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Author Topic: Service Tax Rates in India  (Read 171813 times)
MyTaxes_Expert
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« on: May 01, 2008, 03:53:42 AM »

Budget 2009-10. Finance Minister presented the Budget on Monday, July 06, 2009.: Service taxes extended to a few services:
1. Legal consultants (lawyers to pay service tax from now),
2. Transportation of goods through Railways, including government railways,
3. Transport of coastal goods and goods through Inland Water,
4. Cosmetic and plastic surgery service.

Following have been exempted in the Budget 2009-10:
1. Sub brokers have been exempted from payment of service tax.
2. Transportation of passengers through contract carriage permit has been exempted.
3. Federation of Indian Exporters Organisation and Export promotion councils has been exempted from paying service tax on membership subscription.

Service Tax in India
The responsibility of collecting the tax lies with the Central Board of Excise and Customs(CBEC). The office of Director General (Service Tax) has been formed in the year 1997 to monitor the collection and assessment of service tax.

Service tax is a tax levied on services rendered by a person and the responsibility of payment of the tax is cast on the service provider. It is an indirect tax as it can be recovered from the service receiver by the service provider in course of his business transactions. Every year more and more services have been brought under the net of Service Tax. The current list includes:
1) Telephone, (2) Stockbroker, (3) General Insurance.

(4) Advertising agencies, (5) Courier agencies, (6) Radio pager services.
 
(7) Consulting engineers, (8] Custom house agents, (9) Steamer agents, (10) Clearing & forwarding agents, (11) Air travel agents, (12) Tour operators, (13) Rent-a-Cab Operators (exempted upto 31.3.2000 Vide Notification No.3/99 Dt.28.2.99, reintroduced w.e.f. 1.4.2000), (14) Manpower recruitment Agency (1st July, 1997), (15) Mandap Keepers (1st July, 1997)

The services provided by goods transport operators, out door caterers and pandal shamiana contractors was abolished vide Notification No.49/98, 2nd June,1998.
 
(16) Architects, (17) Interior Decorators, (18) Management Consultants, (19) Practicing Chartered Accountants, (20) Practicing Company Secretaries, (21) Practicing Cost Accountants, (22) Real Estates Agents/Consultants, (23) Credit Rating Agencies, (24) Private Security Agencies, (25) Market Research Agencies, (26) Underwriters Agencies

(27) Scientific and technical consultancy services, (28) Photography, (29) Convention, (30) Telegraph, (31) Telex, (32) Facsimile (fax), (33) Online information and database access or retrieval, (34) Video-tape production, (35) Sound recording, (36) Broadcasting, (37) Insurance auxiliary activity, (38) Banking and other financial services, (39) Port, (40) Authorised Service Stations, (41) Leased circuits Services

(42) Auxiliary services to life insurance, (43) Cargo handling, (44) Storage and warehousing services, (45) Event Management, (46) Cable operators,(47) Beauty parlours
(48) Health and fitness centres,(49) Fashion designer,(50) Rail travel agents,(51) Dry cleaning services.

(52).     Commercial vocational institute, coaching centres and private tutorials, (53) Technical testing and analysis (excluding health & diagnostic testing) technical inspection and certification service, (54) Maintenance & repair services, (55) Commission and Installation Services, (56) Business auxiliary services, namely business promotion and Support services (excluding on information technology services), (57) Internet café, (58) Franchise Services

(59)   Transport of goods by road (earlier Goods Transport Operators service re-introduced), (60)    Out door Caterer’s service (re-introduced), (61)     Pandal or Shamiana service (re-introduced), (62)      Airport Services, (63)      Transport of Goods by Air Services, (64)       Business Exhibition Services, (65)       Construction Services in relation to Commercial or Industrial BuildingConstruction Services in relation to Commercial or Industrial Building

