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No. F. No. 224/44/2014-CX.6 Dated: 6-7-2015


Instructions regarding maintenance of Records in Electronic Form and authentication of records by Digital Signature – manner of verification – ST – Dated 6-7-2015 – Service Tax

F. No. 224/44/2014-CX.6

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

New Delhi, dated the 6th July, 2015

To

Principal Chief Commissioners / Chief Commissioners of Central Excise (All),

Principal Chief Commissioners/Chief Commissioners of Central Excise & Service Tax (All).

Sub: Instructions regarding maintenance of Records in Electronic Form and authentication of records by Digital Signature–manner of verification-reg.

Madam/ Sir,

Kind attention is invited to sub-rule (5) of rule 10 of Central Excise Rules, 2002, inserted vide Notification No. 8/2015-CE (N.T.) dated 01.03.2015 and sub-rule (5) of rule 5 of the Service Tax Rules, 1994 inserted videnotification no. 5/2015-Service Tax dated 01.03.2015. As per the provisions of these sub-rules, the assessees may opt to maintain records in electronic form and authenticate the same by digital signatures subject to conditions, safeguards and procedures prescribed by the Board. Attention is also invited to sub-rule (9) of rule 11 of CER, 2002, and sub-rule (2) of rule 4(C) of the Service Tax Rules, 1994 inserted by the same notifications. As per the provisions of these rules, the assessees may exercise the option to issue invoices authenticated by digital signatures. Subsequently, Board vide Notification No. 18/2015-C.E.(N.T.) dated 6th July, 2015 has prescribed conditions, safeguards and procedures for preserving records in electronic form and authentication of records by digital signatures.

2.0     The salient features of the Notification No. 18/2015-C.E. (N.T.) dated 6th July, 2015 are:-

a.   Every assessee proposing to use digital signature shall use Class 2 or Class 3 Digital Signature Certificate duly issued by the Certifying Authority in India.

b.   Every assessee proposing to use digital signatures shall intimate the details such as name, e-mail id, office address and designation of the person authorized to use the digital signature certificate, name of the Certifying Authority, date of issue of Digital Certificate and validity of the digital signature etc., to the jurisdictional Deputy Commissioner or Assistant Commissioner of Central Excise at least 15 days in advance. In case of any change in the details submitted to the jurisdictional Deputy Commissioner or Assistant Commissioner, complete details shall be submitted afresh within 15 days of such change. Assessees already using digital signature shall intimate the above details within 15 days of issue of the notification.

c.   Every assessee opting to maintain records in electronic form, who has more than one factory or service tax registration, shall maintain separate electronic records for each factory or each service tax registration.

d.   A Central Excise Officer, during an enquiry, investigation or audit, in accordance with the provisions ofsection 14 of the Central Excise Act, 1944 and as made applicable to Service Tax as per the provisions contained in section 83 of the Finance Act, 1994, may direct an assessee to furnish printouts of the records in electronic form and invoices and may resume printouts of such records and invoices after verifying the correctness of the same in electronic format; and after the print outs of such records in electronic form have been signed by the assessee or any other person authorised by the assessee in this regard, if so requested by such Central Excise Officer.

3.0    Following procedures are hereby prescribed for verification of digitally signed invoices and documents:

3.1     The process for verifying digitally signed documents or invoices requires a computer system with internet connection. Digitally signed invoices or documents either in PDF format or the hard copy of invoices and documents may contain a web link where the documents or invoices are stored by the assessee, which can be accessed using this web link for verification. Assessee shall either provide access to the weblink of the company for verification or forward the digitally signed invoice or document by e-mail on requisition by the Central Excise Officer for verification.

3.2     The contents of a digitally signed document or invoice can be verified as follows:

a.     Automatic pop-up of message once a digitally signed invoice is opened for the first time

i.    Whenever a document/ invoice containing a valid digital signature is opened in a pdf format, a pop up will automatically appear on the computer screen indicating the manner in which the digital signature of the person, who has signed the document, can be validated.

ii.    This pop-up would generally contain the messages “At least one signature has problems” and “Signature Panel”.

iii.    Digital signature can be validated by clicking on the signature box, which has message “validity unknown” with a “?” stamp, generally appearing on the bottom right corner of the invoice.

iv.    This pop up will not appear where the sender creates only an image of the digital signature instead of digitally signing the invoice or document. Such an invoice or document will not be a valid digitally signed invoice or document.

b.        Document modification history

i.    Once the signature box on digitally signed invoice or document is clicked, a window bearing title ‘signature validation status’ will appear to provide document modification history. This window will provide the information as to whether the document has been modified or not post signing of the document.

ii.    A tab bearing the title “Signature Properties” shall also appear on the same window and this tab once clicked, a window bearing the title “Signature Properties” will appear.

c.         Access to key information from the signature panel and acceptance of signer post verification of necessary particulars

i.    The next step is to click “show signers’ certificate” option which appears on the “Signature Properties” window. By doing so, various tabs will provide key information about the signer, validity and authenticity of the digital signature certificate, details about the agency that has issued the digital certificate, details about the certificate granted to such issuing agency etc.

ii.    After verifying various particulars (the name of the holder of the digital signature, the validity of the signature and details of issuance of the document) and being satisfied with the authenticity of the document, the Central Excise Officer may add the certificate in question to its list of trusted certificates by clicking the “trust” tab on the menu. By clicking ‘Add to trusted identities’ the signer gets added as a trusted source and the process of verification is thus complete.

4.0         Difficulty, if any, in implementation of the procedure may please be brought to the notice of the Board. Hindi version would follow.

(ROHAN)

Under Secretary to the Government of India

No. 185/4/2015-ST Dated: 30-6-2015


Guidelines regarding detailed scrutiny of Service Tax Returns (ST-3) w.e.f. 01/08/2015. – Dated 30-6-2015 – Service Tax

CIRCULAR NO. 185/4/2015-Service Tax

F. No. 137/314/2012-Service Tax

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE AND CUSTOMS

SERVICE TAX WING

NEW DELHI, Dated: 30th June, 2015

To

All Principal Chief Commissioners of Central Excise

All Chief Commissioners of Central Excise/ Service Tax

Principal Directors General of Service Tax/Central Excise

Intelligence/Systems

Director General of Audit

All Principal Commissioners of Central Excise/Service Tax

All Commissioners of Central Excise/Service Tax

All Principal Commissioners/Commissioners LTU

Subject: Detailed Manual Scrutiny of Service Tax Returns

Madam/Sir

1.1 In the era of self-assessment, the need for a strong compliance verification mechanism cannot be over emphasized. Such a mechanism has three important prongs – audit, anti-evasion and return scrutiny. In order to put in place a strong ‘return scrutiny’ system, a two-part system of return scrutiny was envisaged- a preliminary scrutiny which would be online covering all the returns; and a detailed manual scrutiny of select returns, identified on the basis of risk parameters, to be done by the Division/ Range offices.

1.2 The Board vide Circular No. 113/07/2009-ST dated 23-4-2009 had laid down the procedure for carrying out detailed scrutiny of returns and had circulated a Return Scrutiny Manual for Service Tax. However, with the introduction of the Point of Taxation Rules, 2011, which shifted the liability of payment of service tax from receipt basis to accrual basis, and the advent of negative list-based comprehensive taxation of services in 2012, it was felt that the guidelines for detailed scrutiny of returns needed a revision. In this background, it has been decided that detailed scrutiny of ST-3 returns, with effect from 01.08.2015, should be carried out in the manner outlined below:-

2.0  PRELIMINARY ONLINE SCRUTINY

2.1 The purpose of preliminary scrutiny of returns includes ensuring the completeness of the information furnished in the return, arithmetic correctness of the amount computed as tax and its timely payment, timely submission of the return and identification of non-filers and stop-filers. On the basis of the validation checks incorporated in ACES by the Directorate General of Systems & Data Management (DGS&DM), preliminary scrutiny of all returns is done online in ACES and the returns having certain errors are marked for Review and Correction (RnC). These have to be processed accordingly by the Range Officers.

3.0  SCOPE OF DETAILED MANUAL SCRUTINY

3.1 The purpose of detailed manual scrutiny of returns is to ensure the correctness of the assessment made by the assessee. This includes checking the taxability of the service, the correctness of the value of taxable services in terms of Section 67 of the Finance Act, 1994, read with the Service Tax (Determination of Value) Rules, 2006 and the effective rate of tax after taking into account the admissibility of an exemption notification, abatement, or exports, if any; ensuring the correct availment/utilization of CENVAT Credit on inputs, capital goods, and input services in terms of the CENVAT Credit Rules, 2004, etc. In doing this, the proper officer must rely mainly on assessment-related documents like agreements/contracts and invoices. Detailed financial records should not be called for in a routine manner.

3.2 A detailed scrutiny programme typically supplements the audit programme. The scope of audit, on the other hand, is to inspect the financial records of a company for a complete financial year in order to identify non-compliance issues and to evaluate the assessee’s internal control system. The two processes of audit and scrutiny are, in fact, complementary to each other.

4.0  SELECTION OF RETURNS FOR DETAILED SCRUTINY

4.1  The detailed manual scrutiny programme must replicate some of the best practices in audit. A Return Scrutiny Cell should be created in the Commissionerate’s Headquarters. The Return Scrutiny Cell shall maintain the records of the assessees and the returns which are selected for detailed scrutiny and also the results thereof.

4.2  The focus of detailed manual scrutiny of the returns would be on the returns of those assessees which are not being audited. The detailed return scrutiny would be conducted in respect of such assessees whose total tax paid (Cash + CENVAT) for the FY 2014-15 is below ₹ 50 lakhs. Each Commissionerate has to select equal number of assessees for carrying out returns’ scrutiny from each of the these three total tax paid bands (Cash+CENVAT) viz., ₹ 0 to ₹ 10 lakhs, ₹ 10-25 lakhs and ₹ 25-50 lakhs for the financial year 2014-15.

4.3  The risk parameters and the risk tools which would govern the selection of the returns for detailed manual scrutiny have been developed. The risk scores for the Service Tax returns for the financial year 2014-15 have been calculated. The data has been segregated on the basis of Zone/Commissionerate/Division/Range. The data resides with DGS&DM which will be shared with the Service Tax & Central Excise field formations through secure data exchange in the following manner:-

43.1  The risk score files will be placed on a server. Chief Commissioners of Service Tax & Central Excise Zones are required to nominate a ‘Zonal Nodal Officer’ who shall access these data and distribute the same to the Zonal Commissionerates dealing with Service Tax. The said officer should preferably be of the rank of Additional/Joint Commissioner and should necessarily have an official email id (ICEGATE or NIC email).

4.3.2  The nomination of Zonal Nodal Officers should be informed to the Service Tax Wing, CBEC by email addressed to commr.s1-cbec@nic.in alongwith attaching a scanned copy of the nomination letter. The said communication should contain the nomination by the Chief Commissioner along with the designation, email id, telephone numbers (mobile & land line numbers) of the nominated Nodal Officer.

4.3.3 An email will be sent by DGS&DM to the Zonal Nodal Officer. These Zonal Nodal Officers would need to copy and paste on the internet browser the ‘weblink’ of the page hosting the folders. They would need to login using the username and password which would be shared with them through a separate email sent on their official email id. They would then need to click on the folder bearing the respective Zone name (available on the left panel) to access the files placed there.

4.3.4 The Return Scrutiny Cell, through an officer authorized by the Commissioner, shall collect the Risk Score data for the Commissionerate from the Zonal Nodal Officer.

4.3.5 The list of returns to be taken up for detailed scrutiny would be finalized by the Additional/Joint Commissioner in-charge of Division (or in his absence by the Commissioner) as per the risk score in conjunction with the total tax paid by the assessee, local risk parameters (including sensitive and evasion prone sectors), past compliance record of the assessee and manpower availability. The list of the assessees selected will be sent to the respective Divisions.

4.3.6 The assessees who have been selected for audit or have been audited recently (in the past three years) should not be taken up for detailed scrutiny. However, the Chief Commissioner, may direct detailed manual scrutiny of an assessee’s return who has paid service tax (Cash + CENVAT) more than ₹ 50 lakhs in certain specific cases. In no event should an assessee be subjected to both audit and detailed manual scrutiny.

4.3.7 All the officers should maintain strict confidentiality regarding the Risk Score data including the original score, further selection by the Commissionerate, etc. Under no circumstances it is to be shared with the assessee or any other authority since this is information available in a fiduciary relationship, pertaining to a third party, and which may entail further investigation.

5.0 METHODOLOGY

5.1 Detailed scrutiny of returns must be conducted by the Service Tax Range headed by the Superintendent and assisted by a complement of Inspectors. However, the Divisional DC/AC shall be responsible for the overall supervision of this business process in respect of his/her division. Before return scrutiny is initiated, the assessee must be given prior intimation of at least fifteen days and the purpose of the exercise must be spelt out in an Intimation Letter in a format given as Annexure I. Once an assessee’s returns are taken up for detailed scrutiny, the Range should compile the Assessee Master Information to facilitate trend analysis in a format given as Annexure II. Since this information is based on the returns, it can be obtained from the returns filed in ACES without making any reference to the assessee. Returns scrutiny must be done for a complete financial year by looking at two half-yearly returns in conjunction. Before scrutinizing the return for evaluating the correctness of assessment, the information available in the assessee master should be carefully studied by the Divisional DC/AC and discussed with his officers, much like Desk Review in Audit. To begin with, the returns for the financial year 2013-2014 should be taken up for detailed scrutiny.

5.2 One of the important objectives of return scrutiny is to ensure validation of the information furnished in the self-assessed ST-3 return. The validation exercise would require reconciling information furnished in the ST-3 return with ITR Form Nos. 4, 5, 6 and 26AS and any third party information made available. In addition to this, the scrutiny exercise must also look at the correctness of self-assessment with respect to taxability, admissibility of abatement and eligibility for exemption, valuation and CENVAT credit availed/utilized.

5.3  A Checklist has been prepared for carrying out detailed manual scrutiny of selected ST-3 returns (Annexure III). For achieving the stated objectives, the checks have been categorized as follows:

• Reconciliation for validation of the information furnished in the ST-3 return;

• Taxability in respect of services which may have escaped assessment;

• Classification (for the purposes of due availment of abatement/exemption benefit);

• Valuation; and

• CENVAT credit availment/utilization.

5.4 In case any additional details are required, the same may be obtained from the assessee through requisition rather than through a visit. Calling of such additional documents must be done with the approval of the jurisdictional DC/AC so as to obviate the complaint of administrative intrusion.

5.5 Based on the experience of some Zones/Commissionerates, it is seen that in a month an Inspector will be able to perform detailed manual scrutiny of a minimum of three assessees. While some cases may take time, the scrutiny process of an assessee should be completed in a period not exceeding three months.

6.0  DOCUMENTATION OF FINDINGS

6.1 In order to ensure transparency of the scrutiny process, it is important to document the findings flowing from the scrutiny effort. For this purpose, an Observation Sheet should be prepared. The format of the observation sheet, enclosed as Annexure IV, bears a one-to-one co-relation with the checklist. The scrutiny officer must record his findings under each of the subject of the checklist namely, reconciliation, taxability, classification, valuation and CENVAT credit. Under each of these heads, the officer should record any action that needs to be taken by the Range. The findings should clearly outline the process of scrutiny that led to the outcome. It is also possible that the officer may come across some issues which may have to be referred to audit or anti-evasion. These should also be noted in the relevant column given in the observation sheet. In cases where detailed scrutiny of returns results in detection of defaults in service tax payment and it appears that the proviso to section 73(1) of the Finance Act, 1994is invokable, the ST-3 returns of the past periods should also be verified and the results of such verification should be recorded.

6.2 All scrutiny findings in a month must be discussed in a Monthly Scrutiny Monitoring Committee Meeting headed by the Additional/Joint Commissioner in-charge of the Division (or in his absence by the Commissioner) where each Range should present their scrutiny findings in the form of a ‘Scrutiny Report’ given as Annexure V. The meeting should be attended by all the Range Inspectors, Superintendents and DC/ACs of the Divisions whose supervisory control is with the said ADC/JC. This would provide an opportunity to the officers from other Ranges to respond to the findings and also share best practices. The views of the committee on the return scrutiny findings must be documented and follow up action taken. Important issues may be put up to the Commissioner for information. The minutes of the meeting and the decisions including detection and recovery of service tax dues should be properly recorded and maintained by the Scrutiny Cell of the Commissionerate.

6.3  Zonal Chief Commissioners are requested to submit monthly reports in the format given in Annexure VI to the Directorate General of Service Tax till facilities are developed to enable the Commissionerates to upload the data in the MIS of CBEC.

6.4 Based on the past experiences in performing detailed manual scrutiny, a few Templates/Case studies have been prepared and are enclosed as Annexures VII and VIII. These Case Studies will help and guide the officers who are not conversant with the process of Detailed Scrutiny.

6.5 The timelines to be followed for starting detailed manual scrutiny as per the above detailed process are as below:

6.5.1 Forwarding of official mail ids of the Zonal Nodal Officers by 06.07.2015

6.5.2 Forwarding of data by DGS&DM by 08.07.2015

6.5.3 Finalization of the list of the returns of the assessees selected for detailed manual scrutiny and dispatch of the Intimation Letter by 15.07.2015

6.5.4 Commencement of detailed manual scrutiny of selected returns by 01.08.2015.

6.6 Even after the introduction of GST, it may be appreciated that the basic principles of scrutiny of returns and reconciliation of records would remain the same.

Yours faithfully,

 (Himani Bhayana)

Under Secretary (Service Tax)

No. 184/3/2015-ST Dated: 3-6-2015


Clarification on rate of service tax on restaurant service – Dated 3-6-2015 – Service Tax

Circular No. 184/3/2015-ST

Dated the 3rd June, 2015

F. No. 334 / 5 /2015-TRU (Pt.)

Government of India

Ministry of Finance

Department of Revenue

(Tax Research Unit)

Dated the 3rd June, 2015.

To

Chief Commissioner of Customs and Central Excise (All)

Chief Commissioner of Central Excise & Service Tax (All)

Director General of Service Tax

Director General of Central Excise Intelligence

Director General of Audit,

Principal Commissioner/ Commissioner of Customs and Central Excise (All)

Principal Commissioner/Commissioner of Central Excise and Service Tax (All)

Principal Commissioner/Commissioner of Service Tax (All)

Madam/Sir,

Subject: Clarification on rate of service tax on restaurant service – regarding.

The Service Tax rate has been increased to 14% with effect from 1st  June, 2015. Certain doubts have been raised in regard to abatement on value of services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year.

2. Matter has been examined. Valuation of services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess having the facility of air-conditioning or central air-heating in any part of the establishment, is determined as provided in rule 2C of the Service Tax (Determination of Value) Rules, 2006. In the said rule, service portion in an activity wherein goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity, at a restaurant has been specified as 40 percentage of the total amount charged for such supply. In Budget, 2015, no change has been made in abatement and the rate of service tax on the abated value has been increased to 14% with effect from 1st June, 2015. Therefore, effective service tax rate would be 5.6% (14% of 40%) of the total amount charged.

Hence, with the increase in the applicable rate of service tax from 12.36% (including education cesses) to 14%, the effective rate on such establishments has increased from 4.9% to 5.6% of the total amount charged.

3. It is further clarified that exemption from service tax still continues to services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, other than those having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year.

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

5. Trade Notice/ Public Notice to be issued. Wide publicity through local news media including vernacular press may be given. Hindi version shall follow.

Yours faithfully,

(Akshay Joshi)

Under Secretary to Government of India

No. D.O.F.No.334/5/2015-TRU Dated: 19-5-2015


The increase in Service Tax rate will come into effect from 1st June, 2015. – Except (i) services provided by the Government or local authority to a business entity and (ii) Swachh Bharat Cess – Date in respect of these two shall be notified later. – Dated 19-5-2015 – Service Tax

Government of India
Ministry of Finance
Department of Revenue
Tax Research Unit

D.O. F. No. 334/5/2015-TRU

New Delhi, May 19, 2015

Dear Principal Chief Commissioner / Chief Commissioner / Director General,

The Finance Bill, 2015, has received the assent of the Honorable President and has been notified. In the Budget, 2015, certain amendments in the Finance Act, 1994 have been incorporated through theFinance Act, 2015, which will come into effect from a date to be notified. In this regard, 1st June, 2015 is being notified as the date on which the provisions as specified in paragraph 2 below will come into effect. Certain provisions in some notifications already issued, will also come into effect from 1st June, 2015.

2. Following provisions will come into effect from 1st June, 2015.

2.1 Section 66B of the Finance Act, 1994, prescribes the service tax rate. It has been amended bySection 108 of the Finance Act, 2015. The rate of Service Tax is being increased from 12% to 14% (including cesses). The increase in Service Tax rate will come into effect from 1st June, 2015.(Notification No.14/2015-Service Tax, dated 19th May, 2015 refers)

2.2  Sections 153 and 159 of the Finance Act, 2015 provide that section 95 of the Finance (No.2) Act, 2004 and section 140 of the Finance Act, 2007, levying Education Cess and Secondary and Higher Education Cess, respectively, on taxable services, shall cease to have effect from a date to be notified by the Central Government. The above provisions levying Education Cess and Secondary and Higher Education Cess should also cease to have effect from 1st June, 2015. (Notification No.14/2015-Service Tax, dated 19th May, 2015 refers), that is the date with effect from which the increase in the Service Tax rate comes into effect.

2.3 The Negative List entry [section 66D (j)] that covers “admission to entertainment event or access to amusement facility” is to be omitted vide section 109 (4) of The Finance Act, 2015. Section 65B (9)and 65B (24) of the Finance Act, 1994 defines amusement facility and entertainment event, respectively. These entries in the definitions have been omitted by the Section 107 (a) and (c) of theFinance Act, 2015. These changes will come into effect from 1st June, 2015. The implication of these changes are as follows,-

(a) Service Tax shall be levied on the service provided by way of access to amusement facility providing fun or recreation by means of rides, gaming devices or bowling alleys in amusement parks, amusement arcades, water parks and theme parks.

(b) Service tax shall be levied on service by way of admission to entertainment event of concerts, pageants, musical performances concerts, award functions and sporting events other than the recognized sporting event, if the amount charged is more than ₹ 500 per person for the right to admission to such an event.

This levy would come into effect from 1st June, 2015. (Notification No.14/2015-Service Tax, dated 19th May, 2015 refers)

2.3.1 However, the existing exemption, by way of the Negative List entry, to service by way of admission to entertainment event, namely, exhibition of cinematographic film, circus, recognized sporting event, dance, theatrical performance including drama and ballet shall be continued, through the route of exemption. Entry 47 and definition of “recognised sporting event” [paragraph 2 entry ‘zab’] has been inserted in notification No. 25/2012-ST vide S.No.1.(xii) and S. No. 2.(b) respectively of notification No. 06/2015-ST dated 1st March, 2015. This entry will also come into effect from 1st June, 2015. (Notification No.16/2015-Service Tax, dated 19th May, 2015)

2.4 The entry in the Negative List [section 66D (f)] that covers service by way of any process amounting to manufacture or production of goods has been amended vide section 109(2) of Finance Act, 2015, to exclude any service by way of carrying out any processes for production or manufacture of alcoholic liquor for human consumption. Consequently, Service Tax shall be levied on contract manufacturing/job work for production of potable liquor for a consideration. In this context, the definition of the term “process amounting to manufacture or production of goods” [section 65 B (40)] has also been amended vide section 107 (f) of the Finance Act, 2015. This levy would come into effect from 1st June, 2015. (Notification No.14/2015-Service Tax, dated 19th May, 2015 refers)

2.4.1 A consequential amendment in S. No. 30 of notification No. 25/2012-ST dated 20th June, 2012, to exclude intermediate production of alcoholic liquor for human consumption from ambit of the exemption, will also come into effect from 1st June, 2015. [Notification No. 06/2015-ST dated 1st March 2015 Entry at Sl. No. 1.(ix)] (Notification No.16/2015-Service Tax, dated 19th May, 2015refers)

2.5 An entry in the Negative list covers betting, gambling or lottery [Section 66D (i)]. This entry has been amended by section 109 (3) of the Finance Act, 2015 so as to include an explanation that “betting, gambling or lottery” shall not include the activity carried out by a lottery distributor or selling agent in relation to promotion, marketing, organising, selling of lottery or facilitating in organising lottery of any kind, in any other manner. The objective of making these exclusions was to make it explicitly clear that while lottery per se is not subject to service tax, aforesaid services in relation to lottery will be taxable. This will come into effect from 1st June, 2015. (Notification No.14/2015-Service Tax, dated 19th May, 2015 refers)

2.6 In respect of certain services like money changing service, service provided by air travel agent, insurance service and service provided by lottery distributor and selling agent, the service provider has been allowed to pay service tax at an alternative rate subject to the conditions as prescribed under rules 6(7), 6(7A), 6(7B) and 6(7C) of the Service Tax Rules, 1994. Consequent to the upward revision in Service Tax rate, the said alternative rates shall also be revised proportionately.

2.6.1 Amendments to this effect have been made in the Service Tax Rules which will also come into effect from 1st June, 2015, that is the date with effect from which the increase in the Service Tax rate is made effective. [Notification No. 05/2015-ST 1st March 2015 Entry at Sl. No. 2(a)(e)(ii)] (Notification No.15/2015-Service Tax, dated 19th May, 2015 refers)

3. Presently, services provided by Government or a local authority, excluding certain services specified under clause (a) of section 66D, are covered in the Negative List. An enabling provision has been made, by amending section 66D (a) (iv), to exclude all services provided by the Government or local authority to a business entity from the Negative List [section 109(1) of Finance Act, 2015]. Consequently, the definition of “support service” [section 65 B (49)] is also to be omitted from date to be notified [section 107(h) of Finance Act, 2015]. As and when this amendment is given effect to, all services provided by the Government or local authority to a business entity, except the services that are specifically exempted, or covered by any another entry in the Negative List, shall be liable to service tax. The date from which this amendment would come into effect will be notified in due course.

4. An enabling provision has been incorporated in the Finance Act, 2015 vide section 117 (Chapter VI) to impose a Swachh Bharat Cess on all or any of the taxable services at a rate of 2% or lower on the value of such taxable services. This cess shall be levied on such services at such rate from such date as may be notified by the Central Government. The date from which this amendment would come into effect will be notified in due course.

5. In other words, date of effect of the provisions discussed in para 3 & 4 above are not being notified at present.

6. Amendments have been made by Sections 113, 114 and 115 in the Finance Act, 1994, in order to impart greater clarity and align the service tax provisions with those in Central Excise by adding provisions relating to closure of proceedings in sections 76, 78 and 78B. A similar alignment with the central excise provisions has been done in sections 76(2) and 78(2) with respect to cases where the appellate authority increases the duty or penalty. These changes have come into effect immediately after enactment of Finance Bill, 2015.

7. All the above changes may be brought to the notice of trade and industry and wide publicity may be made in this regard.

(Alok Shukla)
Joint Secretary (TRU-I)

No. D.O.F.No.334/5/2015-TRU Dated: 30-4-2015


Finance Bill, 2015 – Changes in Service Tax, Central Excise and Customs duty rates – Dated 30-4-2015 – Service Tax

Government of India

Ministry of Finance

Department of Revenue

Tax Research Unit

*****

Alok Shukla

Joint Secretary (TRU-I)

Tel: 23092687

Fax: 23092031

Email: alok.shukla@nic.in

D.O.F.No.334/5/2015-TRU

New Delhi, the 30th April, 2015.

Dear Principal Chief Commissioner / Chief Commissioner / Director General,

While replying to the discussions on the Finance Bill, 2015 in Lok Sabha today, Finance Minister has announced certain further changes in Central Excise and Customs duty rates. Notifications No.23 toNo.27/2015-Central Excise and notifications No.28 to No.30/2015-Customs, all dated 30th April, 2015have been issued to give effect to these announcements. Notifications No.12 and No.13/2015-Central Excise (N.T.), dated 30th April, 2015 has also been issued in this regard. As regards Service Tax, notification No.12/2015-Service Tax, dated 30.04.2015 has been issued.

2. The changes introduced through these notifications are summarised below. In addition, a clarification regarding applicability of customs duty exemption notifications has also been provided. Unless otherwise stated, all changes in rates of duty take effect from the midnight of 29th April / 30th April, 2015.

CUSTOMS:

1) Basic Customs Duty on raw and refined / white sugar has been increased from 25% to 40%.S.Nos.76, 77 and 78 of notification No.12/2012-Customs, dated 17.03.2012 as amended bynotification No.28/2015-Customs, dated 30.04.2015 refer.

