Académique Documents
Professionnel Documents
Culture Documents
By CA Rajkamal Shah
carrying out any activity relating to industry, commerce or any other business or
profession.
% of Service Tax
payable by Service
Provider
Insurance agent
Nil
100%
Description of service
% of Service Tax
payable by Service
Provider
Nil
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
Description of service
% of Service Tax
payable by Service
Provider
Sponsorship
Nil
In this case, the person providing sponsorship service is the recipient of consideration and
the sponsor is the recipient of sponsorship service. In case the provider of service is other
than company or a partnership firm located in taxable territory, then the sponsor is liable to
pay tax. In other cases, such provider of service is liable to pay tax.
Exemption is available for services by way of sponsorship of sporting events
organized:
a. by a national sports federation, or its affiliated federations, where participating teams or
individuals represent any district, state or zone;
b. by Association of Indian Universities, Inter-University Sports Board, Sch Games
Federation of India, All India Sports Council for the Deaf, Paralym Committee of India or
Special Olympics Bharat;
c. by Central Civil Services Cultural and Sports Board
d. as part of national games, by Indian Olympic Association or
e. under Panchayat Yuva Kreeda Aur Khel Abhiyaan (PYKKA) Scheme
Description of service
% of Service Tax
payable by Service
Provider
Nil
100%
If assessee being a business entity having turnover of more than Rs. 10 Lakhs in the
previous year receives any legal services from an individual advocate or a firm of advocates
or Arbitral tribunals then service tax is payable by service receiver @ 12.36% of amount
charged by service provider.
Description of service
% of Service Tax
payable by Service
Provider
Nil
100%
Services
provided
by
Government or local authority
(including support service to
Business Entities but excluding
renting of immovable property
and services specified in 66D
(a)(i),(ii), (iii)]
If assessee being a business entity receives any services from government or local
authority by way of support services other than exclusions mentioned above, then service
tax shall be payable by service receiver @ 12.36% of amount charged by service provider.
Definition of Support Service:
S.65B (49) "support services" means infrastructural, operational, administrative, logistic,
marketing or any other support of any kind comprising functions that entities carry out in
ordinary course of operations themselves but may obtain as services by outsourcing from
others for any reason whatsoever and shall include advertisement and promotion,
construction or works contract, renting of immovable property, security, testing and analysis;
Description of service
Service provided or agreed to be
provided by a Director of a
company to the said company
% of Service Tax
payable by Service
Provider
Nil
100%
% of Service Tax
payable by Service
Provider
Nil
60%
Renting
or
hiring
of
a
passenger motor vehicle where
SP is indl. , HUF, partnership,
AOP
- If abatement is claimed
- If abatement is not claimed
Service Tax inclusive of education cess payable by you (receiver of service) @ 12.36% on
40% of Rs..
Service Tax inclusive of education cess levied @ 12.36% on balance 60% of Rs
CENVAT credit of service tax paid for service received for hiring motor vehicles is
mentioned in negative list of CENVAT Credit Rules, 2004 w.e.f. 01.04.2011. So assessee
cannot avail credit for service tax either paid by him on reverse charge basis or collected by
service provider. Thus, it will be cost to company. It is advised that service provider takes
abatement benefit so that the cost to company can be restricted to only 12.36% of service
tax on 40% of value of service provided.
% of Service Tax
payable by Service
Provider
%
of
Service
Tax
payable
by
Service
Receiver
25%
In this case, service receiver is liable to pay 75% of the value of service tax, on reverse
charge basis, leviable on amount charged for service provided and for balance 25% of the
value of service tax the provider of service is liable to collect service tax and pay to
government.
Invoice of service provider should be like:
Service Tax inclusive of education cess payable by you (receiver of service) @ 12.36% on
75% Rs.____
Service Tax inclusive of education cess levied @ 12.36% on balance 25% of Rs. _____.
% of Service Tax
payable by Service
Provider
%
of
Service
Tax
payable
by
Service
Receiver
50%
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 percent of the total amount charged for the works contract;
Original works meansI. all new constructions;
II. all types of additions and alterations to abandoned or damaged structures on land that
are required to make them workable;
III.erection, commissioning or installation of plant, machinery or equipment or structures,
whether pre-fabricated or otherwise;
D :total amount means the sum total of the gross amount charged for the works contract
and the fair market value of all goods and services supplied in or in relation to the execution
of the works contract, whether or not supplied under the same contract or any other contract
after deducting(i) the amount charged for such goods or services, if any; and
(ii) the value added tax or sales tax, if any, levied thereon:
Provided that the fair market value of goods and services so supplied may be determined in
accordance with the generally accepted accounting principles.
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. However, the contractor is eligible to take such credit.
Invoice of service provider should be like:
(i)
"Service Tax inclusive of education cess payable by you (receiver of service) @ 12.36% on
50% of 40% Rs.____
Service Tax inclusive of education cess levied @12.36% on balance 50% on 40% of
Rs. ____
Example: Gross bill amount Rs.1000
Less: Deduction 60% Rs. 600
Taxable portion (40%) Rs. 400
50% of Service Tax @ 12.36% on Rs. 400 payable by both service provider and service
receiver
i.e. Service provider will collect and pay service tax of Rs.24.72 and service receiver shall
pay Rs.24.72 under reverse charge basis.
(ii) For Maintenance and repairs, etc of goods:
"Service Tax inclusive of education cess payable by you (receiver of service) @ 12.36% on
50% of 70% Rs.____
Service Tax inclusive of education cess levied @12.36% on balance 50% on 70% of
Rs. ____
Example: Gross bill amount Rs.1000
Less: Deduction 30% Rs. 300
Taxable portion (70%) Rs. 700
50% of Service Tax @ 12.36% on Rs. 700 payable by both service provider and service
receiver
i.e. Service provider will collect and pay service tax of Rs.43.26 and service receiver shall
pay Rs.43.26 under reverse charge basis.
(iii) For Other works contract:
Service Tax inclusive of education cess payable by you (receiver of service) @ 12.36% on
50% of 60% Rs.____
Service Tax inclusive of education cess levied @12.36% on balance 50% on 60% of
Rs. ____
Example: Gross bill amount Rs.1000
Less: Deduction 40% Rs. 400
Taxable portion (60%) Rs. 600
50% of Service Tax @ 12.36% on Rs. 600 payable by both service provider and service
receiver
i.e. Service provider will collect and pay service tax of Rs.37.08 and service receiver
shall pay Rs.37.08 under reverse charge basis.
Note - In works contract services, where both service provider and service recipient is the
persons liable to pay tax, the service recipient has the option of choosing the valuation
method as per choice, independent of valuation method adopted by the provider of service.
% of Service Tax
payable by Service
Provider
Nil
100%
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
No specification required on invoice. Ensure that payment for such service is made within
six months from the date of invoice, or else tax liability will be considered from the date of
issue of invoice.
In case of partial reverse charge, receiver of service can avail Cenvat credit of service tax
paid on different occasions. However, in absence of any liability of service tax, say in case
of a trader, the credit may get accumulated.