Service Tax on Restaurant Service, Circular No.173/8/2013 – ST

Air Conditioned or  central air heating Restaurant, eating joint or mess serving food or beverages are liable to pay service tax. Central Board of Excise & Customs has issued the clarification related to applicability of service tax on food served outside the Air Conditioned area which is clearly demarcated and separately named but food is sourced from a common kitchen, only the service provided in the AC restaurant is liable to service tax and service provided in a non air-conditioned or non centrally air- heated restaurant will not be liable to service tax. In such cases, service provided in the non air-conditioned / non-centrally air-heated restaurant will be treated as exempted service and credit entitlement will be as per the Cenvat Credit Rules.  In a hotel, if services are provided by a AC restaurant in other areas e.g. swimming pool or an open area attached to the restaurant are liable to service tax.

Circular No.173/8/2013 – ST

F.No.334/3/2013-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

Tax Research Unit

                                                                                                               North Block

New Delhi, 7th October, 2013

To

Chief Commissioners of Central Excise and Customs (All),

Director General (Service Tax), Director General (Central Excise Intelligence), Director General (Audit),

Commissioners of Service Tax (All)

Commissioners of Central Excise (All),

Commissioners of Central Excise and Customs (All).

Madam/Sir,

 Subject: Restaurant Service- clarification -regarding

As part of the Budget exercise 2013, the exemption for services provided by specified restaurants extended vide serial number 19 of Notification 25/2012-ST was modified vide para 1 (iii) of Notification 3/2013-ST.  This has become operational on the 1st of April, 2013.

2.    In this context, representations have been received. On the doubts and questions raised therein clarifications are as follows:

Doubts

Clarifications

1. In a complex where air conditioned as well as non-air conditioned restaurants are operational but food is sourced from the common kitchen, will service tax arise in the non-air conditioned restaurant? Services provided in relation to serving of food or beverages by a restaurant, eating joint or mess, having the facility of air conditioning or central air heating in any part of the establishment, at any time during the year (hereinafter referred as ‘specified restaurant’) attracts service tax. In a complex, if there is more than one restaurant, which are clearly demarcated and separately named but food is sourced from a common kitchen, only the service provided in the specified restaurant is liable to service tax and service provided in a non air-conditioned or non centrally air- heated restaurant will not be liable to service tax. In such cases, service provided in the non air-conditioned / non-centrally air-heated restaurant will be treated as exempted service and credit entitlement will be as per the Cenvat Credit Rules.
2. In a hotel, if services are provided by a specified restaurant in other areas e.g. swimming pool or an open area attached to the restaurant, will service tax arise? Yes. Services provided by specified restaurant in other areas of the hotel are liable to service tax.
3. Whether service tax is leviable on goods sold on MRP basis across the counter as part of the Bill/invoice. If goods are sold on MRP basis (fixed under the Legal Metrology Act) they have to be excluded from total amount for the determination of value of service portion.

 3.    Trade Notice/Public Notice may be issued to the field formations and taxpayers. Please acknowledge receipt of this Circular. Hindi version follows.

Service Tax Exemption to Educational Institution and Auxiliary Educational Services Circular No.172/7/2013 – ST

Services provided to an educational institution in respect of education exempted from service tax, by way of,-

(a) auxiliary educational services; or

(b) renting of immovable property;”.

 As defined in the said notification, “auxiliary educational services” means any services relating to imparting any skill, knowledge, education or development of course content or any other knowledge–enhancement activity, whether for the students or the faculty, or any other services which educational institutions ordinarily carry out themselves but may obtain as outsourced services from any other person, including services relating to admission to such institution, conduct of examination, catering for the students under any mid-day meals scheme sponsored by Government, or transportation of students, faculty or staff of such institution.

By virtue of the entry in the negative list and by virtue of the portion of the exemption notification, it will be clear that all services relating to education are exempt from service tax. There are many services provided to an educational institution. These have been described as “auxiliary educational services” and they have been defined in the exemption notification. Such services provided to an educational institution are exempt from service tax. For example, if a school hires a bus from a transport operator in order to ferry students to and from school, the transport services provided by the transport operator to the school are exempt by virtue of the exemption notification.

In addition to the services mentioned in the definition of “auxiliary educational services”, other examples would be hostels, housekeeping, security services, canteen, etc.

Circular No.172/7/2013 – ST

 F. No.B1/14/2013-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise& Customs

Tax Research Unit

146-F, North Block

New Delhi, 19th September, 2013

To

Chief Commissioners of Central Excise and Service Tax (All),

Director General (Service Tax), Director General (Central Excise Intelligence),

Director General (Audit),

Commissioners of Service Tax (All),

Commissioners of Central Excise and Service Tax (All).

 Madam/Sir,

 Subject: Education services – clarification — reg.

 The following representations have been received seeking clarifications regarding the levy of service tax on certain services relating to the education sector:

 Private Schools Correspondents Confederation, Madurai.

  1. Tamil Nadu Nursery, Primary, matriculation and Higher Secondary Schools Association, Chennai.
  2. Punjab Association, Chennai.
  3. Association of Self financing Universities of Rajasthan
  4. Unaided Schools’ Forum, Mumbai.
  5. Vedavalli Vidyalaya, Wallajapet.
  6. Independent Schools Associations, Chandigarh.
  7. Mother Teresa Public School, New Delhi.
  8. BVM Global, Chennai.
  9. Sastra University, Tanjavur.
  10. HLC International, Chennai.
  11. Sodexo Food Solutions, Mumbai.
  12. Federation of Associations of Maharastra, Mumbai.

2.         The matter is covered by two provisions of the Finance Act, 1994. Section 66D of the Finance Act contains a negative list of services and clause (l) thereof reads as under:

“services by way of –

(i) pre-school education and education upto higher secondary school or equivalent;

(ii) education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force;

(iii) education as a part of an approved vocational education course;”.