2) Basic Customs Duty on Colemanite and other Boron ores has been reduced from 2.5% to Nil.S.No.113 of notification No.12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refers. S.No.113A has been omitted since ulexite ore, being a boron ore, will be eligible for Nil duty under S.No.113.

3) Basic Customs Duty on natural rubber (NR) has been increased from 20% or ₹ 30 per kg., whichever is lower, to 25% or ₹ 30 per kg., whichever is lower. S.No.252 of notification No.12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015refers.

4) Basic Customs Duty on raw silk (not thrown) has been reduced from 15% to 10%. S.No.276 of notification No.12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refers.

5) All Digital Still Image Video Cameras (DSC) falling under tariff item 8525 80 20 irrespective of their specification [including the restriction with reference to video recording time] and their parts are being exempted from Basic Customs Duty. S.No.428A and 429 of notification No.12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refer.

6) Export duty on iron ore fines (below 58% Fe content) [falling under tariff lines 2601 11 41 and2601 11 42] has been reduced from 30% to 10%. There is no change in the export duty rate on iron ore other than iron ore fines (below 58% Fe content). Notification No.27/2011-Customs, dated 01.03.2011 as amended by notification No.30/2015-Customs, dated 30.04.2015 [new S.No.20A refers].

7) Exemption from additional duty of customs levied under section 3 of the Customs Tariff Act (both CVD and SAD) in respect of certain entries of notification No.39/96-Customs, dated 23.07.1996 are being withdrawn. Exemption from Basic Customs Duty in respect of these entries, however, would continue. Paragraph 2 of the notification No.39/96-Customs, dated 23.07.1996 as amended bynotification No.29/2015-Customs dated 30.04.2015 refers. Further, exemption from Basic Customs Duty, CVD and SAD in respect of direct imports by the Government of India and the State Governments would continue. Notification No.39/96-Customs, dated 23.07.1996 as amended bynotification No.29/2015-Customs dated 30.04.2015 [amended S. Nos.9 and 10] refer. These changes, however, will be effective from 01.06.2015.

EXCISE:

1) The speed range for ‘jarda scented tobacco’ has been divided into two ranges (as in case of chewing tobacco),

a. first upto 300 pouches per minute; and

b. second from 301 onwards,

and the deemed capacity and duty payable have been notified accordingly. Notification No.11/2010-Central Excise (N.T.), dated 27.02.2010 [The Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010] as amended bynotification No.13/2015-Central Excise (N.T.), dated 30.04.2015 [for deemed capacity of production] and notification No.16/2010-Central Excise, dated the 27.02.2010 as amended by notification No.25/2015-Central Excise, dated the 30.04.2015 [for duty payable per machine per month] refer.

2) Excise duty exemption on finishing agents, dye carriers to accelerate the dyeing or fixing of dye-stuffs, printing paste and other products and preparations of any kind used in the same factory for the manufacture of textiles and textile articles has been withdrawn. S.No.133 of notification No.12/2012-Central Excise, dated 17.03.2012 as omitted by notification No.24/2015-Central Excise, dated 30.04.2015 refers.

3) The concessional excise duty (and hence, CVD) of 6% on Hard disk, CD ROM drive, DVD drive or writer, Combo drive, flash memory, microprocessors has been restricted only to actual users for manufacture of computer (PCs/desktops) falling under heading 8471. S.No.255/2012-Central Excise, dated 17.03.2012 as amended by notification No.24/2015-Central Excise, dated 30.04.2015 refers.

4) Excise duty exemption presently available to Ordnance Factories is being withdrawn. S.No.1 and 6 of notification No.62/95-CE dated 16.03.1995 as omitted by notification No.23/2015-Central Excise, dated 30.04.2015 refers. Further, excise duty exemption presently available to Defence PSUs is being withdrawn. S.No.2 and 16 of notification No.63/95-CE dated 16.03.1995 as omitted bynotification No.23/2015-Central Excise, dated 30.04.2015 refers. These changes, however, will be effective from 01.06.2015.

5) An Explanation has been inserted in notifications No.14/2015-Central Excise and 15/2015-Central Excise, both dated 01.03.2015 to provide that exemption from Education Cess and Secondary & Higher Education Cess contained therein will also apply to DTA clearances of excisable goods from 100% EOU. Notification No.14/2015-Central Excise, dated 01.03.2015 as amended by notification No.26/2015-Central Excise, dated 30.04.2015; and notification No.15/2015-Central Excise, dated 01.03.2015 as amended by notification No.27/2015-Central Excise, dated 30.04.2015 refers.

The CENVAT Credit Rules, 2004 (CCR, 2004):

1) Rule 3(7)(b) of the CCR, 2004 has been amended so as to allow utilisation of credit of Education Cess and Secondary & Higher Education Cess for payment of basic excise duty in the following situations:

a. Education Cess and Secondary & Higher Education Cess on inputs or capital goods received in the factory of manufacture of final product on or after the 1st day of March, 2015;

b. Balance 50% Education Cess and Secondary & Higher Education Cess on capital goods received in the factory of manufacture of final product in the financial year 2014-15; and

c. Education Cess and Secondary & Higher Education Cess on input services received by the manufacturer of final product on or after the 1st day of March, 2015.

Notification No.12/2015-Central Excise (N.T.), dated 30.04.2015 refers.

CLARIFICATION: The issue as to whether an importer can simultaneously avail the exemption benefits under two notifications, one for Basic Customs Duty and the other for CVD was examined in the Ministry in the matter of import of coal from Indonesia and vide Circular No.41/2013-Customs dated 21.10.2013 it was clarified that an importer while availing of BCD exemption on steam coal under notification No.46/2011-Customs, dated 01.06.2011 can simultaneously avail of concessional CVD at 2% under S.No.123 of notification No.12/2012-Customs, dated 17.03.2012. Drawing the same analogy, in the case of muriate of potash and urea for use in the manufacture of other fertilizers, it was clarified to the Central Excise zone of Visakhapatnam and Bhubaneswar that importers can simultaneously avail benefit of S.No.198 or 203 of notification No.12/2012-Customs, dated 17.03.2012 for concessional rate of BCD and S.No.127 of notification No.12/2012-Central Excise for CVD exemption. Representations have been received regarding divergence in assessment practice in respect of such imports. It is, therefore, clarified that importers can avail of the benefit ofnotification No.12/2012-Customs, dated 17.03.2012 for the purposes of BCD [i.e. S.No.197 to 203 as amended by notification No.46/2012-Customs, dated 17.08.2012] and simultaneously avail benefit ofS.No.127 of notification No.12/2012-Central Excise, dated 17.03.2012 for the purposes of CVD where such imports are for use in the manufacture of other fertilizers.

SERVICE TAX:

1) Service tax on services of Life Insurance business provided under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) have been exempted.

2) Service tax on services of Life Insurance business provided under Pradhan Mantri Jan Dhan Yojana (PMJDY) have been exempted.

3) Service tax on services of General Insurance business provided under Pradhan Mantri Suraksha Bima Yojana (PMSBY) have been exempted.

4) Service tax on services by way of collection of contribution under Atal Pension Yojana (APY) have been exempted.

[Notification No.25/2012-Service Tax, dated 20.06.2012 as amended by notification No.12/2015-Service Tax, dated 30.04.2015 [item (p) of entry.26 and items (e) and (f) of entries 26A and 26B refer.]

With warm regards,

Yours sincerely,

(Alok Shukla)

Joint Secretary (TRU-I)

To:

All Principal Chief Commissioners,

All Chief Commissioners / Directors General,

Copy to:

All Principal Commissioners,

All Commissioners,

Director DPPR / Logistics / Legal Affairs / Data Management.

182/01/2015 dated 27-03-2015


Extension of e-payment deadline and of banking hours – Dated 27-3-2015 – Service Tax

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE AND CUSTOMS

Service Tax Wing

CIRCULAR NO. 182/01/2015 – ST

New Delhi, the 27th March 2015

To

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

The Director General of Service Tax,

The Director General of Systems & Data Management,

The Director General of Central Excise Intelligence,

The Commissioners of Service Tax (Audit) (All)

The Commissioners of Central Excise (Audit) (All)

Subject: Extension of e-payment deadline and of banking hours

The Reserve Bank of India has issued instructions vide RBI/2014-15/515 dated March 25, 2015wherein it has been decided that all agency banks shall keep the counters of their designated branches conducting government business open for full day on March 30, 2015, and till 8.00 p.m. on March 31, 2015. All electronic transactions would, however, continue till midnight of March 31, 2015.

2. Thus the assessees can make e payment till the mid night of March 31, 2015.

3. It is requested that the trade notice may be issued to publicize the extended e payment hours as well as the extended banking hours.

F. No . 137/155/2012-Service Tax ( Pt -II)

 (Rajeev Yadav)

Director (Service Tax)

F. No. 334/5/2015-TRU dated 28-02-2015


Union Budget 2015 – Changes in Service Tax – Dated 28-2-2015 – Service Tax

F. No. 334/5/2015-TRU

Government of India

Ministry of Finance

Department of Revenue

(Tax Research Unit)

***

M. Vinod Kumar

Joint Secretary (Tax Research Unit)

Tel: 011-23093027; Fax: 011-23093037

e-mail: m.kumar58@nic.in

D.O.F. No. 334/5/2015-TRU

New Delhi, dated February 28th, 2015

Dear Madam/Sir,

Subject: Union Budget 2015 – Changes in Service Tax – reg.

The Finance Minister has, while presenting the Union Budget 2015-16, introduced the Finance Bill in the Lok Sabha on the 28th of February, 2015. Clauses 105 to 116 of the Bill cover the amendments made to Chapter V of the Finance Act, 1994. Chapter VI of the Bill (clause 117) contains the enabling provisions relating to levy Swachh Bharat Cess, which empowers the government to impose Cess on all or any of the taxable services at the rate of 2% of the value of taxable services. Changes are also proposed in,-

• the Service Tax Rules, 1994 (STR);

• the CENVAT Credit Rules, 2004(Cenvat Rules);

Other changes are being given effect to by inserting new entries, and amending/omitting existing entries in notification Nos. 25/2012-ST, 26/2012-ST, 30/2012-ST and 31/2012-ST. Further, notification No. 42/2012-ST is being rescinded.

2. It may be noted that changes being made in the Budget are coming into effect on various dates, as indicated in the following paragraphs. These changes are categorized below based on the above criterion:

(i) Changes coming into effect immediately w.e.f. the 1st day of March, 2015;

(ii) Changes coming into effect from the 1st day of April, 2015 ;

(iii) The amendments which will get incorporated in the Finance Act, 1994 immediately on enactment of the Finance Bill, 2015;

(iv) The amendments made in the Finance Act, 1994, including the change in service tax rate that will come into effect from a date to be notified by the Government in this regard after the enactment of the Finance Bill, 2015 ;

(v) Certain fresh entries and amendments to existing entries in notification No. 25/12-ST, and certain amendments in the Service Tax Rules that will come into effect as and when the amendments in the Negative List and revised rate of Service Tax come into effect; and

(vi) Chapter VI of the Finance Bill, 2015, regarding levy of Swachh Bharat Cess on all or any of taxable services that will come into effect from a date to be notified.

For ease of reference, the Table at para 14 summarises the changes being made and indicates the dates on which these changes would come into effect.

The salient features of the changes being made are discussed below.

3. Service Tax Rate:

3.1 The rate of Service Tax is being increased from 12% plus Education Cesses to 14%. The ‘Education Cess’ and ‘Secondary and Higher Education Cess’ shall be subsumed in the revised rate of Service Tax. Thus, the effective increase in Service Tax rate will be from the existing rate of 12.36% (inclusive of cesses) to 14%, subsuming the cesses.

3.2 In this context, an amendment is being made in section 66B of the Finance Act, 1994. Further, it has been provided vide clauses 179 and 187 respectively of the Finance Bill, 2015 that sections 95 of the Finance Act, 2004 and 140 of the Finance Act, 2007, levying Education Cess and Secondary and Higher Education Cess on taxable services shall cease to have effect from a date to be notified by the Government.

3.3 The new Service Tax rate shall come into effect from a date to be notified by the Central Government after the enactment of the Finance Bill, 2015.

3.4 Till the time the revised rate comes into effect, the ‘Education Cess’ and ‘Secondary and Higher Education Cess’ will continue to be levied in Service Tax.

(Clause 106 of the Bill refers)

4. Enabling provision for levy of “Swachh Bharat Cess”:

4.1 An enabling provision is being incorporated in the Finance Bill, 2014 (Chapter VI/clause 117) to empower the Central Government to impose a Swachh Bharat Cess on all or any of the taxable services at a rate of 2% on the value of such taxable services. This cess shall be levied from such date as may be notified by the Central Government after the enactment of the Finance Bill, 2015. The details of coverage of this Cess would be notified in due course.

(Chapter VI/Clause 117 of the Bill refers)

5 Other Legislative changes:

5.1 Negative List - The changes proposed in the Negative List in Section 66 D are as follows:

(i) The Negative List entry that covers “admission to entertainment event or access to amusement facility” is being omitted [section 66D (j)]. Consequently, the definitions of “amusement facility” [section 65 B (9)] and “entertainment event” [section 65B(24)] are also being omitted. The implication of these changes are as follows,-

(a) Service Tax shall be levied on the service provided by way of access to amusement facility providing fun or recreation by means of rides, gaming devices or bowling alleys in amusement parks, amusement arcades, water parks and theme parks.

(b) Service tax to be levied on service by way of admission to entertainment event of concerts, pageants, musical performances concerts, award functions and sporting events other than the recognized sporting event, if the amount charged is more than ₹ 500 for right to admission to such an event. However, the existing exemption, by way of the Negative List entry, to service by way of admission to entertainment event, namely, exhibition of cinematographic film, circus, recognized sporting event, dance, theatrical performance including drama and ballet shall be continued, through the route of exemption. For this purpose a new entry is being inserted in notification No. 25/12-ST. The term recognized sporting event has been defined in the proposed amendment in the said notification.

(ii) The entry in the Negative List that covers service by way of any process amounting to manufacture or production of goods [section 66D (f)] is being pruned to exclude any service by way of carrying out any processes for production or manufacture of alcoholic liquor for human consumption. Consequently, Service Tax shall be levied on contract manufacturing/job work for production of potable liquor for a consideration. In this context, the definition of the term “ process amounting to manufacture or production of goods” [section 65 B (40)] is also being amended, along with the Negative List entry [section 66D (f)], with a consequential amendment in S. No. 30 of notification No. 25/12-ST, to exclude intermediate production of alcoholic liquor for human consumption from its ambit.

(iii) Presently, services provided by Government or a local authority, excluding certain services specified under clause (a) of section 66D, are covered by the Negative List. Service Tax applies on the “support service” provided by the Government or local authority to a business entity. An enabling provision is being made, by amending section 66D (a)(iv), to exclude all services provided by the Government or local authority to a business entity from the Negative List. Consequently, the definition of “support service” [section 65 B (49)] is being omitted. Accordingly, as and when this amendment is given effect to, all services provided by the Government or local authority to a business entity, except the services that are specifically exempted, or covered by any another entry in the Negative List, shall be liable to service tax .

(Clauses 105 and 107 of the Bill refers)

The above changes in the Negative List shall come into effect from a date to be notified later, after the enactment of the Finance Bill, 2015.

5.2 Further amendments in Chapter V of the Finance Act, 1994:

(i) Services, excluding a few specified services, provided by the government are included in the Negative List. Further, specified services received by the government are also exempt. Hitherto, the term “government” has not been defined in the Act or the notification. This has given rise to  interpretational issues. To address such issues, a definition of the term “government” is being incorporated in the Act [section 65 B (26A)].

(Clause 105 of the Bill refers)

(ii) The intention in law has been to levy Service Tax on the services provided by:

(a) chit fund foremen by way of conducting a chit.

(b) distributor or selling agents of lottery, as appointed or authorized by the organizing state for promoting, marketing, distributing, selling, or assisting the state in any other way for organizing and conducting a lottery.

However, Courts have taken a contrary view in some cases, while in some cases the levy has been upheld.

An Explanation is being inserted in the definition of “service” to specifically state the intention of the legislature to levy Service Tax on activities undertaken by chit fund foremen in relation to chit, and lottery distributors and selling agents, in relation to lotteries [section 65 B (44)]. Further, an explanation is being added in entry (i) of section 66D to specifically state that these activities are not covered by the Negative List.

(Clauses 105 and 107 of the Bill refers)

(iii) Section 66F (1) prescribes that unless otherwise specified, reference to a service shall not include reference to any input service used for providing such services. An illustration is being incorporated in this section to exemplify the scope of this provision. As illustrated, reference to service provided by the Reserve Bank of India (RBI), in section 66D (b) does not include any agency service provided by other banks to RBI, as such agency services are input services used by RBI for provision of its main service. Accordingly, banks providing agency service to or in relation to services of RBI, are liable to pay Service Tax on the agency services so provided by virtue of the existing section 66F (1).

(Clause 108 of the Bill refers)

(iv) Section 67 prescribes for the valuation of taxable services. It is being prescribed specifically in this section that consideration for a taxable service shall include:

(a) all reimbursable expenditure or cost incurred and charged by the service provider. The intention has always been to include reimbursable expenditure in the value of taxable service. However, in some cases courts have taken a contrary view. Therefore, the intention of legislature is being stated specifically in section 67.

(b) amount retained by the distributor or selling agent of lottery from gross sale amount of lottery ticket, or, as the case may be, the discount received, that is the difference in the face value of lottery ticket and the price at which the distributor or selling agent gets such tickets.

(Clause 109 of the Bill refers)

(v) Section 73 is being amended in the following manner:

(a) a new sub-section (1B) is being inserted to provide that recovery of the Service Tax amount self-assessed and declared in the return but not paid shall be made under section 87, without service of any notice under sub-section (1) of section 73; and

(b) sub-section (4A) that provides for reduced penalty if true and complete details of transaction were available on specified records, is being omitted.

(Clause 110 of the Bill refers)

(vi) Section 76 is being amended to rationalize the provisions relating to penalties, in cases not involving fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or rules with the intent to evade payment of Service Tax, in the following manner,-

(a) penalty not to exceed ten per cent. of Service Tax amount involved in such cases;

(b) no penalty is to be paid if Service Tax and interest is paid within 30 days of issuance of notice under section 73 (1);

(c) a reduced penalty equal to 25% of the penalty imposed by the Central Excise officer by way of an order is to be paid if the Service Tax, interest and reduced penalty is paid within 30 days of such order; and

(d) if the Service Tax amount gets reduced in any appellate proceeding, then the penalty amount shall also stand modified accordingly, and benefit of reduced penalty ( 25% of penalty imposed) shall be admissible if service tax, interest and reduced penalty is paid within 30 days of such appellate order.

(Clause 111 of the Bill refers)

(vii) Section 78 is being amended to rationalize penalty, in cases involving fraud or collusion or wilful mis-statement of suppression of facts or contravention of any provision of the Act or rules with the intent to evade payment of Service Tax, in the following manner,-

(a) penalty shall be hundred per cent of Service Tax amount involved in such cases;

(b) a reduced penalty equal to 15% of the Service Tax amount is to be paid if Service Tax, interest and reduced penalty is paid within 30 days of service of notice in this regard;

(c) a reduced penalty equal to 25% of the Service Tax amount, determined by the Central Excise officer by an order, is to be paid if the Service Tax, interest and reduced penalty is paid within 30 days of such order; and

(d) if the Service Tax amount gets reduced in any appellate proceeding, then the penalty amount shall also stand modified accordingly, and benefit of reduced penalty (25%) shall be admissible if Service Tax, interest and reduced penalty is paid within 30 days of such appellate order.

(Clause 112 of the Bill refers)

(viii) A new section 78 B is being inserted to prescribe, by way of a transition provision, that,-

(a) amended provisions of sections 76 and 78 shall apply to cases where either no notice is served, or notice is served under subsection (1) of section 73 or proviso thereto but no order has been issued under sub-section (2) of section 73, before the date of enactment of the Finance Bill, 2015; and

(b) in respect of cases covered by sub-section (4A) of section 73, if no notice is served, or notice is served under sub-section (1) of section 73 or proviso thereto but no order has been issued under sub-section (2) of section 73, before the date of enactment of the Finance Bill, 2015, penalty shall not exceed 50% of the Service Tax amount.

(Clause 113 of the Bill refers)

(ix) Section 80, that provided for waiver of penalty in certain circumstances, is being omitted.

(Clause 114 of the Bill refers)

(x) Section 86 is being amended to prescribe that remedy against the order passed by Commissioner (Appeal), in a matter involving rebate of Service Tax, shall lie in terms of section 35EE of the Central Excise Act. It is also being provided that all appeals filed in Tribunal after the date the Finance Act, 2012 came into effect and pending on the date when the Finance Bill, 2015 receives assent of the President shall be transferred and dealt in accordance with section 35EE of the Central Excise Act.

(Clause 115 of the Bill refers)

(xi) Certain changes have been made in the provisions relating to Settlement Commission. These provisions, contained in the Central Excise Act, 1944, are made applicable to Service Tax, through section 83 of the Finance Act, 1994. For details, the D.O. letter of J.S. (TRU-I) may please be referred to.

The above stated changes in the Finance Act, 1994, shall get incorporated in the said Act on the day the Finance Bill, 2015 is enacted.

6 Review of Exemptions :

6.1 Exemption presently available on specified services of construction, repair, maintenance, renovation or alteration service provided to the Government, a local authority, or a governmental authority ( vide S. No. 12 of the notification No. 25/12-ST ) shall be limited only to,-

(a) a historical monument, archaeological site or remains of national importance, archeological excavation or antiquity;

(b) canal, dam or other irrigation work; and

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

Exemption to other services presently covered under S. No. 12 of notification No. 25/12-ST is being withdrawn.

6.2 Exemption to construction, erection, commissioning or installation of original works pertaining to an airport or port is being withdrawn (S. No 14 of the notification No. 25/12-ST). The other exemptions covered under S. No. 14 of notification No. 25/12-ST shall continue unchanged.

6.3 Exemption to services provided by a performing artist in folk or classical art form of (i) music, or (ii) dance, or (iii) theater, will be limited only to such cases where amount charged is upto ₹ 1,00,000 for a performance (S. No 16 of notification No. 25/12-ST).

6.4 Exemption to transportation of food stuff by rail, or vessels or road will be limited to food grains including rice and pulses, flour, milk and salt. Transportation of agricultural produce is separately exempt, and this exemption would continue (S. Nos. 20 and 21 of notification No. 25/12-ST).

6.5 Exemptions are being withdrawn on the following services:

(a) services provided by a mutual fund agent to a mutual fund or assets management company,

(b) distributor to a mutual fund or AMC,

(c) selling or marketing agent of lottery ticket to a distributor. Service Tax on these services shall be levied on reverse charge basis.

(S. No 29 of notification No. 25/12-ST).

6.6 Consequent to imposition of Service Tax levy on service by way of manufacture of alcoholic liquor for human consumption, an amendment is being made in the entry at S. No. 30 of notification No. 25/12-ST to exclude carrying out of intermediate production process of alcoholic liquor for human consumption on job work from this entry.

(S. No 30 of notification No. 25/12-ST).

6.7 Exemption is being withdrawn on the following service,-

(a) Departmentally run public telephone;

(b) Guaranteed public telephone operating only local calls;

(c) Service by way of making telephone calls from free telephone at airport and hospital where no bill is issued.

(S. No. 32 of notification No. 25/12-ST).

6.8 Existing exemption, vide notification No. 42/12-ST dated 29.6.2012, to the service provided by a commission agent located outside India to an exporter located in India is being rescinded with immediate effect. This exemption has become redundant in view of the amendments made in law in the previous budget, in the definition of “intermediary” in the Place of Provision of Services Rules, making the place of provision of a service provided by such agents as outside the taxable territory.

The above changes in notification No. 25/12-ST, except the change mentioned in para 6.6, shall come into effect from the 1St day of April 2015. The change mentioned at para 6.6 shall come into effect from a date to be notified after the enactment of the Finance Bill, 2015. The change mentioned at S. No. 6.8 comes into effect immediately.

7 New Exemptions:

7.1 Hitherto, any service provided by way of transportation of a patient to and from a clinical establishment by a clinical establishment is exempt from Service Tax. The scope of this exemption is being widened to include all ambulance services.

(Amended in the entry at S. No. 2 of notification No. 25/12-ST refers).

7.2 Life insurance service provided by way of Varishtha Pension Bima Yojna is being exempted.

(Amendment in entry at S. No. 26A of notification No. 25/12-ST refers)

7.3 Service provided by a Common Effluent Treatment Plant operator for treatment of effluent is being exempted.

(New entry at S. No. 43 of notification No. 25/12-ST).

7.4 Services by way of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labeling of fruits and vegetables is being exempted.

(New entry at S. No. 44 of notification No. 25/12-ST).

7.5 Service provided by way of admission to a museum, zoo, national park, wild life sanctuary and a tiger reserve is being exempted. These services when provided by the Government or local authority are already covered by the Negative List.

(New entry at S. No. 45 of notification No. 25/12-ST).

7.6 Service provided by way of exhibition of movie by the exhibitor (theatre owner) to the distributor or an association of persons consisting of such exhibitor as one of it’s members is being exempted.

(New entry at S. No. 46 of notification No. 25/12-ST).

7.7 Goods transport agency service provided for transport of export goods by road from the place of removal to an inland container depot, a container freight station, a port or airport is exempt from Service Tax vide notification No. 31/12-ST dated 20.6.2012. Scope of this exemption is being widened to exempt such services when provided for transport of export goods by road from the place of removal to a land customs station (LCS).

(Amendment in notification No. 31/12-ST refers).

All the above New Exemptions shall come into effect from the 1st day of April, 2015.

8. New entries being incorporated in notification No. 25/12-ST, to continue exemption to certain activities that are presently covered by the Negative List entries which are being omitted:

8.1 Service by way of right to admission to,-

i. exhibition of cinematographic film, circus, dance, or theatrical performances including drama or ballet.

ii. recognized sporting events.

iii. concerts, pageants, award functions, musical performances or sporting events not covered by S. No. ii, where the consideration for such admission is upto ₹ 500 per person.

(New entry 46 of notification No. 25/2012-ST and clause (zab) of definitions in the said notification)

These changes shall be made effective from the date the amendments being made in the Negative List concerning the service by way of admission to entertainment events come into effect.

9. Abatements:

9.1 At present, service tax is payable on 30% of the value of rail transport for goods and passengers, 25% of the value of goods transport by road by a goods transport agency and 40% for goods transport by vessels. The conditions prescribed also vary. A uniform abatement is now being prescribed for transport by rail, road and vessel and Service Tax shall be payable on 30% of the value of such service subject to a uniform condition of non-availment of Cenvat Credit on inputs, capital goods and input services.

9.2 At present, Service Tax is payable on 40% of the value of air transport of passenger for economy as well as higher classes, e.g. business class. The abatement for classes other than economy is being reduced and Service Tax would be payable on 60% of the value of such higher classes.

9.3 Abatement is being withdrawn from services provided in relation to chit. Consequently, Service Tax shall be paid by the chit fund foremen on the full consideration received by way of fee, commission or any such amount. They would be entitled to take Cenvat Credit.

The proposed rationalization in abatements shall come into effect from the 1st day of April, 2015.

10. Reverse Charge Mechanism

10.1 Manpower supply and security services when provided by an individual, HUF, or partnership firm to a body corporate are being brought to full reverse charge. Presently, these are taxed under partial reverse charge mechanism.

10.2 Services provided by,-

(i) mutual fund agents, mutual fund distributors; and

(ii) agents of lottery distributor

are being brought under reverse charge consequent to withdrawal of the exemption on such services. Accordingly, Service Tax in respect of mutual fund agent and mutual fund distributor services shall be paid by the assets management company or, as the case may be, by the mutual fund receiving such services. In respect of agents of lottery, Service Tax shall be paid by the distributor of lottery.

This above changes in reverse charge mechanism will come into effect from the 1st day of April, 2015.

11. Service Tax Rules

11.1 In respect of any service provided under aggregator model, the aggregator, or any of his representative office located in India, is being made liable to pay Service Tax if the service is so provided using the brand name of the aggregator in any manner. If an aggregator does not have any presence, including that by way of a representative, in such a case any agent appointed by the aggregator shall pay the tax on behalf of the aggregator. In this regard appropriate amendments have been made in rule 2 of the Service Tax Rules, 1994 and notification No. 30/2012-ST dated 20.6.2012 This change comes into effect immediately i.e., w.e.f. 1st March, 2015.

