Consulanting engineer service tax

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mgopakumar (Querist)
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19 October 2013 1.when the service tax started for the consultant?

2.what was the limit for paying service tax?

3.in which date the service tax limits enhance 8/9lacks ?

4.i was paid the service tax when the limit was 6lacks after enhancing 8/9lack. i had not to paid. now my income 15l per year and service tax is paying from 2009 December. is it required to submit the nil return during from the enhanced amount 8 lacks to 2009 November with getting salary 15lk also any action for not submitting in nil return.
5.kindly inform force of action to be taken.

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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19 October 2013 Your queries are resolved seratim:

(1)By Notification no.23/97-ST dated 02.07.1997 Service tax on Engineering Consultancy was introduced w.e.f.07-07-1997.

Section 65(31) of Finance Act 1994 defines an Engineering Consultant as a qualified engineer providing taxable service. “Taxable Service” means any service provided or to be provided to any person, by a consulting engineer in relation to advice, consultancy or technical assistance in any manner in one or more disciplines of engineering including the discipline of computer hardware engineering but excluding the discipline of computer software engineering”

(2)The threshold limit i.e. the limit upto which Service Tax is not payable was first introduced from 01.04.2005 at Rs.4 lakhs.

By Notification no.4/2007 - ST dated 01.03.2007 the limit was raised to Rs.8 lakhs w.e.f. 01-04-2007.

By Notification no.8/2008 - ST dated 01.03.2008 the threshold limit was raised to Rs.10 lakhs w.e.f. 01-04-2008.

(3) You have not specified on what date you took your registration as Service Provider under section 65(31) of Finance Act, 1994 as 'Consulting Engineer', but from your query in point 4 it is apparent that you were a registered service provider prior to 01.04.2007 and that is why you had paid service tax when your income was Rs.6 lakhs.

(4) It is not very clear from your query whether you are a qualified engineer in full time employment of some company / organization or were a Professional Consultant.

The nomenclature of your appointment is not important, but the terms of your emoluments are. If you were paid professional charges by the organization which employed you and they issued the Income Tax Deducted at Source Certificate in Form 16A, you were rendering Consulting Engineering Services. However, if you were paid a salary by the organization which employed you and they issued the Income Tax Deducted at Source Certificate in Form 16, then you were a salaried employee.

If there is a employer/employee relation between the service provider and service recipient, then no taxable service is rendered. This is the preamble to your query.

Once a person registers himself as a Service Provider / Recipient with the Central Excise authorities he becomes liable to file the periodic ST-3 Return irrespective of whether he renders taxable service or not. In other words the liability even to file NIL returns exist. There is a circular - I am unable to recall the details - which allows non taxable service providers from filing ST - 3. One can take recourse to the said circular.

Once the remuneration crossed Rs.10 lakhs, ST-3 return should be filed and ST paid. If not done so please do so immediately with interest.

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