 Further section 93(1) of the Finance Act, 1994, enables the Government to exempt generally or subject to such conditions taxable service of specified description. By virtue of the said power, Government has issued a notification No.25/2012-ST dated 20th June,2012, exempting certain services. Sl.no.9 thereof reads as follows:

 “Services provided to an educational institution in respect of education exempted from service tax, by way of,-

(a) auxiliary educational services; or

(b) renting of immovable property;”.

 As defined in the said notification, “auxiliary educational services” means any services relating to imparting any skill, knowledge, education or development of course content or any other knowledge–enhancement activity, whether for the students or the faculty, or any other services which educational institutions ordinarily carry out themselves but may obtain as outsourced services from any other person, including services relating to admission to such institution, conduct of examination, catering for the students under any mid-day meals scheme sponsored by Government, or transportation of students, faculty or staff of such institution.

 3.         By virtue of the entry in the negative list and by virtue of the portion of the exemption notification, it will be clear that all services relating to education are exempt from service tax. There are many services provided to an educational institution. These have been described as “auxiliary educational services” and they have been defined in the exemption notification. Such services provided to an educational institution are exempt from service tax. For example, if a school hires a bus from a transport operator in order to ferry students to and from school, the transport services provided by the transport operator to the school are exempt by virtue of the exemption notification.

 4.         In addition to the services mentioned in the definition of “auxiliary educational services”, other examples would be hostels, housekeeping, security services, canteen, etc.

 5.         Thus the apprehensions conveyed in the representations submitted by certain educational institutions and organizations have no basis whatsoever. These institutions and organizations are requested not to give credence to rumours or mischievous suggestions. If there is any doubt they are requested to approach the Chief Commissioner concerned.

 6.         All concerned are requested to acknowledge the receipt of this circular

Service Tax Officer: Power to Arrest Defaulter of Service Tax, Circular 171/6/2013-Service Tax

An officer of Central Excise not below the rank of  Superintendent of Central Excise can carry out an arrest on being authorized by the Commissioner of Central Excise. To authorize the arrest the Commissioner should have reason to believe that the person proposed to be arrested has committed an offence specified in clause (i) or clause (ii) of sub-section (1) of section 89. The reason to believe must be based on credible material which will stand judicial scrutiny. Also Circular 171/6/2013-Service Tax deals with the procedure of arrest also arrest pre and post conditions.

Section 89 of the Finance Act, 1994. Offences and Penalties. – (1) Whoever commits any of the following offences, namely,—”(a) knowingly evades the payment of service tax under this Chapter; or”;

 (b) avails and utilises credit of taxes or duty without actual receipt of taxable service or excisable goods either fully or partially in violation of the rules made under the provisions of this Chapter; or

(c) maintains false books of account or fails to supply any information which he is required to supply under this Chapter or the rules made thereunder or (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true) supplies false information; or

(d) collects any amount as service tax but fails to pay the amount so collected to the credit of the Central Government beyond a period of six months from the date on which such payment becomes due, shall be punishable,—
(i) in the case of an offence where the amount exceeds fifty lakh rupees, with imprisonment for a term which may extend to three years:
Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for a term of less than six months;
(ii) in any other case, with imprisonment for a term, which may extend to one year.

(2) If any person convicted of an offence under this section is again convicted of an offence under this section, then, he shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to three years:

Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for a term less than six months.
(3) For the purposes of sub-sections (1) and (2), the following shall not be considered as special and adequate reasons for awarding a sentence of imprisonment for a term of less than six months, namely:—
(i) the fact that the accused has been convicted for the first time for an offence under this Chapter;
(ii) the fact that in any proceeding under this Act, other than prosecution, the accused has been ordered to pay a penalty or any other action has been taken against him for the same act which constitutes the offence;
(iii) the fact that the accused was not the principal offender and was acting merely as a secondary party in the commission of offence;
(iv) the age of the accused.

(4) A person shall not be prosecuted for any offence under this section except with the previous sanction of the Chief Commissioner of Central Excise.

Circular 171/6/2013-Service Tax

F.No. 137/47/2013-Service Tax

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

Service Tax Wing

***

New Delhi, the 17th September, 2013

To,

All Chief Commissioners of Central Excise

All Chief Commissioners of Customs and Central Excise

All Directors General

All Commissioners of Service Tax

All Commissioners of Central Excise

 Subject:  Guidelines for arrest and bail in relation to offences punishable under the Finance Act, 1994

 Section 103 (K) of the Finance Act, 2013 has introduced Sections 90 & 91 in the Finance Act, 1994, with effect from  10th May, 2013.  In terms of section 90 of the Finance Act , 1994, as amended, offences under section 89(1) (ii) shall be cognizable and all other offences shall be non-cognizable and bailable. In terms of section 91(1) read with section 89(1) (i) and (ii) of the Finance Act, 1994, as amended, the power to arrest has been introduced in cases involving evasion of service tax covered under section 89(1) (i) and (ii) of the Finance Act, 1994, as amended and the amount of service tax evaded  exceeds rupees fifty lakh. In this context, the following points may be noted for strict compliance:-

 1.2       The following cases are covered under section 89(1) (i):

1.2.1     where a person knowingly evades the payment of service tax, or

1.2.2   avails and utilizes  credit of taxes or duty without actual receipt of taxable service or excisable goods either fully or partially in violation of the rules, or

1.2.3    maintains false books of accounts or fails to supply any information which he is required to supply or supplies false information, and the amount of service tax involved is more than fifty lakh rupees.