11.2 Rule 4 is being amended to provide that the CBEC shall, by way of an order, specify the conditions, safeguards and procedure for registration in service tax. In this regard Order No. 1/15-ST, dated 28.2.2015, effective from 1.3.2015 has been issued, prescribing documentation, time limits and procedure for registration. It has also been prescribed that henceforth registration for single premises shall be granted within two days of filing the application.

11.3 A provision for issuing digitally signed invoices is being added along with the option of maintaining of records in electronic form and their authentication by means of digital signatures. The conditions and procedure in this regard shall be specified by the CBEC (rule 4, 4A and 5).

11.4 Rule 6 (6A) which provided for recovery of service tax self-assessed and declared in the return under section 87 is being omitted consequent to the amendment in section 73 for enabling such recovery. This change will come into effect from the date of enactment of the Finance Bill, 2015.

11.5 In respect of certain services like money changing service, service provided by air travel agent, insurance service and service provided by lottery distributor and selling agent, the service provider has been allowed to pay service tax at an alternative rate subject to the conditions as prescribed under rule 6 (7), 6(7A), 6(7B) and 6(7C) of the Service Tax Rules, 1994. Consequent to the upward revision in Service Tax rate, the said alternative rates shall also be revised proportionately. Amendments to this effect have been proposed in the Service Tax Rules.

The amendments specified in para 11.5 shall come into effect as and when the revised Service Tax rate comes into effect.

12. Cenvat Credit Rules, 2004

12.1 Rule 4(7) is being amended to allow Cenvat Credit of Service Tax paid under partial reverse charge by the service receiver without linking it to the payment to the service provider. This change will come into effect from 1.4.2015.

12.2 The period for taking Cenvat Credit is being extended from six months from the date of invoice to one year from the date of invoice.

12.3 Certain other changes are being made in the provisions of the Cenvat Credit Rules, 2004, which, inter-alia, include allowing Cenvat Credit on input and capital goods received directly by job workers, defining “export goods” for the purposes of rule 5, defining “exempt goods” for the purposes of rule 6, making applicable the provision of rule 9(4) to importer dealers, authorizing imposition of restrictions on registered dealers under rule 12AAA, and provisions relating to recovery of credit wrongly taken and imposition of penalty. For details, the D.O. letter of J.S (TRU-I) may please be referred to.

13. Advance Rulings:

The facility of Advance Ruling is being extended to all resident firms by specifying such firms under section 96A (b)(iii) of the Finance Act, 1994.

(Notification No. 9/2015-ST, dated 1.3.2015 refers)

14. Summary of changes being made and the dates on which they would come into effect: -

Subject Refer Para
With immediate effect (from 1.3.2015)
(i) Shifting the liability of payment of service tax on aggregator of a service where service is provided under the brand name of the aggregator

(ii) Amendments in rules 4, 4A and 5 of the Service Tax Rules, 1994

(iii) Certain amendments in the Cenvat Credit Rules

(iv) Rescinding of notification No. 42/2012-ST

(v) Extending the scope of advance rulings to resident

firms

11.1

11.2 and 11.3

12.2 and

12.3

6.8

13

With effect from the 1st day of April, 2015
(i) Rationalization of exemptions at S. Nos. 12, 14, 16, 20, 21 and 29 of notification No. 25/2012-ST

(ii) Omitting the entry at S. No. 32 in notification No. 25/2012-ST

(iii) New exemptions for,-

• Precondition, pre-cooling, ripening, waxing, retail packing, labeling of fruits and vegetables

• Service by a Common Effluent Treatment Plant operator

• Varistha Bima Yojana

• Ambulance services

• Admission to a museum, zoo, national park, wild life sanctuary, and a tiger reserve

• Service provided by exhibitor of movie to a distributor or an AOP consisting of exhibitor as one of its member

• Transport of export goods by road from the place of removal to a land customs station

(iv) Change in abatement rates and conditions thereof for transport of passengers and goods by train; transport of goods by road by a GTA; transport of goods by vessels; executive/business class travel by air; and withdrawal of abatement on services provided in relation to chit

(v) Amendment in reverse charge mechanism,-

• To prescribe full reverse charge on manpower supply and security service provided by individual, HUF, partnership firm to a body corporate

• Prescribing reverse charge on service provided by a mutual fund agent, mutual fund distributor and agents of lottery distributor

(vi) Amendment in rule 4(7) of the Cenvat Credit Rules to allow credit of service tax paid by recipient of service in partial reverse charge immediately on payment of tax

6.1 to 6.5

6.7

7.1 to 7.7

 

9.1 to 9.3

10.1 and

10.2

12.1

Changes in the Finance Act, 1994 that would get incorporated on enactment of the Finance Bill 2015
(i) Insertion of new definition to specify the term “government” [section 65 B (26A)]

(ii) Insertion of a new Explanation in the definition of service [section 65 B(44)]

(iii) Insertion of an illustration in sub-section (1) of section 66F(1) to explain the scope of this subsection

(iv) Amendment in the definition of the terms “consideration” in section 67

(v) Amendments in sections 73, 76 and 78.

(vi) Insertion of transition provision by way of section 78B

(vii) Omitting section 80(viii) Amendments in section 86

(ix) Amendments in the provisions relating to Settlement Commission

(x) Omitting of rule 6 (6A) of the Service Tax Rules

5.2(i)

5.2 (ii)

5.2(iii)

5.2 (iv)

5.2(v) to (vii)

5.2 (viii)

5.2 (ix)

5.2(x)

5.2 (xi)

11.4

With effect from a date to be notified after the enactment of the Finance Bill, 2015 in respect of each provision
New Service Tax rate 3
Swachh Bharat Cess 4
Amendments in the Negative List (section 66D) and definitions (section 65B), namely,-

(i) Omitting the definitions of the terms “amusement facility”[section 65 B (9)], “entertainment event” [section 65 B(24)], and entry

(j) in section 66D

(ii) Amendments in the definition of terms “process amounting to manufacture or production of goods” [section 65 B (40)] and entry (f) in section 66D

(iii) Omitting the definition of the terms “support service”[section 65 B (49)], and amendment in section 66D(a) (iv)

5.1 (i)

5.1 (ii)

5.1 (iii)

Amendment in S. No. 30 of notification No. 25/12-ST to exclude job work in relation to alcoholic liquor for human consumption from the scope of this exemption 6.6
Insertion of a new entry at S. No. 47 of notification No. 25/12- ST to exempt services by way of (i) right to admission to exhibition of film, circus, dance or theatrical performances including drama, or ballet; (ii) recognized sporting event; and (iii) admission to other events where the consideration for admission is upto ₹ 500; 8.1
Amendments in alternative rates of service tax provided for  air travel agent, insurance service, money changing service and service provided by a lottery distributor and selling agent in rule 6(7), 6(7A), 6(7B) and 6(7C) of the Service Tax Rules. 11.5

15. General

15.1 Changes explained above are not intended to be exhaustive and are meant only to draw attention to major changes. The text of the statutory provisions and the wordings of the notifications should be read carefully for interpreting the law.

15.2 Field formations are requested to go through the changes made in the Budget carefully. Any issues or doubts which may arise or any omission/error observed may kindly be brought to the notice of the undersigned, or Dr. Abhishek Chandra Gupta, Technical Officer at abhishek.gupta81@nic.in as soon as possible.

I would like to express my appreciation of the pre-budget suggestions and inputs received from field formations. I would also thank the officers in TRU who had worked as a cohesive team during the Budget exercise. A special word of thanks to Shri G. D. Lohani who, though promoted as Commissioner mid-way through the exercise, continued to work as a part of the team with unabated enthusiasm.

With regards,                                                                                         Yours sincerely,

(M. Vinod Kumar)

To:

All Chief Commissioners / Director Generals

All Principal Commissioners/Commissioners of Service Tax

All Principal Commissioners/Commissioners of Central Excise

01/2015 dated 28-02-2015


Documentation, time limits and procedure with respect to filing of registration applications for single premises – Dated 28-2-2015 – Service Tax

F. No. 137/22/2012-Service Tax ( Part-I)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Service Tax Wing

ORDER No. 01/2015-SERVICE TAX

New Delhi, the 28th February, 2015

The legal provisions for registration in service tax are contained in section 69 of the Finance Act, 1994, rule 4 of the Service Tax Rules, 1994 and the Service Tax (Registration of Special Category of Persons) Rules, 2005. Paragraph 2 of Circular 97/8/2007-Service Tax dated 23-8-2007 and Order No. 2/2011-Service Tax dated 13-12-2011 also explain some of the procedural aspects of registration in service tax.

In supercession of Order No. 2/2011-Service Tax dated 13-12-2011, the Central Board of Excise and Customs specifies the following documentation, time limits and procedure with respect to filing of registration applications for single premises, which shall come into effect from 1-3-2015.

2. General procedure

(i) Applicants seeking registration for a single premises in service tax shall file the application online in the Automation of Central Excise and Service Tax (ACES) website www.aces.gov.in  inForm ST-1.

(ii) Registration shall mandatorily require that the Permanent Account Number (PAN) of the proprietor or the legal entity being registered be quoted in the application with the exception of Government Departments for whom this requirement shall be non-mandatory. Applicants, who are not Government Departments shall not be granted registration in the absence of PAN. Existing registrants, except Government departments not having PAN shall obtain PAN and apply online for conversion of temporary registration to PAN based registration within three months of this order coming into effect, failing which the temporary registration shall be cancelled after giving the assessee an opportunity to represent against the proposed cancellation and taking into consideration the reply received, if any.

(iii) E-mail and mobile number mandatory: The applicant shall quote the email address and mobile number in the requisite column of the application form for communication with the department. Existing registrants who have not submitted this information are required to file an amendment application by 30-4-2015.

(iv) Once the completed application form is filed in ACES, registration would be granted online within 2 days, thus initiating trust-based registration. On grant of registration, the applicant would also be enabled to electronically pay service tax.

(v) Further, the applicant would not need a signed copy of the Registration Certificate as proof of registration. Registration Certificate downloaded from the ACES web site would be accepted as proof of registration dispensing with the need for a signed copy.

3. Documentation required

The applicant is required to submit a self attested copy of the following documents byregistered post/ Speed Post to the concerned Division, within 7 days of filing the Form ST-1 online, for the purposes of verification:-

(i) Copy of the PAN Card of the proprietor or the legal entity registered.

(ii) Photograph and proof of identity of the person filing the application namely PAN card, Passport, Voter Identity card, Aadhar Card, Driving license, or any other Photo-identity card issued by the Central Government, State Government or Public Sector Undertaking.

(iii) Document to establish possession of the premises to be registered such as proof of ownership, lease or rent agreement, allotment letter from Government, No Objection Certificate from the legal owner.

(iv) Details of the main Bank Account.

(v) Memorandum/Articles of Association/List of Directors.

(vi) Authorisation by the Board of Directors/Partners/Proprietor for the person filing the application.

(vii) Business transaction numbers obtained from other Government departments or agencies such as Customs Registration No. (BIN No), Import Export Code (IEC) number, State Sales Tax Number (VAT), Central Sales Tax Number, Company Index Number (CIN) which have been issued prior to the filing of the service tax registration application.

4. Where the need for the verification of premises arises, the same will have to be authorised by an officer not below the rank of Additional /Joint Commissioner.

5. The registration certificate may be revoked by the Deputy/Assistant Commissioner in any of the following situations, after giving the assessee an opportunity to represent against the proposed revocation and taking into consideration the reply received, if any:

(i) the premises are found to be non existent or not in possession of the assessee.

(ii) no documents are received within 15 days of the date of filing the registration application.

(iii) the documents are found to be incomplete or incorrect in any respect.

6. The provisions of sub-rules (5A) and (6) of rule 4 of the Service Tax Rules, 1994 may be referred to regarding change in any information or details furnished by an assessee and transfer of business to another person, respectively. Similarly, sub rule (7) of the Service Tax Rules, 1994 may be referred to in case a registered person ceases to provide the service for which he has been granted registration.

7. Paragraph 2.0 of Circular 97/8/2007-Service Tax dated 23-8-2007 consisting of subparagraphs 2.1 to 2.7 may be treated as withdrawn since there have been changes in the relevant legal provisions since the issuance of that Circular. The current legal provisions in theService Tax Rules, 1994 and the Service Tax (Registration of Special Category of Persons) Rules, 2005 may also be referred to.

(Himani Bhayana)

Under Secretary (Service Tax)

To,

All Principal Chief Commissioners/Chief Commissioners of Central Excise/Service Tax

Principal Directors General/Directors General Service Tax/Systems/Audit/Central

Excise Intelligence

181/7/2014-ST dated 10-12-2014


Audit of the Service Tax assessees by the officers of Service Tax and Central Excise Commissionerates – Dated 10-12-2014 – Service Tax

Circular No. 181/7/2014-Service Tax

F. No. 137/46/2014-Service Tax

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

New Delhi, the 10th December, 2014

To,

All Principal Chief Commissioners / Chief Commissioners of Central Excise/Service Tax

Principal Directors General/ Director General Service Tax/ DGCEI/Systems/ Audit

All Principal Commissioners/Commissioners of Central Excise/Service Tax

All Principal Additional Directors General/ Additional Directors General Audit

Madam/Sir

Sub: Audit of the Service Tax assessees by the officers of Service Tax and Central Excise Commissionerates

Section 94 of the Finance Act, 1994 deals with rule making powers of the Central Government in relation to service tax. Sub-section (2) of section 94, dealing with specific purposes for which rules can be made, was amended with effect from 06.08.2014, vide Section 114(J) of theFinance Act, 2014, and a new clause (k) was added to sub-section (2) of section 94, which is reproduced below –

“(k) imposition, on persons liable to pay service tax, for the proper levy and collection of tax, of duty of furnishing information, keeping records and the manner in which such records shall be verified.”

2.    In exercise of the rule making powers under clause (k) of sub-section (2) of section 94 of theFinance Act, 1994, the Central Government has inserted a new rule 5(A)(2) in the Service Tax Rules, 1994 vide notification no. 23/2014-Service Tax dated 5th December, 2014. This rule, interalia, provides for scrutiny of records by the audit party deputed by the Commissioner. Such scrutiny essentially constitutes audit by the audit party consisting of departmental officers.

3.    Verification of records mandated by the statute is necessary to check the correctness of assessment and payment of tax by the assessee in the present era of self-assessment. It may be noted that the expression “verified” used in section 94(2)(k) of the said Act is of wide import and would include within its scope, audit by the departmental officers, as the procedure prescribed for audit is essentially a procedure for verification mandated in the statute.

4.    It may also be noted that the Hon’ble High Court of Delhi in the judgment dated 04.08.2014 in the case of M/s Travelite (India) [2014-TIOL-1304-HC-DEL-ST] had quashed rule 5A(2) of theService Tax Rules, 1994 on the ground that the powers to conduct audit envisaged in the rule did not have appropriate statutory backing. This judgment can now be distinguished as a clear statutory backing for the rule now exists in section 94(2)(k) of the said Act.

5.    Departmental officers are directed to audit the Service Tax assessees as provided in the departmental instructions in this regard. Difficulty, if any, in implementing the circular may be brought to the notice of the Board. Hindi version will follow.

(Himani Bhayana)

Under Secretary (Service Tax)

Office Order 10/2014 dated 12-11-2014


Corrigendum to Office Orders No. 3/2014-CUS Dated 15.10.2014, 4/2014-ST Dated 15.10.2014, 5/2014-C.E. Dated 22.10.2014, 6/2014-ST Dated 22.10.2014, 7/2014-CUS Dated 22.10.2014 and 8/2014-CUS Dated 22.10.2014 – Dated 12-11-2014 – Service Tax

F. No. 390/Review/ 49 /2014-JC

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

(Judicial & Review Cell)

CORRIGENDUM

New Delhi, Dated 12.11.2014

Office Order-10

Subject:  Corrigendum to Office Orders No. 3/2014-CUS Dated 15.10.2014, 4/2014-ST Dated 15.10.2014, 5/2014-C.E. Dated 22.10.2014, 6/2014-ST Dated 22.10.2014, 7/2014-CUS Dated 22.10.2014 and 8/2014-CUS Dated 22.10.2014

In exercise of the powers conferred under Section 35B(1B) (i) of the Central Excise Act, 1944 Section 129A(1B)(i) of the Customs Act, 1962 and Section 86(1)(1A) of the Finance Act,1994 and with the approval of the Competent Authority, the Office Order No. 3/2014-CUS Dated 15.10.2014, 4/2014-ST Dated 15.10.2014, 5/2014-C.E. Dated 22.10.2014, 6/2014-ST Dated 22.10.2014, 7/2014-CUS Dated 22.10.2014and 8/2014-CUS Dated 22.10.2014  are hereby amended as follows:-

1.    Office Order No. 3/2014-CUS Dated 15.10.2014

(a)   For S. No. 26 & 33 the following shall be substituted, namely

S. No

Committees

    Area of Jurisdiction

26

(1)     Principal Chief Commissioner of Customs, Mumbai II

(2)   Chief Commissioner of Customs, Mumbai -I

 I.  Principal Commissioner of Customs (Nhava Sheva-I), Mumbai, Zone-II;

II.  Principal Commissioner of Customs (Nhava Sheva-II), Mumbai, Zone-II;

III. Commissioner of Customs (Nhava Sheva-III), Mumbai, Zone-II;

IV. Commissioner of Customs (Nhava Sheva-IV), Mumbai, Zone-II;

V.  Commissioner of Customs (Nhava Sheva-V), Mumbai, Zone-II;

VI. Commissioner of Customs (Nhava Sheva-General), Mumbai, Zone-II

33 (1)   Chief Commissioner of Customs(Prev.), Tiruchirapalli

(2)   Chief Commissioner of Central Excise, Coimbatore

 I. Commissioner of Customs (Preventive),

Tiruchirappalli; and

II. Commissioner of Customs, Tuticorin.

(b)  In S.No.24 in column 3 of the table, the words “Commissioner(Adj.), DGRI, Mumbai” shall be substituted with the words “Commissioner(Adj.) – DGRI, Delhi”

(c)    In S.No.25 in column 3 of the table, the words “Commissioner(Adj.), DGRI, Delhi” shall be substituted with the words “Commissioner(Adj.) – DGRI, Mumbai”

2.    Office Order No. 4/2014-ST Dated 15.10.2014

(a)   S. No. 24A shall be added after S.No. 24 and for S.No. 23 and 24 the following shall be substituted, namely

23 (1)    Chief Commissioner of Central Excise, Vishakhapatnam

(2)    Principal Chief Commissioner of Central Excise, Hyderabad

             I.    Vishakhapatnam-I

II.    Vishakhapatnam-II  (Kakinanda)

III.   Vishakhapatnam-III  (Nellore)

IV.   Guntur

V.    Tirupati

24

(1)   Principal Chief Commissioner of Central Excise, Chennai

(2)   Chief Commissioner of Customs, Chennai

 

I.    Central.Excise., Chennai-III

II.   Puduchery

III.   LTU, Chennai

24A

      (1)     Chief Commissioner of Service Tax, Chennai

(2)   Chief Commissioner of Customs, Chennai

 

I.       Service Tax-I, Chennai

II       Service Tax-II, Chennai

I.    Service Tax-III, Chennai

3.    Office Order No. 5/2014-C.E. Dated 15.10.2014

(a)   For S. No. 6 and 43 the following shall be substituted, namely

6

 

 

 

 

 

 

 

 

 

(i)For the Jurisdiction of Commissioner of Central  Excise, Indore

Commissioner of Central  Excise, Indore and

Commissioner of Central  Excise, Bhopal

(ii)For the Jurisdiction of Commissioner of Central  Excise, Bhopal

Commissioner of Central  Excise, Bhopal and

Commissioner of Central  Excise, Indore

(iii)For the Jurisdiction of Commissioner of Central  Excise, Gwalior

Commissioner of Central  Excise, Gwalior, and

Commissioner of Central  Excise, Bhopal

 

 

Commissioner of Central  Excise (Appeals), Bhopal-I

6A

 

 

 

 

 

(i)For the Jurisdiction of Commissioner of Central  Excise, Raipur

Commissioner of Central  Excise, Raipur and

Commissioner of Central  Excise, Bilaspur

(ii)For the Jurisdiction of Commissioner of Central  Excise, Bilaspur

Commissioner of Central  Excise, Bilaspur and

Commissioner of Central  Excise,Raipur

(iii)For the Jurisdiction of Commissioner of Central  Excise, Jabalpur

Commissioner of Central  Excise, Jabalpur, and Commissioner of Central  Excise,Bilaspur

 

Commissioner of Central  Excise (Appeals), Bhopal-II

 

43

(1)

 (i)For the Jurisdiction of Commissioner of CentralExcise, Guntur

Commissioner of Central Excise, Guntur and Commissioner of Central Excise, Nellore (Vishakhapatnam-III)

(ii)For the Jurisdiction of Commissioner of Central

Excise, Nellore (Vishakhapatnam III)  

Commissioner of Central Excise, Nellore (Vishakhapatnam-III) and

Commissioner of Central Excise, Guntur

(iii)For the jurisdiction of Commissioner of Central Excise, Tirupati

Commissioner of Central Excise, Tirupati and

Commissioner of Central Excise, Vishakhapatnam-II

Commissioner of Central Excise (Appeals), Vishakhapatnam-II

(b)  For S.No. 21 & 22 the words “Commissioner of Central Excise (Appeals), Jaipur I and Commissioner of Central Excise (Appeals) Jaipur II” occurring in column 3 shall be substituted with the words “Commissioner of Central Excise (Appeals), Jaipur”.

4.    Office Order No. 6/2014-ST Dated 22.10.2014

(a)           For S.No.6 & 45 the following shall be substituted, namely

6

 

 

 

 

 

 

 

 

(i)For the Jurisdiction of Commissioner of Central  Excise, Indore

Commissioner of Central  Excise, Indore and

Commissioner of Central  Excise, Bhopal

(ii)For the Jurisdiction of Commissioner of Central  Excise, Bhopal

Commissioner of Central  Excise, Bhopal and

Commissioner of Central  Excise, Indore

(iii)For the Jurisdiction of Commissioner of Central  Excise, Gwalior

Commissioner of Central  Excise, Gwalior, and

Commissioner of Central  Excise, Bhopal

 

Commissioner of Central  Excise (Appeals), Bhopal-I

6A

 

 

 

 

 

(i)For the Jurisdiction of Commissioner of Central  Excise, Raipur

Commissioner of Central  Excise, Raipur and

Commissioner of Central  Excise, Bilaspur

(ii)For the Jurisdiction of Commissioner of Central  Excise, Bilaspur

Commissioner of Central  Excise, Bilaspur and

Commissioner of Central  Excise,Raipur

(iii)For the Jurisdiction of Commissioner of Central  Excise, Jabalpur

Commissioner of Central  Excise, Jabalpur, and Commissioner of Central  Excise,Bilaspur

 

Commissioner of Central  Excise (Appeals), Bhopal-II

45 (1)

(i)For the Jurisdiction of Commissioner of CentralExcise, Guntur

Commissioner of Central Excise, Guntur and Commissioner of Central Excise, Nellore (Vishakhapatnam-III)

(ii)For the Jurisdiction of Commissioner of Central

Excise, Nellore (Vishakhapatnam III)

Commissioner of Central Excise, Nellore (Vishakhapatnam-III) and

Commissioner of Central Excise, Guntur

(iii)For the jurisdiction of Commissioner of Central Excise, Tirupati

Commissioner of Central Excise, Tirupati and

Commissioner of Central Excise, Vishakhapatnam-II

Commissioner of Central Excise (Appeals), Vishakhapatnam-II

(b)   For S.No. 22 & 23 the words “Commissioner of Central Excise (Appeals), Jaipur I and Commissioner of Central Excise (Appeals) Jaipur II” occurring in column 3 shall be substituted with the words “Commissioner of Central Excise (Appeals), Jaipur”.

5.  Office Order No. 7/2014-CUS Dated 22.10.2014

(a ) or S.No.6 & 43 the following shall be substituted, namely

6

 

 

 

 

 

 

 

 

(i)For the Jurisdiction of Commissioner of Central  Excise, Indore

Commissioner of Central  Excise, Indore and

Commissioner of Central  Excise, Bhopal

(ii)For the Jurisdiction of Commissioner of Central  Excise, Bhopal

Commissioner of Central  Excise, Bhopal and

Commissioner of Central  Excise, Indore

(iii)For the Jurisdiction of Commissioner of Central  Excise, Gwalior

Commissioner of Central  Excise, Gwalior, and

Commissioner of Central  Excise, Bhopal

 

Commissioner of Central  Excise (Appeals), Bhopal-I

6A

 

 

 

 

 

(i)For the Jurisdiction of Commissioner of Central  Excise, Raipur

Commissioner of Central  Excise, Raipur and

Commissioner of Central  Excise, Bilaspur

(ii)For the Jurisdiction of Commissioner of Central  Excise, Bilaspur

Commissioner of Central  Excise, Bilaspur and

Commissioner of Central  Excise,Raipur

(iii)For the Jurisdiction of Commissioner of Central  Excise, Jabalpur

Commissioner of Central  Excise, Jabalpur, and Commissioner of Central  Excise,Bilaspur

 

Commissioner of Central  Excise (Appeals), Bhopal-II

43 (1)

(i)For the Jurisdiction of Commissioner of CentralExcise, Guntur

Commissioner of Central Excise, Guntur and Commissioner of Central Excise, Nellore (Vishakhapatnam-III)

(ii)For the Jurisdiction of Commissioner of Central

Excise, Nellore (VishakhapatnamIII)

Commissioner of Central Excise, Nellore (Vishakhapatnam-III) and

Commissioner of Central Excise, Guntur

(iii)For the jurisdiction of Commissioner of Central Excise, Tirupati

Commissioner of Central Excise, Tirupati and

Commissioner of Central Excise, Vishakhapatnam-II

 

Commissioner of Central Excise (Appeals), Vishakhapatnam-II

(b)  The entry in column 3 of the S.No. 21 & 22 the words “Commissioner of Central Excise (Appeals), Jaipur I and Commissioner of Central Excise (Appeals) Jaipur II” occurring in column 3 shall be substituted with the words “Commissioner of Central Excise (Appeals), Jaipur”.

6.    Office Order No. 8/2014-CUS Dated 22.10.2014

(a)    For S. No. 11 and 12 the following shall be substituted, namely

11 (1)

For the Jurisdiction of Commissioner of Customs, Ludhiana

Commissioner of Customs, Ludhiana and

Commissioner of Customs (Preventive), Amritsar

 

 

Commissioner Of Central Excise(Appeals), Chandigarh-I

12

 For the Jurisdiction of Commissioner of Customs (Preventive), Jodhpur

Commissioner of Customs (Preventive), Jodhpur  and

Commissioner of Central Excise, Jodhpur

Commissioner of Central Excise

(Appeals), Jaipur

(Archana P. Tiwari)

Joint Secretary (Review)

OFFICE ORDER – 6 / 2014-ST dated 22-10-2014


Constitution of Review Committee of Commissioners of Central Excise and Service Tax – Reg. – Dated 22-10-2014 – Service Tax

F.No.390/Review/ 36 /2014-JC

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

(Judicial & Review Cell)

New Delhi, Dated 22.10.2014 

OFFICE ORDER – 6 / 2014-ST

Subject: Constitution of Review Committee of Commissioners of Central Excise and Service Tax -  Reg.  

In exercise of the powers conferred by sub-section (1A) of section 86 of the Finance Act, 1994(32 of 1994),  the Central  Board of Excise and Customs constituted under the Central  Board of Revenue Act, 1963 (54 of 1963) constitutes the following Committees consisting of two Commissioners of Central  Excise mentioned in column (2) of the Table below to be the Committee, for the areas falling within the jurisdiction of the Commissioner of Central  Excise (Appeals) mentioned in the corresponding entry in column (3) of the said Table for the purpose of sub-section (2) of  said section.

Sl. No.

