This book is a compilation of key Service Tax Legal provisions (as applicable from 1 July 2012). Relevant amendments have been shown in re...
This book is a compilation of key Service Tax Legal provisions (as applicable from 1 July 2012). Relevant amendments have been shown in red colour/ track change. Also, Central Excise provisions which are applicable (vide sec. 83 of FA’ 1994) to ST legislation are highlighted in green colour. For feedback/queries readers may write to capritam@gmail.com
1 0 t h E d i t i o n 2 M a r c h 2 0 1 6
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CA Pritam Mahure
+91 09920644648 | 202, Vaidehi Vista, Baner-Pashan Link Rd, Pashan, Pune - 411021
Contents
ABOUT THE BOOK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1. NEGATIVE LIST – IN A NUTSHELL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
A. In a nutshell ..................................................................................... 13
B. Negative vis-Ã -vis Positive list regime – A Comparative Analysis ............. 13
C. Rules deleted/ substituted .................................................................. 13
D. Key provisions and effective date ........................................................ 14
E. Abatement (Refer Not. No. 26/2012 and Valuation Rules) ....................... 14
F. Reverse Charge Mechanism (Refer Not. No. 30/2012-ST) ....................... 15
G. Brief Note on Negative List regime ...................................................... 17
2. EXISTING INDIRECT TAX SYSTEM IN INDIA . . . . . . . . . . . . . . . 20
Key features of specified indirect taxes: ................................................... 20
Current Indirect tax implications on various transactions ............................ 22
3. SERVICE TAX — STATUTORY PROVISIONS . . . . . . . . . . . . . . . . . 24
4. APPLICABLE CENTRAL EXCISE PROVISIONS . . . . . . . . . . . . . . . 90
6. SERVICE TAX RULES, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
7. SERVICE TAX (DETERMINATION OF VALUE) RULES, 2006
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
1.Short title and commencement. — ...................................................... 151
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2.Definitions ....................................................................................... 151
2A. Determination of value of service portion in works contract................. 151
2B.Determination of value of service in relation to money changing ........... 154
2C. Determination of value of service portion involved in a restaurant or as
outdoor catering ......................................................................... 155
3.Manner of determination of value ....................................................... 156
4.Rejection of value ............................................................................. 156
5.Inclusion in or exclusion .................................................................... 157
6.Cases in which the commission, costs, etc., will be included or excluded . 159
8. POINT OF TAXATION RULES, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . 162
1.Short title and commencement .......................................................... 162
2.Definitions ....................................................................................... 162
2A. Date of payment ........................................................................... 163
3.Determination of point of taxation ...................................................... 163
4.Point of taxation in case of change in effective rate of tax ...................... 164
5. Payment of tax in case of new services .............................................. 165
7. Point of taxation in case of specified services or persons ...................... 165
8.Determination of point of taxation in case of copyrights, etc .................. 166
8A. Determination of point of taxation in other cases ............................... 166
9.Transitional Provisions ...................................................................... 167
9. PLACE OF PROVISION OF SERVICES RULES, 2012 . . . . . 168
1. Short title, extent and commencement .......................................... 168
2. Definitions .................................................................................. 168
3. Place of provision generally .......................................................... 171
4. Place of provision of performance based services ............................ 171
5. Place of provision of services relating to immovable property ............ 172
6. Place of provision of services relating to events ............................... 172
7. Place of provision of services provided at more than one location ...... 172
8. Provision of services - Provider and recipient located in taxable territory
................................................................................................. 172
9. Place of provision of specified services ........................................... 173
10. Place of provision of goods transportation services .......................... 173
11. Place of provision of passenger transportation service ...................... 173
12. Place of provision of services provided on board a conveyance .......... 173
13. Powers to notify description of services or circumstances for certain
purposes .................................................................................... 174
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14. Order of application of rules.......................................................... 174
10. CENVAT CREDIT RULES, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175
1.Short title, extent and commencement ................................................ 175
2.Definitions ....................................................................................... 175
3.CENVAT credit .................................................................................. 182
4.Conditions for allowing CENVAT credit ................................................. 192
5. Refund of CENVAT Credit .................................................................. 198
5A.Refund of CENVAT credit to units in specified areas ............................ 200
5B. Refund of CENVAT credit to service providers RCM services ................ 201
6.Obligation of a manufacturer or service providers ................................. 201
7.Manner of distribution of credit by input service distributor ................... 217
7A.Distribution of credit on inputs by the office or any other premises ....... 220
