpaying Unit, it is required that the said Unit should have paid the excise duty/service tax of more than Five Crore Rupees in the financial year 2004-05 or during the year preceding the year of application. Income Tax assessees paying advance tax of more than Rs. 10 crores can also be eligible for LTU status.
  • when a excisable unit shut then what process required also excise duty pending & what about excise audit & AG audit ? rakesh kalantri

    In case a unit is being shut down than it has to surrender its excise registration. Notification No. 35/2001-CE(NT) prescribes that the registered assessee who ceases to carry on the operation for which he is registered, shall de-register himself by making a declaration in the form specified in Annexure-III and deposit his registration certificate with the Superintendent of Central Excise. If any amount of duty is pending it should be payable within the statutory time limit. The procedure regarding audit is the same as normal audit procedure. No special procedure is prescribed.
  • Respected sir, how to sale a capital good on which credit is not taken though it was a excisable invoice,is it necessary to take credit on it to sale or we have to make an exempted excisable invoice. mehul

    It has to be sold under an invoice issued under Rule 11 of CER, 2002. Since you have not taken the credit, as such there is no need to reverse the credit. Mention the fact that "No cenvat credit is taken on such capital goods" on the face of invoice. There is no need to take credit but the clearance of capital goods has to take place under a Central Excise invoice but without any payment of duty.
  • whether a DTA unit can claim refund of unutilized CENVAT credit under rule 5 of CCRs, 2004 as the rule covers export and not deemed export narendra

    When a unit exports under bond then it is eligible to claim refund of unutilised credit under Rule 5 of Cenvat Credit Rules, 2004 read with notification 5/2006. It does not apply only EOU. Even a DTA unit exporting goods can claim refund. Even as per tribunal decisions, the unit sending goods to 100% EOU can claim refund of unutilised cenvat credit.
  • Sir, is service tax applicable on work contract of making Aluminium / Glass window, Door. if yes When the liability of service registration number arise and what is the percentage of Service tax.is abatment recived on gross value. PINTU SHAH

    Yes, Making of Aluminium/Glass window door is leviable to service tax under work contract service, If such making of aluminium/glass window door is related Work project like Residential, commercial, industrial, institutional etc. The liability of service tax registration will arises when value of taxable services provided or to be provided is equal to 10 Lakhs or more then 10 lakhs. The rate of service tax on “work contract service” is 10.3% (inclusive of Education Cess and Sec. Higher Education Cess) on value of service. However assessee has an option to pay service tax under composition scheme @ 4.12% (inclusive of Education Cess and Sec. Higher Education Cess) on gross amount charged for the work contract but the service provider cannot avail Cenvat credit of Inputs, when he opts the composition scheme. The restriction under composition scheme is only on Cenvat credit of input and he can avail Cenvat credit on input service and capital goods.
  • SSI Exemption Limit is allowed till 1.5 Crores provided turnover in previous year was within 4.0 Crores. Say a new unit starts product on September 1, will they be eligible for exemption upto 1.5 crores for the remaining part of the year or the amount will be proportionate to the months. If the former is true are than any precedents/circulars or case laws? Bharath Kedia

    Yes, new unit is eligible to take whole credit of 1.5 crores for the remaining part of the year povided his product should be covered SSI exemption notification number 8/2003-CE dated 1.3.2033 and as amended. According to this Notification, SSI exemption limit is allowed upto 1.5 crores when aggregate value of clearances (exempted as well as dutiable products) in previous financial year was within the limit of 4.0 crores. There is no provision of proportionate exemption. Hence, in this case when the unit starts production from September, the last year aggregate value will be zero. Therefore, the unit is eligible for SSI exemption upto Rs. 1.5 crores for the remaining part of the year.
  • Sir, What is the Basic Duty and CVD payable on (a) Iron Ore Pellets, and (b) Sponge Iron currently in India E S Ullas