Committees

Area of Jurisdiction

(1)

(2)

(3)

1

For the Jurisdiction of Commissioner of Central Excise, Ahmedabad-III

Commissioner of Central Excise, Ahmedabad-III and

Commissioner of Service Tax, Ahmedabad

Commissioner of Central Excise (Appeals), Ahmedabad-I

2

For the Jurisdiction of Commissioner of Service Tax, Ahmedabad

Commissioner of Service tax, Ahmedabad and

Commissioner of Central Excise, Ahmedabad-III

Commissioner of Central Excise (Appeals), Ahmedabad-II

3

(i)For the Jurisdiction of Commissioner of Central Excise, Rajkot

Commissioner of Central Excise, Rajkot and

Commissioner of Central Excise, Kutch(Gandhidham)

(ii)For the Jurisdiction of Commissioner of Central Excise,Bhavnagar

Commissioner of Central Excise, Bhavnagar and

Commissioner of Central Excise,Rajkot

(iii)For the Jurisdiction of Commissioner of Central Excise, Kutch (Gandhidham)

Commissioner of Central Excise, Kutch and

Commissioner of Central Excise, Bhavnagar

Commissioner of Central Excise (Appeals), Ahmedabad-III

4

For the Jurisdiction of Commissioner of Service Tax, Bangalore-I

Commissioner of Service tax, Bangalore-I and

Commissioner of Central Excise, Bangalore-II

For the Jurisdiction of Commissioner of

Service Tax, Bangalore-II

Commissioner of Service tax, Bangalore-II and

Commissioner of Central Excise, Bangalore-I

Commissioner of Service Tax (Appeals), Bangalore

5

For the Jurisdiction of Commissioner of Central Excise, Bangalore V

Commissioner of Central Excise, Bangalore-V and

Principal Commissioner of Central Excise,LTU Commissionerate, Bangalore

For the Jurisdiction of Commissioner of Central Excise, LTU,Bangalore

Commissioner of Central Excise, LTU,Bangalore and

Commissioner of Central Excise, Bangalore V

Commissioner of Central Excise (Appeals), Bangalore-I

6

(i)For the Jurisdiction of Commissioner of Central Excise, Indore

Commissioner of Central Excise, Indore and

Commissioner of Central Excise, Bhopal

(ii)For the Jurisdiction of Commissioner of Central Excise, Bhopal

Commissioner of Central Excise, Bhopal and

Commissioner of Central Excise, Indore

(iii)For the Jurisdiction of Commissioner of Central Excise, Gwalior

Commissioner of Central Excise, Gwalior, and

Commissioner of Central Excise,Bhopal

(iv)For the Jurisdiction of Commissioner of Central Excise, Raipur

Commissioner of Central Excise, Raipur and

Commissioner of Central Excise, Bilaspur

(v)For the Jurisdiction of Commissioner of Central Excise, Bilaspur

Commissioner of Central Excise, Bilaspur and

Commissioner of Central Excise,Raipur

(vi)For the Jurisdiction of Commissioner of Central Excise, Jabalpur

Commissioner of Central Excise, Jabalpur, and

Commissioner of Central Excise,Bilaspur

Commissioner of Central Excise (Appeals), Bhopal-I

7

(i)For the Jurisdiction of Commissioner of Central Excise, Bhubaneshwar-I

Commissioner of Central Excise, Bhubaneshwar-I and

Commissioner of Central Excise, Bhubaneshwar-II

(ii)For the Jurisdiction of Commissioner of Central Excise, Bhubaneshwar-II

Commissioner of Central Excise, Bhubaneshwar-II and Commissioner of Central Excise, Bhubaneshwar-I

(iii)For the Jurisdiction of Commissioner of Central Excise, Rourkela

Commissioner of Central Excise, Rourkela and Commissioner of Central Excise, Bhubaneshwar-II

 

Commissioner of Central Excise (Appeals), Bhubaneshwar

8

(i)For the Jurisdiction of Commissioner of Central Excise, Chandigarh-I

Commissioner of Central Excise, Chandigarh I and

Commissioner of Central Excise, Panchkula

(ii)For the Jurisdiction of Commissioner of Central Excise, Ludhiana

Commissioner of Central Excise, Ludhiana and

Commissioner of Central Excise, Chandigarh-II

(iii)For the Jurisdiction of Commissioner of Central Excise, Jalandhar

Commissioner of Central Excise, Jalandhar and

Commissioner of Central Excise, Jammu and Kashmir

Commissioner of Central Excise (Appeals), Chandigarh-I

9

(i)For the Jurisdiction of Commissioner of Central Excise, Jammu and Kashmir

Commissioner of Central Excise, Jammu and Kashmir and

Commissioner of Central Excise, Jalandhar

(ii)For the Jurisdiction of Commissioner of Central Excise, Chandigarh-II

Commissioner of Central Excise, Chandigarh-II and

Commissioner of Central Excise, Chandigarh I

Commissioner of Central Excise (Appeals), Chandigarh- II

10

(i)For the Jurisdiction of Commissioner of Service Tax, Chennai-I

Commissioner of Service Tax, Chennai-I and

Commissioner of Service Tax, Chennai-III

(ii)For the Jurisdiction of Commissioner of Service Tax, Chennai-III

Commissioner of Service Tax, Chennai-III and

Commissioner of Service Tax, Chennai-I

(iii) For the Jurisdiction of Commissioner of Central Excise, LTU,Chennai

Commissioner of Central Excise, LTU, Chennai and

Commissioner of Central Excise,Chennai-IV

Commissioner of Service Tax (Appeals) Chennai-I

11

For the Jurisdiction of Commissioner of Service Tax, Chennai-II

Commissioner of Service Tax, Chennai-II and

Commissioner of Service Tax, Chennai-III

Commissioner of Service Tax (Appeals) Chennai-II

12

For the Jurisdiction of Commissioner of Central Excise, Cochin

Commissioner of Central Excise, Cochin and

Commissioner of Central Excise, Thiruvanthapuram

Commissioner of Central Excise (Appeals), Cochin-I

13

For the Jurisdiction of Commissioner of Central Excise, Calicut

Commissioner of Central Excise, Calicut

and

Commissioner of Central Excise, Cochin

Commissioner of Central Excise (Appeals), Cochin-II

14

For the Jurisdiction of Commissioner of Central Excise, Thiruvananthapuram

Commissioner of Central Excise, Thiruvananthapuram and

Commissioner of Central Excise, Cochin

Commissioner of Central Excise (Appeals), Cochin- III

15

(i)For the Jurisdiction of Commissioner of Central Excise, Coimbatore

Commissioner of Central Excise, Coimbatore and

Commissioner of Central Excise, Madurai

(ii)For the Jurisdiction of Commissioner of Central Excise, Madurai

Commissioner of Central Excise, Madurai and

Commissioner of Central Excise Coimbatore

(iii)For the Jurisdiction of Commissioner of Central Excise, Salem

Commissioner of Central Excise, Salem and

Commissioner of Central Excise, Thirunelveli

(iv) For the Jurisdiction of Commissioner of Central Excise, Thirunelveli

Commissioner of Central Excise, Thirunelveli and

Commissioner of Central Excise, Salem

Commissioner of Central Excise (Appeals)-I, Coimbatore

16

For the Jurisdiction of Commissioner of Central Excise, Tiruchirapalli

Commissioner of Central Excise, Tiruchirapalli and

Commissioner of Central Excise, Madurai

Commissioner of Central Excise (Appeals)-II, Tiruchirapalli

17

(i)For the Jurisdiction of Commissioner of Service Tax, Delhi-I

Commissioner of Service Tax, Delhi-I

Commissioner of Service Tax, Delhi-II

(ii)For the Jurisdiction of Commissioner of Service Tax, Delhi-II

Commissioner of Service Tax, Delhi-II

Commissioner of Service Tax, Delhi-I

Commissioner of Service Tax (Appeals)-I

18

(i)For the Jurisdiction of Commissioner of Service Tax, Delhi -III

Commissioner of Service Tax, Delhi-III

Commissioner of Service Tax, Delhi-IV

(ii)For the Jurisdiction of Commissioner of Service Tax, Delhi – IV

Commissioner of Service Tax, Delhi-IV

Commissioner of Service Tax, Delhi-III

Commissioner of Service Tax, (Appeals)- Delhi II

19

(i)For the Jurisdiction of Commissioner of Central Excise, Rohtak

Commissioner of Central Excise, Rohtak and

Commissioner of Central Excise, Sonipat

(ii)For the Jurisdiction of Commissioner of Central Excise, Sonipat(Delhi-III)

Commissioner of Central Excise, and Sonipat

Commissioner of Central Excise, Rohtak

(iii)For the Jurisdiction of Commissioner of Central Excise,LTU

Commissioner of Central Excise, LTU and Commissioner of Central Excise, Delhi-II

iv)For the Jurisdiction of Commissioner of Central Excise, Panchkula

Commissioner of Central Excise, Panchkula and

Commissioner of Central Excise, Chandigarh

Commissioner of Central Excise (Appeals), Delhi-I

20

(i)For the Jurisdiction of Commissioner of Central Excise, Faridabad-I

Commissioner of Central Excise, Faridabad-I and

Commissioner of Central Excise, Faridabad-II

(ii)For the Jurisdiction of Commissioner of Central Excise, Faridabad-II

Commissioner of Central Excise, Faridabad-II and

Commissioner of Central Excise, Faridabad-I

(iii)For the Jurisdiction of Commissioner of Central Excise, Gurgaon-I

Commissioner of Central Excise, Gurgaon -I and

Commissioner of Central Excise, Gurgaon -II

(iv)For the Jurisdiction of Commissioner of Central Excise, Gurgaon -II

Commissioner of Central Excise, Gurgaon

-II and

Commissioner of Central Excise, Gurgaon -I

Commissioner of Central Excise (Appeals), Delhi-II

21

(i) For the Jurisdiction of Commissioner of Central Excise, Hyderabad-I Commissioner of Central Excise, Hyderabad-I and

Commissioner of Central Excise, Hyderabad-II

(ii)For the Jurisdiction of Commissioner of Central Excise, Hyderabad-II

Commissioner of Central Excise, Hyderabad-II and

Commissioner of Central Excise, Hyderabad-I

(iii)For the Jurisdiction of Commissioner of Central Excise, Hyderabad-III

Commissioner of Central Excise, Hyderabad-III and

Commissioner of Central Excise, Hyderabad-IV

(iv)For the Jurisdiction of Commissioner of Central Excise, Hyderabad-IV

Commissioner of Central Excise, Hyderabad-IV and

Commissioner of Central Excise, Hyderabad-III

(v)For the Jurisdiction of Commissioner of Service Tax, Hyderabad

Commissioner of Service Tax, Hyderabad

and

Commissioner of Central Excise, Hyderabad-IV

Commissioner of Service Tax (Appeals),Hyderabad

22

(i)For the Jurisdiction of Commissioner of Central Excise, Jaipur

Commissioner of Central Excise, Jaipur and

Commissioner of Central Excise, Alwar

(ii)For the Jurisdiction of Commissioner of Central Excise, Alwar

Commissioner of Central Excise, Alwar and

Commissioner of Central Excise Jaipur,

Commissioner of Central Excise (Appeals), Jaipur-I

23

(i)For the Jurisdiction of Commissioner of Central Excise, Jodhpur

Commissioner of Central Excise, Jodhpur and

Commissioner of Central Excise, Udaipur

(ii)For the Jurisdiction of Commissioner of Central Excise, Udaipur

Commissioner of Central Excise, Udaipur and

Commissioner of Central Excise Jodhpur

Commissioner of Central Excise (Appeals), Jaipur-II

24

(i)For the Jurisdiction of Commissioner of Service Tax-I, Kolkata

Commissioner of Service Tax-I, Kolkata and

Commissioner of Service Tax-II, Kolkata

(ii)For the Jurisdiction of Commissioner of Service Tax-II, Kolkata

Commissioner of Service Tax-II, Kolkata and

Commissioner of Service Tax-I, Kolkata

 

Commissioner of Service Tax (Appeals), Kolkata

25

(i)For the Jurisdiction of Commissioner of Central Excise, Bolpur

Commissioner of Central Excise, Bolpur and

Commissioner of Central Excise, Durgapur

(ii)For the Jurisdiction of Commissioner of Central Excise, Durgapur

Commissioner of Central Excise, Durgapur and

Commissioner of Central Excise,Bolpur

Commissioner of Central Excise (Appeals), Kolkata–II

26

(i)For the Jurisdiction of Commissioner of Central Excise, Haldia

Commissioner of Central Excise, Haldia and

Commissioner of Service Tax-I, Kolkata

(ii)For the Jurisdiction of Commissioner of Central Excise, Siliguri

Commissioner of Central Excise, Siliguri and

Commissioner of Central Excise, Durgapur

(iii)For the Jurisdiction of Commissioner LTU, Kolkata

Commissioner, LTU

Commissioner of Service Tax-II, Kolkata

Commissioner of Central Excise (Appeals), Kolkata–I

27

(i)For the Jurisdiction of Commissioner of Central Excise, Kanpur

Commissioner of Central Excise, Kanpur

and

Commissioner of Central Excise, Agra

(ii)For the Jurisdiction of Commissioner of Central Excise, Agra

Commissioner of Central Excise, Agra and

Commissioner of Central Excise, Kanpur

Commissioner of Central Excise (Appeals), Lucknow

28

(i)For the Jurisdiction of Commissioner of Central Excise, Allahabad

Commissioner of Central Excise, Allahabad and

Commissioner of Central Excise, Lucknow

(ii)For the Jurisdiction of Commissioner of Central Excise, Lucknow

Commissioner of Central Excise, Lucknow and

Commissioner of Central Excise, Allahabad

Commissioner of Central Excise (Appeals), Allahabad

29

(i)For the Jurisdiction of Commissioner of Service Tax, Noida

Commissioner of Service Tax, Noida and

Commissioner of Central Excise, Meerut

(ii)For the Jurisdiction of Commissioner of Central Excise, Meerut

Commissioner of Central Excise, Meerut and

Commissioner of Central Excise, Noida-I

(iii)For the Jurisdiction of Commissioner of Central Excise,

Dehradun

Commissioner of Central Excise, Dehradun and

Commissioner of Central Excise, Hapur

(iv)For the Jurisdiction of Commissioner of Central Excise, Hapur

Commissioner of Central Excise, Hapur and

Commissioner of Central Excise, Dehradun

Commissioner of Central Excise (Appeals), Meerut-I

30

For the Jurisdiction of Commissioner of Central Excise, Ghaziabad

Commissioner of Central Excise, Ghaziabad and

Commissioner of Central Excise, Noida-I

Commissioner of Central Excise (Appeals), Meerut-II

31

(i) For the Jurisdiction of Commissioner of Central Excise, Belgaum

Commissioner of Central Excise, Belgaum and

Commissioner of Central Excise, Mysore

(ii)For the Jurisdiction of Commissioner of Central Excise, Mysore Commissioner of Central Excise, Mysore and

Commissioner of Central Excise, Mangalore

(iii)For the Jurisdiction of Commissioner of Central Excise, Mangalore Commissioner of Central Excise, Mangalore and

Commissioner of Central Excise Mysore,

Commissioner of Central Excise (Appeals), Mysore

32

(i)For the Jurisdiction of Commissioner of Service Tax-I, Mumbai

Commissioner of Service Tax-I, Mumbai

Commissioner of Service Tax, Audit-I, Mumbai

(ii)For the Jurisdiction of Commissioner of Service Tax-II, Mumbai

Commissioner of Service Tax-II, Mumbai

Commissioner of Service Tax, Audit-II, Mumbai

(iii)For the Jurisdiction of Commissioner of Service Tax-III, Mumbai

Commissioner of Service Tax-III, Mumbai

Commissioner of Service Tax-IV, Mumbai

(iv) For the Jurisdiction of Commissioner of Service Tax-IV, Mumbai

Commissioner of Service Tax-IV, Mumbai

Commissioner of Service Tax-IIII, Mumbai

Commissioner of Service Tax (Appeals)-I, Mumbai

33

(i)For the Jurisdiction of Commissioner of Service Tax-V, Mumbai

Commissioner of Service Tax-V, Mumbai

Commissioner of Service Tax-IV, Mumbai

(ii)For the Jurisdiction of Commissioner of Service Tax-VI, Mumbai

Commissioner of Service Tax-VI, Mumbai

Commissioner of Service Tax-VII, Mumbai

(iii)For the Jurisdiction of Commissioner of Service Tax-VII, Mumbai

Commissioner of Service Tax-VII, Mumbai

Commissioner of Service Tax-VI, Mumbai

(iv)For the Jurisdiction of Commissioner of LTU, Mumbai

Commissioner of LTU, Mumbai

Commissioner of Service Tax-I, Mumbai

Commissioner of Service Tax (Appeals)-II, Mumbai

34

(i)For the Jurisdiction of Commissioner of Central Excise, Nagpur-I

Commissioner of Central Excise, Nagpur-I and

Commissioner of Central Excise, Nagpur-II

(ii)For the Jurisdiction of Commissioner of Central Excise, Nagpur-II

Commissioner of Central Excise, Nagpur-II and

Commissioner of Central Excise, Nagpur-I

(iii)For the Jurisdiction of Commissioner of Central Excise, Wardha

Commissioner of Central Excise, Wardha and

Commissioner of Central Excise, Nagpur-II

(iv)For the Jurisdiction of Commissioner of Central Excise, Aurangabad

Commissioner of Central Excise, Aurangabad

and

Commissioner of Central Excise, Nasik-I

(v)For the Jurisdiction of Commissioner of Central Excise, Nasik-I

Commissioner of Central Excise, Nasik I and

Commissioner of Central Excise, Nasik II

(vi)For the Jurisdiction of Commissioner of Central Excise,

Nasik-II

Commissioner of Central Excise, Nasik-II and

Commissioner of Central Excise, Nasik-I

Commissioner of Central Excise (Appeals),Nagpur

35

(i)For the Jurisdiction of Commissioner of Service Tax, Pune

Commissioner of Service Tax, Pune and

Commissioner of Central Excise, Pune-III

Commissioner of Service Tax (Appeals), Pune

36

(ii)For the Jurisdiction of Commissioner of Central Excise, Kolhapur

Commissioner of Central Excise,Kolhapur and

Commissioner of Central Excise, Pune-III

(iii)For the Jurisdiction of Commissioner of Central Excise, Goa

Commissioner of Central Excise, Goa

and

Commissioner of Customs, Goa

Commissioner of Central Excise (Appeals), Pune-II

37

(iv)For the Jurisdiction of Commissioner of Central Excise, Pune-II

Commissioner of Central Excise, Pune-II and

Commissioner of Central Excise, Pune-IV

(ii)For the Jurisdiction of Commissioner of Central Excise, Pune-I

Commissioner of Central Excise, Pune-I and

Commissioner of Service Tax, Pune-III

Commissioner of Central Excise (Appeals), Pune-III

38

(i)For the Jurisdiction of Commissioner of Central Excise, Jamshedpur

Commissioner of Central Excise, Jamshedpur

and Commissioner of Central Excise, Ranchi-I

(ii)For the Jurisdiction of Commissioner of Central Excise, Ranchi-I

Commissioner of Central Excise, Ranchi-I and

Commissioner of Central Excise, Jamshedpur

(iii)For the Jurisdiction of Commissioner of Central Excise, Dhanbad

Commissioner of Central Excise,Dhanbad and

Commissioner of Central Excise, Bokaro (Ranchi-II)

(iv)For the Jurisdiction of Commissioner of Central Excise, Bokaro (Ranchi-II)

Commissioner of Central Excise, Bokaro(Ranchi-II) and

Commissioner of Central Excise,Dhanbad

Commissioner of Central Excise (Appeals), Ranchi

39

For the Jurisdiction of Commissioner of Central Excise, Patna

Commissioner of Central Excise, Patna and

Commissioner of Central Excise, (Audit),Patna

Commissioner of Central Excise (Appeals), Patna

40

(i)For the Jurisdiction of Commissioner of Central Excise, Shillong

Commissioner of Central Excise, Shillong and

Commissioner of Central Excise, Dibrugarh

(ii)For the Jurisdiction of Commissioner of Central Excise, Guwahati

Commissioner of Central Excise, Guwahati and

Commissioner of Central Excise,Dibrugarh

(iii)For the Jurisdiction of

Commissioner of Central Excise, Dibrugarh

Commissioner of Central Excise, Dibrugarh and

Commissioner of Central Excise, Guwahati

Commissioner of Central Excise (Appeals), Shillong

41.

(i)For the Jurisdiction of Commissioner of Central Excise, Vadodara-I

Commissioner of Central Excise, Vadodara-I and

Commissioner of Central Excise,Vadodara-II

(ii)For the Jurisdiction of Commissioner of Central Excise, Vadodara-II

Commissioner of Central Excise, Vadodara-II and

Commissioner of Central Excise,Vadodara-I

(iii)For the Jurisdiction of Commissioner of Central Excise, Anand

Commissioner of Central Excise, Anand and

Commissioner of Central Excise,Vadodara-I

Commissioner of Central Excise (Appeals), Vadodara-I

42

i)For the Jurisdiction of Commissioner of Central Excise, Bharuch

Commissioner of Central Excise, Bharuch and

Commissioner of Central Excise,Surat-I

(ii)For the Jurisdiction of Commissioner of Central Excise, Surat-I

Commissioner of Central Excise, Surat-I and

Commissioner of Central Excise,Surat-II

(iii)For the Jurisdiction of Commissioner of Central Excise, Surat-II

Commissioner of Central Excise, Surat-II and

Commissioner of Central Excise,Surat-I

Commissioner of Central Excise (Appeals), Vadodara- II

43

(iii)For the Jurisdiction of Commissioner of Central Excise, Valsad

Commissioner of Central Excise, Valsad and

Commissioner of Central Excise,Daman

(iv)For the Jurisdiction of Commissioner of Central Excise,Daman

Commissioner of Central Excise, Daman and

Commissioner of Central Excise,Valsad

(ix)For the Jurisdiction of Commissioner of Central Excise,Silvassa

Commissioner of Central Excise, Silvasa and

Commissioner of Central Excise,Daman

Commissioner of Central Excise (Appeals), Vadodara-III

44

(i)For the Jurisdiction of Commissioner of Central Excise, Vishakhapatnam-I

Commissioner of Central Excise, Vishakhapatnam-I and

Commissioner of Central Excise, Vishakhapatnam-II.

(ii)For the Jurisdiction of Commissioner of Central Excise, Vishakhapatnam-II

Commissioner of Central Excise, Kakinada (Vishakhapatnam-II) and

Commissioner of Central Excise, Nellore (Vishakhapatnam-III)

Commissioner of Central Excise (Appeals), Vishakhapatnam-I

45

(i)For the Jurisdiction of Commissioner of Central Excise, Guntur

Commissioner of Central Excise, Guntur and

Commissioner of Central Excise, Nellore (Vishakhapatnam-III)

(ii)For the Jurisdiction of Commissioner of Central Excise, Nellore (Vishakhapatnam-II)

Commissioner of Central Excise, Nellore (Vishakhapatnam-III) and

Commissioner of Central Excise, Guntur

Commissioner of Central Excise (Appeals), Vishakhapatnam-II

Explanation- The expression “Commissioner” in column 2 shall include “Principal Commissioner” and expression “Commissioner of Central Excise (Appeals)” in column 3 of the table shall include “Commissioner of Service Tax (Appeals)”, wherever applicable.

(Archana P. Tiwari)

Joint Secretary (Review)

04/2014 dated 15-10-2014


Constitution of Review Committee of Chief Commissioners of Central Excise & Chief Commissioners of Service Tax – Reg. – Dated 15-10-2014 – Service Tax

F. No. 390/Review/ 36 /2014-JC

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

(Judicial & Review Cell)

OFFICE ORDER – 4 / 2014 – ST

New Delhi, Dated 15.10.2014

Subject:  Constitution of Review Committee of Chief Commissioners of Central Excise & Chief Commissioners of Service Tax -   Reg.

In exercise of the powers conferred by sub-section (1A) of section 86 of the Finance Act,1994 (32 of 1994) , the Board hereby constitutes the following Committees consisting of two Chief Commissioners of Central Excise mentioned in column (2) of the Table below to be the Committees , for the areas falling within the jurisdiction of the Commissioners of Central Excise / Service Tax specified in the corresponding entry in column(3) of the said Table for the purpose of sub-section (2) of the said section.

TABLE

Sl.

Committees

Area of Jurisdiction

1

(1)   Chief Commissioner of Central Excise, Ahmedabad(2)   Chief Commissioner of Customs, Ahmedabad       I.        Ahmedabad-III.        Ahmedabad-II

III.        Ahmedabad-III

IV.        Bhavnagar

V.        Rajkot

VI.        Kutch (Gandhi Nagar)

VII.        Principal Commissioner of Service Tax, Ahmedabad

2

1. Chief Commissioner of Central Excise, Bangalore2. Chief Commissioner of Customs, Bangalore       I.        Bangalore-III.        Banalore-II

III.        Bangalore-III

IV.        Bangalore-IV

V.        Bangalore-V

VI.        Commissioner of Service Tax, Bangalore I

VII.        Commissioner of Service Tax, Bangalore II

VIII.        LTU, Bangalore

3

(1)   Chief Commissioner of Central Excise, Bhopal(2)   Chief Commissioner of Central Excise, Nagpur       I.        BhopalII.        Indore

III.        Raipur

IV.        Bilaspur

V.        Jabalpur

VI.        Gwalior

4

(1)   Chief Commissioner of Central Excise, Bhubaneswar(2)   Chief Commissioner of Central Excise, Kolkata       I.        Bhubaneswar-III.        Bhubaneswar-II

III.        Rourkela

5

(1)   Chief Commissioner of Central Excise, Chandigarh(2)   Chief Commissioner of Central Excise, Delhi.       I.        Chandigarh-III.        Chandigarh-II

III.        Jalandhar

IV.        Ludhiana

V.        J & K

6

(1)   Chief Commissioner of Central Excise, Cochin(2)   Chief Commissioner of Central Excise, Coimbatore       I.        CochinII.        Calicut

III.        Thiruvanantha-puram

7

(1)   Chief Commissioner of Central Excise, Coimbatore(2)   Chief Commissioner of Central Excise, Cochin       I.        CoimbatoreII.        Madurai

III.        Salem

IV.        Thirunelveli

V.        Tiruchirappalli

8

(1)   Chief Commissioner of Service Tax, Delhi(2)   Principal Chief Commissioner of Central Excise, Delhi       I.        Delhi-III (Sonepat)II.        Faridabad-I

III.        Faridabad-II

IV.        Panchkula

V.        Rohtak

VI.        LTU (Delhi)

9

(1)   Chief Commissioner of Service Tax, Delhi(2)   Chief Commissioner of Central Excise, Chandigarh   I.  Principal Commissioner of Service Tax -I,  DelhiII.  Principal Commissioner of Service Tax -II,  Delhi

III.  Commissioner of Service Tax – III, Delhi

IV.Commissioner of Service Tax -IV,  Delhi

10

(1)   Chief Commissioner of Central Excise, Hyderabad(2)   Chief Commissioner of Central Excise,Vishakhapattnam       I.     Hyderabad-III.     Hyderbad-II

III.     Hyderabad-III

IV     Hyderbad-IV

V      Principal Commissioner of Service Tax, Hyderabad

11

(1)   Chief Commissioner of Central Excise, Jaipur(2)   Principal Chief Commissioner of Central Excise, Vadodara       I.        Jaipur-III.        Jodhpur

III.        Alwar

IV.        Udaipur

12

(1)   Chief Commissioner of Central Excise, Kolkata(2)   Chief Commissioner of Central Excise,Shillong       I.     BolpurII.     Haldia

III.     Kolkata-I

IV.      Kolkata-II

V.      Kolkata-III

VI.      Kolkata-IV

VII.      Kolkata-V

VIII.      Siliguri

IX.      Durgapur

X.        Principal Commissioner of Service Tax-I, Kolkata

XI.        Commissioner of Service Tax-II, Kolkata

13

(1)   Principal Chief Commissioner of Central Excise, Lucknow(2)   Chief Commissioner of Central Excise, Meerut       I.        AllahabadII.        Agra

III.        Kanpur

IV.        Lucknow

14

(1)   Chief Commissioner of Central Excise, Mysore(2)   Chief Commissioner of Central Excise, Bangalore       I.        BelgaumII.        Mangalore

III.        Mysore.

15

(1)   Chief Commissioner of Central Excise, Meerut(2)   Chief Commissioner of Central Excise,Lucknow       I.        GhaziabadII.        Meerut

III.        Noida-I

IV.        Noida-II

V.        Hapur

VI.        Dehradun

VII.        Principal Commissioner of Service Tax, Noida

16

   (1)        Chief Commissioner of Service Tax, Mumbai(2)        Principal Chief Commissioner of Central Excise, Mumbai I  I.   Principal Commissioner of Service Tax -I,  MumbaiII.  Commissioner of Service Tax -II,  Mumbai

III.  Principal Commissioner of Service Tax -III,  Mumbai

IV.   LTU, Mumbai

.