In such cases, the Assistant Commissioner or  the Deputy Commissioner shall, for the purpose of releasing an arrested person on bail or otherwise,  have the same powers and be subject to the same provisions as an officer in-charge of a police station has, and  is subject to, under Section 436 of the Code of Criminal Procedure, 1973( 2 of 1974). This is in terms of section 91(3) of the Finance Act, 1994, as amended.

 1.3       The following cases are covered under section 89(1) (ii):

1.3.1    where  a person has collected any amount exceeding fifty lakh rupees as service tax but fails to pay the amount as collected to the credit of the Central Government beyond a period of six months from the date on which such payment becomes due.

In such cases,   after following the due procedure of arrest, the arrested person must be produced before the magistrate without unnecessary delay, and definitely within 24 hours. This is in terms of section 91(2) of the Finance Act, 1994, as amended. The magistrate will decide on whether or not to grant bail.

 2.0        Conditions precedent

 2.1        Since arrest impinges on the personal liberty of an individual, this power must be exercised carefully.  The Finance Act 1994, as amended,  has  specified categories of offences in respect of which only powers of arrest may be exercised and these offences are covered under clause (i) or clause (ii) of sub-section (1) of section 89 of the Finance Act, 1994.  Further, the Finance Act 1994 has also prescribed value limits of evasion of service tax exceeding  Rs 50 lakh, for exercising the powers of arrest.

 2.2        The legal stipulations in the Finance Act 1994 , as amended, contained in section 91 read with section 89 must be strictly adhered to. An officer of Central Excise not below the rank of  Superintendentof Central Excise can carry out an arrest on being authorized by the Commissioner of Central Excise. To authorize the arrest the Commissioner should have reason to believe that the person proposed to be arrested has committed an offence specified in clause (i) or clause (ii) of sub-section (1) of section 89. The reason to believe must be based on credible material which will stand judicial scrutiny.

 2.3     Apart from fulfilling the legal requirements, the need to ensure proper investigation, prevention of the possibility of tampering with evidence or intimidating or influencing witnesses and large amounts of service tax evaded are relevant factors before deciding to arrest a person.

  3.0      Procedure for arrest

 3.1        The provisions of   the Code of Criminal Procedure 1973 (2 of 1974) relating to arrest and the procedure thereof must be adhered to .  It is therefore advised that the Commissioner should ensure that allofficers  are fully familiar with the provisions of the  Code of Criminal Procedure 1973 (2 of 1974).

 3.2        There is no prescribed format for arrest memo but an arrest memo must be in compliance with the directions in D.K Basu vs State of West Bengal reported in 1997(1) SCC 416 ( see paragraph 35). The arrest memo should include:

3.2.1     brief facts of the case;

3.2.2     details of the person arrested;

3.2.3     gist of evidence against the person;

3.2.4    relevant section (s) of the Finance Act, 1994 or other laws attracted to the case and to the arrested person;

3.2.5    the grounds of arrest must be explained to the arrested person and this fact noted in the arrest memo;

3.2.6   a nominated person (as per the details provided by arrested person) of the arrested person should be informed immediately and this fact also may  be mentioned in the arrest memo;

3.2.7   the date and time of arrest may be mentioned in the arrest memo and the arrest memo should be given to the person arrested under proper acknowledgment;

3.2.8    a separate arrest memo has to be made and provided to each individual/arrested person. This should particularly be kept in mind in the event that there are several arrests in a single case.

 3.3        Further there are certain modalities that should be complied with at the time of arrest and pursuant to an arrest, which include the following:

3.3.1    A female  should be arrested by or in the presence of a woman  officer;

3.3.2   Medical examination of an arrested person should be conducted by a medical officer in the service of Central or State Governments and in case the  medical officer is not available , by a registered medical practitioner, soon after the arrest is made. If an arrested person is a female then such an examination shall be made only  by, or under supervision of a female medical officer , and in case the female medical officer is not available, by  a female registered medical practitioner.

 3.3.3   It shall be the duty of the person having the custody of an arrested person to take reasonable care of the health and safety of the arrested person.

  4.0   Post arrest formalities

 4.1        The procedure is separately outlined for the different categories as listed in section 89(1) (i) and (ii) of the Finance Act, 1994, as amended:

 4.1.1     In cases covered under section 89(1) (i), the Assistant Commissioner or Deputy Commissioner is bound to release a person on bail against a bail bond. The bail conditions should be informed   in writing to the arrested person and also informed on telephone to the nominated person of the person (s) arrested .The arrested person should be also allowed to talk to a nominated person. The conditions will relate to, inter alia, execution of a personal bail bond and one surety of like amount given by a local person of repute, appearance before the investigating officer when required and not leaving the country without informing the officer. The amount to be indicated in the personal bail bond and security will depend, inter alia, on the amount of tax involved.

4.1.2       If the conditions of the bail are fulfilled by the arrested person, he shall be released by the officer concerned on bail forthwith.   However, only in cases where the conditions for granting bail are not fulfilled, the arrested person shall be produced before the appropriate Magistrate without unnecessary delay and within twenty-four (24) hours of arrest.  The arrested person may be handed over to the nearest police station for his safe custody, within 24 hours, during the night under a challan, before he is produced before the Court.

 4.2         In cases covered under section 89(1) (ii) and only in the event of circumstances preventing the production of the arrested person before a Magistrate without unnecessary delay, the arrested person may be handed over to nearest Police Station for his safe custody, within 24 hours, under a proper challan, and produced before the Magistrate on the next day, and the nominated person of the arrested person may be also informed accordingly.

 4.3     Formats of the relevant documentation i.e. the Bail Offer Letter, the Bail Bond and the Challan for handing over to the police, in the Code of Criminal Procedure, 1973. ( 2 of 1974) may be followed.