8.Storage of input outside the factory of the manufacturer ....................... 220
9.Documents and accounts ................................................................... 221
9A.Information relating to principal inputs .............................................. 225
10.Transfer of CENVAT credit ................................................................ 226
10A. Transfer of CENVAT credit of additional duty ................................... 226
11.Transitional provision ...................................................................... 228
12.Special dispensation ........................................................................ 229
12A. Procedure and facilities for large tax payer ...................................... 229
12AAA. Power to impose restrictions in certain types of cases ................... 233
13.Power of CG to notify goods for deemed CENVAT credit ....................... 234
14.Recovery of CENVAT credit wrongly taken or erroneously refunded ....... 234
15.Confiscation and penalty ................................................................. 235
15A. General penalty ........................................................................... 235
16.Supplementary provision ................................................................. 236
11. SERVICE TAX VCES , 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237
12. Service Tax VCES Rules, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
1. Short title and commencement ......................................................... 241
2. Definitions ...................................................................................... 241
3. Registration .................................................................................... 241
4. Form of declaration .......................................................................... 241
5. Form of acknowledgment of declaration ............................................. 241
6. Payment of tax dues ........................................................................ 241
7. Form of acknowledgement of discharge .............................................. 242
FORM VCES- 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244
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FORM VCES- 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246
13. Not i f icat ions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247
14/2012 - Research & development cess ................................................ 247
25/2012 - Mega exemption notification .................................................. 248
26/2012 - Abatement notification .......................................................... 270
27/2012 - Exemption for foreign diplomatic mission ................................ 280
29/2012 - Exemption on property tax paid ............................................. 283
30/2012 - Reverse charge mechanism ................................................... 285
31/2012 - Exemption to gta services for exporter .................................... 292
32/2012 - Exemption of services provided by tbi and ............................... 299
33/2012 - Exemption to small service providers ...................................... 303
34/2012 - Rescinding of earlier 81 notifications ....................................... 306
35/2012 - Earlier works contract composition scheme rescinded ............... 310
28/2011 - Notified continuous supply of services ..................................... 311
39/2012 - Rebate on inputs and input services ....................................... 312
40/2012 - Exemption on services provided to sez authorised operations .... 319
41/2012 - Rebate for service tax paid — new scheme .............................. 333
27/2012(ce) – Cenvat credit refund (rule 5) .................................................... 363
43/2012 - Exemption to railways........................................................... 367
45/2012 - Reverse charge mechanism for directors and security services ... 368
46/2012 – STR amended for RCM on directors and security services .......... 369
47/2012 – Return due date .................................................................. 370
48/2012 - Amends ST-1 and Accounting codes re-notified ........................ 371
49/2012 - Exemption to Janashri and Aam Aadmi Bima Yojana ........................... 382
1/2013 - Amendment in Service Tax Rules, 1994 ............................................. 383
2/2013 - Construction of Complex – Taxable value 25% or 30% ............... 402
3/2013 - Mega Exemption Amended ...................................................... 403
4/2013 - Advance Ruling (Applicable for Public Company) ........................ 405
5/2013 - New ST-5, ST-6 and ST-7 notified ............................................ 406
6/2013 - Focus Market Scheme ............................................................. 416
7/2013 - Focus Product Scheme ............................................................ 421
8/2013 - Vishes Krishi and Gram Udyog Yojana ...................................... 424
9/2013 - Construction service – Change in abatement ............................. 426
10/2013 - Service Tax Voluntary Compliance Encouragement Rules notified 427
11/2013 - Amends Not. No. 6/2013-ST .................................................. 428
12/2013 - Special Economic Zone (SEZ) Developer / Unit ........................ 430
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13/2013 – Amendment to Not. 25/2012 ......................................................... 440
1/1/2013 - AD-HOC EXEMPTION ............................................................... 441
12/2013 (CE) – Amendment in 3 (5A) of CCR ................................................. 442
14/2013 – Catering in canteen .............................................................. 443
15/ 2013- Amendment in SEZ Not. ........................................................ 444
16 /2013- E-payment (1 lac) ................................................................ 445
17/2013-Amendment to FMS Not. ......................................................... 446
01/2014 – Amendment in Mega Not. ............................................................ 447
02/2014 – ST – Governmental Authority definition ............................................ 448
03/2014-ST – Forward contract sub-broker exemption ...................................... 449
05/2014-ST – FMS Amendment ................................................................. 451
18/2013-C.E. (N.T.) –Rescinded later .................................................... 452