17

(1)   Chief Commissioner of Service Tax, Mumbai(2)   Principal Chief Commissioner of Central Excise, Mumbai II  I.  Commissioner of Service Tax -IV,  MumbaiII.   Commissioner of Service Tax -V,  Mumbai

III.   Commissioner of Service Tax -VI,  Mumbai

IV.   Commissioner of Service Tax -VII,  Mumbai

V.    Commissioner(Adj.),DGCEI, Mumbai.

18

(1)   Chief Commissioner of Central Excise,Nagpur(2)   Chief Commissioner of Central Excise, Bhopal       I.        AurangabadII.        Nagpur-I

III.        Nagpur-II

IV.        Nasik-I

V.        Nasik-II

VI.        Wardha

19

(1)   Chief Commissioner of Central Excise, Pune(2)   Principal Chief Commissioner of Central Excise, Mumbai-I       I.        GoaII.        Pune-I

III.        Pune-II

IV.        Pune-III

V.        Pune-IV

VI.        Kolhapur

VII.        Principal Commissioner of Service Tax , Pune

20

(1)   Chief Commissioner of Central Excise,Ranchi(2)   Principal Chief Commissioner of Central Excise, Kolkata       I.        JamshedpurII.        Patna

III.        Ranchi-I

IV.        Ranchi-II

V.        Dhanabad

21

(1)   Chief Commissioner of Central Excise,Shillong(2)   Principal Chief Commissioner of Central Excise, Kolkata       I.        DibrugarhII.        Shillong

III.        Guwahati

22

(1)   Principal Chief Commissioner of Central Excise, Vadodara(2)   Chief Commissioner of Central Excise, Jaipur       I.        DamanII.        Surat-I

III.        Surat-II

IV.        Vadodara-I

V.        Vadodara-II

VI.        Valsad

VII.        Anand

VIII.        Bharuch

IX.        Silvasa

23

(1)   Chief Commissioner of Central Excise, Vishakhapatnam(2)   Principal Chief Commissioner of Central Excise, Hyderabad       I.    Vishakhapatnam-III.    Vishakhapatnam-II (Kakinanda)

III.    Vishakhapatnam-III (Nellore)

24

(1)   Chief Commissioner of Service Tax, Chennai(2)   Chief Commissioner of Central Excise, Chennai

 

 

 I.   Principal Commissioner of Service Tax -I,  ChennaiII.   Commissioner of Service Tax -II,  Chennai

III.   Commissioner of Service Tax -III,  Chennai

IV.    Puduchery

V.    LTU, Chennai

25

(1)   Chief Commissioner of Central Excise & Service Tax, LTU, Kolkata.(2)   Chief Commissioner of Customs, Kolkata.  Commissioner of Central Excise & Service Tax

Explanation. – For the purpose of this notification the expression, “Chief Commissioners of Central Excise”, shall include the Chief Commissioners of Customs notified vide Notification No. 17/2007- Service Tax, Dated-12th May, 2007.

 ( Sunil K. Sinha )

Director (Judicial & Review Cell)

180/06/2014 –ST dated 14-10-2014


Levy of service tax on activities involved in relation to inward remittances from abroad to beneficiaries in India through MTSOs- reg. – Dated 14-10-2014 – Service Tax

Circular No. 180/06/2014 –ST

F. No 354/105/2012-TRU (Pt.)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Tax Research Unit

Room No 153, North Block, New Delhi

Dated 14th October, 2014

To

Chief Commissioner of Customs and Central Excise (All)

Chief Commissioner of Central Excise & Service Tax (All)

Director General of Service Tax

Director General of Central Excise Intelligence

Director General of Audit

Commissioner of Customs and Central Excise (All)

Commissioner of Central Excise and Service Tax (All)

Commissioner of Service Tax (All)

Madam/Sir,

Subject: -  Levy of service tax on activities involved in relation to inward remittances from abroad to beneficiaries in India through MTSOs- reg.

Vide circular No. 163/14/2012–ST, dated 10th July, 2012, on the issue of  levy of service tax on the activities involved in the inward remittance it was clarified that there is no service tax per se on the  foreign exchange remitted  to India from outside for the reason that money does not constitute a service and that conversion charges or fee levied for sending such money would also not be liable to service tax as the person sending money and the company conducting the remittance  are both located outside India. It was also clarified that the Indian bank or financial institution who provides service to the foreign bank or any other entity is not liable to service tax as the place of provision of service shall be the location of the recipient of service. This clarification covers the scenario where the Indian bank or financial institution provides services on principal to principal basis to the foreign bank/entity, on its own account, and thus the service is covered by the general rule, i.e. rule 3 of the Place of Provision of Service Rules, 2012.

2.   However, subsequently, it had been brought to the notice of the Board that the foreign money transfer service operator (MTSO), conducting remittances to beneficiaries in India, have appointed Indian Banks/financial entities as their agents in India who provide agency /representation service to such MTSO for furtherance of their service to a beneficiary in India. The agents are paid a commission or fee by the MTSO for their services. The entire sequence of transactions in remittances of money from overseas through the MTSO route is as under:

Step 1: Remitter located outside India (say ‘A’) approaches a Money Transfer Service Operator (MTSO)/bank (say B) located outside India for remitting the money to a beneficiary in India; ‘B’ charges a fee from ‘A’.

Step 2:  ‘B’ avails the services of an Indian entity (agent) (say ‘C’) for delivery of money to the ultimate recipient of money in India (say ‘E’);  ‘C’ is paid a commission/fee by ‘B’.

Step 3: ‘C’ may avail service of a sub-agent (D). ‘D’ charges fee/commission from ‘C’.

Step 4: ‘C’ or ‘D’, as the case may be, delivers the money to ‘E’ and may charge a fee from ‘E’.

3.   Clarifications have been sought as to whether such agents (referred in Step 2 above) would fall in the category of intermediary, and if so, whether service tax would be leviable on the commission/fee amount charged by such agents. Clarifications have also been sought as to whether the services provided by sub agent (referred in step 3 & 4 above) are leviable to service tax and on certain other related issues.

4.    The issues discussed above have been examined and it is clarified as follows,-

S. No.

Issues

Clarification

1

Whether service tax is payable on remittance received in India from abroad? No service tax is payable per se on the amount of foreign currency remitted to India from overseas. As the remittance comprises money, it does not in itself constitute any service in terms of the definition of ‘service’ as contained in clause (44) of section 65B of the Finance Act 1994.

2

Whether the service of an agent or the representation service provided by an Indian entity/ bank to a foreign money transfer service operator (MTSO) in relation to money transfer falls in the category of intermediary service? Yes. The Indian bank or other entity acting as an agent to MTSO in relation to money transfer, facilitates in the delivery of the remittance to the beneficiary in India. In performing this service, the Indian Bank/entity facilitates the provision of Money transfer Service by the MTSO to a beneficiary in India.  For their service, agent receives commission or fee. Hence, the agent falls in the category of intermediary as defined inrule 2(f) of the Place of Provision of Service Rules, 2012. 

3

Whether service tax is leviable on the service provided, as mentioned in point 2 above, by an intermediary/agent located in India (in taxable territory) to MTSOs located outside India? Service provided by an intermediary is covered by rule 9 (c) of the Place of Provision of Service Rules, 2012. As per this rule, the place of provision of service is the location of service provider. Hence, service provided by an agent, located in India (in taxable territory), to MTSO is liable to service tax.The value of intermediary service provided by the agent to MTSO is the commission or fee or any similar amount, by whatever name called, received by it from MTSO and service tax is payable on such commission or fee.

4.

Whether service tax would apply on the amount charged separately, if any, by the Indian bank/entity/agent/sub-agent from the person who receives remittance in the taxable territory, for the service provided by such Indian bank/entity/agent/sub-agent Yes. As the service is provided by Indian bank/entity/agent/sub-agent to a person located in taxable territory, the Place of Provision is in the taxable territory. Therefore, service tax is payable on amount charged separately, if any.

5.

Whether service tax would apply on the services provided by way of currency conversion by a bank /entity located in India (in the taxable territory) to the recipient of remittance in India?  Any activity of money changing comprises an independent taxable activity. Therefore, service tax applies on currency conversion in such cases in terms of the Service Tax (Determination of Value) Rules. Service provider has an option to pay service tax at prescribed rates in terms of Rule 6(7B) of theService Tax Rules 1994. 

6.

Whether services provided by sub-agents to such Indian Bank/entity located in the taxable territory in relation to money transfer is leviable to service tax? Sub-agents also fall in the category of intermediary. Therefore, service tax is payable on commission received by sub-agents from Indian bank/entity.

5.         Accordingly, Circular No. 163/14/2012-ST, dated 10.7.2012 stands superceded.

6.         Trade Notice/Public Notice may be issued accordingly.

7.        Please acknowledge the receipt of this circular. Hindi version to follow.

 Yours sincerely,

(Dr. Abhishek Chandra Gupta)

Technical Officer, TRU

Tel: 011-2309 2037

F. No. 354/156/2014-TRU dated 10-10-2014


Discontinuation of Certain Reports – Dated 10-10-2014 – Service Tax

Instruction

F. No. 354/156/2014-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise Customs

Dated: 10th October, 2014

To

All Chief Commissioners of Customs/Central Excise & Customs/Central Excise

All Commissioners of Customs/ Central Excise & Customs/Central Excise

All Directors General of CBEC/CDR, CESTAT

Sir,

Subject: Discontinuation of Certain Reports

I am directed to say that TRU receives following monthly reports from field formations which are no longer required.

S.No

Name of the Report

1 Monthly Report on Zarda Scented Tobacco (F. No. 341/24/2010-TRU)
2 Monthly Statement in Respect of Clearance and Revenue Realization of All Brands of Cigarettes (F. No. 352/4/84-TRU)
3 Cigarette Data- Report (F. No. 341/24/2009-TRU)
4 Component Wise Monthly Revenue from Customs (F. No. 334/1/2005-TRU)
5 Information in Respect of Functioning of Compounded Levy Scheme for Gutkha /Pan Masala (F. No. 336/27/2008-TRU)
6 Import of Vanaspati/Bakery Shortening etc. at nil rate of duty from Nepal and Sri Lanka and at Customs duty of 30% from Countries other than Nepal and Sri Lanka(F. No. 341/4/2005-TRU)
7 Statement Showing Monthly Revenue Collection and Cess Collected for Different Commodities (F. No. 333/11/93-TRU)
8 Monthly Report regarding Import of Alcoholic Beverages. (F. No. 334/1/2003-TRU)
9 Import Under Indo-Srilanka Free Trade Agreement –Monitoring of Quota Allocation.
10 Mechanism for Refund Scheme for the 4% Additional CV Duty in those Cases where the Imported Goods are resold and again subjected to Vat/Sales Tax-Monthly Report (F. No. 354/129/2007-TRU)
11 Data on Imports of Wheat (F. No. 354/88/2010-TRU)
12 Data on Export of Chromium Ores and Concentrates (F. No. 334/1/2008-TRU)
13 Data in respect of Man-Made Fibers and Filament Yarn (F. No. 335/2/2005-TRU)
14 Data on Revenue from Levy of 10% Excise Duty on Ready Made Garments and Made Up Articles Bearing a Brand Name or Sold Under a Brand Name Falling under Chapters 61,62 and 63 (F. No. 336/255/2011-TRU)
15 Data in respect of Exports and Imports of Cotton and Cotton waste (F. No. 354/164/2006-TRU)

The above Reports are being discontinued with immediate effect. It is requested that the same may not be sent to the Ministry from now on.

Pramod Kumar

US (TRU

179/5/2014-ST dated 24-09-2014


Service Tax –- Joint Venture – reg. – Dated 24-9-2014 – Service Tax

Circular No. 179/5/2014-ST

F. No. 354/187/2013-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise& Customs

Tax Research Unit

North Block, New Delhi

24th September, 2014

To,

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

Director General (Service Tax), Director General (Audit),

Director General (Central Excise Intelligence),

Commissioners of Service Tax (All),

Commissioners of Central Excise and Service Tax (All).

Madam/Sir,

Subject:  Service Tax –- Joint Venture – reg.

Certain doubts have been raised regarding the levy of service tax on taxable services provided (i) by the members of the Joint Venture (JV) to the JV and vice versa; and (ii) inter se between the members of the JV. In addition, doubts have also been raised regarding taxation of cash calls or capital contribution made by the members to the JV and also administrative services provided by a member to the JV.

2.   The issue has been examined. With effect from 1st July, 2012, under the negative list approach, all services are taxable subject to the definition of the service [available in section 65B (44) of the Finance Act, 1994], other than the services specified in the negative list [section 66D] and exemption notification [Notification No. 25/2012-ST]. According to Explanation 3(a) of the definition of service, “an unincorporated association or a body of persons, as the case may be, and a member thereof shall be treated as distinct persons”. In accordance with the above explanation, JV and the members of the JV are treated as distinct persons and therefore, taxable services provided for consideration, by the JV to its members or vice versa and between the members of the JV are taxable.

3.   In the context of a JV project, cash calls are capital contributions made by the members of JV to the JV. If cash calls are merely a transaction in money, they are excluded from the definition of service provided in section 65B(44) of the Finance Act, 1994. Whether a ‘cash call’ is ‘merely… a transaction in money’ [in terms of section 65B(44) of the Finance Act, 1994] and hence not in the nature of consideration for taxable service, would depend on the terms of the Joint Venture Agreement, which may vary from case to case.

4.   Detailed and close scrutiny of the terms of JV agreement may be required in each case, to determine the service tax treatment of cash calls. Some important aspects, by way of illustration, which could be examined in this regard, are:-

4.1  Taxable service provided by a JV to its members:

Cash calls, sometimes, could be in the nature of advance payments made by members towards taxable services to be received from the JV. For instance, JV which receives the cash call from its members may in return agree to do something of direct benefit either to the member or on the behest of a member to a third party, such as granting of right, reserving production capacity or providing an option on future supplies.

4.1.1   Taxable services received by a JV from its members or third party:

Payments made out of cash calls pooled by a JV, towards taxable services received from a member or a third party is in the nature of consideration and hence attracts service tax.

4.2      Taxable services provided by members to the JV:

Usually responsibility of managing the cash calls of the JV is assigned to one or some of the members of the JV, by way of a contractual agreement, for which he/they may receive a consideration either in cash or kind (say, goods or services).

A member of JV may provide support services (for example, administrative service in the form of setting up/management of a project office/site office) to the JV for a consideration either in cash or kind (say, goods or services).

5.   JV being an unincorporated temporary association constituted for the limited purpose of carrying out a specified project within a time frame, a comprehensive examination of the various JV agreements (at times, there could be number of inter se agreements between members of the JV) holds the key to understanding of the taxation of transactions involving taxable services between the JV and its members or inter-se  between the members of a JV. Therefore officers in the field formations are advised to carefully examine the leviability of service tax with reference to the specific terms/clauses of each JV agreement.

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

7.  Hindi version to follow.

[Dr. Abhishek Chandra Gupta]

Technical Officer, TRU

Tel. no.:  011-23093075

1/2014 dated 16-09-2014


Appointment of officers – Dated 16-9-2014 – Service Tax

F.No.137/29/2014-SERVICE TAX

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE AND CUSTOMS

Order No. 1/2014-SERVICE TAX

New Delhi, the 16th September, 2014

In exercise of the powers conferred by rule 3 of the Service Tax Rules, 1994, the Central Board of Excise & Customs hereby rescinds Order No. 3/3/94-Service Tax Rule (3), dated the 11thOctober, 1994, No. 4/1/95-Service Tax, dated the 25th July, 1995, No. 5/1/1996-Service Tax, dated the 31st October, 1996, No. 5/1/97-Service Tax, dated the 25th July, 1997, No. 7/1/97-Service Tax, dated the 5th November, 1997, No. 1/1/98-Service Tax, dated the 7th October, 1998, No. 3/1/2004-Service Tax Rule (3), dated the 1st March, 2004, No. 4/2/2004-Service Tax, dated the 18th May, 2004, No. 1/1/2010-Service Tax, dated the 10th February, 2010 and all other orders relating to the appointment of officers and their jurisdiction issued under rule 3 of the Service Tax Rules, 1994.

2.     This order shall come into force on 15th October, 2014.

(Himani Bhayana)

Under Secretary to the Government of India

To

All Principal Chief Commissioners of Central Excise

All Chief Commissioners of Central Excise/ Service Tax

Principal Directors General of Service Tax/Central Excise Intelligence/ Systems

Director General of Audit

All Principal Commissioners of Central Excise/Service Tax

All Commissioners of Central Excise/Service Tax

All Principal Commissioners/Commissioners LTU

LETTER D.O.F. NO.334/15/2014-TRU dated 25-08-2014


Tax base broaden by extending the levy of service tax to all forms of advertising except print media. – Dated 25-8-2014 – Service Tax

DATED 25-8-2014

The Finance (No. 2) Bill, 2014 received the assent of the President of India on 6th August, 2014 and has been enacted as the Finance (No.2) Act, 2014 [Act No.25 of 2014] [hereinafter referred to as the said Act].

1.2 In view of the enactment, clauses (D) to (L) of section 114 of the said Act have already come into force. In respect of clauses (A) to (C), the appointed date will be 1st October, 2014 [Notification No. 18/2014-ST].

1.3 Broadening of the tax base by extension of service tax levy to all forms of advertising except print media [as defined in section 65B (39a) of the Finance Act, 1994] and on services provided by radio-taxis, wall come into effect on 1st October, 2014. In respect of services provided by radio-taxis, taxable portion will be 40% of the amount charged in terms of entry 9A in Notification 26/2012-ST as amended. Therefore, on the services provided by radio taxis, service tax payable will be 4.944% of the amount charged.

1.4 The appointed date in respect of clause (C) of section 114 of the said Act will be 1st October, 2014. Drawing power from the amended Explanation inserted in section 67A of theFinance Act, 1994, Rule 11 is proposed to be inserted in the Service Tax Rules, 1994

[Notification 19/2014-ST] with effect from 1st October, 2014, from when the exchange rate for calculation of value of services sought to be imported into the taxable territory will be based on generally accepted accounting principles.

1.5 Now, vide amended section 94 of the Finance Act, 1994, rule making powers have been specified—

(i)    to impose upon persons liable to pay service tax, inter alia, the duty of furnishing information, keeping records and making returns and the manner in which they shall be verified;

(ii)   for withdrawal of facilities or imposition of restrictions (including restrictions on utilization of CENVAT credit) on service providers or exporters, to check evasion of duty or misuse of CENVAT credit; and

(iii)  to issue instructions in supplemental or incidental matters.

Regarding (ii) above, Notification No.25/2014-CE(NT) is being issued with immediate effect. Inrule 12AAA of Cenvat Credit Rules, 2004, the expression ‘provider of taxable service’ has been inserted vide the said Notification.

Regarding (iii) above, Notification No.19/2014-ST is being issued, to insert rule 12 which gives powers to issue supplementary instructions, in the Service Tax Rules, with effect from 1st October, 2014.

1.6 Explanations in respect of changes discussed above are not exhaustive and the text of the relevant statutory provisions and the wordings of the notifications should be read carefully to implement the law. I would like to express my thanks to officers in field formations who have shared their ideas and views with TRU.

[LETTER D.O.F. NO.334/15/2014-TRU]

178/4/2014-ST – 11-07-2014


Manner of distribution of common input service credit under rule 7(d) of the Cenvat Credit Rules, 2004 – regarding. – Dated 11-7-2014 – Service Tax

Circular No. 178/4/2014-ST

F.No.334/15/2014-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise& Customs

Tax Research Unit

North Block, New Delhi

11th July, 2014

To,

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

Director General (Service Tax), Director General (Audit),

Director General (Central Excise Intelligence),

Commissioners of Service Tax (All),

Commissioners of Central Excise and Service Tax (All).

Madam/Sir,

Subject: Manner of distribution of common input service credit under rule 7(d) of the Cenvat Credit   Rules, 2004 — regarding.

Doubts have been raised regarding the manner and extent of the distribution of common input service credit in terms of amended rule 7 [especially rule 7(d)] of the Cenvat Credit Rules, 2004(CCR). Rule 7 provides for the mechanism of distribution of common input service credit by the Input Service Distributor to its manufacturing units or to units providing output services. An amendment was carried out vide Notification no. 05/2014-CE (N.T.) dated 24th February, 2014,amending inter-alia rule 7(d) providing for distribution of common input service credit among all units in their turnover ratio of the relevant period. Rule 7(d), after the amendment, reads as under:

‘credit of service tax attributable to service used by more than one unit shall be distributed pro rata on the basis of the turnover of such units during the relevant period to the total turnover of all its units, which are operational in the current year, during the said relevant period’

2. These doubts have arisen with respect to the meaning of the words ‘such unit’ used in rule 7(d). It has been stated in the representations that due to the use of the term ‘such unit’, the distribution of the credit would be restricted to only those units where the services are used. It has been interpreted by the trade that in view of the amended rule 7(d) of the CCR, the credit available for distribution would get reduced by the proportion of the turnover of those units where the services are not used.

3. Rule 7 was amended to simplify the method of distribution. Prior to this amendment there were a few issues raised by the trade regarding distribution of credit under rule 7 such as determining the turnover of each unit for each month and distributing by following the nexus of the input services with the units to which such services relate. The amendment in the said rule was carried out to address these issues. The amended rule 7(d) seeks to allow distribution of input service credit to all units in the ratio of their turnover of the previous year. To make the intent of the amended rule clear, illustration of the method of distribution to be followed is given below.

4. An Input Service Distributor (ISD) has a total of 4 units namely ‘A’, “B’, ‘C’ and ‘D’, which are operational in the current year. The credit of input service pertaining to more than one unit shall be distributed as follows:

Distribution to ‘A’ = XY         * Z

X = Turnover of unit ‘A’ during the relevant period

Y = Total turnover of all its unit i.e. ‘A’+’B’+’C’+’D’ during the relevant period

Z = Total credit of service tax attributable to services used by more than one unit

Similarly the credit shall be distributed to the other units ‘B’, ‘C’ and ‘D’.

Illustration:

An ISD has a common input service credit of ₹ 12000 pertaining to more than one unit. The ISD has 4 units namely ‘A’, ‘B’, ‘C’ and ‘D’ which are operational in the current year.

Unit Turnover in the previous year (in Rs.)
A (Manufacturing excisable goods) 25,00,000
B (Manufacturing excisable and exempted goods) 30,00,000
C (providing exclusively exempted service) 15,00,000
D (providing taxable and exempted service) 30,00,000
Total 1,00,00,000

The common input service relates to units ‘A’, ‘B’ and ‘C’, the distribution will be as under:

(i) Distribution to ‘A’ =12000 * 2500000/10000000
= 3000
(ii) Distribution to ‘B’ =12000 * 3000000/10000000
= 3600
(iii) Distribution to ‘C’ = 12000 * 1500000/10000000
= 1800
(iv) Distribution to ‘D’ = 12000 * 3000000/10000000
= 3600

The distribution for the purpose of rule 7(d), will be done in this ratio in all cases, irrespective of whether such common input services were used in all the units or in some of the units.

5. Reference may be made to Sh. G. D. Lohani, Director (TRU) in case of any further doubt. Trade Notice/Public Notice may be issued to the field formations and tax payers. Please acknowledge receipt of this Circular.

6. Hindi version to follow.

Yours sincerely,

[Dr. Abhishek Chandra Gupta]

Technical Officer, TRU

Tel. no.: 011-23093075

D.O.F. No. 334/15/2014-TRU – 10-07-2014


Union Budget, 2014-15: Changes in Service Tax – reg. – Dated 10-7-2014 – Service Tax

Government of India

Ministry of Finance

Department of revenue

Tax Research Unit

M. Vinod Kumar

Joint Secretary (Tax Research Unit)

Tel: 011-23093027; Fax: 011-23093037

e-mail: m.kumar58@nic.in

D.O.F. No. 334/15/2014-TRU

New Delhi, dated July 10, 2014.

Dear Madam/Sir,

Sub.: Union Budget, 2014-15: Changes in Service Tax – reg.

The hon‟ble Finance Minister has, while presenting the Union Budget 2014-15, introduced the Finance (No.2) Bill, 2014 [hereinafter, the Bill] in the Lok Sabha on the 10th of July, 2014. Clause 106 appearing in Chapter V of the Bill covers the amendments made to Chapter V of the Finance Act, 1994. In addition, a set of notifications are also under issue.

1.2 After the introduction of the Negative List based tax regime in the services sector in July, 2012, the emphasis has been to ensure stability and continuity. To carry this further, this year, only a limited number of changes have been made in service tax. The main focus in service tax at the present juncture is to widen the tax base and enhance compliance.

1.3 The changes being made by amendments in notifications and rules can be categorized into two broad categories based on when they would come into effect: (i) changes which will have immediate effect; and (ii) changes which are proposed to be given effect to only from 1st October, so as to coincide with the Service Tax Return cycle. As far as statutory amendments are concerned, they would come into effect only from the date on which the Bill receives the assent of the President. Regarding certain amendments proposed for widening the tax base, they would come into effect on a date to be notified after the Bill receives the assent of the President. Entries in the Bill and the notifications may be carefully read, for this purpose.

1.4 The changes being made are discussed below under three broad categories:

(i) Measures to widen the tax base; [Para 2]

(ii) Measures for compliance enhancement; [Para 3] and

(iii) Facilitation measures. [Para 4]

2. Measures to widen the tax base:

Broadening the tax base is a fiscal objective justified in itself. Primary objective of the negative list approach which came into effect from 1st July, 2012 was also to broaden the tax base.

Keeping this in view, the negative list and exemptions have been reviewed.

2.1 Review of the Negative List of services:

2.1.1 Service tax leviable currently on sale of space or time for advertisements in broadcast media, namely radio or television [section 66D (g) read with section 66B], is proposed to be extended to cover such sales on other segments like online and mobile advertising. The new levy would further extend to advertisements in internet websites, out-of-home media, on film screen in theatres, bill boards, conveyances, buildings, cell phones, Automated Teller Machines, tickets, commercial publications, aerial advertising, etc. Sale of space for advertisements in print media, however, would continue to be in the negative list and hence remain excluded from service tax. Print media is being defined in service tax law for the purpose. This change will come into effect from a date to be notified later, after the Finance (No.2) Bill, 2014 receives the assent of the President.

2.1.2 Service tax is proposed to be levied on services provided by radio taxis or radio cabs, whether or not air-conditioned [section 66D (o)(vi)]. The abatement presently available to rent-a-cab service would also be made available to radio taxi service, to bring them on par. A definition of radio taxi is being included in the exemption notification No.25/2012-ST. Service tax on radio taxi services will come into effect from a date to be notified later, after the Finance (No.2) Bill, 2014 receives the assent of the President.

2.2 Review of General Exemptions:

The following changes are being made as a result of the review of exemptions.

2.2.1: Exemptions being withdrawn [Notification 25/2012-ST]:

(i) Presently service of passenger transportation by a contract carriage other than for the purposes of tourism, conducted tour, charter or hire, is exempt from service tax [Sl.No.23 (b)]. The scope of exemption is being reduced by withdrawing the exemption in respect of air-conditioned contract carriages. As a result, any service provided for transport of passenger by air-conditioned contract carriage including which are used for point to point travel, will attract service tax, with immediate effect. Service tax will be charged at an abated value of 40% of the amount charged from service receiver; therefore, effective tax will be 4.944%. Services by non-air conditioned contract carriages for purposes other than tourism, conducted tour, charter or hire continue to be exempted.

(ii) Exemption to services by way of technical testing or analysis of newly developed drugs, including vaccines and herbal remedies on human participants by a clinical research organization approved to conduct clinical trials by the Drug Controller General of India [Sl.No.7] is being withdrawn. This would be taxable with immediate effect.