(66)       Intellectual Property Services, (67)       Opinion Poll Services, (68)       TV or Radio Programme Services, (69)       Survey and Exploration of Minerals Services, (70)       Travel Agent’s Services other than Rail and Air travel agents, (71)       Forward Contract Services, (72)      Transport of goods through pipe line or other conduit Services, (73)      Site preparation & clearance Services, (74)      Dredging Services, (75)      Survey & Mapmaking Services, (76)      Cleaning Services, (77)      Membership of Clubs & Associations, (78)      Packaging Services, (79)      Mailing list compilation & Mailing Services, (80)      Construction Services in relation to Residential Complexes
 
Penal provisions do exist in respect of Service Tax also. Failure to obtain registrations, failure to pay the tax, failure to furnish the prescribed returns, suppression of the correct value of the taxable services and failure to comply with notice do attract penal provisions as prescribed. But, it is specifically provided that no penalty is imposable on the assessee for any of the above failures, if the assessee proves that there was reasonable cause for the failure. This provision has been inserted to take care of the genuine difficulties of the new assessees.

Relief to Housing Societies. The central governments has notified to levy service tax (applicable from April 1, 2007) on only those societies where the maintenance charges paid by members of society exceeds Rs 3000 per month and the overall gross collection of the society is more than Rs. 8 lakhs per annum. Thus if the society collects less than Rs. 3000 per month or its total collection is less than Rs. 10 lakhs (applicable from 1.4.2008), then it does not collect service tax.

Rate of Service Tax & Service Tax Exemption amount
The new service tax rate effective from 24/2/2009 is 10.3%, which is down by 2% from the previous service tax rate of 12.36% (including 3% education cess). However, if your turnover for last year was less than Rs. 10 lacs (applicable from 1.4.2008; previous to this the limit was Rs. 8 lacs) you don't collect the service tax. That is only if your turnover is over 10 lacs, you must collect service tax. The service tax is payable to the government on the amount realized or received. That is the liability to pay the service tax is not based on the total billing amount.

From April 1, 2008 the service tax rate on the composite works contract scheme (for contractors registered under this scheme) is doubled from 2% of the total value of the contract to 4%. The scheme, introduced in the last Budget, brought works contract services in the service tax net. The services included integrated construction and turnkey projects on which value-added tax (VAT) is also levied. Contractors have the option to either register their projects started after June 1, 2007, under the scheme and pay a lower tax rate or pay the existing rate of 12.36% as service tax.

Sources pointed out that the decision to hike the service tax rate under the scheme was mainly to bring the tax rate on a par with the earlier works contract scheme that was applicable from 2004 to 2007. The earlier scheme also had an effective tax rate of about 4% on construction related services.


Payment & Return Due Dates
(a) Individuals or Proprietary Concerns and Partnership Firm. Service tax is to be paid on quarterly basis. The due date for payment of service tax is the 5th of the month immediately following the respective quarter. (Quarters are : April to June, July to September, October to December and January to March). However, payment for the last quarter i.e. January to March is required to be made by 31st of March itself.

 Half yearly return is filed on Form ST-3. The due date for April - Sept return is 25th October and for October - March return is 25th April.

(b) Other category of service providers. Service tax is to be paid on a monthly basis, by the 5th of the following month.  However, payment for the month of March is required to be made by 31st of March itself.  

Export of Service Rules, 2005 & Export of Service (Amendment) Rules, 2006. There is no service tax applicable on export of service if such service is delivered outside India and used outside India and payment for such service provided outside India is received by the service provider in convertible foreign exchange.

Sevice Tax Registration. To apply for service tax number, you must use Form 1. You must have PAN to apply. For more information: www.cbec.gov.in and www. servicetax.gov.in

Chennai Office
OFFICE OF THE COMMISSIONER OF SERVICE TAX, 6th Floor, MHU Complex, 692 Anna Salai, Nandanam, Chennai 600 035 (Phone: 24323017; Fax: 24323046)
« Last Edit: March 31, 2010, 05:26:36 AM by MyTaxes_Expert » Logged
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« Reply #1 on: August 25, 2011, 09:57:00 AM »

About Service Tax Registration.
Any one providing services (covered under service tax) must Register for Service Tax within 30 days of providing taxable service or when the limit of Rs.9,00,000 is crossed. There is no registration fee. For registration visit www.aces.gov.in.



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