 4.4       Every Commissionerate should maintain a Bail Register which will have the details of the case, arrested person, bail amount, surety amount. The money/instruments/documents received as surety should be kept in safe custody. The money should be deposited in the treasury. The other instruments/documents should be kept in the custody of a single nominated officer. It should be ensured that the instruments/documents received as surety are kept valid till the bail is discharged.

 5.0     Reporting System

 5.1     A report on every person arrested should be sent to the jurisdictional Chief Commissioner with a copy to DGCEI (Headquarters) the same day or on the next day.

 5.2         Chief Commissioners shall send a report on every arrest to the Zonal Member within 24 hours of the arrest giving such details as prescribed in the monthly report . To maintain an all India record of arrests made in service tax, a monthly report of all persons arrested in the Zone shall be sent by the Chief Commissioner to DGCEI (Headquarters), New Delhi, by the 5th of the succeeding month,  in the following format:

Monthly Report on Persons Arrested in a Zone

 

S.No Name, designation

and age of

arrested person

Date of

arrest

Commissionerate Name and

Registration

Number of

Company

Amount of

duty evaded

Role in

evasion

and

nature of

evidence

collected

             
             
             
Total            

Yours faithfully

(Rajeev Yadav)

Director (Service Tax)

Download Service Tax Return (ST-3) for the period April -September 2013: Last Date 25th Oct

Service Tax Return (ST-3)  for the period April -September’ 13 has been made available for e-filing by the assesses in both offline and  online version in ACES w.e.f 1st October, 2013. The last date of filing the ST-3 return for the said period is 25th October, 2013.

Service Provider can download the latest ST 3 Service Tax Half Yearly return for online filing of Service Tax return.

In case of any difficulty in accessing the ACES Application or in filing ST 3 returns, the assesses can seek help of the ACES Service Desk by sending e-mail to  or calling up national toll-free number 1800 425 4251. In general, the Service Desk functions on any working day from Monday to Friday between 9 AM and 7 PM and on Saturdays between 9 AM to 2.30 PM. But to help the assessees file their returns, it will remain open from 9 AM and 7 PM on all Saturdays till 25th October’13. But to help the assesses file their returns, it will remain open from 9 AM and 7 PM on all Saturdays till 25th October’13 and from 9AM to 7PM on last Sunday  i. e 20-10-2013.
Assessees are requested to file their returns in ACES well in advance to avoid rush and inconvenience at the last moment.

Download (ZIP)

Section 66B of Finance Act, 1994 for Service Tax Rate and Negative List of Services Notification 25/2012

As per section 66B of the Finance Act,1994 for Service Tax Rate and Negative List of Services as per Service Tax Notification No 25/2012. Current Service Tax Rate will be 12.36% from April 2012 i.e Service Tax Rate of 12% plus education cess of 2% and Secondary & Higher Education Cess of 1% will be applicable, which leads to total of 12.36% on Services for year 2012-2013 and no changes where made in Finance Act, 2013 so service tax rate of 12.36% will remain same for year 2013-2014. Service Tax Notification No 25/2012 provided list of services which are exempted from service tax. Also Clause 6 (3) of the Notification 25/2012 given Rs 10 lakhs exemption limit from service tax.

Reference Section 66B of Finance Act 1994: Service Tax Rate 

66B. There shall be levied a tax (hereinafter referred to as the service tax) at the rate of twelve per cent. on the value of all services, other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another and collected in such manner as may be prescribed.

Service Tax Notification No.  25/2012 dated 20th June, 2012

G.S.R……(E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Act) and in supersession of notification number 12/2012- Service Tax, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 210 (E), dated the 17th March, 2012, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the following taxable services from the whole of the service tax leviable thereon under section 66B of the said Act, namely:-

  1. Services provided to the United Nations or a specified international organization;
  2. Health care services by a clinical establishment, an authorised medical practitioner or  para-medics;
  3. Services by a veterinary clinic in relation to health care of animals or birds;
  4. Services by an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) by way of charitable activities;
  5. Services by a person by way of- (a)     renting of precincts of a religious place meant for general public; or (b)     conduct of  any religious ceremony;
  6. Services provided by

(a) an arbitral tribunal to –

(i) any person other than a business entity; or

(ii) a business entity with a turnover up to rupees ten lakh in the preceding financial year;

(b)  an individual as an advocate or a partnership firm of advocates by way of   legal services to,-

(i) an advocate or partnership firm of advocates providing legal services ;

(ii) any person other than a business entity; or

(iii) a business entity with a turnover up to rupees ten lakh in the preceding financial  year; or

(c)  a person represented on an arbitral tribunal to an arbitral tribunal;

7.  Services by way of technical testing or analysis of newly developed drugs, including vaccines and herbal remedies, on human participants by a clinical research organisation approved to conduct clinical trials by the Drug Controller General of India;

8.  Services by way of training or coaching in recreational activities relating to arts, culture or sports;

9.    Services provided to or by an educational institution in respect of education     exempted from service tax, by way of,-

(a)  auxiliary educational services; or

(b)  renting of immovable property;

10. Services provided to a recognised sports body by-

(a)  an individual as a player, referee, umpire, coach or team manager for participation in a sporting event organized by a recognized sports body;

(b)  another recognised sports body;

  1. Services by way of sponsorship of sporting events organised,-

(a)     by a national sports federation, or its affiliated federations, where the participating teams or individuals represent any district, state or zone;

(b)     by Association of Indian Universities, Inter-University Sports Board, School Games Federation of India, All India Sports Council for the Deaf, Paralympic 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;

12. Services provided to the Government, a local authority or a governmental authority by way ofconstructionerection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of –

(a)  a civil structure or  any other original works meant predominantly for  use other than for commerce, industry, or any other business or profession;

(b)  a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958);