    The rate of Basic Excise Duty or CVD on “Iron Ore Pellets” (26011210) is 10%. And the rate of Basic Custom duty on “Iron Ore Pellets” is 2.5% (as amended from Notification 21/2002-Cus. dated 1.3.2002). The rate of Basic Excise Duty or CVD on “Sponge Iron cast fitting” (73071110) is 10%. And the rate of Basic Custom duty on “Sponge Iron cast fitting” is 10%.
  • We buy raw material from domestic manufacturer and claim Cenvat and after processing exporting the final product without payment of duty. Is there any additional export benefit in Customs/Excise other that claiming cenvat on RM. S. Nagesh Hegde

    yes, there are number of export benefits available like drawback, advance authorisation/ DFIA, FMS, FPS, VKGUY, Market linked FPS etc. are available. Since you are availing Cenvat credit on inputs then you can claim drawback with Cenvat credit. You can go through foreign trade policy to view the other benefits.
  • Sir, we as a dealer sold 100 Qty to manufacturer with cenvat pass, now manufacturer wants to return 60 qty back to us through issuance of excise invoice by reversing the cenvat amount availed on 60 Qty. Can we take it as fresh entry in RG23D and pass on the same to other manfuacturer/dealer. S. Nagesh Hegde

    Yes, you as a dealer can do so. The only requirement for the dealer is that the goods should be received under a duty paying document. Since the dealer is receiving the same, he can enter the same in RG 23D register.
  • Respected Sir. We have purchase Raw Material from HALDIA Petrofils. We have got the RM with Excise Duty, also they have charged Freight Charges + Service Tax. Can we take Credit of the same Invoice. 

    Yes, we can also take the credit of service tax charged on Freight in Excise invoice. Any invoice issued under Rule 11 of Central Excise Rules is a valid duty paying document for taking Cenvat credit under Rule 9 of Cenvat Credit Rules, 2004.
  • I have paid the 4% addl. duty and CVD on imports by partly through debiting of DEPB licence and partly by Cash. Can I avail CENVAT credit on the said Addl. Duty and CVD which is paid through DEPB. If yes, what document to be provided, since Bill of Entry does not reveal the details of duties paid through DEPB. Only the total amount debited in DEPB license is mentioned in Bill of Entry. Please advice. 

    Yes, manufacturer can take credit of 4% SAD and CVD paid through DEPB as per condition number (vi) specified in notification number 97/2009-Cus. Dated 11.9.2009 and as amended. Further, the valid duty paying document is Bill Of Entry as per Rule 9 of Cenvat Credit Rules. The Bill of Entry clearly mentions BCD amount as well as CVD amount when the duty is passed through DEPB. The credit of BCD amount includes Basic custom duty plus custom education cess and custom SHE cess and the credit of the same is not available. The CVD amount includes CVD plus education cess on CVD plus SHE cess on CVD and 4% SAD. The credit is available on this amount. However, one has to calculate the complete duty amount at his own and tally the same with duty paid through DEPB. Then he can take the credit.
  • Respected Sir, how to sale machinery in excise if it is purchased from a non-excisable trader,it will be an exempted sale or it would be a duty paid sale. mehul m ashar

    As per Rule, we have to reverse the cenvat credit on removal of capital goods. As we have purcahsed from non-registered dealer then we have not taken the credit on the same. Since the credit is not taken then there is no need to reverse the same. It will not be termed as exempted sale or duty paid sale. We have to reverse the credit taken at the time of purchase.
  • i want to know what r the service tax provisions related to works contract service what r the requirment for filling return for such work contract service and the time period in which is should be filled virendra modi

    The provisions relating to works contract are very vast and it is difficlut to answer the same in this query section. If we are registered in works contract under Sales tax then we can opt for work contract under service tax.If we are not able to maintain the material and labour separately then we can opt for composition scheme under service tax. The rate of tax under composition scheme is 4%. For every contract, the assessee has to opt for composition scheme.
  • i have purchased mahciney for rs.200000.00 and taken credit Rs.10000.00(50%)and i want to sell mahcinery after 2 months then we have to calculate duty on 50% taken or on 100% duty?and can we take remaining 50% credit on the sold machiney. mehul.m.ashar