01/2014-CE (NT) – CENVAT Credit amendment ............................................. 453
02/2014-CE(N.T.) – Amends Rule 12 ..................................................... 454
05/2014 – CE (NT) – Rule 7 (ISD Amendment) ............................................... 455
07/2014 – CE (NT) – Rescinds 18/2013 ................................................. 456
09/2014-CE(N.T.) – CCR Amendment .................................................... 457
11/2014–CE (N.T.) –Return for a Quarter ............................................... 458
12/2014–CE (NT)- Refund for Partial RCM service providers ..................... 460
13/2014–CE (N.T.) – Rescinds Not. No. 6/2012CE (NT) ........................... 465
15/2014 - CE(N.T.) – 12AAA introduced ................................................. 466
06/2014-ST – Mega Not. amended ........................................................ 467
07/2014-ST – SEZ refund simplified ...................................................... 471
08/2014-ST – Abatement amended ....................................................... 474
09/2014-ST – RCM amended ................................................................ 477
10/2014-ST – RCM amended ................................................................ 479
11/2014-ST – Valuation Rules amended ................................................. 481
12/2014-ST – Interest rates notified ...................................................... 482
13/2014-ST – POT amended ................................................................. 483
14/2014-ST – POPS amended ............................................................... 485
15/2014-ST –Advance Ruling for private company .................................. 487
21/2014-CE(NT) – CCR amendment ...................................................... 488
22/2014 – ST – Appointment of Officers................................................. 490
23/2014-ST – Service Tax (Amendment) Rules ....................................... 492
1/2015-ST – Amendment to Notification No. 20/2014-ST ......................... 493
2/2015-ST – Jurisdiction of Principal Director/ Principal Commissioner ....... 501
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3/2015-ST – Notification No. 42.2012-ST rescinded ................................. 503
4/2015-ST – Amendment to Notification No. 31/2012-ST ......................... 504
5/2015-ST – Service Tax (Amendment) Rules, 2015 ................................ 505
6/2015-ST – Amendments in Notification No. 25/2012-ST ....................................... 507
7/2015-ST - Amendments in Notification No. 30/2012-ST .................................... 511
8/2015-ST - Amendments in Notification No. 26/2012-ST ........................................ 513
9/2015 – ST – Resident Firm ................................................................ 515
10/ 2015 – ST – Service provided against scrip ....................................... 516
11 / 2015 – ST – Exemption against Scrip .............................................. 518
12/2015-ST - Amendments in Notification No. 25/2012-ST ....................... 521
13/2015-ST - Amendments in Notification No. 26/2012-ST ...................... 522
14/2015-ST – Applicability of provisions ................................................ 523
15/2015-ST – Applicability of provisions ................................................. 524
16/2015-ST – Applicability of Provisions ................................................. 525
17/2015-ST – Power System Development Fund Scheme ........................ 526
18/2015-ST – Rank of Officers .............................................................. 531
19/2015-ST – Money Transfer Service ................................................... 532
20/2015-ST - Amendments in Notification No. 25/2012-ST ...................... 533
21/2015-ST – Swachh Bharat Cess (SBC) .............................................. 534
22/2015 - ST – SBC Exemption ............................................................. 535
23 /2015- Amendments in Notification No. 22/2015-ST ........................... 536
24 /2015-ST – RCM applicable for SBC .................................................. 537
25/2015-ST – Service Tax (Amendment) Rules ....................................... 538
26/2015-ST – Service Tax (Third Amendment) Rules, 2015 ...................... 539
27/2015-ST – Service Tax (Fourth Amendment) Rules, 2015 .................... 540
01/2016- ST - Amendment to Notification No. 41/2012-ST ...................... 541
02/2016- ST – Amendment to Notification No. 12/2013-ST ...................... 542
03/2016- ST – Rebate of Swachh Bharat Cess ........................................ 543
04/2016 – ST - Annual Information Return ............................................. 544
05/2016 – ST – Amendment in exemption of SBC ................................... 551
6/2016 – ST – Effective date for amendment in Section 66D(a)(iv) ........... 552
07/2016 – ST – Exemption from RCM for ‘Support Services’ ..................... 553
08/2016 – ST - Amendment to Notification No.26/2012-ST ...................... 554
09/2016 – ST - Amendment to Notification No. 25/2012-ST ..................... 558
10/2016 – ST - Point of Taxation Rules .................................................. 564
11/2016 – ST - Exemption on Sale of Software ....................................... 565
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12/2016 – ST - Amendment to Notification No. 32-2012-ST ..................... 567
13/2016 – ST - Interest Rates Revised................................................... 569
14/2016 – ST - Interest Rates - Section 73B .......................................... 570
15/2016 – ST - Deletion of word 'Support' .............................................. 571
16/2016 – ST - Effective Date for Notification No. 5/2015-ST ................... 572
17/2016 – ST - Effective Date for Notification No. 7/2015-ST ................... 573
18/2016 – ST - Amendment to Notification No. 30/2012-ST ..................... 574
19/2016 – ST - Amendment to Service Tax Rules, 1994 ........................... 576
14. CIRCULARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 579
160/11/2012 - Applicability of EC and SHEC .......................................... 579
161/12/2012 – Accounting code for Negative List .................................... 581
163/14/2012 - Clarification on Remittances ............................................ 583
164/15/2012 – Clarification on vocational education ................................ 583
165/16/2012 - Circular on restoration of accounting codes ....................... 586