(c)    a structure meant predominantly for use  as (i) an educational, (ii) a clinical, or  (iii) an art or cultural establishment;

(d)  canal, dam or other irrigation works;

(e)  pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal; or

(f)    a residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation 1 to clause 44 of section 65 B of the said Act;

  1. Services provided by way of constructionerection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,-

(a)     a road, bridge, tunnel, or terminal for road transportation for use by general public;

(b)     a civil structure or  any other original works pertaining to a scheme under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana;

(c)      a building owned by an entity registered under section 12 AA of the Income tax Act, 1961(43 of 1961) and meant predominantly for religious use by general public;

(d)     a pollution control or effluent treatment plant, except located as a part of a factory; or

a structure meant for funeral, burial or cremation of deceased;

14. Services by way of construction, erection, commissioning, or installation of original works pertaining to,-

(a)  an airport, port or railways, including monorail or metro;

(b)  a single residential unit otherwise than as a part of a residential complex;

(c)   low- cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent authority empowered under the ‘Scheme of Affordable Housing in Partnership’ framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India;

(d)  post- harvest storage infrastructure for agricultural produce including a cold storages for such purposes; or

(e)  mechanised food grain handling system, machinery or equipment for units  processing  agricultural produce as food stuff excluding alcoholic beverages;

15. Temporary transfer or permitting the use or enjoyment of a copyright covered under clauses (a) or (b) of sub-section (1) of section 13 of the Indian Copyright Act, 1957 (14 of 1957), relating to original literary, dramatic, musical, artistic works or cinematograph films;

16. Services by a performing artist in folk or classical art forms of (i) music, or (ii) dance, or (iii) theatre, excluding services provided by such artist as a brand ambassador;

  1. Services by way of collecting or providing news by an independent journalist, Press Trust of India or United News of India;

18. Services by way of renting of a hotel, inn, guest house, club, campsite or other commercial places meant for residential or lodging purposes, having declared tariff of a unit of accommodation below rupees one thousand per day or equivalent;

19. Services provided in relation to serving of food or beverages by a restaurant, eating joint or a  mess, other than those having (i) the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year, and (ii) a licence to serve alcoholic beverages;

20. Services by way of transportation by rail or a vessel from one place in India to another of the following goods –

(a)  petroleum and petroleum products falling under Chapter heading 2710 and  2711 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);

(b)  relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap;

(c)   defence  or military equipments;

(d)  postal mail or mail bags;

(e)  household effects;

(f)    newspaper or magazines registered with the Registrar of Newspapers;

(g)  railway equipments or materials;

(h)  agricultural produce;

(i)    foodstuff including flours, tea, coffee, jaggery, sugar, milk products, salt and edible oil, excluding alcoholic beverages; or

(j)    chemical fertilizer and oilcakes;

21. Services provided by a goods transport agency by way of transportation of –

(a)  fruits, vegetables, eggs, milk, food grains or pulses in a goods carriage;

(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;

22. Services by way of giving on hire –

(a)     to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; or

(b)     to a goods transport agency, a means of transportation of goods;

23. Transport of passengers, with or without accompanied belongings, by –

(a)  air, embarking from or terminating in an airport located in the state of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or Tripura or at Bagdogra located in West Bengal;

(b)  a contract carriage for the transportation of passengers, excluding tourism, conducted tour, charter or hire; or

(c)    ropeway, cable car or aerial tramway;

24. Services by way of vehicle parking to general public excluding leasing of space to an entity for providing such parking facility;

25. Services provided to Government, a local authority or a governmental authority by way of –

(a)  carrying out any activity in relation to any function ordinarily entrusted to a municipality in relation to water supply, public health, sanitation conservancy, solid waste management or slum improvement and upgradation; or

(b)  repair or maintenance of a vessel or an aircraft;

26. Services of general insurance business provided under following schemes –

(a)     Hut Insurance Scheme;

(b)     Cattle Insurance under Swarnajaynti Gram Swarozgar Yojna (earlier known as Integrated Rural Development  Programme);

(c)      Scheme for Insurance of Tribals;

(d)     Janata Personal Accident Policy and Gramin Accident Policy;

(e)     Group Personal Accident Policy for Self-Employed Women;

(f)       Agricultural Pumpset and Failed Well Insurance;

(g)     premia collected on export credit insurance;

(h)     Weather Based Crop Insurance Scheme or the Modified National Agricultural Insurance Scheme, approved by the Government of India and implemented by the Ministry of Agriculture;

(i)       Jan Arogya Bima Policy;

(j)       National Agricultural Insurance Scheme (Rashtriya Krishi Bima Yojana);

(k)     Pilot Scheme on Seed Crop Insurance;

(l)       Central Sector Scheme on Cattle Insurance;

(m)  Universal Health Insurance Scheme;

(n)     Rashtriya Swasthya Bima Yojana; or

(o)     Coconut Palm Insurance Scheme;

27. Services provided by an incubatee up to a total turnover of fifty lakh rupees in a financial year subject to the following conditions, namely:-

(a)  the total turnover had not exceeded fifty lakh rupees during the preceding financial year; and

(b)  a period of three years has not been elapsed  from the date of entering  into an agreement as an incubatee;

28. Service by an unincorporated body or a non- profit entity registered under any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution –

(a)  as a trade union;

(b)  for the provision of carrying out any activity which is exempt from the levy of service tax; or

(c)   up to an amount of five thousand rupees per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex;

29. Services by the following persons in respective capacities –

(a)  sub-broker or an authorised person to a stock broker;

(b)  authorised person to a member of a commodity exchange;

(c)   mutual fund agent to a mutual fund or asset management company;

(d)  distributor to a mutual fund or asset management company;

(e)  selling or marketing agent of lottery tickets to a distributer or a selling agent;