    While removing the machine from the factory, you should take the remaining 50% Credit. This means that the whole credit of duty is to be taken in the same financial year. Then if the machine is not put to use then you have to reverse the complete cenvat credit. But in case it is put to use then you should deduct depreciation @ 2.5% per quarter as per Rule 3 (5) of Cenvat Credit Rules, 2005 and then reverse the cenvat credit.
  • In case of goods exported, If we have availed rebate of excise duty paid on inputs under rule 18, can we avail 1% duty drawback as per customs circular no 35/2010 dtd 17/9/10? abhishek bhargava

    There are two types of rates in the drawback schedule. One is "with cenvat credit" which is custom portion only. The other is 'without cenvat credit" which with excise and custom duty. It implies that if we have availed the cenvat credit of excise duty then custom portion is allowed and in another case, sicne credit is not availed then benefit of excise and custom will be allowed. Sicne you have availed the benefit of excise duty under Rule 18 then only custom portion will be allowed. Since you have not mentioned the product name as well as whether this "with cenvat" rate or "without cenvat" rate, hence we cannot comment. You have to judge as per guildelines given above.
  • We have paid service tax on bills towards our parent company outside india. Now when we came to know that it is covered under Export of service, we are claiming refund of service tax paid. But deptt is saying since we have recovered Service tax from our parent company, they will transfer the refund to Consumer Welfare Fund. Please help.... Jugmohan

    A person cannot be enriched unjustly. If you have recovered service tax paid by you from your parent company then you cannot claim refund of service tax as you will be enriched unjustly. It is required to be proved that service tax has not been recovered from the parent company if it is not recovered from them by leading cogent evidence. But if the service tax amount is recovered then the refund of the same will not be given to you but will be transferred to Consumer Welfare Fund.
  • Dear sir, I have request the my new password as earlier as possible the above email address, AMIT my passward mismatch

    in case you have forgot the password then at the time of login, you should click on "Forgot password". You will get the username and password on your e-mail address by the software.
  • Can duty paid goods (specifically liquor) be allowed to stock at duty free shops at airports? Pls provide the reference of related statute/circular/ notification Kewal Satra

    since the liquor is covered under State excise duty and we are not dealing in this subject, we are not able to reply the same. Please contact the expert in this field.
  • Builder issue following details to buyer at the time of booking of residential unit and as per agreement: Description Amount (Rs.) Basic sale price 23, 08,887 PLC charges/ ( Development charges) 26,674 Security services 58,000 Club membership facility 43250 Maintenace charges 25250 Total Payable 24,62,061 Is he is liable to pay service tax in following catagory: Construction of Residential complex Preferential location and development charges Security service Club service Repair or maintenance service. Is it correct and builder has to take registration in all above category. Pls clarify Thanks deepak gupta

    As per the clause (ii) of definition given of residential complex in sec 65(91a) residential complex means any complex comprising of (ii) a common area. Common area as per circular no. B1/6/2005-TRU, dated 27-7-2005 would include roads, staircases and other similar areas where residents of the residential complex have easement rights. The list of facilities prescribed is merely illustrative and not exhaustive. Some residential complexes may also contain other facilities such as market or shopping complex, schools, security, banks, gymnasium, health club, sports facilities, and power back up and the like. Thus all the services provided by builder will be chargeable pertaining to Club, security, repair or maintenance will be chargeable under the head “Construction of residential complex service only”. However, for preferential location and development charges, there is a separate head itself called “Preferential location or development of complex service sec (65(105)(zzzzu) under which same shall be chargeable and separate registration for the same shall also have to be taken by builder.
  • Builder company: As per agreement builder issued a Letter dated 18 october 2011 to buyer mentioning: On start of first floor roof payment of Rs. 139200 should paid upto: 31 october-2011 & even no work is started on that date. Actual payment received on 08 December-2011 Which date is to be considered for service tax as per point of taxation rules 2011. Pls clarify Thanks deepak gupta

