Here a conversation between me and my friend who wants to start up his advertising business,please have a look:
My Friend’s Question1
My Friend: Hey! I need to start up my own advertising business.Is service tax applicable to me?
Me: Hey there,Congratulations for your new venture.Well ,service tax is applicable to you as the service you have chosen doesn’t fall in Negative List of Services:
(Reference:Section 66D of The Finance Act,1994)
His Question2
My Friend: Oh!are there any services on which there is no service tax?
Me: Yes,there are services specified in the negative list that are out of the service tax ambit.And some services have been exempted wide some notifications.
(Reference:section 66D of the Finance Act,Notification No.25/2012 etc)
His third Question
My Friend: Do I need to register under the service tax as I am providing a taxable service?
Me: Relax,you need not register under Service tax as soon as you start providing services.Till the time the aggregate value of taxable services do not exceed 9,00,000, you need not get registered.
But please note thet after aggregate value of taxable services exceed 9,00,000 then you need to register within 30 days of the day when you cross the 9,00,000 limit.
(Reference: Section 69 read with Service Tax Registration of Special Category Of Person Rules 2005,also Rule 3 of service Tax rules)
His Fourth question
My friend:Ok,then do you mean that I need to pay service tax as well ,when I get registered?
Me:You still have a reason to smile.No need to pay service tax till your aggregate value of taxable services exceed 10,00,000 during a financial year.
(Reference :Notification No.33/2012)
His Fifth Question:
My friend: Do I need to pay service tax on the entire taxable value once I cross the limit of 10,00000?
Me: I knew that this would be your next question.Well ,I have prepared a table to help you.
|
Case |
Turnover Previous Year |
Turnover Current year |
Servicetax liability in Current Year |
|
Case 1 |
Less than 10 lakh |
Less than 10 lakh |
No service tax liability |
|
Case 2 |
Less than 10 lakh |
More than 10 lakh |
Service tax applicable on value of taxable service after 10,00,00 |
|
Case 3 |
More than 10 lakh |
Less than 10 lakh |
Start paying service tax from the very first day |
Hope this table has helped you in understanding the exemption available.
(Refernce:Notification 33/2012 dated 20.06.2012)
His Sixth Question
My Friend: How will I pay service tax ,once I have cross the limit of 10,00,000?
Me: Well,it is just simple.You can make an online payment by 6th of the next month or in case you choose to pay through physical challan by 5th of the month following the month or quarter in which the invoices are issued.
Just note that when the service tax paid by you exceeds 1,00,000,then the e-payment becomes mandatory.
(Refernce :Notification No.16/2013 and Rule 6 of Serviec Tax Rules)
His Seventh Question
My Friend: Thanks for the help so far,Can you just let me know whether I am required to furnish a Return under Service Tax?
Me: Even I wished this is your last question
Yes dear ,as you are a service tax assessee now,you are required to furnish a electronic return in Form-ST-3.The return would be a half yearly return to be submitted by 25th of the month following the half-year.
Also,be particular to furnish the return,otherwise you will end up paying a penalty of upto rupees 20,000/-
(Reference:Section70 of Finance Act,1994 ,Rule 7 of service Tax rules)
Hope this was fun learning
CAclubindia