2.2.2 Rationalization of Exemptions:

(i) Education:

At present, all services provided by educational institutions [providing educational services specified in the negative list] to their students, faculty and staff are exempted [section 66 D (l)of the Finance Act, 1994]; this will continue. However, in respect of services received by such educational institutions, presently, exemption is being operated through the concept of „auxiliary educational services‟ [Sl.No.9]. Doubts have been raised and clarifications have been sought regarding the scope and meaning of „auxiliary educational services‟. To bring clarity, it is proposed to omit the concept of „auxiliary educational services‟ and specify in the notification, the services which will be exempt when received by the eligible educational institutions. Accordingly, the following services received by eligible educational institutions are exempted from service tax: (i) transportation of students, faculty and staff of the eligible educational institution; (ii) catering service including any mid-day meals scheme sponsored by the Government; (iii) security or cleaning or house-keeping services in such educational institution; (iv) services relating to admission to such institution or conduct of examination. Further, for the purposes of this exemption, „educational institution‟ is being defined in the exemption notification 25/2012-ST as institutions providing educational services specified in the negative list.

It may be noted that the scope of exemption remains the same as earlier in the case of services provided by eligible educational institutions; in the case of services received by the eligible educational institutions, exemption will be available only in respect of the services specified as above. Further as a rationalization measure, the exemption hitherto available to services provided by way of renting of immovable property to educational institutions stands withdrawn, with immediate effect.

(ii) Services ordinarily provided by a Municipality:

For greater clarity, the exemption in respect of services provided to Government or local authority or governmental authority [in entry at Sl.No.25], has been made more specific. Services by way of water supply, public health, sanitation conservancy, solid waste management or slum improvement and up-gradation will continue to remain exempted but the exemption would not be extendable to other services such as consultancy, designing, etc., not directly connected with these specified services.

(iii) Services by a Hotel, Inn or Guest House:

According to the present entry at Sl. No. 18, “service by way of renting of a hotel, inn, guest house, club or campsite or other commercial places meant for residential or lodging purposes, having a declared tariff of a unit of accommodation below rupees one thousand per day or equivalent” is exempt from service tax. Some doubts appears to have arisen on account of use of the word “commercial” in the entry as to whether dharmashalas, ashram or any such entity which offer accommodation would be covered therein. It may be noted that this exemption, upto the specified threshold level, is available to any entity providing service by way of accommodation, including dharmashalas or ashram or such other entities. To remove any ambiguity, the word „commercial‟ is being omitted. Renting of vacant land or buildings for hotels would continue to be taxable irrespective of the hotel‟s declared tariff.

Where the exclusions and exemptions are withdrawn to widen the tax base, if the aggregate value of taxable service provided by a person in a financial year does not exceed Rupees Ten Lakh, exemption will be available in terms of Notification 33/2012-ST.

2.3 Service tax on service portion in Works Contracts:

In Rule 2A of the Service Tax (Determination of Value) Rules, 2006, category„ B‟ and „ C‟ of works contracts are proposed to be merged into one single category, with percentage of service portion as 70%; this change will come into effect from 1st October, 2014. This rationalization by way of merger of categories has been made to avoid disputes of classification between these two categories. [Notification No.11/2014-ST].

3. Measures for compliance enhancement:

3.1 Variable rates of Interest:

To encourage prompt payment of service tax, it is being proposed to introduce interest rates which would vary on the extent of delay [Notification No.12/2014-ST]. Simple interest rates per annum payable on delayed payments under section 75, are prescribed as follows:

Extent of delay

Simple interest rate per annum

Up to six months 18%
More than six months & upto one year 18% for first six months, and 24% for the period of delay beyond six months
More than one year 18% for first six months, 24% for second six months, and 30% for the period of delay beyond one year

This new interest rate regime will become operational only on 1st October 2014. In other words, upto 1st October, 2014, the rate of interest of 18%, presently applicable, will continue to apply. The variable interest rates will apply only on or after 1st October, 2014.

As an illustration, assume a case where service tax became due, say, on the 6th of July, 2012 and the assessee pays the dues on 6th of December, 2014. In such a case, the interest to be charged would be as below:

(i) 18% simple interest upto September, 30th, 2014.

(ii) For the period from 1st October, 2014 to 6th December, 2014, the rate of interest will be 30% since the period of delay is beyond one year.

As specified in the proviso to section 75, three per cent concession on the applicable rate of interest will continue to be available to the small service providers.

3.2 E-payment:

E-payment of service tax is being made mandatory with effect from the 1st Oct 2014. Relaxation from e-payment may be allowed by the Deputy Commissioner/Asst. Commissioner on case to case basis [Notification 09/2014-ST].

4. Facilitation measures:

4.1.1 Section 67A in the Finance Act, 1994:

The Explanation to Section 67A is being amended to enable the Government to prescribe rules for determination of rate of exchange for calculation of taxable value in respect of certain services. Rules will be prescribed in due course, after the Bill receives the assent. This amendment has been proposed in view of requests from the trade and industry to delink the conversion from the notified Customs rates of exchange as at present. Any suggestions would be welcome before the Rules are notified.

4.1.2 Service Tax Rules: [changes to have immediate effect]:

Service provided by a Director to a body corporate is being brought under the reverse charge mechanism; service receiver, who is a body corporate will be the person liable to pay service tax. This is in view of requests by body corporates such as the Reserve Bank of India.

Services provided by Recovery Agents to Banks, Financial Institutions and NBFC is being brought under the reverse charge mechanism; service receiver will be the person liable to pay service tax. [Notification 9/2014 -ST and 10/2014-ST]

4.1.3 Place of Provision of Services Rules: [changes to take effect from 1st October, 2014].

(i) Provision for prescribing conditions for determination of place of provision of repair service carried out on temporarily imported goods is being omitted. The second proviso to rule 4(a) is being amended to prescribe that it would suffice for the purpose of exclusion of repair service from applicability of rule 4(a) that the goods imported for repair are exported after repair without being put to any use other than that which is required for such repair. It may please be noted that this exclusion does not apply to goods that arrive in the taxable territory in the usual course of business and are subject to repair while such goods remain in the taxable territory, e.g., any repair provided in the taxable territory to containers arriving in India in the course of international trade in goods will be governed by rule 4.

(ii) The definition of intermediary is being amended to include the intermediary of goods in its scope. Accordingly, with effect from 1.10.2014, an intermediary of goods, such as a commission agent or consignment agent shall be covered under rule 9(c) of the Place of Supply of Services Rules.

(iii) Service consisting of hiring of Vessels (excluding yachts) and Aircraft is being excluded from rule 9(d). Accordingly, hiring of vessels, or aircraft, irrespective of whether short term or long term, will be covered by the general rule, that is, the place of location of the service receiver. Hiring of yachts would however continue to be covered by rule 9 (d). [Notification 14/2014-ST]

4.1.4 Point of Taxation Rules: [Notification No.13/2014-ST]

The first Proviso to rule 7 of the Point of Taxation Rules (POTR) is being amended to provide that point of taxation in respect of reverse charge will be the payment date or the first day that occurs immediately after a period of three months from the date of invoice, whichever is earlier. This amendment will apply only to invoices issued after 1st October, 2014. A transition rule is being prescribed (new rule 10 of POTR).

4.1.5 CENVAT Credit Rules: [Notification No.21/2014-CE (N.T.)]

(i) A manufacturer or a service provider shall take credit on inputs and input services within a period of six months from the date of issue of invoice, bill or challan w.e.f. 1st September,2014 [ newly inserted proviso to rule 4 (1) and fifth proviso to rule 4(7) refer]

(ii) In case of service tax paid under full reverse charge, the condition of payment of invoice value to the service provider for availing credit of input services is being withdrawn. However, there is no change in respect of partial reverse charge. [Refer amended proviso to rule 4(7)].

(iii) Re-credit of CENVAT credit reversed on account of non-receipt of export proceeds within the specified period or extended period, to be allowed, if export proceeds are received within one year from the period so specified or extended period. This can be done on the basis of documents evidencing receipt of export proceeds [Refer the newly inserted proviso to rule 6(8)].

4.1.6 Notification 26/2012- ST prescribing Taxable Portion: [Notification No. 8/2014-ST]

(i) The condition for availing abatement in case of GTA service is being amended with immediate effect to clarify that the condition for non- availment of credit is required to be satisfied by the service providers only. Service recipient will not be required to establish satisfaction of this condition by the service provider [Sl. No. 7 refers].

(ii) Service of transportation of passenger by air-conditioned contract carriages is taxable with immediate effect, as stated earlier. Hence, an entry has been inserted at Sl. No. 9A providing that the taxable portion of such service shall be 40% with the condition that CENVAT credit of inputs or capital goods or input services has not been taken.

(iii) The condition against entry No. 9 is amended with effect from 1st October 2014, to allow the credit of input service of renting of a motor cab if such services are received from a person engaged in the similar line of business i.e. a sub-contractor providing services of renting of motor cab to the main contractor. The whole of the CENVAT credit has been allowed with respect to input service of renting of any motor cab, received from a person who is paying service tax on 40% of the value of services. The CENVAT credit eligibility will be restricted to 40% of the credit of the input service of renting of any motor cab if service tax is paid or payable on full value of the services i.e. no abatement is availed.

(iv) Tour operator service providers are also being allowed to avail CENVAT credit on the input service of another tour operator, which are used for providing the taxable service. This is being provided to avoid cascading of taxes. (Sl. No. 11 refers). [Change to be effective from 1st October, 2014]

(v) Taxable portion in respect of transport of goods by vessel is being reduced from 50% to 40%. Effective service tax will decrease from the present 6.18% to 4.944%, with effect from 1st October, 2014.

4.1.7 Simplification of Partial Reverse Charge mechanism: [Notification No.10/2014-ST]

In renting of motor vehicle, where the service provider does not take abatement the portion of service tax payable by the service provider and service receiver will be modified as 50% each. This change will come into effect from 1st of October 2014.

4.1.8  Advance Ruling:

The resident private limited company is being included as a class of persons eligible to make an application for Advance Ruling in service tax [Notification No.15/2014-ST]. This change will come into effect immediately.

4.1.9  SEZ – procedural simplification: [changes to have immediate effect]

Certain changes are being made in Notification No 12/2013-ST dated 1st July 2013 [vide amending Notification No.07/2014-ST] as follows:

(i) It is being provided that the Central Excise Officer would issue authorization in Form A-2, within fifteen working days from the date of receipt of Form A-1 by the Central Excise Officer.

(ii) Authorization will have validity from the date on which Form A-1 is verified by the Specified Officer of SEZ. However, if Form A-1 is furnished after a period of 15 days from the date of its verification by the Specified Officer, the authorization shall have validity from the date of furnishing of Form A-1 to the Central Excise Officer.

(iii) SEZ Units or the Developer will, pending issuance of Form A-2, be entitled to avail upfront exemption on the basis of Form A-1. However, in such a case, the SEZ Unit/Developer would be required to furnish a copy of authorization issued by the Central Excise Officer within 3 months from the date of receipt of specified services. If a copy of authorization is not provided within the said period of three months, the service provider shall pay service tax on the service so provided availing the exemption.

(iv) As regards services covered under full reverse charge, it is being mentioned specifically in Form that there would be no requirement of furnishing service tax registration number of service provider.

(v) It is being provided that a service shall be treated as exclusively used for SEZ operations if the recipient of service is SEZ unit or developer, invoice is in the name of such unit/developer and the service is used exclusively for furtherance of authorized operations in SEZ.

(vi) Certain doubts have been raised by field formations as regards the jurisdiction for the purposes of granting refunds under notification No. 12/2013-ST to the SEZ Units and SEZ Developers. It is clarified that the jurisdictional Deputy Commissioner / Assistant Commissioner of Central Excise for all purposes under the said notification would be the authority with whom SEZ Units or the Developers are registered for taking upfront exemption or for the purposes ofChapter V of the Finance Act, 1994. In this context, attention is also invited to Circular No. 105/08/2008-ST, dated 16.9.2008. If SEZ units have obtained a centralized registration under the Service Tax Rules, it will have option to file a common service tax refund in respect of all units covered under the Centralized Registration or file a unit-wise refund at its option, to the authority having jurisdiction over centralized registration.

4.1.10 Input Service Distributor:

Rule 7 of the CENVAT Credit Rules, 2004, provides for the manner of distribution of common input service credit by the Input Service Distributor. This was amended vide notification No. 05/2014-CE (N.T.) amending, inter-alia, rule 7(d), to provide for distribution of common input service credit among all units in their turnover ratio of the relevant period. Some interpretational issues were raised regarding the amendment such as: (i) due to the use of the term „such unit‟ in rule 7(d), the distribution of the credit would be restricted to only those units where the services are used, and (ii) the credit available for distribution would also get reduced by the proportion of the turnover of those units where the services are not used.

These issues are being clarified vide Circular No. 178/04/2014-ST, dated 10.7.2014 illustrating the effect of the amendment carried out vide notification No. 05/2014-CE (N.T.).  It clarifies that the amended rule 7 allows distribution of input service credit to all units (which are operational in the current year) in the ratio of their turnover of the previous year/previous quarter as the case may be.

4.2 Exemptions to the social sector: [changes to have immediate effect]

4.2.1 All life micro-insurance schemes approved by the Insurance Regulatory Development Authority (IRDA), where sum assured does not exceed Fifty Thousand Rupees are being exempted from service tax [entry at Sl. No.26A of Notification 25/2012-ST amended byNotification No.06/2014-ST].

4.2.2 Transport of organic manure by vessel, rail or road (by GTA) is being exempted by amending entries at Sl. No. 20 and 21. Therefore, organic manure will be on par with fertilizer which is already exempted.

4.2.3 Services by way of loading, unloading, packing, storage or warehousing, transport by vessel, rail or road (GTA), of cotton, ginned or baled, is being exempted [amendment of entry at Sl. No. 20 & 21 and 40].

4.2.4 Services provided by Common Bio-medical Waste Treatment Facility operators by way of treatment, disposal of bio medical waste or processes incidental to such treatment or disposal are being exempted [new entry at Sl. No.2B].

4.2.5 Service provided by Employees‟ State Insurance Corporation (ESIC) during the period prior to 1.7.2012 is proposed to be exempted from service tax. This exemption for services by ESIC would come into effect from the date the Finance (No.2) Bill, receives the assent of the President. It may be noted that any service provided by ESIC to persons governed under the Employees‟ Insurance Act, 1948 is already exempt for the period commencing from 1.7.2012 [Sl. No. 36].

4.3 Technical exemptions: [changes to have immediate effect]

4.3.1 Specialized financial services received by RBI from outside India, in the course of management of foreign exchange reserves, e.g. external asset management, custodial services, securities lending services, are being exempted [new entry at Sl. No. 41 of 25/2012-ST].

4.3.2 Services provided by the Indian tour operators to foreign tourists in relation to tours wholly conducted outside India are being exempted. This exemption is available to Indian tour operators in cases where they organize tours for a foreign tourist wholly outside India, e.g., service provided to a Sri Lankan for a tour conducted in Bhutan. It may be noted that service provided by a tour operator in relation to an inbound or an outbound tours continue to be leviable to service tax [new entry at Sl. No.42].

5. Amendments in Chapter V of the Finance Act, 1994:

The amendments proposed vide the Bill in Chapter V of the Finance Act, 1994 would come into effect on the date the Bill receives the assent. In some cases, the amendments would be given effect from a date to be notified after the assent [section 65B, 66D and 67A]

5.1 Central Excise provisions made applicable to service tax:

Section 83 is being amended to prescribe that the provisions of following sections of the Central Excise Act shall apply, mutatis mutandis, to service tax,-

(i) Section 5A(2):This section prescribes that any explanation inserted in a notification or special order at any time within one year of issue of notification or order, for clarifying the scope or applicability thereof, shall have effect from the date of issue of such notification or order.

(ii) Section 15 A: This new section is being inserted in the Central Excise Act to stipulate that third party sources shall furnish periodic information, as specified, in the manner as may be prescribed.

(iii) Section 15B: This new section is being inserted in the Central Excise Act to prescribe that failure to provide information under section 15A of the Act would attract penalty as specified.

(iv) Section 35F: Section 35F of the Central Excise Act has already been made applicable to Service Tax. This section is being substituted with a new section to prescribe a mandatory fixed pre-deposit of 7.5% of the duty demanded or penalty imposed or both for filing of appeal before the Commissioner(Appeal) or the Tribunal at the first stage, and 10% of the duty demanded or penalty imposed or both for filing second stage appeal before the Tribunal. The amount of pre-deposit payable would be subject to a ceiling of ₹ 10 Crore. All pending appeals/stay application would be governed by the statutory provisions prevailing at the time of filing such stay applications/appeals. This new provisions would, mutatis mutandis, apply to Service Tax.

5.2 Other Amendments:

5.2.1 Section 73 is being amended to prescribe time limits for completion of adjudication as already exists in Central Excise. This time limit would need to be followed, as far as possible.

5.2.2 Section 80 is being amended to exclude the reference of first proviso to section 78. This amendment, in effect, removes the power to waive the 50% penalty imposable in cases where service tax has not been levied, not paid or short levied or short paid on account of suppression of facts or willful misstatement but details of transactions are available in the specified record.

5.2.3 Section 82(1) is being amended, along the lines of section 12F (1) of the Central Excise Act, so that Joint Commissioner or Additional Commissioner or any other officer notified by the Board can authorize any Central Excise Officer to search and seize.

5.2.4 Sub-section (6A) of section 86 is being amended to omit the words “for grant of stay or”.

5.2.5 Section 87 is being amended to incorporate power to recover dues of a predecessor from the assets of a successor purchased from the predecessor as it is presently provided for insection 11 of the Central Excise Act, 1944.

5.2.6 Section 94 is being amended to obtain rule making powers (a) to impose upon assessees, inter alia, the duty of furnishing information, keeping records and making returns and specify the manner in which they shall be verified; (b) for withdrawal of facilities or imposition of restrictions (including restrictions on utilization of CENVAT credit) on service provider or exporter, to check evasion of duty or misuse of CENVAT credit; and (c) to issue instructions in supplemental or incidental matters.

6.1 Changes explained above are not intended to be exhaustive and the analysis of changes does not have legal validity; analysis of changes wherever provided is merely meant to highlight certain aspects of these changes. The text of the statutory provisions and the wordings of the notifications should be read carefully for interpreting the law.

6.2 Field formations are requested to go through the changes made in the Budget carefully. Any issues or doubts which may arise or any omission/error observed may kindly be brought to the notice of the undersigned, Shri J. M. Kennedy, Director, TRU at jm.kennedy@nic.in or Shri G.D.Lohani, Director, TRU, at gd.lohani@nic.in as soon as possible.

I would like to express my thanks for the pre-budget suggestions and inputs which have been received from certain field formations. I would request that similar inputs be continued to be forwarded in future also.

With regards,

Yours sincerely,

(M. Vinod Kumar)

To:

All Chief Commissioners/ Directors General

All Commissioners of Service Tax

All Commissioners of Central Excise

04/2014 dated 25-03-2014


Clarification with regard to section 180 of the Companies Act, 2013. – Dated 25-3-2014 – Companies Law

General Circular no. 04 /2014

No. 1/32/2013- CL V (Pt. File)

Government of India

Ministry of Corporate Affairs

5th Floor, ‘A’ Wing, Shastri Bhavan,

Dr. R P Road, New Delhi-110001

Dated: 25/03/2014

To

All Regional Directors,

All Registrar of Companies,

All the Stakeholders,

Subject: Clarification with regard to section 180 of the Companies Act, 2013.

Sir,

This Ministry has received many representations regarding various difficulties arising out of implementation of section 180 of the Companies Act, 2013 with reference to borrowings and/or creation of security, based on the basis of ordinary resolution. The matter has been examined in the Ministry and it is hereby clarified that the resolution passed under section 293 of the Companies Act, 1956 prior to 12.09.2013 with reference to borrowings (subject to the limits prescribed) and / or creation of security on assets of the company will be regarded as sufficient compliance of the requirements of section 180 of the Companies Act, 2013 for a period of one year from the date of notification of section 180 of the Act.

Yours faithfully,

(KMS Narayanan)

Assistant Director (Policy)

Ph. No. 23387263

Copy to: Guard File

177/03/2014-ST dated 17-02-2014


Circular No.177/03/2014 – ST

F. No.334/03/2014-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise& Customs

Tax Research Unit

North Block, New Delhi

17th February, 2014

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: Rice– exemptions from service tax — regarding.

Doubts have been raised regarding the scope and applicability of various exemptions available to various activities in relation to rice, under the negative list approach. These doubts have been examined and clarifications are given below:

2. These doubts have arisen in the context of definition of ‘agricultural produce’ available in section 65B(5) of the Finance Act, 1994. The said definition covers ‘paddy’; but excludes ‘rice’. However, many benefits available to agricultural produce in the negative list [section 66D(d)] have been extended to rice, by way of appropriate entries in the exemption notification.

3.Transportation of rice:

3.1 by a rail or a vessel: Services by way of transportation of food stuff by rail or a vessel from one place in India to another is exempt from service tax vide exemptionnotification 25/2012-ST dated 20th June, 2012 [entry sl.no.20(i)]; food stuff includes rice.

3.2 by a goods transport agency: Transportation of food stuff by a goods transport agency is exempt from levy of service tax [exemption notification 25/2012-ST dated 20th June, 2012 [entry sl.no.21(d)]; amending notification 3/2013-ST dated 1st March 2013]. Food stuff includes rice.

4. Loading, unloading, packing, storage and warehousing of rice: Exemption has been inserted in the exemption notification 25/2012-ST dated 20th June, 2012 [entry sl.no.40]; amending notification 4/2014-ST dated 17th February 2014 may be referred.

5. Milling of paddy into rice: When paddy is milled into rice, on job work basis, service tax is exempt under sl.no.30 (a) of exemption notification 25/2012-ST dated 20th June, 2012, since such milling of paddy is an intermediate production process in relation to agriculture.

6. Reference may be made to JS, TRU in case of any further doubt. Trade Notice/ Public Notice may be issued. Hindi version to follow.

[S. Jayaprahasam]

Technical Officer, TRU

F. No. B1/19/2013-TRU (Pt.) dated 11-12-2013


The Service Tax Voluntary Compliance Encouragement Scheme – issues for clarification – reg. – Dated 11-12-2013 – Service Tax

 

F. No. B1/19/2013-TRU (Pt.)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

(Tax Research Unit)

New Delhi the 11th December, 2013

To,

All Chief Commissioners of Central Excise/Service Tax

Director General Service Tax

All Commissioners of Central Excise/Service Tax

Madam/Sir,

Sub: The Service Tax Voluntary Compliance Encouragement Scheme – issues for clarification – reg.

The undersigned is directed to state that the Board has issued clarifications on issues concerning various aspects of the VCES, vide circulars dated 13.05.2013, 8.08.2013 and 25.11.2013. A FAQ has also been issued on VCES. However, certain instances have come to notice, as mentioned below, that the declarants under the VCES are still facing difficulties.

2.   In one instance, the Designated Authority has asked a declarant, who has “tax dues” only for a part of the period covered by the Scheme, to furnish an undertaking that he had no unpaid “tax dues” for the remaining period covered by the Scheme. However, the Scheme does not envisage furnishing of any such undertaking. A declarant may have tax dues only for a part period covered by the Scheme. In terms of the Scheme a declaration of tax dues has to be made in Form VCES-I, which includes an undertaking that the information given in the declaration is correct and complete. Therefore, the Designated Authority should not ask for any other undertaking or declaration beyond what has been prescribed in the Scheme or Rules made there under.

3. In another instance, the Designated Authority has objected to the payment of the first tranche of 50%, payable by 31.12.2013, in installments. It is clarified that the Scheme only prescribes that the declarant would pay a minimum amount of 50% of the tax dues by 31.12.2013. Rest of the payment may be made by 30.6.2014, without any interest, and any amount remaining unpaid on 30.6.2014 shall be paid by 31.12.2014, with interest for the period of delay beyond 30.6.2014. There is no bar to pay these amounts in installments. For example a declarant may pay the 50% amount that he is required to pay by 31.12.2013 in more than one installment. Therefore, payment of 50% “tax dues” in lump-sum may not be insisted to.

4.   In some instances, it has been observed that the Designated Authority has raised frivolous/unnecessary queries as regards the veracity and the manner of calculation of tax dues. While the designated authority may cause arithmetical check as regards the correctness of computation of tax dues, the Scheme does not envisage investigation by the designated authority into the veracity of declaration. Only if the Commissioner has reason to believe that the declaration filed by the declarant is substantially false he may, for reasons to be recorded in writing, serve notice on the declarant requiring him to show cause why he should not pay the tax dues not paid or short-paid.

Yours faithfully,

(S. Jayaprahasam)

Technical Officer (TRU)

Tel. No.: 2309 5547.

 

174/9/2013-Service Tax dated 25-11-2013


The Service Tax Voluntary Compliance Encouragement Scheme – reg. – Dated 25-11-2013 – Service Tax

 

Circular No.174/9/2013 – ST

F.No.B1/19/2013-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

(Tax Research Unit)

North Block

New Delhi, 25th November, 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,

Sub: The Service Tax Voluntary Compliance Encouragement Scheme – reg.

The Service Tax Voluntary Compliance Encouragement Scheme (VCES) has come into effect from 10.5.2013. Most of the issues raised with reference to the Scheme have been clarified by the Board vide circular Nos. 169/4/2013-ST, dated 13.5.2013 and No.170/5/2013-ST, dated 8.8.2013. These clarifications have also been released in the form of FAQs. Attention is also invited to letter F. No. 137/50/2013-ST, dated 22.8.2013 as regards the action to be taken by the field formations for effective implementation of the Scheme. A number of interactive sessions have also been held at various places to ascertain and address the concerns of trade on any aspect of the Scheme.

2. In the recently held interactive sessions at Chennai, Delhi and Mumbai, which were chaired by the Hon’ble Finance Minister, the trade had raised certain queries and also expressed some apprehensions. Most of these issues have already been clarified in the aforementioned circulars/FAQs. Certain issues raised in these interactive sessions, which have not been specifically clarified hitherto or clarified adequately, are discussed and clarified as below.

S.No.

Issue raised

Clarification

1 An instance was brought to notice wherein a declaration was returned probably on the ground that it was incomplete. As has already been directed by the Board, vide the said letter dated 22.8.2013 (para 2.4 of the letter), the designated authority shall ensure that no declaration is returned. In all cases, declaration should be promptly received and duly acknowledged. Request for clarification should be dealt with promptly. Defects in the application, if any, should be explained to the declarant and possible assistance be provided in rectifying these defects. The effort must be to accept a declaration, as far as possible, and recover the arrears of tax.
2 An apprehension was raised that declarations are being considered for rejection under section 106 (2) of the Finance Act, 2013, even though the “tax dues” pertain to an issue or a period which is different from the issue or the period for which inquiry /investigation or audit was pending as on 1.3.2013. Section 106(2) prescribes four conditions that would lead to rejection of declaration, namely,

(a) an inquiry or investigation in respect of a service tax not levied or not paid or short-levied or short-paid has been initiated by way of,-

(i) search of premises under section 82 of theFinance Act,1994 ; or

(ii) issuance of summons under section 14 of the Central Excise Act, 1944; or

(iii) requiring production of accounts, documents or other evidence under theFinance Act,1994 or the rules made there under; or

(b) an audit has been initiated,

and such inquiry, investigation or audit was pending as on the 1st day of March, 2013.

These conditions may be construed strictly and narrowly. The concerned Commissioner may ensure that no declaration is rejected on frivolous grounds or by taking a wider interpretation of the conditions enumerated in section 106 (2). If the issue or the period of inquiry, investigation or audit is identifiable from summons or any other document, the declaration in respect of such period or issue alone will be liable for rejection under the said provision.

Examples:

(1) If an inquiry, investigation or audit, pending as on 1.3.2013 was being carried out for the period from 2008-2011, benefit ofVCES would be eligible in respect of ‘tax dues’ for the year 2012, i.e., period not covered by the inquiry, investigation or audit.

(2) If an inquiry or investigation, pending as on 1.3.2013 was in respect of a specific issue, say renting of immovable property, benefit ofVCES would be eligible in respect of ‘tax dues’ concerning any other issue in respect of which no inquiry or investigation was pending as on 1.3.2013.

It is also reiterated that the designated authority, if he has reasons to believe that the declaration is covered by section 106 (2), shall give a notice of intention to reject the declaration within 30 days of the date of filing of the declaration stating such reasons to reject the declaration. Commissioners should ensure that this time line is followed scrupulously.