    Commercial or industrial construction service and construction of residential complex service has been notified as Continuous supply of service. As per Point of Taxation rules, in case of continuous supply of service, the point of taxation shall be (a)The time when the invoice for the service provided or to be provided is issued; Provided that where the invoice is not issued within fourteen days of the completion of the provision of the service, the point of taxation shall be date of such completion. (b)In a case, where the person providing the service, receives a payment before the time specified in clause (a), the time, when he receives such payment, to the extent of such payment. Explanation 1. – For the purpose of this rule, where the provision of the whole or part of the service is determined periodically on the completion of an event in terms of a contract, which requires the service receiver to make any payment to service provider, the date of completion of each such event as specified in the contract shall be deemed to be the date of completion of provision of service. Explanation 2. - For the purpose of this rule, wherever any advance, by whatever name known, is received by the service provider towards the provision of taxable service, the point of taxation shall be the date of receipt of each such advance. As per your query, the agreement provides that a letter is issued to the buyer mentioning that “On start of first floor roof payment of Rs. 139200 should be paid up to 31 October-2011 & even no work was started on that date.” Thus, as per given information buyer should pay for first floor roof till 31 October, 2011. So event in this case is date as per contract on which payment is to be made i.e. 31 October, 2011. In case of continuous provision of service is date of completion of service is end of event (i.e. date on which payment as per contract is to be made). As per Point of Taxation Rules, 2011, Point of taxation shall be earlier of date of issuing of invoice or date of making advance payment, whichever is earlier. But if invoice id not issued till 14 days of completion of service, then point of taxation shall be date of completion of service or date of advance payment, whichever is earlier. In the given case, service is deemed to be completed on 31st October, 2011. If the builder issues invoice within 14 days of such completion (i.e. till 14November, 2011), then point of taxation shall be date of issue of such invoice or 8 December, 2011(date of making advance payment) whichever is earlier i.e. date of issue of invoice. But if the builder fails to issue invoice till 14th November, 2011 then point of taxation shall be earlier of 31st October (provision of service) or 8th December (date of advance payment); which will be 31st October 2011.
  • commercial construction& residental comlex construction service tax paid in which value actual amount received or stamp duty valuation which ever is greater/lessor CA HEMANT T DEWANI

    Under commercial construction & residential complex construction, service tax is payable on the amount received, billed or service provided whichever is earlier. Hence, it does not say anything about the stamp duty valuation.
  • In case of renting of immovable property having joint ownership by 05 persons, whether basic exemption of Rs.10 lakhs is availeble to all 05 persons or to ONLY ONE person ? Rent agreemnet is entered by all 5 persons and accrodingly separate cheques are also received by all 5 persons and further all the 5 person have shown rent income in their individual income tax return also and claimed TDS on rent also MEHUL SHAH

    In case of renting of immovable property having joint ownership by 05 persons, whether basic exemption of Rs.10 lakhs is availeble to all 05 persons or to ONLY ONE person? Rent agreemnet is entered by all 5 persons and accrodingly separate cheques are also received by all 5 persons and further all the 5 person have shown rent income in their individual income tax return also and claimed TDS on rent also.
  • While filing ST-3 for GTA, we are require to give detail of amount exempt under N/N 34/2004 or not. If detail require , in what way? saurabh

    Yes, the details of exempt amount is required to be shown in ST-3 return. In column F(I)(a) “Service Received” we have to mention total amount of Freight Amount paid and in column F(I)(c)(ii) “Amount paid towards exempted service (other than export of service)” we have to mention amount of Freight relating to Notification No. 34/2004 and 13/2008. The difference of above columns will be the taxable amount.
  • We are registered as trader but we want to sell goods through hi-sea sales from a different state, how to prepare invoice in such situation Narayan Singh Rathore