(f)    selling agent or a distributer of SIM cards or recharge coupon vouchers;

(g)  business facilitator or a business correspondent to a banking company or an insurance company, in a rural area; or

(h)  sub-contractor providing services by way of works contract to another contractor providing  works contract services which are exempt;

30. Carrying out an intermediate production process as job work in relation to –

(a)  agriculture, printing or textile processing;

(b)  cut and polished diamonds and gemstones; or plain and studded jewellery of gold and other precious metals, falling under Chapter 71 of the Central Excise Tariff Act ,1985 (5 of 1986);

(c)   any goods on which appropriate duty is payable by the principal manufacturer; or

(d)  processes of electroplating, zinc plating, anodizing, heat treatment, powder coating, painting including spray painting or auto black, during the course of manufacture of  parts of  cycles or sewing machines upto an aggregate value of taxable service of the specified processes of  one hundred and fifty lakh rupees in a financial year subject to the condition that such  aggregate value had not exceeded  one hundred and fifty lakh rupees during the preceding financial year;

31. Services by an organiser to any person in respect of a business exhibition held outside India;

32. Services by way of making telephone calls from –

(a)  departmentally run public telephone;

(b)  guaranteed public telephone operating only for local calls; or

(c)   free telephone at airport and hospital where no bills are being issued;

33. Services by way of slaughtering of bovine animals;

34. Services received from a  provider of service  located in a non- taxable territory by –

(a)  Government, a local authority, a governmental authority or an individual in  relation to any purpose other than commerce, industry or any other business or profession;

(b)  an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) for the purposes of providing charitable activities; or

(c)   a person located in a non-taxable territory;

35. Services of public libraries by way of lending of books, publications or any other knowledge- enhancing content or material;

36. Services by Employees’ State Insurance Corporation  to persons governed    under the Employees’ Insurance Act, 1948 (34 of 1948);

37. Services by way of transfer of a going concern, as a whole or an independent part thereof;

38. Services by way of public conveniences such as provision of facilities of bathroom, washrooms, lavatories, urinal or toilets;

39. Services by a governmental authority by way of any activity in relation to any function entrusted to a municipality under article 243 W of the Constitution.

  1. Definitions. – For the purpose of this notification, unless the context otherwise requires, –

(a) “Advocate” has the meaning assigned to it in clause (a) of sub-section (1) of section 2 of the Advocates Act, 1961 ( 25 of 1961);

(b) “appropriate duty” means duty payable on manufacture or production under a Central Act or a State Act, but shall not include ‘Nil’ rate of duty or duty wholly exempt;

(c)  “arbitral tribunal” has the meaning assigned to it in clause (d) of section 2 of the Arbitration and Conciliation Act, 1996 (26 of 1996);

(d) “authorised medical practitioner” means a medical practitioner registered with any of  the  councils of the recognised system of medicines established or recognized by law in India and includes a medical professional having the requisite qualification to practice in any recognised system of medicines in India as per any law for the time being in force;

(e) “authorised person” means any person who is appointed as such either by a stock broker (including trading member) or by a member of a commodity exchange and who provides access to trading platform of a stock exchange or a commodity exchange as an agent of such stock broker or member of a commodity exchange;

(f) “auxiliary educational services” means any services relating to imparting any skill, knowledge, education or development of course content or any other knowledge – enhancement activity, whether for the students or the faculty, or any other services which educational institutions ordinarily carry out themselves but may obtain as outsourced services from any other person, including services relating to admission to such institution, conduct of examination, catering for the students under any mid-day meals scheme sponsored by Government, or transportation of students, faculty or staff of such institution;

(g) “banking company” has the meaning assigned to it in clause (a) of section 45A of the Reserve Bank of India Act,1934(2 of 1934);

(h) “brand ambassador” means a person engaged for promotion or marketing of a brand of goods, service, property or actionable claim, event or endorsement of name, including a trade name, logo or house mark of any person;

(i) “business facilitator or business correspondent” means an intermediary appointed under the business facilitator model or the business correspondent model by a banking company or an insurance company under the guidelines issued by Reserve Bank of India;

(j) “clinical establishment” means a hospital, nursing home, clinic, sanatorium or any other institution by, whatever name called, that offers services or facilities requiring diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India, or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases;

(k) “charitable activities” means activities relating to –

(i) public health by way of –

(a)  care or counseling of (i) terminally ill persons or persons with  severe physical or mental disability, (ii) persons afflicted with HIV or AIDS, or (iii) persons addicted to a dependence-forming substance such as narcotics drugs or alcohol; or

(b)  public awareness of preventive health, family planning or  prevention of HIV infection;

(ii) advancement of religion or spirituality;

(iii) advancement of educational programmes or skill development relating to,-

(a)     abandoned, orphaned or homeless children;

(b)     physically or mentally abused and traumatized persons;

(c)      prisoners; or

(d)     persons over the age of 65 years residing in a rural area;

(iv) preservation of environment including watershed, forests and wildlife; or

(v) advancement of any other object of general public utility up to a  value of,-

(a)  eighteen lakh and seventy five thousand rupees for the year 2012-13 subject to the condition that total value of such activities had not exceeded twenty five lakhs rupees during 2011-12;

(b)  twenty five lakh rupees in any other financial year subject to the condition that total value of such activities had not exceeded twenty five lakhs rupees during the preceding financial year;

(l) “commodity exchange” means an association as defined in section 2 (j) and recognized under section 6 of the Forward Contracts (Regulation) Act,1952 (74 of 1952);

(m) “contract carriage” has the meaning assigned to it in clause (7) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988);

(n)“declared tariff” includes charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air-conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit;

