For internal circulation of BSNL only

E2-E3

Finance

Indirect Taxes

WELCOME

This is a presentation for the E2-E3

(Finance) Core Module for the Topic:

Indirect Tax .

Eligibility: Those who have got the Up

gradation from E2 to E3.

This presentation is last updated on 21-3-

2011.

You can also visit the Digital library of

BSNL to see this topic.

For internal circulation of BSNL only

For internal circulation of BSNL only

AGENDA

Salient features of Service Tax

Registration

Payment of Service Tax

Various Penalties

For internal circulation of BSNL only

Service Tax – Salient features

Service tax is under Sec-66 of Finance

Act,1994.

Rate – 12% + EC + SAH Education cess. Total

Service Tax is 12.36% from 11-05-2007. From

24-02-2009 Service Tax is 10% and total Service

Tax is 10.30% including Education Cess

For internal circulation of BSNL only

Service Tax – Salient features

Person who is providing taxable

service is liable to pay Service tax.

TDS will be on the gross amount

including Service tax and education

cess.

For internal circulation of BSNL only

Service Tax – Salient features

Small service providers whose turnover less

than Rs.10 lakhs per annum are exempt from

Service tax.

No Service Tax on service provided in J&K.

Service Tax is payable in the value of taxable

service and not value of entire value of

contract

For internal circulation of BSNL only

Service Tax – Salient features

If gross amount is inclusive of

Service Tax, value of taxable service is

calculated by back calculation.

Service Tax & Education Cess have to

be rounded off individually.

Service Tax is for the net amount of services

excluding VAT/Sales Tax.

Service Tax is on the net amount after

discount etc.

For internal circulation of BSNL only

Exemption from Service Tax

Small service providers

Export of services

Services provided by any person to United

Nations or any other internationl organisation

Service provided by RBI

Service rendered to developer of SEZ

Services rendered to a unit in SEZ

For internal circulation of BSNL only

Exempted Services in BSNL

Departmentally run public telephone for local

calls.

Guaranteed public telephone operating only

for local calls.

Free Telephone at Airport and Hospital where

no bills are issued

For internal circulation of BSNL only

Specific exemptions of Service Tax( Certain cases)

Goods Transport

Agency (GTA)(No Service Tax for the

transportation of fruits,

vegetables, eggs or milk )

Tax only on 25% amount in his

invoice ( Payment will be

made by consignor/ consignee

who is actually paying freight)

Outdoor caterer Tax on 50% amount if he

provides full and substantial

meal

For internal circulation of BSNL only

Specific exemptions of Service Tax( Certain cases)

Package tours &

other than package

tour

Tax is payable only on 40%

of gross amount charged

Rent-a -cab operator Tax payable on 40% of gross amount charged

For internal circulation of BSNL only

Registration

Persons providing taxable service in excess of

Rs.9 lakhs

Input service distributors

Persons liable to pay service tax on the services

received

For internal circulation of BSNL only

Registration

Centralised Registration is required if a

person paying Service Tax has

Centralised Billing systems or Centralised

Accounting systems

Such centralised billing system of centralised

Accounting systems are located in different

premises

For internal circulation of BSNL only

Registration

A person should register within 30 days from

the date of commencement of the business of

providing taxable service

Person providing more than one taxable

service is required to take only one single

registration. He should indicate all taxable

services provided by him in Form ST-1

For internal circulation of BSNL only

Registration

Apply in Form ST-1 along with the

following documents:

1. Copy of PAN,

2. Proof of residence

3. Constitution of applicant

For internal circulation of BSNL only

Registration

Registration certificate in Form ST-2 within 7

days.

Deemed registration

Registration No is a 15 digit - PAN based

(PAN + alpha-code (ST) + Numeric code)

For internal circulation of BSNL only

Invoice by service provider

Invoice should be prepared within 14

days from date of completion of taxable

service or receipt of payment towards

the value of taxable service, whichever

is earlier

The invoice/ challan/ bill should be

(i) signed by authorised person.

The invoice/ challan/ bill should be

(ii) serially numbered

For internal circulation of BSNL only

Invoice by service provider

The invoice should contain-Name, address and registration number of

person providing taxable service

Name and address of person receiving

taxable service

Description, classification and value of

taxable service provided or to be provided

Service tax and education cess should be

shown separately

For internal circulation of BSNL only

Persons liable to pay Service Tax

In most cases, service provider

Exception:

Taxable service provided by any person

from a country other than India

In case of services of GTA

In case of sponsorship service

provided to a body corporate or firm.