    For issuing an invoice, it is first required that the person issuing an invoice should have taken registration. This means that the premises from which the goods are to be sold should be registered premises. In your case, it is required that you should have registered premises i.e. depot or godown and only then an invoice can be issued. The clearance procedure to be followed in high seas sales is the same as that of general purpose clearance. The Bill of entry should be in the name of one party only and the name of the high sea buyer will be noted only on production of high sea sale contract which should be legally enforceable. Original bill of entry should also be given. All declarations, undertaking, bonds etc. are to be given by the high sea buyer. And the Original importer is also required to fulfill conditions relating to importation.
  • procedure for registration under excise. documents required . information required. sandeep shetkar

    You have to file online application for the Central Excise Registration. After online filing, take a printout of the same form and acknowledgement generated after filing that application. We normally give this check list to our client for Central Excise registration:- 1. MEMORANDUM & ARTICALS OF ASSOCIATION – IN CASE OF COMPANY/ PARTNERSHIP DEED- PARTNERSHIP FIRM; 2. COPY OF LEASE DEED AGREEMENT/PATTA/ RENT DEED AGREEMENT; 3. COPY OF PAN CARD OF FIRM & ITS PARTNERS; 4. COPY OF SITE MAP PLAN; 5. COPY OF GROUND MAP PLAN; 6. COPY OF SSI REGISTRATION, IF ANY; 7. COPY OF RST/CST/TIN REGISTRATION NO; 8. COPY OF IEC CODE; 9. NUMBER OF BANK A/C & TWO MAJOR BANK DETAIL- NAME OF BANK, BRANCH, A/C NUMBER & TYPE OF A/C –SAVING/ CURRENT A/C; 10. NAME ADDRESS, PHONE, FAX NO. E-MAIL ADDRESS, PAN AND OF FIRM/COMPANY; 11. NAME, RESIDENTILA ADDRESS, PHONE NO, FAX NO., E-MAIL ADDRESS, PAN CARD OF DIRECTOR/PARTNES & AUTHORISED SIGNATORY, IF ANY; 12. INVESTMENT IN LAND, PLANT MACHINERY
  • what is the procedure to take credit on machinery imported if the installation is in the unit-1 and want to take cenvat credit in unit-2 mehul.m.ashar

    The credit is available in the unit in which it is installed.
  • Dear Sir, Please let me know that can I take cenvat credit of Ed. Cess and Higher Edu cess on total duty(final duty) for the purchase from 100% EOU PAWAN GINODIA

    As per new Rule, the Education cess and SHE cess paid on CVD and SAD is available as credit. Hence it is final payment of education cess and SHE cess. Therefore, you can take credit of education cess and SHE cess.
  • Dear sir, can I have details of VAT levied on hotels under the VAT Acts across the country? sankar

    We are dealing in Central Excise, DGFT, custom and service tax. But we are not dealing in service tax matters. Hence, your queries cannot be answered by us.
  • Dear Sir, I have a query related to construction services. AS 7 construction contracts state that the revenue should be recognized on % completion method. whereas now as per point of taxation rules ST should be paid on due basis. now the problem is what shall be entry in accounts as per AS. Because if we due drs following ST rule we are ignoring AS 7 and if we follow AS 7 we are ignoring ST due basis. Waiting for an early reply. Siddharth Rutiya

    Rule 3 of the Point of Taxation Rules provide that service tax will be payable from the date of issue of invoice or from payment made, whichever is earlier. If the invoice is issued within the prescribed period of 14 days then from the date of completion of the provision of service, service tax will beome payable. And it will bw the date of completion of provision of service or payment, if the invoice is not issued within the prescribed period. First of all it is important to note that, rules that govern accounting in books and that govern tax law such as service tax are different and should be followed individually. They should not be mixed as each one have different statue backing with them. In the accounting, the concerned point is about construction contracts, which is governed by AS-7 “Construction contracts”. The accounting in the books shall be done as per above standard (as the same is mandatory in nature). As per this AS revenue and cost should be recognized as per % of completion method, where contract revenue is matched with contract cost incurred in reaching stage of completion. Contract revenue is recognized as revenue in the statement of profit and loss in the accounting periods in which the work is performed. Contract costs are usually recognized as an expense in the statement of profit and loss in the accounting periods in which the work to which they relate is performed. In such a case, the agreement between contractor and contractee becomes important. This is because payment is made on continuous basis and invoice is raised in accordance with the relevant agreement. This agreement decides date of making payment and the date on which invoice is raised. In such a situation, payment of service tax as per Rule 3 of the Point of Taxation Rules, 2011 shall be made at the time of making payment or date of raising invoice which ever is earlier. Thus, the account should be prepared as per relevant statue i.e. AS-7 “Construction contract” and service tax should be paid as per Rule 3 of Point of Taxation Rules, 2011.
  • Dear Sir, I want to know that can an Assessee registered with excise department perform 100% job work task with out performing any kind of manufacturing activity on his own, if yes than the circular in this regard. CA. Shantanu Bist