(o) “distributor or selling agent” has the meaning assigned to them in clause (c) of the rule 2 of the Lottery (Regulation) Rules, 2010 notified by the Government of India in the Ministry of Home Affairs, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (i), vide number G.S.R. 278(E), dated the 1st April, 2010 and shall include distributor or selling agent authorised by the lottery- organising State;

(p) “general insurance business” has the meaning assigned to it in clause (g) of section 3 of General Insurance Business (Nationalisation) Act, 1972 (57 of 1972);

(q)“general public” means the body of people at large sufficiently defined by some common quality of public or impersonal nature;

(r)“goods carriage” has the meaning assigned to it in clause (14) of section 2 of the Motor  Vehicles Act, 1988 (59 of 1988);

(s) “governmental authority’’ means a board, or an authority or any other body established with 90% or more participation by way of equity or control by Government and set up by an Act of the Parliament or a State Legislature to carry out any function entrusted to a municipality under article 243W  of the Constitution;

(t) “health care services” means any service by way of  diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India and includes services by way of transportation of the patient to and from a clinical establishment, but does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or to reconstruct anatomy or functions of body affected due to congenital defects, developmental abnormalities, injury or trauma;

(u) “incubatee” means an entrepreneur located within the premises of a Technology Business Incubator (TBI) or Science and Technology Entrepreneurship Park (STEP) recognised by the National Science and Technology Entrepreneurship Development Board (NSTEDB) of the Department of Science and Technology, Government of India and who has entered into an agreement with the TBI or the STEP to enable himself to develop and produce hi-tech and innovative products;

(v)“insurance company” means  a company carrying on life insurance business or general insurance business;

(w)“legal service”  means any service provided in relation to advice, consultancy or assistance in any branch of law, in any manner and includes representational services before any court, tribunal or authority;

(x)“life insurance business” has the meaning assigned to it in clause (11) of section 2 of the Insurance  Act, 1938 (4 of 1938);

(y) “original works” means  has the meaning assigned to it in Rule 2A of  the Service Tax (Determination of Value) Rules, 2006;

(z) “principal manufacturer” means any person who gets goods manufactured or processed on  his account from another person;

(za) “recognized sports body” means – (i) the Indian Olympic Association, (ii) Sports Authority of India, (iii) a national sports federation recognised by the Ministry of Sports and Youth Affairs of the Central Government, and its affiliate federations, (iv) national sports promotion organisations recognised by the Ministry of Sports and Youth Affairs of the Central Government, (v) the International Olympic Association or a federation  recognised by the International Olympic Association or (vi) a federation or a body which regulates a sport at international level and its affiliated federations or bodies regulating a sport in India;

(zb) “religious place” means a place which is primarily meant for conduct of prayers or worship pertaining to a religion, meditation, or spirituality;

(zc) “residential complex” means any complex comprising of a building or buildings, having more than one single residential unit;

(zd)“rural area” means the area comprised in a village as defined in land revenue records, excluding-

the area under any municipal committee, municipal corporation, town area committee, cantonment board or notified area committee; or

any area that may be notified as an urban area by the Central Government or a State Government;

(ze)“single residential unit” means a  self-contained residential unit which is designed for use, wholly or principally, for residential purposes for one family;

(zf) “specified international organization” means an international organization declared by the Central Government in pursuance of section 3 of the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947), to which the provisions of the Schedule to the said Act apply;

(zg)”state transport undertaking” has the meaning assigned to it in clause (42) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988);

(zh)”sub-broker” has the meaning assigned to it in sub-clause (gc) of clause 2 of the Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992;

(zi) “trade union” has the meaning assigned to it in clause (h) of section 2 of the Trade Unions Act,1926(16 of 1926).

3. This notification shall come into force on the 1st day of July, 2012.

Due Date for Half Year Service Tax Return from Oct to March 2013

CBEC has declared the due date for filing half service tax return for period ending 31st March 2013. Due date for half yearly service tax return has been extended from 25th April to 31st August 2013. Service Tax ST-3 Form for half yearly service tax return is expected to be released on 31st July 2013. Due date for Half Year ending 30th Sept 2013 i.e. 1st April 2013 to 30th September is 25th October 2013.

Due Date for Service Tax Half Yearly Return for period

  • 1st April to 30th September : 25th October
  • 1st October to 31st March: 25th April

Service Tax Order No: 03/2013 Dated 23rd April 2013

In exercise of the powers conferred by sub-rule(4) of rule 7 of the Service Tax Rules, 1994, the Central Board of Excise & Customs hereby extends the date of submission of the  Form ST-3, for the period from 1stOctober 2012 to 31st March 2013, from 25th April, 2013 to  31st August, 2013.

The circumstances of a special nature, which have given rise to this extension of time, are as follows:

“The Form ST-3, for the period from 1st October 2012 to 31st March 2013, is expected to be available on ACES around 31st of July, 2013”

Now Available: Download Half Yearly Service Tax Return Oct to March 2013

Download Service Tax Return ST-3 for Second Quarter July -Sept 2012

Due date for July-Sept 2012, 2nd Quarterly Service Tax Return is 30th April 2013. As per the CBEC quarterly service return has be filed in new format of ST-3 Form. Service Provider should always use the latest format of ST-3 for Quarterly Return. Service Provider can download the latest ST 3 Service Tax Quarterly return for online filing of Service Tax return.

Download (ZIP)

Amendment of ST-1 for Service Taxpayer registered under other than Negative List Category

Amendment of ST-1 for Service Taxpayer registered under other than Negative List Category after Restoration of service specific accounting codes for payment of service tax has been decided vide Board’s Circular No.165/16/2012 -ST from F.No.341/21/2012-TRU dated 20.11.2012. Accordingly, a list of 120 descriptions of services for the purpose of registration and accounting codes corresponding to each description of service for payment of tax is provided. On the advice of the office of the C & AG, a specific sub head had been created for payment of “penalty” under various descriptions of services. Henceforth, the sub-head “other receipts” is meant only for payment of interest payable on delayed payment of service tax. Accounting Codes under the sub-head “deduct refunds” is not to be used by the taxpayers, as it is meant for use by the field formations while allowing refund of tax. 