3 Whether benefit of VCES would be available in cases where documents like balance sheet, profit and loss account etc. are called for by department in the inquiries of roving nature, while quoting authority of section 14 of the Central Excise Act in a routine manner. The designated authority/ Commissioner concerned may take a view on merit, taking into account the facts and circumstances of each case as to whether the inquiry is of roving nature or whether the provisions ofsection 106 (2) are attracted in such cases.
4 Whether the benefit of the Scheme shall be admissible in respect of any amount covered under the definition of ‘taxes dues’, as defined in the Scheme, if paid by an assesses after the date of the Scheme coming into effect, (i.e., 10.5.2013), but before a declaration is filed Yes, benefit of the Scheme would be available if such amount is declared under the Scheme subsequently, along with the remaining tax dues, if any, provided that Cenvat credit has not been utilized for payment of such amount.

Example:

A person has tax dues of Rs. 10 lakh. He makes a payment of Rs. 2 lakh on 15.5.2013, without making a declaration under VCES. He does not utilize Cenvat credit for paying this amount. Subsequently, he makes declaration underVCES on 1.7.2013. He may declare his tax dues as Rs. 10 lakh. Rs. 2 lakh paid before making the declaration will be considered as payment under VCES.

5 Whether declaration can be made in such case where service tax pertaining to the period covered by the Scheme along with interest has already been paid by the parties, before the Scheme came into effect, so as to get waiver from penalty and other proceedings? As no “tax dues” is pending in such case, declaration cannot be filed under VCES. However, there may be a case for taking a lenient view on the issue of penalties under the provision of the Finance Act, 1994. In this regard attention is invited to section 73 (3)and section 80 of the Finance Act, 1994.

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

Yours sincerely,

(S. Jayaprahasam)

Technical Officer, TRU

Tel: 011-2309 2037

F. No: 137/116/2012- Service Tax dated 22-11-2013


Lowering of the threshold for e-payment to rupees one lakh – Dated 22-11-2013 – Service Tax

 

F. No: 137/116/2012- Service Tax

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

Service Tax Wing

New Delhi the 22nd November, 2013

To

All Chief Commissioners of Central Excise / Customs and Central Excise

Directors General of Service Tax /Central Excise Intelligence /Audit/Systems

All Commissioners of Central Excise/ Customs and Central Excise

All Commissioners of Service Tax

Commissioners LTU Mumbai/Delhi/Bangalore/Chennai/Kolkata

All Additional Directors General Systems

Joint Secretary TRU-I & II

Madam/Sir,

Subject: Lowering of the threshold for e-payment to rupees one lakh

In terms of the proviso to rule 6(2) of the Service Tax Rules, 1994, an assessee who has paid a total service tax of rupees ten lakh or more, including the amount paid by utilisation of CENVAT credit in the preceding financial year, shall deposit the service tax liable to be paid by him electronically, through internet banking. Vide notification number 16/2013- Service Tax dated the 22nd November, 2013, the proviso has been amended to the effect that an assessee who has paid a total of rupees one lakh or more ( including the amount paid by utilising CENVAT) in the preceding financial year , shall have to deposit service tax electronically, through internet banking.

2. A similar amendment to the third proviso to Rule 8(1) of the Central Excise Rules, 2002 has been made vide notification no 15/2013-Central Excise (N.T.) dated 22nd November 2013.

3. Both these notifications shall come into effect from 1st January, 2014.

4. All Chief Commissioners are requested to kindly ensure that trade/ public notices are issued immediately so that all assessees as well as the designated banks are aware of the above changes.

Yours faithfully,

(Rajeev Yadav)

Director (Service Tax)

173/8/2013-ST dated 07-10-2013


Restaurant Service- clarification -regarding – Dated 7-10-2013 – 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.

Yours sincerely,

(S. Jayaprahasam)

Technical Officer, TRU

Tel: 011-2309 2037

 

14/2013 dated 23-09-2013


Standard Operating Procedure for cases under Non-filers Monitoring System (‘NMS’)-regarding. – Order-Instruction – Dated 23-9-2013 – Income Tax

 

INSTRUCTION NO. 14/2013

F. No. 225/153/2013/ITA.II

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

North-Block ITA-II, Division

New Delhi 23th September, 2013

To

All Chief-Commissioners of Income-tax

All Directors-General of Income-tax

Subject: Standard Operating Procedure for cases under Non-filers Monitoring System (‘NMS’)-regarding.

The existing procedure for monitoring cases of ‘Non-filers of IT Returns’ as identified by Director General of Income Tax (System) has been examined by the Board. It is felt that at present cases of Non-Filers are not being uniformly monitored by the Assessing Officers due to lack of consistency in approach in dealing with such cases. Therefore, in order to streamline processing of such cases and to ensure consistency in monitoring NMS cases by the Assessing Officers, the Board, hereby lays down the following Standard Operating Procedure:

1. The Assessing Officer should issue letter to the assessee within 15 days of the case being assigned in NMS, seeking information about the return of income flagged in NMS. Facility to generate letter has been provided in the NMS module of i-taxnet.

2. If the letters is delivered, the Assessing Officer should capture the delivery date in the NMS module.

3. If the letter is not delivered, the Assessing Officer should issue letter to the alternate addresses of the assessee available in the Online Monitoring System or any other address available with the Assessing Officer through field enquiries or otherwise. All addresses used in IT Return, AIR, CIB databases have been made available to the Assessing Officer in the Online Monitoring System to assist the field formations in identification current address of the taxpayer.

4. If the returns is received, the assessing officer should capture the details in AST within 15 days of filing of the return. If the assessee informs that paper return has already been filed which was not captured in AST, the details of return should be entered in the AST within 15 days of receiving such information. E-filed returns will be automatically pushed to NMS.

5. If no return is required to be filed in the case (non resident etc.), the Assessing Officer should mark “No return is required” and mention reason for the same in NMS which needs to be confirmed by Range head.

6. If the Assessing Officer is not able to serve the letter and identify the taxpayer, assessing officer should mark the assessee “Assessee not traceable” in NMS which needs to be confirmed by Range head.

7. In cases where the assessee has been identified and no return has been filed within 30 days of the time given in the letter, the Assessing Officer should consider initiation of proceedings u/s 142(1)148 in AST.

8. The cases will be processed every week by the Directorate of Systems and will be marked as closed in NMS if one of the following actions are taken for A.Yr.’s 2010-11, 2011-12 and 2012-13:

a) Details of return are available in AST

b) Notice u/s 142(1) or 148 has been issued in AST

c) “No return is required” is marked by the Assessing Officer and confirmed by Range head.

I am further directed to suite that the above be brought to notice of all officers working under your jurisdiction for necessary and strict compliance.

(Rohit Garg)

Deputy Secretary Government of India

 

172/7/2013 – ST dated 19-09-2013


Education services – clarification — reg. – Dated 19-9-2013 – Service Tax

 

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:

1.   Private Schools Correspondents Confederation, Madurai.

2.   Tamil Nadu Nursery, Primary, matriculation and Higher Secondary Schools Association, Chennai.

3.   Punjab Association, Chennai.

4.   Association of Self financing Universities of Rajasthan

5.   Unaided Schools’ Forum, Mumbai.

6.   Vedavalli Vidyalaya, Wallajapet.

7.   Independent Schools Associations, Chandigarh.

8.   Mother Teresa Public School, New Delhi.

9.   BVM Global, Chennai.

10.  Sastra University, Tanjavur.

11.  HLC International, Chennai.

12.  Sodexo Food Solutions, Mumbai.

13.  Federation of Associations of Maharastra, Mumbai.

2. The matter is covered by two provisions of the Finance Act, 1994. Section 66D of theFinance 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.

(J.M.Kennedy)

Director, TRU

Tel: 011-23092634

E-mail: jm.kennedy@nic.in

 

171/6/2013-Service Tax dated 17-09-2013


Guidelines for arrest and bail in relation to offences punishable under the Finance Act, 1994 – Dated 17-9-2013 – Service Tax

 

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 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.

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 all officers 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)

 

Exemption Order 01/2013-ST dated 17-09-2013


Ad-hoc exemption order for taxable service provided by the hotel or restaurant in the flood affected State of Uttarakhand. – Dated 17-9-2013 – Service Tax

 

F. No. 354/182/2013-TRU

Government of India

Ministry of Finance

Department of Revenue

Tax Research Unit

New Delhi,   17th September, 2013

AD-HOC EXEMPTION ORDER NO. 1/1/2013

Whereas the recent floods and landslides has caused extensive damage in the State of Uttarakhand and has adversely affected the life of the common man in the state. There is a need to provide support to ensure sustenance for the local population by revival of the hospitality industry;

And whereas taxable services provided in the State of Uttarakhand are chargeable to service tax;

Now therefore, in exercise of the powers conferred by sub-section (2) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do and that there are circumstances of exceptional nature as mentioned above, hereby exempts the following taxable service provided to any person in the State of Uttarakhand, from the whole of service tax leviable thereon undersection 66B of the Finance Act, 1994 (32 of 1994), namely:-

i. Services by way of renting of a room in a hotel, inn, guest house, club, campsite or other commercial place meant for residential or lodging purposes;

ii. Services provided in relation to serving of food or beverages by a restaurant, eating joint or mess

This exemption order is applicable for the above mentioned taxable services provided during the period 17th September, 2013 to 31st March, 2014.

(Raj Kumar Digvijay)

Under Secretary to the Government of India

 

04/2013-Service Tax dated 30-08-2013


F.No.137/99/2011-Service Tax

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

New Delhi, dated the 30th August, 2013

Order No: 4/2013-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 theForm ST-3 for the period from 1st October 2012 to 31st March 2013, from 31st August, 2013 to 10th September, 2013.

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

“ Difficulties have been faced by assessees in uploading the offline utilities”.

Himani Bhayana

Under Secretary (Service Tax)

Central Board of Excise and Customs

To

All Chief Commissioners of Central Excise / Customs and Central Excise

Directors General of Service Tax /Central Excise Intelligence /Audit/Systems All Commissioners of Central Excise/ Customs and Central Excise

All Commissioners of Service Tax

All Commissioners LTU

All Additional Directors General Systems

170/5 /2013-ST dated 08-08-2013


Circular No. 170/5 /2013 – ST

F. No. B1/19/2013-TRU (Pt)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Tax Research Unit

New Delhi, dated the 8th August, 2013

To,

Chief Commissioners of Central Excise and Customs (All),

Director General (Service Tax), Director General (Systems),

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: The Service Tax Voluntary Compliance Encouragement Scheme – clarifications regarding.

The Service Tax Voluntary Compliance Encouragement Scheme (VCES) has come into effect from 10.5.2013. Some of the issues raised with reference to the Scheme have been clarified by the Board vide circular No. 169/4/2013-ST, dated 13.5.2013. Subsequently, references have been received by the Board seeking further clarifications as regards the scope and applicability of the Scheme.

2. The issues have been examined and clarifications thereto are as follows:

S No.

Issues

Clarification

1

Whether the communications, wherein department has sought information of roving nature from potential taxpayer regarding their business activities without seeking any documents from such person or calling for his presence, while quoting the authority of section 14of the Central Excise Act, 1944,would attract the provision ofsection 106 (2) (a)?
Attention is invited to clarification issued at S. No. 4 of the circular No. 169/4/2013–ST, dated 13.5.2013, as regards the scope ofsection 106 (2) (a) of the Finance Act, 2013, wherein it has been clarified that the provision of section 106 (2)(a)(iii) shall be attracted only in such cases where accounts, documents or other evidence are requisitioned by the authorized officer from the declarant under the authority of a statutoryprovision. 

A communication of the nature as mentioned in the previous column would not attract the provision of section 106 (2)(a)even though the authority of section 14 of the Central Excise Act may have been quoted therein.

2

An assessee has two units at two different locations, say Mumbai and Ahmedabad. Both are separately registered.   The Mumbai unit has received a Show Cause Notice for non-payment of tax on a revenue stream but the Ahmedabad unit has not. Whether the Ahmedabad unit is eligible for VCES? Two separate service tax registrations are two distinct assessees for the purposes of service tax levy. Therefore, eligibility for availing of the Scheme is to be determined accordingly. The unit that has not been issued a show cause notice shall be eligible to make a declaration under the Scheme.

3

Whether a declaration can be made under the Scheme in respect of CENVAT credit wrongly utilized for payment of service tax? Any service tax that has been paid utilizing the irregular credit, amounts to non-payment of service tax. Therefore such service tax amount is covered under the definition of “tax dues”.

4

Whether a party, against whom an inquiry, investigation or audit has been initiated after 1.3.2013 (the cutoff date) can make a declaration under the Scheme? Yes. There is no bar from filing of declaration in such cases.

 

 

5

There was a default and a Show Cause Notice was issued for the period prior to the period covered by the Scheme, i.e. before Oct 2007. Whether declaration can be filed for default on the same issue for the subsequent period? In the context of the Scheme, the relevant period is from Oct 2007 to Dec 2012. Therefore, the 2nd proviso to section 106 (1) shall be attracted only in such cases where a show cause notice or order of determination has been issued for the period from Oct 2007 to Dec 2012. Accordingly, issuance of a show cause notice or order of determination for any period prior to Oct 2007, on an issue, would not make a person ineligible to make a declaration under the Scheme on the same issue for the period covered by the Scheme.     Therefore, declaration can be made under VCES.

6

In a case where the assessee has been audited and an audit para has been issued, whether the assessee can declare liability on an issue which is not a part of the audit para, under the VCES 2013? Yes, declarant can declare the “tax dues” concerning an issue which is not a part of the audit para.

7

Whether a person, who has paid service tax for a particular period but failed to file return, can take the benefit of VCES Scheme so as to avoid payment of penalty for non- filing of return? Under VCES a declaration can be made only in respect of “tax dues”. A case where no tax is pending, but return has not been filed, does not come under the ambit of the Scheme. However, rule 7C of the Service Tax Rules provides for waiver of penalty in deserving cases where return has not been filed and, in such cases, the assessee may seek relief under rule 7C.

8

A person has made part payment of his ‘tax dues’ on any issue before the scheme was notified and makes the declaration under VCES for the remaining part of the tax dues. Will he be entitled to the benefit of non-payment of interest/penalty on the tax dues paid by him outside the VCES, i.e., (amount paid prior to VCES)? No. The immunity from interest and penalty is only for “tax dues” declared under VCES.

If any “tax dues” have been paid prior to the enactment of the scheme, any liability of interest or penalty thereon shall be adjudicated as per the provisions of Chapter V of the Finance Act, 1994 and paid accordingly.

9

Whether an assessee, who, during a part of the period covered by the Scheme, is in dispute on an issue with the department under an erstwhile provision of law, can declare his liability under the amended provisions, while continuing to litigate the outstanding liability under the erstwhile provision on the issue? In terms of the second proviso to section 106 (1), where a notice or order of determination has been issued to a person in respect of any issue, no declaration shall be made by such person in respect of “tax dues” on the same issue for subsequent period. Therefore, if an issue is being litigated for a part of the period covered by the Scheme, i.e., Oct, 2007 to Dec 2012, no declaration can be filed under VCES in terms of the said proviso on the same issue for the subsequent period.

10

Whether upon filing a declaration a declarant realizes that the declaration filed by him was incorrect by mistake? Can he file an amended declaration? The declarant is expected to declare his tax dues correctly. In case the mistake is discovered suo-moto by the declarant himself, he may approach the designated authority, who, after taking into account the overall facts of the case may allow amendments to be made in the declaration, provided that the amended declaration is furnished by declarant before the cut off date for filing of declaration, i.e., 31.12.2013.

11

What is the consequence if the designated authority does not issue an acknowledgement within seven working days of filing of declaration? Whether the declarant can start making payment of the tax dues even if acknowledgement is not issued? Department would ensure that the acknowledgement is issued in seven working days from the date of filing of the declaration. It may however be noted that payment of tax dues under the Scheme is not linked to the issuance of an acknowledgement. The declarant can pay tax dues even before the acknowledgement is issued by the department.

12

Whether declarant will be given an opportunity to be heard and explain his cases before the rejection of a declaration under section 106(2) by the designated authority? Yes. In terms of section 106 (2) of theFinance Act, 2013, the designated authority shall, by an order, and for reasons to be recorded in writing, reject a declaration if any inquiry/investigation or audit was pending against the declarant as on the cutoff date, i.e., 1.3.2013. An order under this section shall be passed following the principles of natural justice.

To allay any apprehension of undue delays and uncertainty, it is clarified that the designated authority, if he has reasons to believe that the declaration is covered bysection 106 (2), shall give a notice of intention to reject the declaration within 30 days of the date of filing of the declaration stating the reasons for the intention to reject the declaration. For declarations already filed, the said period of 30 days would apply from the date of this circular.

The declarant shall be given an opportunity to be heard before any order is passed by the designated authority.

13

What is the appeal mechanism against the order of the designated authority whereby he rejects the declaration under section 106 (2) of the Finance Act, 2013? The Scheme does not have a statutory provision for filing of appeal against the order for rejection of declaration undersection 106 (2) by the designated authority.

14

A declarant pays a certain amount under the Scheme and subsequently his declaration is rejected. Would the amount so paid by him be adjusted against his liability that may be determined by the department? The amount so paid can be adjusted against the liability that is determined by the department.

15

Section 111 prescribes that where the Commissioner of Central Excise has reasons to believe that the declaration made by the declarant was ‘substantially false’, he may serve a notice on the declarant in respect of such declaration. However, what constitutes a ‘substantially false’ declaration has not been specified.

 

The Commissioner would, in the overall facts of the case, taking into account the reasons he has to believe, take a judicious view as to whether a declaration is ‘substantially false’. It is not feasible to define the term “substantially false” in precise terms.   The proceeding undersection 111 would be initiated in accordance with the principles of natural justice.

To illustrate, a declarant has declared his “tax dues” as Rs. 25 lakh. However, Commissioner has specific information that declaration has been made only for part liability, and the actual “tax dues”   are Rs. 50 lakh. This declaration would fall in the category of “substantially false”.

This example is only illustrative.

16

What is the consequence if a declarant fails to pay atleast 50% of declared amount of tax dues by the 31st Dec 2013? One of the conditions of the Scheme [section 107 (3)] is that the declarant shall pay atleast an amount equal to 50% of the declared tax dues under the Scheme, on or before the 31.12.2013. Therefore, if the declarant fails to pay atleast 50% of the declared tax dues by 31st Dec, 2013, he would not be eligible to avail of the benefit of the scheme.

17

Whether the CENVAT credit is admissible on the inputs/input services used for provision of output service in respect of which declaration has been made under VCES for payment of any tax liability outside the VCES?

 

The VCES Rules 2013 prescribe that CENVAT credit cannot be utilized for payment of “tax dues” under the Scheme. Accordingly the “tax dues” under the Scheme shall be paid in cash.

The admissibility of CENVAT credit on any inputs and input services used for provision of output service in respect of which declaration has been made shall continue to be governed by the provisions of the Cenvat Credit Rules, 2004.

18

(a) Whether the tax dues amount paid under VCES would be eligible as CENVAT credit to the recipient of service under a supplementary invoice?

 

(b) Whether cenvat credit would be admissible to the person who pays tax dues under VCES as service recipient under reverse charge mechanism?

 

Rule 6(2) of the Service Tax Voluntary Compliance Encouragement Rules, 2013, prescribes that CENVAT credit cannot be utilized for payment of “tax dues” under the Scheme. Except this condition, all issues relating to admissibility of CENVAT credit are to be determined in terms of the provisions of the Cenvat Credit Rules.

As regards admissibility of CENVAT credit in situations covered under part (a) and (b), attention is invited to rule 9(1)(bb) and 9(1)(e) respectively of the Cenvat Credit Rules.

19

In terms of section 106 (2)(b), if a declaration made by a person against whom an audit has been initiated and where such audit is pending, then the designated authority shall by an order and for reasons to be recorded in writing, reject such declaration. As the audit process may involve several stages, it may be indicated as to what event would constitute,-

(i) initiation of audit; and

(ii) culmination of audit.

Initiation of audit: For the purposes ofVCES, the date of the visit of auditors to the unit of the taxpayer would be taken as the date of initiation of audit. A register is maintained of all visits for audit purposes.

Culmination of audit: The audit process may culminate in any of the following manner.-

(i) Closure of audit file if no discrepancy is found in audit;

(ii) Closure of audit para by the Monitoring Committee Meeting (MCM);

(iii)   Approval of audit para by MCM and payment of amount involved therein by the party in terms of the provisions of theFinance Act, 1994;

(iv)   Approval of audit para by MCM, and issuance of SCN, if party does not agree to the para so raised.

The audit culminates at a point when the audit paras raised are settled in any manner as stated above.

The pendency of audit as on 1.3.2013 means an audit that has been initiated before 1.3.2013 but has not culminated as on 1.3.2013.

3. Trade Notice/Public Notice may be issued to the field formations and tax payers.

Please acknowledge receipt of this Circular.

Hindi version follows.

Yours sincerely,

(S. Jayaprahasam)

Technical Officer, TRU

Tel: 011-2309 2037

 

169/4/2013-ST dated 13-05-2013


Circular No. 169/4 /2013 – ST

F. No. B1/19/2013-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Tax Research Unit

New Delhi, dated the 13th May, 2013

To,

Chief Commissioners of Central Excise and Customs (All)

Director General (Service Tax), Director General (Systems)

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,

Sub: The Service Tax Voluntary Compliance Encouragement Scheme-clarifications regarding.

The Service Tax Voluntary Compliance Encouragement Scheme (VCES) has come into effect upon enactment of the Finance Bill 2013 on the 10th May, 2013. The Service Tax Voluntary Compliance Encouragement Rules, 2013 has been issued to bring into effect the Scheme. Some references have been received seeking clarification as regards the scope and applicability of the Scheme.

2. The issues have been examined and clarifications thereto are as follows:

S. No. Issues Clarification
1 Whether a person who has not obtained service tax registration so far can make a declaration under VCES? Any person who has tax dues to declare can make a declaration in terms of the provisions of VCES. If such person does not already have a service tax registration he will be required to take registration before making such declaration.
2 Whether a declarant shall get immunity from payment of late fee/penalty for having not taken registration earlier or not filed the return or for delay in filing of return. Yes. It has been provided in VCES that, beside interest and penalty, immunity would also be available from any other proceeding under the Finance Act, 1994and Rules made thereunder.
3 Whether an assessee to whom show cause notice or order of determination has been issued can file declaration in respect of tax dues which are not covered by such SCN or order of determination? In terms of section 106 (1) of the Finance Act, 2013 and second proviso thereto, the tax dues in respect of which any show cause notice or order of determination under section 72, section 73 or section 73A has been issued or which pertains to the same issue for the subsequent period are excluded from the ambit of the Scheme. Any other tax dues could be declared under the Scheme subject to the other provisions of the Scheme.
4. What is the scope of section 106 (2)(a)(iii)?

Whether a communication from department seeking general information from the declarant would lead to invoking ofsection 106 (2) (a)(iii) for rejection of declaration under the said section?

Section 106 (2) (a)(iii) of the Finance Act, 2013 provides for rejection of declaration if such declaration is made by a person against whom an inquiry or investigation in respect of service tax not levied or not paid or short-levied or short paid, has been initiated by way of requiring production of accounts, documents or other evidence under the chapter or the rules made thereunder, and such inquiry or investigation is pending as on the 1st day of March, 2013.

The relevant provisions, beside section 14of the Central Excise Act as made applicable to service tax vide section 83 of the Finance Act,1994, under which accounts, documents or other evidences can be requisitioned by the Central Excise Officer for the purposes of inquiry or investigation, are as follows,-

(i) Section 72 of the Act envisages requisition of documents and evidences by the Central Excise Officer if any person liable to pay service tax fails to furnish the return or having made a return fails to assess the tax in accordance with the provision of the Chapter or rules made thereunder.

(ii) Rule 5A of the Service Tax Rules, 1994prescribes for requisition of specified documents by an officer authorised by the Commissioner for the purposes specified therein.

The provision of section 106 (2)(a)(iii) shall be attracted only in such cases where accounts, documents or other evidences are requisitioned by the authorised officer from the declarant under the authority of any of the above stated statutory provisions and the inquiry so initiated against the declarant is pending as on the 1st day of March, 2013.

No other communication from the department would attract the provisions ofsection 106 (2)(a)(iii) and thus would not lead to rejection of the declaration.

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

Yours sincerely

(S. Jayaprahasam)

Technical Officer, TRU

Tel: 011-2309 2037

 

03/2013-Service Tax dated 23-04-2013


F.No.137/99/2011-Service Tax

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

Order No: 03/2013-Service Tax

New Delhi, dated the 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 1st October 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”.

Himani Bhayana

Under Secretary (Service Tax)

Central Board of Excise and Customs

To

All Chief Commissioners of Central Excise / Customs and Central Excise

Directors General of Service Tax /Central Excise Intelligence /Audit/Systems All Commissioners of Central Excise/ Customs and Central Excise

All Commissioners of Service Tax

All Commissioners LTU

All Additional Directors General Systems

168/3/2013-ST dated 15-04-2013


Circular No. 168/3 /2013 – ST

F. No. 356/2/2013-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Tax Research Unit

North Block

New Delhi, 15th April, 2013

To,

Chief Commissioners of Central Excise and Customs (All),

Director General (Service Tax), Director General(Systems), 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: Tax on service provided by way of erection of pandal or shamiana – regarding.

Several representations have been received seeking clarification on the levy of service tax on the activity of preparation of place for organizing event or function by way of erection/laying of pandal and shamiana. The doubt that has been raised is that this may be a transaction involving “transfer of right to use goods” and hence deemed sale.

2. The issue has been examined. “Service” defined in section 65B (44) of the Finance Act, 1994, includes a ‘declared service’. Activity by way of erection of pandal or shamiana is a declared service, under section 66E B(f). The process of erection of Pandal or shamiana is a reasonably specialized job and is carried out by the supplier with the help of his own labour. In addition to the erection of pandal or shamiana the service is generally coupled with other services like supply of crockery, furniture, sound system, lighting arrangements, etc.

3. For a transaction to be regarded as “transfer of right to use goods”, the transfer has to be coupled with possession. Andhra Pradesh High Court in the case of Rashtriya Ispat Nigam Ltd. Vs. CTO [1990 77 STC 182] = [1989 (12) TMI 325 - ANDHRA PRADESH HIGH COURT] held that since the effective control and possession was with the supplier, there is no transfer of right to use. This decision of the Andhra Pradesh High Court was upheld by the Supreme Court subsequently [2002] 126 STC 0114 = 2002 (3) TMI 705 – SUPREME COURT OF INDIA. In the matter of Harbans Lal vs. State of Haryana – [1993] 088 STC 0357  [Punjab and Haryana High Court] =[1992 (2) TMI 321 - PUNJAB AND HARYANA HIGH COURT], a view was taken that if pandal, is given to the customers for use only after having been erected, then it is not transfer of right to use goods.

4. In the case of BSNL Vs. UOI [2006] 3 STT 245 = [ 2006 (3) TMI 1 - Supreme court ] Hon’ble Supreme Court held that to constitute the transaction for the transfer of the right to use the goods, the transaction must have the following attributes:-

a. There must be goods available for delivery;

b. There must be a consensus ad idem as to the identity of the goods;

c.   The transferee should have a legal right to use the goods and, consequently, all legal consequences of such use including any permissions or licenses required therefor should be available to the transferee;

d. For the period during which the transferee has such legal right, it has to be the exclusion of the transferor : this is the necessary concomitant or the plain language of the statute, viz., a “transfer of the right to use” and not merely a license to use the goods:

e. Having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again transfer the same right to others.

5. Applying the ratio of above judgments and the test formulated by Hon’ble Supreme Court, the activity of providing pandal and shamiana along with erection thereof and other incidental activities do not amount to transfer of right to use goods. It is a service of preparation of a place to hold a function or event. Effective possession and control over the pandal or shamiana remains with the service provider, even after the erection is complete and the specially made–up space for temporary use handed over to the customer.

6. Accordingly services provided by way of erection of pandal or shamiana would attract the levy of service tax.

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

(S. Jayaprahasam)

Technical Officer, TRU

Tel: 011-2309 2037

02/2013 dated 12-04-2013


F.No.137/99/2011-Service Tax

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

New Delhi, dated the 12th April, 2013

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.”

Himani Bhayana

Under Secretary (Service Tax)

Central Board of Excise and Customs

To

All Chief Commissioners of Central Excise / Customs and Central Excise

Directors General of Service Tax /Central Excise Intelligence /Audit/Systems All Commissioners of Central Excise/ Customs and Central Excise

All Commissioners of Service Tax

All Commissioners LTU

All Additional Directors General Systems

01/2013 dated 06-03-2013


F.No.137/99/2011-Service Tax

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

ORDER NO. 01/2013

(Service Tax Wing)

New Delhi, dated the 6th March, 2013

Sub: Date extension for service tax return for period July, 2012 To Sept, 2012 from 25thMarch to 15th 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 1 st July 2012 to 30th September 2012, from 25th March, 2013 to 15th April, 2013.

