chapter - 12 assessment procedure
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noTRANSCRIPT
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LEARNING OUTCOME
Introduction to Service Tax:1) Assessment Procedure2) Point of Taxation3) Taxable Territory4) Gross Amount
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Negative List (Section 66 D)
Services provided by:Category 1: Govt./ Local authorityCategory 2: RBICategory 3: foreign diplomatic mission located in
IndiaCategory 4: agricultural/ agricultural produceCategory 5: trading of goodsCategory 6: any process – manufacturing/ production
of goodsCategory 7: selling of space or time slots for
advertisement – TV or Radio
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Negative List (Section 66 D)
Services:Category 8: by way of access to a road/ bridge- payment of
toll chargesCategory 9: betting/ gambling or lotteryCategory 10: admission to entertainment eventCategory 11: transmission/ distribution – electricityCategory 12: EducationCategory 13: residential dwellings – residence useCategory 14: financial sectorCategory 15: transportation of passengerCategory 16: Transportation of goodsCategory 17: funeral services
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Assessment Procedure
Value of services: declared Basis of charge: 12.36%Service – not in negative list/ exemption notificationProvided in taxable territoryComputation of tax liabilityPoint of taxationReverse charge mechanismThreshold limit
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Assessment Procedure
Point of taxation:date of completion of service
OrReceipt of payment – towards service
Whichever is earlier
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Assessment Procedure
Gross Amount:Value of service:
Cum-tax gross amount charged ____________________________X 100 (100 + Rate of Service Tax)
Service Tax:Cum-tax gross amount charged
____________________________X Rate of Tax (100 + Rate of Service Tax)
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Assessment Procedure
1. Expenses - not part of – services – but incurred – as per business practice/ administrative convenience
And recovered – Customer – not includible – Value of Service
Example: Taxes, transport, loading charges, paid on behalf of the customer
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Assessment Procedure
2. If Value of services – not ascertainable (Rule 3 of Service Tax Valuation Rules)
Value of similar services Equivalent money value(Rule 3a) of consideration
(Rule 3b)
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EXEMPTED SERVICES
1. Services to UN2. Medical and Health Care3. Charitable activities4. Religious services5. Legal services – by Arbitral Tribunal6. Classical or Folk artists7. Sponsorship of certain sports event8. Technical testing or analysis of newly develpoed
drugs.Etc.
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ABATEMENT SERVICES
1. Accommodation booking service by tour operator10% of the gross amount charged.
2. Air travel agent: Option to pay flat rate tax: • 0.6% - domestic booking• 1.2% - international booking
3. Mandap keepers, hotels, convention services: providing full catering services:
60% of the gross amount charged.
NOTE: Refer page No. 103-104 for more services (29th edition)
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REVERSE CHARGE MECHANISM
Service Receiver Pays taxExceptions:1. Services provided by non- resident2. Insurance agents3. Consignor/ consignee paying freight – GTA services4. Agents of mutual fund
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Registration
Less than 9 Lacs Even if more than one premises Electronic filing No registration – all services being exported Penalty for non-registration: Rs.10,000 or Rs.200 per
day (which ever is higher) Interest of 18%: for late payment of tax Returns: ST3 – Half yearly (25th day) Rs.20,000 for late filing of returns
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Registration
Less than 9 Lacs Even if more than one premises Electronic filing No registration – all services being exported Penalty for non-registration: Rs.10,000 or Rs.200 per
day (which ever is higher) Interest of 18%: for late payment of tax