Registrations obtained under the positive list approach continue to be valid. New taxpayers can obtain registrations by selecting the relevant description/s from among the list of 120 descriptions of services as listed. Where registrations have been obtained under the description “OTHER THAN IN THE NEGATIVE LIST”, the taxpayer should file amendment application online in ACES and opt for relevant description/s from the list of 120 descriptions of services given in the Annexure. If any applications for amendment of ST-1 are pending with field formations, seeking the description ‘all taxable services’, such amendment may not be necessary and the officers in the field formations may provide necessary guidance to the taxpayers in this regard. Directorate General of Systems will be making necessary arrangements for display of the list of 120 descriptions of services and their corresponding Accounting Codes in Form ST-1 and Form ST-2 as may be necessary.

The above mentioned Board’s Circular dated 20.11.2012 is available

In view of the issue of the above said Circular, the required Form ST1, Amend ST1, ST2, Amended ST2 and ST3 have been taken up for modification in ACES and the work is in progress. It is likely to be completed within two to three weeks period. Until the completion of the same, the list of taxable services with description will not be available for the applicants / assessees to select. Only the description “OTHER THAN IN THE NEGATIVE LIST” is available presently

Extension of Due Date of Submission for 2nd Quarterly Return of Service Tax in ST 3

CBEC has again extended the due date of 2nd Quarterly Service Tax Return by 15 days from 15th April 2013 to 30th April 2013. Extension of Due Date of Quarterly Service Tax Return by Order No.02/2013-Service Tax.

In exercise of the powers conferred by sub-rule(4) of rule 7 of the Service Tax Rules, 1994, the Central Board of Excise & Customs hereby extends the date of submission of the Form ST-3 for the period from 1st July 2012 to 30th September 2012, from 15th April, 2013 to 30th April, 2013.
The circumstances of a special nature, which have given rise to this extension of time, are as follows: “Assessees have represented about difficulties in filing returns. While this
aspect is being attended to, there should not be any delay and inconvenience to the assessees.

Penalty or Late Fee for Furnishing of Service Tax Returns

Penalty or Late Fee for Furnishing of Service Tax  Returns

Every Person who is liable to pay service tax is required to submit the service tax return on time or due date as prescribed by the service tax authority. In case person is not able to file Service Tax return he has to pay penalty/late fee for same. But as per section 70 of Finance Act,1994 maximum penalty for late filing of Service Tax return is Rs 20000/-(Twenty Thousand Rupees Only).

As per Rule 7C of Service Tax Rules 1994 7C): Schedule for Late Fee For Service Tax Return (Read Penalty Chart for Service Tax)

(i) fifteen days from the date prescribed for submission of such return, an amount of five hundred rupees;

(ii) beyond fifteen days but not later than thirty days from the date prescribed for submission of  such return, an amount of one thousand rupees; and

(iii) beyond thirty days from the date prescribed for submission of such return an amount of one thousand rupees plus one hundred rupees for every day from the thirty first day till the date of furnishing the said return:

Provided also that where the gross amount of service tax payable is nil, the Central Excise officer  officer may, on being satisfied that there is sufficient reason for not filing the return, reduce or waive the penalty.

Section Nature of default Amount for Penalty
70 Fees for late filling of Return.

Delay upto 15 days from the due date

Delay of more than 15 days and upto 30 days from the due date

Delay of more than 30 days from the due date

 

Rs. 500

 

Rs. 1000

 

Rs. 1000 + Rs. 100 per day from 31st day maximum Rs.20000 w.e.f. 01.04.2011 prior to that Rs. 2000/-

Reference Rule 7C of Service Tax Rules 1994

(7C). Amount to be paid for delay in furnishing the prescribed return.— Where the return
prescribed under rule 7 is furnished after the date prescribed for submission of such return, the person liable to to furnish the said return shall pay to the credit of the Central Government, for the period of  delay of-

(i) fifteen days from the date prescribed for submission of such return, an amount of five hundred rupees;
(ii) beyond fifteen days but not later than thirty days from the date prescribed for submission of  such return, an amount of one thousand rupees; and
(iii) beyond thirty days from the date prescribed for submission of such return an amount of one thousand rupees plus one hundred rupees for every day from the thirty first day till the date of furnishing the said return:
Provided that the total amount payable in terms of this rule, for delayed submission of return, shall not  exceed the amount specified in section 70 of the Act:
Provided further that where the assessee has paid the amount as prescribed under this rule for delayed submission of return, the proceedings, if any, in respect of such delayed submission of return shall be deemed to be concluded.

Provided also that where the gross amount of service tax payable is nil, the Central Excise officer  officer may, on being satisfied that there is sufficient reason for not filing the return, reduce or waive the penalty.

Reference Chapter V Section 70 of Finance Act 1994

70. Furnishing of Returns

Every person liable to pay the service tax shall himself assess the tax due on the services provided by him and shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency and with such late fee not exceeding twenty thousand rupees, for delayed furnishing of return, as may be prescribed.

(2) The person or class of persons notified under sub-section (2) of section 69, shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency as may be prescribed.

Section 69 of Finance Act 1994, Service Tax Registration

69. Registration – (1) Every person liable to pay the service tax under this chapter or the rules made there under shall, within such time and in such manner and in such form as may be prescribed, make an application for registration to the 6[Superintendent of Central Excise.
(2) The person or class of persons notified under sub-section (2) of section 69, shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency as may be prescribed.