    There is no circular avaialble but there is no ban also on doing 100% job work. The central excise registration is taken for the goods to be manufactured. If no goods are manufactured then no duty is payable.
  • Dear sir I have filled the form no 15 CA. During the filing of form 15ca i do one mistake. i have entered the wrong 15cb certificate no in form 15ca. now what is te process for rectifying it. parul

    This query does not fall under the fields for which we provide service. We are dealing in Central Excise, service tax, custom and DGFT.
  • we undertook survey abroad in respect to our product which is not excisable and paid Service Tax on the payments made in FOREX.We are simultaneously outservice provider in the category of AMC. Can i avail Cenvat of the said ST paid. sanjay gupta

    The finished good is exempted from payment of excise duty, then as per Rule 6 (1) of the Cenvat Credit Rules, 2004 the cenvat credit of input services utilized in relation to exempted finished goods will not be available. Also, the output service provided by you has no nexus with the service utilised by you, therefore, the cenvat credit of service tax paid on the Forex services will not be available to you.
  • Dear Sir half yearly service tax return must fill up online submit or manual submit to department pls.send your suggestion sir... rahul

    It is compulsory to file online return from October 1,2011. But the date of filing of online return has been extended from October 25 to December 26.
  • respected sir please send me detail procedure to e-file form EXP-2 (service tax). Sir your early response will be highly appreciated as last date to file EXP-2 is 15 october 2011. CA Manoj Sharma

    The format of EXP-2 is available on our website. It is to be filed in that format only. The relevant shipping along with other export documents as well as original bills of service provider are to be submitted. The certification is also to be done. The transport of road as well as commission to foreign agent under BAS service is exempted under notificaiton 18/2009 and return in respect of these services are to be filed.
  • WILL GST BE IMPLEMENTED FROM 01-04-2012.WHAT IS THE LATEST NEWS ON IT. mehul.m.ashar

    The consitutional amendment is still pending. thus, it seems to be difficult to be implemented from 1.4.2012. After the amendment passed by both houses, it has to be passed by all states. Thereafter the GST bill will be proposed and will be discussed with all concerned i.e. Centre, State and trade associaiton will discuss the same. Thereafter it will be passed. Since, it is said that all the returns as well as registration will be online, hence the software based on law will be placed and discussed. There after the GST will be implemented. But till now, the centre and states are fighting on the same. Even TN chief minister has objected on GST implementation.
  • what is the punishment on late e-filing of er-1 at present. mehul.m.ashar

    For late e-filing of ER-1 return under the Central Excise Rules, 2002 the provision of general penalty under Rule 27 will apply as no specific provision has been provided. Under this Rule, for contravention of any of the provisions of Central Excise Rules, where no penalty is provided elsewhere penalty of Rs. 5, 000/- will be imposable. Similar provision is provided under Rule 15A of the Cenvat Credit Rules, 2004.
  • i have paid by mistake Rs.40000 in the excise pay code no.00380115 instead of in 00380003 so can i get refund from central excise department. mehul.m.ashar

    If there is minor mistake in writing accounting code then it could be condoned. But if you have paid the amount twice i.e. one under wrong head and one under coorect head then you can apply for refund from the department.
  • what is the excisable procedure to sell goods if we receive part qty.as sales return from a non-excisable trader. mehul.m.ashar