166/1/2013 – Reminder letters for insurance policies .............................. 597
167/2/2013 - Milk transportation by rail ................................................. 598
969/03/2013-CX – CESTAT Appeal forms ..................................................... 599
168/3/2013 - Clarification on Pandal and Shamiyana ............................... 603
169/4/2013 - Clarification on VCES ....................................................... 605
170/5 /2013 - Clarification on VCES ...................................................... 607
171/6/2013 - Circular on Arrest and Bail ........................................................ 611
172/7/2013 – Education services – Clarification ............................................... 615
173/8/2013 – Restaurant clarifications .......................................................... 618
174/9/2013 – VCES clarifications ................................................................ 620
175/01/2014 ST – RWA Clarification ...................................................... 623
176/2/2014 – ST – VCES Discharge and CENVAT ........................................... 625
177/03/2014 – ST – Rice, paddy clarification .................................................. 625
974/08/2013-CX - Arrest and Bail ......................................................... 626
178/4/2014-ST – ISD clarification ......................................................... 633
179/5/2014-ST – Joint Venture ...................................................................... 634
180/06/2014 – ST - Remittances from abroad ................................................. 636
181/7/2014-ST - Audit ............................................................................. 639
995/2/2015-CX - Audit norms ..................................................................... 640
182/01/2015 –ST - Payment ...................................................................... 644
183 / 02 / 2015-ST – Rate of Service Tax ...................................................... 645
184/3/2015-ST – Restaurant service .................................................... 647
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186/5/2015-ST – Various Services provided by GTA ......................................... 649
1009/16/2015-CX – Guidelines for Prosecution ............................................... 650
1010/17/2015-CX - Monetary Limits for Arrest................................................. 656
187/6/2015-ST – Refund claim ............................................................. 657
188/7/2015-ST – Accounting Codes for Swachh Bharat Cess .............................. 660
189/8/2015 – ST – Seed Testing ........................................................... 661
190/9/2015- ST Applicability on Input Services – Export of Garments ........ 664
15. POTR CIRCULARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 667
341/34/2010-TRU - POTR Clarifications .................................................. 667
154/5/2012-ST – POTR clarification ....................................................... 671
155/6/2012-ST – POTR Clarifications ..................................................... 672
158/9/2012-ST – Change in Rate .......................................................... 673
162/13/2012 - Clarification on POTR...................................................... 675
16. DRAFT CIRCULAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 678
Draf t c i rcular on s taf f benef i ts ................................................... 678
Draft circular on service tax on air transport ........................................... 684
17. INSTRUCTIONS/ ORDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 688
Instructions – Negative list of service tax regime .................................... 688
Filing of ST-3 ...................................................................................... 690
Order 3/2012 - Due date for filing of Service Tax return ..................................... 692
Service tax instruction ......................................................................... 693
Order 2/2013 - ST-3 [30 April 2013] ..................................................... 695
Order 3/2013 - ST-3 [31 August 2013] .................................................. 696
Order 4/2013 - ST-3 [10 September 2013] ............................................ 697
F.No: 137/116/2012- E-payment 1 lacs ................................................. 698
F. No. B1/19/2013-TRU (Pt.) - VCES...................................................... 700
F. No. 137/50/2013-VCES .................................................................... 701
F.No.275/05/2014-CX.8A – Validity of Stay ............................................ 702
17/1/2012-CX.1 – Proposed amendment in Rule 6 of CCR ........................ 704
18. DISPUTE RESOLUTION SCHEME, 2016 . . . . . . . . . . . . . . . . . . . . 706
19. SWACHH BHARAT CESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 710
20. KRISHI KALYAN CESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 711
21. Budget 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 712
Union FM –Budget Speech (Extracts) ..................................................... 712
TRU – Budget 2013 – Service Tax ..................................................... 718
Supply of food in restaurant, ‘sale’ or ‘service’? – CA Pritam Mahure .......... 721
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ST on Foreign Bank Charges ................................................................. 727
CEVAT Credit of ST paid under VCES ..................................................... 732
Applicability of VAT on flat .................................................................... 737
Economic Times - Pause Due to Paucity of Funds .................................... 744
Valuation of barter between Landowner and Developer ............................ 746
Applicability of Excise duty on Sales Tax Retention .................................. 752
Service Tax on Mid-day meal scheme .................................................... 757
CENVAT Credit - ‘Interest’ing issue ........................................................ 763
20. Budget 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 768
Service Tax TRU letter ......................................................................... 776
21. TRU – Budget - 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 803
2 2. An Educ at ion Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 843
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CA Pritam Mahure
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