For internal circulation of BSNL only

Payment of Service Tax

Service tax is payable on 5th of the following

month

For the month of March the payment is to be

made by 31st March

e-payment is mandatory by all assesses who

have paid Service Tax of Rs.10 L or more

For internal circulation of BSNL only

Payment of Service Tax

Amount collected as Service Tax must be

paid to Government.

Any amount collected as Service Tax though

it is not required to be collected shall be

deposited to Government.

For internal circulation of BSNL only

Interest on late payment of Service tax

Interest rate is 13% w.e.f 10-09-2004

Interest payment is automatic

For internal circulation of BSNL only

Demand and Interest

Any service tax not levied or short-levied or

short-paid or erroneously refunded, the

Central Excise officer may, within one

year from the relevant date, serve show

cause notice

Proviso is 5 years in the case of fraud,

collusion, willful mis-statement, suppression

of facts, etc.

For internal circulation of BSNL only

Returns

Half yearly returns in Form- ST3 in triplicate

within 25 days of end of half year

(1st April to 30th Sept & 1st Oct to 31st Mar)

Accompanied by TR 6 Chellan

Separate return for each taxable service

For internal circulation of BSNL only

Late fee for late filing of returns

Delay up to 15 days - Rs.500/-

Delay up to 30 days - Rs.1,000/-

Delay beyond 30 days – Rs.1,000 + Rs.100/-

per day of delay beyond 30 days, maximum

Rs.2,000/-

If return not filed within the period , penalty

is leviable up to Rs.5,000/- under section 77.

Can be waived for reasonable cause under

section 80.

For internal circulation of BSNL only

Penalties for non-payment or delayed payment

Penalty shall be minimum Rs.200/- per day

during which such failure continues or @ 2%

per month whichever is higher, starting with

the first day after due date till date of actual

payment outstanding amount.

For internal circulation of BSNL only

Penalty for non-registration

Rs. 5000/- or Rs.200/- per day during which

the failure continues whichever is higher,

starting with the first day after the due date,

till the date of actual compliance

For internal circulation of BSNL only

Penalties - General

Failure to keep , maintain or retain books of

account and other documents as required –

Rs.5,000/-

Failure to furnish information called for,

failure to produce documents called for ,

failure to appear before Central Excise officer

– penalty of Rs.5,000/- or Rs.200/- for every

day during which failure continues,

whichever is higher.

For internal circulation of BSNL only

Penalties - General

Failure to make e-payment – Penalty of Rs.5,000/-

Any person who issues invoice with incorrect or

incomplete details or fails to account for an invoice in

his books of account - Penalty Rs.5,000/-

Penalty for contravention of any provision of the rules

can be up to Rs.5,000/-

For internal circulation of BSNL only

Appeals

If adjudication order is passed by authority

lower than commissioner of Central Excise, first

appeal will be with Commissioner (Appeals)

under Sec 85(1) within 3 months from date of

receipt of order of adjudicating authority.

Second and final appeal is with Appellate

Tribunal (CESTAT) under section 86(1) within 3

months

Appeal is in form ST-5 in quadruplicate

For internal circulation of BSNL only

BSNL InstructionsService Tax registration Number and PAN of

BSNL are printed on the Telephone bills/

demand notices/invoices, challans etc.

The amount of Service Tax is calculated on the

total amount of telephone bill before adjustment

of excess/double payment/deposit etc.

OYT connections, Service Tax is calculated on

the rent payable before allowing OYT rebate

No Service Tax on the surcharge

For internal circulation of BSNL only

BSNL Instructions

Service tax from 01-06-2007

Interconnect usage charges (IUC)

Port charges

Infrastructure charges

Rental for junction links (charges for

junction links of BSNL form one exchange

to another)

For internal circulation of BSNL only

BSNL Instructions

No Service Tax on USO claim amount of BSNL

Service Tax is applicable on Access Deficit

Charges

Service Tax is applicable on TA/DA and

reimbursement of expenditure to CAs for the

discharge of duties in their professional

capacity for BSNL

Service Tax to hiring of cabs payable only

when they got service tax registration

For internal circulation of BSNL only

BSNL Instructions

Incidence of Service tax on renting of

immovable properties

Service Tax is payable by BSNL towards

payment of rent by BSNL for space hired for

Roof Top Towers/Ground Based Towers

No Service Tax is leviable towards renting of

vacant staff quarters on rent to Central/State

PSUs by BSNL and also renting of community

halls to employers/others by BSNL

For internal circulation of BSNL only