Avail 50% discount on All CS & CMA subjects for Dec batch . Use coupon code Dec14

×

Please Wait ..

Sign-in to your account


Username:
Password:

Remember Me

Forgot your password?

Sign-up now



Join CAclubindia.com and Share your Knowledge. Registered members get a chance to interact at Forum, Ask Query, Comment etc.


Discussion > Service Tax > Notifications >

Amndment in service tax rule w.e.f 1st july 2012...!!!

    Post New Topic
Pages : 1





CA, CS in Job


[ Scorecard : 618]
Posted On 10 July 2012 at 10:12 Report Abuse

BIRD'S EYE VIEW

In pursuance of recent changes (with effect from 1st July, 2012) in Service Tax under the Finance Act,1994, service receiver shall discharge service tax liability on behalf of service provider either by full or by part as per the following table. That means service receiver has to deposit service tax to the department as if service receiver is deemed service provider by complying all the relevant sections rules & valuation rules within the ambit of service tax under the Finance Act,1994.

Descripttion of Service

Status of Service Provider

Tax to be paid by Service provider

Status of Service Receiver

Tax to be paid (deposited) by Service Receiver

1.In respect of services provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road.

(Tax to be paid on 25% of the value)

By any transport agency

Nil

Company or body corporate where receiver is either consignor or consignee.

100%

 

2. In respect of services provided or agreed to be provided by way of sponsorship .

 

(Tax to be paid on 100% of the value).

 

 

Any assessee be individual, Company etc.

 

NIL

 

Any body corporate, Partnership firm.

 

100%

3. In respect of services provided or agreed to be provided by an Arbitral Tribunal.

 

(Tax to be paid on 100% of the value).

Arbitral Tribunal

Nil

Any body corporate

100%

4. In respect of services provided or agreed to be provided by individual advocate.

 

(Tax to be paid on 100% of the value)

 

 

 

 

Individual advocate

Nil

Any body corporate

100%

 

5. In respect of services provided or agreed to be provided by way of support service by Govt. or local authority.

 

(Tax to be paid on 100% of the value).

 

Govt. or local authority

 

Nil

 

Any body corporate

 

100%

 

6. In respect of services provided or agreed to be provided” by way of renting or hiring any motor vehicle designed to carry passenger on abated value.

 

(Tax to be paid on 40% of the value).

 

An Individual/ HUF/ proprietary Firm/ partnership Firm/ AOP

 

Nil

 

Any company or Any body corporate

 

100%

 

7. In respect of services provided or agreed to be provided” by way of renting or hiring any motor vehicle designed to carry passenger on non abated value.

 

(Tax to be paid on 100% of the value).

 

 

An individual/ HUF/ proprietary Firm/ partnership Firm /AOP

 

60%

 

Any company or Any body corporate

 

40%

 

8. In respect of services provided or agreed to be provided by way of supply of man-power for any purpose.

 

(Tax to be paid on 100% of the value)

 

An individual/ HUF/ proprietary Firm/ partnership Firm /AOP

 

25%

 

Any company or Any body corporate

 

75%

 

9.In respect of services provided  or agreed to be provided by way of works contract.

 

(Tax to be paid on 100% of the value)

 

An individual/ HUF/ proprietary Firm/ partnership Firm/ AOP

 

50%

 

Any company or Any body corporate

 

50%

 

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.

(Tax to be paid on 100% of the value).

 

Any body

 

Nil

 

Any body

 

100%

 

If you receive any bill related to above 10 category and if status of service provider is as per above table, you have to deposit service tax irrespective of status of service provider having or not Service tax Registration with reference to threshold limit of taxable service.

POINTS TO BE REMEMBERED/TAKEN CARE OF :

1.         Legal service / Legal consultancy provided by individual advocate.

  1. check the status of advocate.
  1. Be sure whether service tax is included in the contract or not. If included deduct the service tax amount @ 12.36% on the entire value of taxable services so claimed.

 

2.         Any support service provided by Govt. or local authority.

  1. If you receive any service either in relation to garbage clearance, security service  etc. from Govt. or local authority, service tax is to be paid on the entire value of taxable service @ 12.36%.