    We have already replied the query raised by you. However, we are once again producing the reply for your ready referenc:- "From the query, it seems that you are excise registered unit and intend to sale the input as such on which no credit is taken as it is received from non- excisable trader. It has to be removed under Excise invocie under Rule 11 and there is no need of reversal of Cenvat credit as no credit is taken." If the facts understood by us are wrong, do revert back to us to reply the same.
  • I had got registered in 2002 with number starting with ST. I had not taken pan based number & had been filing nil return since 2004 as turnover was less than threshhold limit. Now aces doesn't accept st no, how i should file the return under aces. Whether ihave totake fresh no & surrnder the old no or there is a way out. I am registered at commessionerate Delhi II jitander khattar

    You have to apply afresh & apply for registration to the department. When you submit the documents of registration to the department clearly mention the facts in the forwarding letter that you are already registered and filing return manually on regualar basis.
  • One of our group company is an Exporter of Iron ore. It has used various input services during the course of export, after paying service tax. It sought to avail the refund under Notification 41 / 2007 dt.6.10.2007. It has not filed the claim at the end of relevant quarter. The adjudicating authority has proposed to reject the claim. Is there any case law that the period in section 11 B prevails over the period mentioned in the notification ? belavendiran

    We have not come across such case law. On the contrary, the legal position is against us. The following decisions clearly says that the time limitation under Section 11B does not apply in such cases:- a. 2009-TIOL-1463-CESTAT-AHM b. 2011-TIOL-68-CESTAT-MAD c. 2010-TIOL-1526-CESTAT- AHM
  • Recently notifcation regarding mandatory efiling of central excsie return is published.The word used that it is mandatory for all assesses.I would like to know if unit paid duty less than 1 cror for previous financial yea,.Is it necessary to them to efile er4,er5 and er6? Our local range office make interpreting that it is mandatory to all assesses without limit of duty paid. SANDEEP

    When the law says that the return is to be filed if the assessee has paid more than Rs. one crore from PLA+Cenvat then there is no question of filing it manually or online. Thus, the contention of the department is not tenable.
  • is service tax paid on courier services were available to utilise the excide duty to be paid on finished goods which are about to remove K Venkata Appa Rao

    As per High Court decision of Ultratech Cement, the credit is available on business expenditure. Courier service is business expenditure only and credit on the same is avaialbe. Furhter, as per latest amendment also, it does not fall under exclusion category. Hence the credit on courier service is allowed. Further, as per latest amendment, credit of service tax is avaialbe on receipt of invoice provided the payment of the same is made within three months of taking of credit. Hence, you can take the credit immediately on receipt of invoice and utilse the same in payment of excise duty on your final product.
  • what is the excisable procedure to sell goods if we receive part qty. from a non-excisable trader. mehul.m.ashar

    From the query, it seems that you are excise registered unit and intend to sale the input as such on which no credit is taken as it is received from non- excisable trader. It has to be removed under Excise invocie under Rule 11 and there is no need of reversal of Cenvat credit as no credit is taken.
  • is it liable for an assessee to file er-4,er-5,er-6 according to the notification no.21/2011 & 22/2011 dated 14-09-2011 paying duty more than 10 laks & less than 1 crore mehul.m.ashar

    The unit has to file the ER-4, ER-5 and ER-6 is if he is paying Excise duty more than Rs. one crore from PLA plus cenvat. Thus, when there is no need to file the return if you are paying less than Rs. one crore, then there is no question of filing it electronically.
  • we have Received the security amount regarding to complex on lease, 50 % amount out of the security will be adjusted with the rent income in coming 12 months. My question is 50 % security amount which shall be adjusted with future rent shall be treated as a advance against of rent or not and what we will be liable for pay service tax on advance payment received? NAVIN JAIN

    If the security amount received by you clearly say that it is adjustable with the advance then it is clear that it is advance rent only. In that case, the ser