3.         Rent-a- cab service (Hire –car bill)

  1. You insist party to take abatement otherwise our service tax liability will be more because we will not be able to take Cenvat Credit and at the time of floating of tender or on evaluation of tender this abatement effect is to be considered.
  1. If party does not claim service tax you also have to pay service tax as per following.

Taxable service = Rs.100

Service Tax to pay = Rs. 100x40%x12.36% = Rs. 4.944

  1. If party claims service tax, check whether they claim service tax on 100% taxable value, if yes, reimburse to service provider 60% of service tax and 40% of service tax deposit to the department.

4.         Supply of Man-power.

  1. Check the invoice properly as per the contract.
  1. Some times service provider by taking registration for “man-power  supply“ is also providing Security Agent’s service, Construction service, Erection service along with  material supply. Hence, it becomes now pre-requisite to check what is the nature of job and whether service provider is raising invoice referring such classification which has  close proximity to the job as per the contract. Other-wise consequently we may have to pay more service tax.
  2. If the job is partly for supply of material and rendering of service, it is justified to insist party to raise invoice under the classification “Works Contract Service”, after taking registration of works contract services.
  3. It is experienced that by taking “Man-power Supply” classification, Service Provider provides service of Repair & Maintenance (like Civil & Electrical Maintenance service) but this is not correct and in that case we have to deposit service tax to the department on behalf of service provider. In this case proper classification of service “Repair & maintenance Service”, hence check the classification of service as per their registration certificate.

5.         Works contract Service

 

a)         Check the invoice as per the contract particularly apportionment of supply of material and corresponding sales tax liability and rendering of service and corresponding service tax.

 

6.         Definition of Work Contract as per Service Tax under the Finance Act, 1994 is as follow.

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, improvement, repair, renovation, alteration of any building or structure on land or for carrying out any other similar activity or a part thereof in relation to any building or structure on land.

7.          Local Authority means:

  1. A panchayat
  2. A Cantonment Board
  3. A Municipal Committee & a District body
  4. Cantonment Board
  5. A regional council or a district council
  6. A development Board
  7. A regional council constituted under article 371A of the Constitution.

 

8.                 Support Service means

Infrastructural, operational, administrative, logistice, marketing or any other support of any kind comprising function that entire carry out in ordinary course of operations themselves but may obtain as services by outsourcing from others for any reason whatsoever  and include advertisement and promotion, construction or works contract, renting of immovable  property, security, testing and analysis.  

 

9.         Common check for all invoices related to service tax

Before processing the bill related to service tax, check the following.

I)          Name & address of the service provider with reference to the contract  & registration certificate and organization status of the Service Provider.

II)         Reference of service tax registration number in the invoice of the service provider as per the registration certificate.

III)        Name and address of the service receiver.

IV)       Classification of the service mentioned having close proximity to the job entrusted as per contract.

                V)        Check the invoice value properly as per the contract.

VI)       Check whether taxable Services amount, service tax amount, rate of service tax, abatement percentage are mentioned in the invoice or not.

VII)      If the contract is inclusive of service tax, deduct the amount of service tax, which we have to pay on behalf of service provider.



Total thanks : 1 times

Online classes for CA CS CMA



Ritesh Jain
CA, CS in Job


[ Scorecard : 618]
Posted On 10 July 2012 at 16:33

It is just a nutshell of what actuallly is the position after 1st July 2012....in service tax.




There are 1 Replies to this message






Related Files








Related Threads


Post your reply for Amndment in service tax rule w.e.f 1st july 2012...!!!



Your are not logged in . Please login to post replies

Click here to login


Not a member yet ?? Click here to signup

Message







    

  • Use thank button to convey your appreciation.
  • Maintain professionalism while posting and replying to topics.
  • Try to add value with your each post.




Forum Home | Forum Portal | Member Control Center | Who is Where | Popular Threads | Today's Topic | Recent Posts | Today's Posts | Post New Topic | Thread With Files | Top Threads This Month | Forum Stats | Unreplied Threads

back to the top