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

a) The Form ST-3 is expected to be available on ACES around 20th March, 2013.

b) This will result in all the assessees attempting to file their returns in a short time period, which may result in problems in the computer network and further delay and inconvenience to the assessees.

Himani Bhayana

Under Secretary (Service Tax)

Central Board of Excise and Customs

 To

All Chief Commissioners of Central Excise / Customs and Central Excise

Directors General of Service Tax /Central Excise Intelligence /Audit/Systems All Commissioners of Central Excise/ Customs and Central Excise

All Commissioners of Service Tax

All Commissioners LTU

All Additional Directors General Systems

D.O.F. No. 334/3/2013-TRU dated 28-02-2013


Government of India

Ministry of Finance

Department of revenue

Tax Research Unit

***

V. K. Garg

Joint Secretary (Tax Research Unit)

Tel: 011-23093027; Fax: 011-23093037

e-mail: garg.vk@nic.in

D.O.F. No. 334/3/2013-TRU

New Delhi, dated February 28, 2013.

Dear Sir/ Madam,

Subject: Union Budget 2013: Changes in Service Tax-reg.

The service tax changes in Budget 2013 are largely guided by the objectives to provide a stable tax regime and improve voluntary compliance. The important changes are as follows:

A. Legislative changes

Following changes are being made in the Finance Act, 1994:

1. There are following changes in relation to the negative list:

(i) The definition of approved vocational course in section 65B(11) is being proposed to be changed to:

a) include courses run by an industrial training institute or an industrial training centre affiliated to State Council for Vocational Training; and

b) delete clause (iii) dealing with courses run by an institute affiliated to the National Skill Development Corporation.

(ii) The definition of “process amounting to manufacture or production” in section 65B(40) is being expanded to include processes under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955

(iii) The negative list entry in sub-clause (i) of clause (d) of section 66D is being modified by deleting the word “seed”. This will allow the benefit to all other testings in relation to “agriculture” or “agricultural produce”.

2. The provisions of section 73 are being modified such that if the grounds for invoking extended period are not sustained, the Central Excise officer will be able to determine the demand for the shorter period of eighteen months.

3. The penalty under section 77(a) is being restricted to Rs. 10,000. A new section 78A is also being introduced to impose penalty on directors and officials of the company for specified offences in cases of willful actions.

New provisions are being introduced to prescribe revised punishments for offences in section 89, make certain offences cognizable and others non-cognizable and bailable. The Policy wing of the Board will be issuing detailed instructions in due course.

These changes will come into force when the Finance Bill, 2013 is enacted.

B. Exemptions

4. The following changes are being made w.e.f April 1, 2013 in the exemption notification number 25/2012-ST dated June 20, 2012:

(i) Exemption by way of auxiliary educational services and renting of immovable property by (and not to) specified educational institutes under S. No 9 will not be available;

(ii) The benefit of exemption under S. No 15 of the notification in relation to copyrights for cinematograph films will now be available only to films exhibited in a cinema hall or theatre. This will allow service providers to pass on input tax credits to taxable end-users;

(iii) Exemption under S. No 19 will now be available only to non air-conditioned (non-centrally air-heated) restaurants; the dual requirement earlier that it should also have a license to serve alcohol is being done away with;

(iv) The exemptions available to transportation of goods by railway and vessel under S. No 20 and services provided by a goods transportation agency (GTA) under S. No.21 are being harmonized. Thus exemption to transportation of petroleum and petroleum products, postal mails or mail bags and household effects by railways and vessels will not be available while the benefit of transportation of agricultural produce, foodstuffs, relief materials for specified purposes, chemical fertilizers and oilcakes, registered newspapers or magazines and defence equipments will be available to GTAs;

(v) The exemptions under S. No 24 for vehicle parking to general public and S. No 25 for repair or maintenance of government aircrafts are being withdrawn; and

(vi) The definition of “charitable activities” is being changed by deleting the portion listed in sub-clause (v) of clause (k). Thus the benefit to charities providing services for advancement of “any other object of general public utility” up to Rs. 25 Lakh will not be available. However the threshold exemption will continue to be available up to Rs. 10 lakh.

C. Abatement

5. The abatement available under S. No 12 of notification 26/2012-ST dated June 20, 2012 for construction of a complex, building, civil structures etc. is being reduced from the existing 75% to 70% for construction other than residential properties having a carpet area up to 2000 sq ft or where the amount charged is less than Rs. 1 crore. This will come into effect from March 1, 2013.

D. Voluntary Compliance Encouragement Scheme, 2013 (VCES)

6.1 A new scheme is proposed to be introduced to encourage voluntary compliance with the following main features:

(i) The scheme can be availed of by non-filers or stop-filers or persons who have not made a truthful declaration in their return. However it will not be applicable to persons against whom any inquiry or investigation is pending by the issue of search warrant or summon or by way of audit;

(ii) The defaulter will be required to make a truthful declaration of all his pending tax dues (from October1, 2007 to December 31, 2012) and pay at least half of that before December 31, 2013; remaining half to be paid by:

(a) June 30, 2014 without interest; or

(b) By December 31, 2014 with interest from July 1, 2014 onwards;

(iii) On compliance with all the requirements the person will have immunity from interest (as specified), penalties and other proceedings;

6.2 The scheme will come into force when the Finance Bill is enacted. It is clarified that the tax-payers will need to settle their dues for the period after December 31, 2012 under the present law.

E. Advance Ruling Authority

7. The benefit of Advance Ruling Authority is being extended to resident public limited companies.

F. Disclaimer and requests

8. This letter is meant to provide a quick glimpse of the important changes and should not be used in any quasi-judicial or judicial proceedings, where only the relevant legal texts need to be referred to.

9. Despite best efforts it is possible that you may find some unintended errors, or omissions. I shall be extremely thankful if you could point out them to me or to my colleagues at the earliest.

10. Please also feel free to contact us in case of any doubt, difficulty, or suggestion relating to interpretation or implementation of the provisions mentioned above. You may also like to contact Shri J.M. Kennedy, Director (TRU) [Tel: 23092634; e-mail: jm.kennedy@nic.in] or Shri G.D. Lohani, Director [Tel: 23092374; e-mail: gd.lohani@nic.in] or Shri Sachin Jain, O.S.D. [Tel: 23092374; e-mail: sachinjainirs@yahoo.com].

11. I express my sincere thanks for your suggestions which provided us rare perspectives on many issues and helped us carry out our task with greater precision.

Sincere regards,

Yours sincerely

(V. K. Garg)

To:

All Chief Commissioners/ Directors General

All Commissioners of Service Tax

All Commissioners of Central Excise

F. No. 137/98/2006-CX-4 ( Part-I) dated 22-02-2013


F. No. 137/98/2006-CX-4 ( Part-I)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

(Service Tax Wing)

Room No 263A North Block

New Delhi, 22nd February 2013

To

All Chief Commissioners of Central Excise / Customs and Central Excise

Directors General of Service Tax /Central Excise Intelligence /Audit/Systems;

All Commissioners of Central Excise/ Customs and Central Excise

All Commissioners of Service Tax

Commissioners LTU Mumbai/Delhi

All Additional Directors General Systems

Madam/Sir,

Subject: Revised Form ST 3

Attention is invited to this office letter dated 28th September 2012 issued from F. No 137//22/2012-Service Tax ( copy of which can be accessed at www.cbec.gov.in) , wherein it was informed , inter alia, that in the ST- 3 return which was due by 25-10-2012, assessees had to provide data only for the period 1-4-2012 to 30-6-2012 . It was also informed therein that data for the period 1-7-2012 to 30-9-2012 would have to be furnished in a return in a revised format and that the revised format of the return and the last date for filing it would be indicated separately.

2.       Data for the remaining portion of the half year ( i.e 1-7-2012 to 30-9-2012 ) can now be furnished by the assessees in the revised Form ST3 , which has been notified videnotification 1/2013 –Service Tax dated 22- 2-2013 . Since ordinarily this would have formed part of the return , the due date of which was 25th October 2012, rule 7(2) of the Service Tax Rules 1994 has also been amended vide the same notification, so as to provide that the last date for filing the return covering the period 1-7-2012 to 30-9-2012 is 25-3-2013. It is clarified that when filing this return, assessees need to fill in data only for the period   1-7-2012 to 30-9-2012.

3.        The paper version has to be notified for legality( reference paragraph 2 above). It must however be borne in mind that in terms of rule 7(3) of the Service Tax Rules 1994, all returns have to be filed electronically. The electronic version, to be completed by the assessee, may therefore differ in certain aspects from the paper version. For example, for certain fields, drop down menus from which an option has to be chosen, will be there in the electronic version but not in the paper version . Similarly provisions in the electronic version to add rows or validate entries cannot be appropriately indicated in the paper version.   The revised Form ST-3 is expected to be available on ACES by the first week of March. However in the event of any delay , the last date will be suitably extended   and adequate time given so   that no inconvenience is caused to the assessees. The assessees are advised to access the ACES website wherein updates will be given.

4.         The objective behind revising the ST-3 form has been to retain the existing structure, which both the assessees and the departmental officers are familiar with, while making some changes required after 1-7-2012.   Assessees are expected to fill in service wise data as before, for effective use of the data available consequent to the restoration of accounting codes. In the interregnum, the assessee might not be able to do so, as duty payment was not required to be service wise. While recognizing this difficulty, assessees are requested to provide service wise data, to the extent possible, for this period also.

5.         The above information may be communicated to departmental officers and assessees. Hindi version to follow.

Yours faithfully,

(S.M. Tata)

Commissioner( Service Tax)

Central Board of Excise and Customs

167/2 /2013 – ST dated 01-01-2013


Circular No.167/2 /2013 – ST

F.No.B-1/2/2010 -TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

Tax Research Unit

153, North Block,

New Delhi, 1st January, 2013

To

Chief Commissioners of Central Excise and Customs (All),

Director General (Service Tax), Director General(Systems),

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: Service tax on services by way of transportation of goods by rail/vessel – transportation of milk – regarding.

          Representation has been received from the Indian Railways seeking clarification as to whether service by way of transportation of milk by rail is covered by Notification No.25/2012-ST dated 20.06.2012, serial number 20(i).

2.         The representation has been examined. The expression ‘foodstuff’ appearing inNotification No.25/2012-ST dated 20.06.2012, serial number 20(i) includes milk. Therefore, it is clarified that the service by way of transportation of milk by rail or a vessel from one place in India to another, is covered by the Notification No.25/2012-ST dated 20.06.2012.

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

(S. Jayaprahasam)

Technical Officer, TRU

Tel: 011-23092037

166/1/2013 -ST dated 01-01-2013


Circular No.166/1/2013 -ST

F.No 354/190/2012- TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Tax Research Unit

*****

Room No 153, North Block, New Delhi

Dated 1st January, 2013

To

Chief Commissioner of Customs and Central Excise (All);

Chief Commissioner of Central Excise & Service Tax (All);

Director General of Service Tax; Director General of Central Excise Intelligence; Director General of Audit;

Commissioner of Customs and Central Excise (All);

Commissioner of Central Excise and Service Tax (All);

Commissioner of Service Tax (All)

Respected Madam/Sir,

Subject: – Clarification in respect of notices/ reminder letters issued for life insurance policies – regarding.

 It has been represented by life insurance companies that in terms of the practice followed, reminder notices/letters are being issued to the policy holders to pay renewal premiums. Such reminder notices only solicit furtherance of service which if accepted by policy holder by payment of premium results in a service.Clarification has been desired whether service tax needs to be paid on the basis of such reminders.

3.         The matter has been examined. Under the Point of Taxation Rules 2011, the point of taxation generally is the date of issue of invoice or receipt of payment whichever is earlier. The invoice mentioned refers to the invoices as issued under Rule 4A of the Service Tax Rules 1994.No tax point arises on account of such reminders.Thus it is clarified that reminder letters/notices for insurance policies not being invoices would not invite levy of service tax. In case of issuance of any invoice, point of taxation shall accordingly be determined.

4.         The above clarification is issued only for life insurance sector.

5.         Trade Notice/Public Notice may be issued to the field formations accordingly.

6.         Please acknowledge the receipt of this circular. Hindi version to follow.

(S.Jayaprahasam)

Technical Officer, TRU

Tel: 011-23092037

16/2012-13 dated 21-12-2012


OFFICE OF COMMISSIONER OF SERVICE TAX-I, MUMBAI.

Tel. 022-22034425. FAX. 022- 22060618, 022-22033056

5th Floor, New C. Excise Bldg., 115, M. K. Road, Churchgate, Mumbai-400 020.

Trade Notice No. 16/2012-13-S.Tax-I

Dated  21.12.2012

Sub:- Direct credit of Refund/ Rebate to the Exporters’ credit by way of  Electronic payment under RTGS/ NEFT facility-reg.

It has been brought to our notice that the present practice of issuing account payee cheques to the refund claimants is cumbersome and it also entails lot of paperwork, including return of cheques due to incomplete address and other clerical errors, leading to considerable delay in realisation of the refund/rebate amounts by the claimants.

2.In order to alleviate these problems, it has been decided to introduce Electronic payment/remittance of sanctioned rebate/refund amounts known as RTGS/NEFT facility offered by State Bank of India, mandatorily for every refund/rebate claim, for crediting the sanctioned refund/rebate claim amounts directly to claimant’s  account with effect from  01.01.2013.

3. For this purpose, the following procedure is prescribed.

(i) For all fresh claims of refund/rebate received after 01.01.2013, the claimants shall provideOne Time Authorisation with claim of refund/rebate filed by the assessee (in duplicate), duly certified by the beneficiary Bank branch authorities, in the enclosed format as Annexure A, at the time of filing such refund/rebate claims, in favour of the jurisdictional Divisional DC/AC. For all subsequent refund/rebate claims, the claimant shall submit self-attested copy of the Authorisation already submitted to the Div. DC/AC. The Authorisation shall be valid for one Financial year and a fresh Authorisation shall be filed alongwith first refund claim filed in the subsequent Financial year.

(ii)  Authorisations filed for each Financial year shall be given a serial number and entered in an Authorisation Register to be maintained in the Division office. In case of any change in the details of Authorisation, new Authorisation, duly certified by the Bank, shall be submitted by the assessee. The Division office shall ensure the correctness of the reference to earlier Authorisation and all details shall be incorporated in the Authorisation Register. Format of Authorization Register is enclosed as Annexure C.

(iii)  In case of pending refund/rebate claims  as on 01.01.2013,  where refund/rebate has not been sanctioned or if sanctioned, has not been paid to the claimant in those cases  also the payment will be made through RTGS/ NEFT facility of State Bank of India.  For this purpose, such Authorisation is to be obtained from such claimants by 15.01.2013.

(iv) All the jurisdictional DC/AC have been authorised to order for payment of refund under the system of Electronic payment of sanctioned rebate/refund amounts through RTGS/NEFT facility, through Authorised Branch of State Bank of India, Mumbai. For this purpose, the jurisdictional DC/AC shall submit a list of sanctioned refund claims in the form of Annexure B and an E.mail copy to the Bank along with a cheque for consolidated refund amount. The Bank after tallying all relevant details shall remit the sanctioned refund amounts to the respective beneficiaries mentioned in the Annexure B, out of the consolidated fund amount on the cheque.

(iv) It is further clarified that bank may charge the refund claimant, the charges for remitting refund amount through RTGS/NEFT and refund claimant would get only the net amount. The jurisdictional Divisional DC/AC shall issue the Refund Order after mentioning the payment/ remittance details i.e. UTR no. in the Refund/ Rebate Order.

(viii) All the Trade Associations are requested to bring the contents of this Trade Notice to the notice of their members in particular and the Trade in general.

(SUSHIL SOLANKI)

COMMISSIONER,

SERVICE TAX-I, MUMBAI.

Encl: As referred above,

F. No. V/ST-I/Tech-II/RamuDeora/656/12

Mumbai, the December, 2012.

Copy to:

1.  The Chief Commr., C. Excise, Mumbai Zone-I

2.  The Chief Commr., C. Excise, Mumbai, Zone-II.

3.  The Director General of Service Tax, Mumbai,

4.  The Commissioner (Service Tax), CBEC, New Delhi,

5.  The Commissioner, Service Tax-II, Mumbai,

6.  The Addl. Commr. (P&E), Churchgate/Addl. Commr. (Audit), Worli/Addl. Commr. (Tribunal & Review), Churchgate, Service Tax-I, Mumbai,

7.  The Asstt./Dy. Commissioner, Service Tax, Mumbai, Div.-I, II, III,

8.  The Asst./Dy. Commr. Audit-I/II/III, Anti-Evasion-I & II, TAR, Adjudication, Legal, Tribunal & Review, Stats, Tech-I (Old Custom House), ACES (for uploading this Trade Notice on website)

9.  The P.A to the Commissioner, Service Tax-I, Mumbai,

10.   The Asst. Gen. Manager, State Bank of India, Churchgate (1821) Branch, “The International”, 16, Maharshi Karve Road, Mumbai-400 020, for information,

11.  As per mailing list,

12.  Notice Board.

13.   Master file.

Note:  The following Text may either be printed on a plain paper with your office address stamp on it or on a letter head of the firm

AUTHORIZATION   (Annexure-A)

To,

The Deputy / Assistant Commissioner,

Division – I /II/III,

Service Tax – I, Mumbai.

Sir,

Subject:- Authorisation for Financial Year-2012-13 –reg.

I/We authorize payment/credit of sanctioned rebate/refund amount for Service Tax for all my rebate/refund claims filed during Financial year 2012-13 at your office through  online  (ACES) refund/rebate  method, directly to my Bank account through RTGS/ NEFT after deduction of applicable RTGS/NEFT charges, as per RBI guidelines. In case of any remittance made by mistake or duplicated, I/we undertake to re-credit back to the Department. I hereby declare following details for the purpose.

REGISTRATION DETAILS

Name                                                    :    M/s.

                                                              —————————————————————–

15 Digit Service Tax

Registration No.   :                           ————————————————–

Constitution of the business: Proprietorship Partnership   LLP   

                                                     Private Ltd.      Public Ltd.        other  

APPLICANT FIRM DETAIL

Address                               :

                                —————————————————————-

                                —————————————————————-

Telephone No. : —————————————————————-    Mobile No. : —————————————————————-

Email ID            : —————————————————————-

BANK ACCOUNT DETAILS OF THE REGISTERED ASSESSEE TO WHICH SANCTIONED REFUND AMOUNT IS TO BE DEPOSITED.

Name of The Bank  
Branch  
Bank Account No.  
IFCS Code  
Type of Bank Account Saving A/c Current A/c
  • I/We fully understand that any information furnished in the application if found incorrect or false will render me/us liable for any penal action or other consequences as may be prescribed in law or otherwise warranted.
Place  :          Signature   :
Date  :           Name   :

 

Designation:

[Proprietor/Partner/Director/Authorized Signatory. In case of Authorized Signatory,

Authorization/Power of Attorney in favor of the Auth.  Signatory to be submitted)] which would also be verified by the Bank.

 

Enclosed: (1) Photocopy of cross cancelled blank Cheque- YES/ NO.

(2) Authorization/POA in favor of Auth.signatory-YES/ NO.

BANK VERIFICATION

Certified that above details are tallied with Bank records and found correct.

[In case the Authorisation is signed by Authorised Signatory, beneficiary bank branch shall verify and confirm that said Authorised Signatory is also authorised by the firm/company to transact in the Bank.]

Signature  :- _______________________

Name    :- _______________________

(of the beneficiary Bank Branch Manager  along with Office seal)

Note: -

  • All information shall be mandatorily filled/provided.

Annexure B

Annexure C

Format of Authorization Register

(To be maintained by the division office)

FINANCIAL YEAR —2012-13

1.  Sr. No. ,

2.  Name of the refund claimant i.e. beneficiary,

3.  S. Tax registration No.,

4.  Address,

5.  Name and Branch of the beneficiary Bank,

6.  Beneficiary’s account no.,

7.  IFSC Code no.

8.  E.mail ID,

9.  Date of submission of the Authorization,

10.  Whether photocopy of cancelled blank cheque submitted by the claimant and details compared with what has been given in the Application,

11.  Name of the Bank Officer certifying the Bank account details,

12.  Remarks.

F.No.01(32)/R(Judl.)/CESTAT/2012 dated 21-12-2012


F.No.01(32)/R(Judl.)/CESTAT/2012

CUSTOM, EXCISE &SERVICE TAX APPELLATE TRIBUNAL

WEST BLOCK-2 R.K.PURAM, New Delhi-110066

Dated : 21.12.2012

CIRCULAR

The Hon’ble Vice President, CESTAT has ordered as under:-

1. Hence forth appeals and stay applications are to be listed in the cause list chronologically age-wise.

2. Assistant Registrars of the concern Benches will ensure that at least 20 stay applications and 15 regular matters are listed in cause list chronologically.

3. Appeal remanded by Hon’ble Supreme Court and the High Court should be listed on the top of the cause list chronologically.

4. Where out of turn hearing has been granted in any Bench in respect of any appeal the said appeal be listed in the cause list accordingly following chronological order unless the Bench has directed the same to be placed on top of the list.

5. The Bunch Appeals involving same issue will be treated as one case.

F.No.334/6/2012-TRU dated 06-11-2012


BY FAX /SPEED POST ONLY

F.No.334/6/2012-TRU

Government of India

Ministry of Finance

Department of Revenue

Tax Research Unit

***

 

New Delhi, dated the 6th November, 2012

To

Trade and Industry Associations

Subject: Suggestions from the Industry and Trade Associations for Budget 2013-14 regarding changes in direct and indirect taxes.

Sir/Madam,

In the context of formulating the proposals for the Union Budget of 2013-14, the Ministry of Finance would like to be benefited by the suggestions and views of your Association.  You may like to send your suggestions for changes in the duty structure, rates and broadening of tax base on both direct and indirect taxes giving economic justification for the same.

2. Your suggestions and views may be supplemented and justified by relevant statistical information about production, prices, revenue implication of the changes suggested and any other information to support your proposal. It would not be feasible to examine suggestions that are either not clearly explained or which are not supported by adequate justification/ statistics. Further, as regards direct taxes, the government policy is to phase out profit linked deductions and minimizes exemptions; you may take this into consideration while forwarding proposals. The Synopsis of your suggestions could be given in the following format:

Sr.No. Issue Justification

3. Your suggestions and views may be emailed, as word document in the form of separate attachments, in respect of, Indirect Taxes

(1. Customs and Central Excise,

2. Service Tax) to budget-cbec@nic.in. and

3. Direct Tax to ustpl3@nic.in.

Hard copies of the Pre-Budget proposals/ suggestions relating to Customs & Central Excise may be sent to Shri P. K. Mohanty, Joint Secretary (TRU-I), and Service Tax to Shri V K Garg, Joint Secretary (TRU-II), CBEC, while the suggestions relating to  Direct Taxes may be sent to Shri Sunil Gupta, Joint Secretary, Tax Policy and Legislation (TPL), CBDT . It would be appreciated if your views and suggestions reach us by the 23rd November, 2012.

Yours sincerely,

(Prashant Kumar Jha)

Budget Officer (TRU)

Room No.153, North Block

Tel/Fax: 011-23094819

5/2012 dated 06-11-2012


OFFICE OF THE COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX,

N-5, TOWN CENTRE, CIDCO, AURANGABAD-431030

Trade Notice No. 5/2012

(SR. No. 02/Sevottam/2012),

dated 6-11-2012

The Trade, Industry and all stakeholders of the department are informed that the Central Board of Excise and Customs, New Delhi, has formulated Citizen’s charter after consulting representatives from Confederation of Indian Industry, Federation of Indian Chambers of Commerce & Industry, PHD Chamber of Commerce & Industry, Federation of Indian Exporters Association, Quality Council of India, Container Corporation of India, Delhi Customs Clearing Agents Association, the officers and staff associations of the department with vision to provide an efficient and transparent mechanism for collection of indirect taxes and enforcement of cross border controls with a view to encourage voluntary compliance.

2. In order to handle Grievance in a fair, objective and just manner, an internal machinery is required to be set up in this Commissionerate as downward extension to the grievance redressal system. This Commissionerate has established a single window system at the main entrance, to facilitate speedy disposal of grievance and to take the feedback from all the stake holders. This is monitored by the Public Grievance Officer.

3. In the above manner, Public Grievance redressal efforts are taken in terms of timeliness and single window facility to enhance the customer’s satisfaction. Further, as per the commitment made by the Department under the Citizen’s charter the following Grievance Redressal mechanism has been kept in place in this Commissionerate at Aurangabad;

(a) To promptly acknowledge written grievance within 48 hours of receipt of the same and attempt to provide final reply within 30 working days of the receipt to the applicant/complainant.

(b) A Public Grievance Officer has been designated in Aurangabad Commissionerate with whom all complaints and grievances can be taken up. The contact details of the Public Grievance Officer is available in the Commissionerate’s website at www.centralexciseAurangabad.gov.in and their name with phone number and address is displayed at entrances and conspicuous places in the office building of the Commissionerate.

(c)  A Public Grievance Committee has been set up for taking up Common complaints grievances and necessary feedback would be up taken to strengthen Public Grievance Mechanism of the Commissionerate.

4. The grievances of serious nature are closely monitored until their final disposal and grievance redressed is communicated to the applicant. In the process of handling the Public Grievances in Aurangabad Commissionerate, we envisage the following Grievance prone areas, analysis them and recommend measures to eliminate causes of such Grievances. The grievances are primarily divided into three categories;

I. Complaints of corrupt practices against officers

II. Grievances against merits of the decision taken by officers.

III. Delay in decision making by officers

5. For handling complaints against corrupt practices by the officers, the department has a separate vigilance set up called Directorate General of Vigilance handled by Director General. Any complaints of corruption against the officer can be lodged with the D.G. Vigilance at New Delhi or the Zonal units of the Directorate of Vigilance. A complaint handling policy has also been formulated by the Central Board of Excise and Customs. To handle such complaints the Vigilance section of this Commissionerate handles such complaints of this Commissionerate.

6. For redressal of grievances against the merits of a decision taken by an officer, the Central Excise and Customs law itself provides for remedial measures in the form of appeals, revisions etc. Any adjudication order passed by an officer contains a preamble indicating the authority to whom the appeal can be made and the procedure thereof and the details of the mechanism for appeals, revisions the relevant provisions in the Customs and Excise law may be referred to.

7. For other types of grievances including delays in decision making, administrative machinery the Public Grievance officer in this Commissionerate may be contacted/referred to.

7.1 The Additional Commissioner(P &V), Central Excise, Aurangabad has been designated as the Public Grievance Redressal Officer for the Head Quarters Office and the Divisional ACs/DCs have been designated as Public Grievance Redressal Officer for the respective Division Offices under the Commissionerate of Central Excise, Aurangabad, with whom all complaints and grievances can be taken up. The contact details of the Public Grievance Redressal Officer is available in the Commissionerate’s website at www.centralexciseaurangabad.gov.in.

7.2 A Centralised Public Grievance Redress and Monitoring System(CPGRAMS) is already available for the stakeholders to lodge complaints. This system is being monitored by the Commissioner of Customs, Central Excise and Service Tax, Aurangabad himself on a day to day basis and action is initiated without delay. The system is also being monitored at higher levels in the department. Under CPGRAMS, an online acknowledgement along with registration number is received by the complainant immediately on submission. The status of the complaint is also available on the CPGRAMS system. The documented procedure under SEVOTTAM as per CPGRAMS is laid down in SQM 3.2.3 and 3.2.1.11.

8. This Commissionerate of Customs, Central Excise and Service Tax, Aurangabad, has also designated an officer as Public Relations Officer (PRO) who can be approached for seeking information on any technical or administrative matter.

9. It is further informed that for delays in decision making on the part of any officer of this Commissionerate (such as delay in grant of permissions, sanction of refunds, drawback etc.) the aggrieved person is advised to meet the Commissioner and or Additional Commissioners.

10. If any stakeholder is not satisfied with the response of the field officers and he/she still has grievances, he/she could approach the Chief Commissioner of Customs, Central Excise and Service Tax, Nagpur Zone, Nagpur, who is also the appellate authority for such Grievance Redressal.

(KUMAR SANTOSH)

[F. No. VGN (30) 9/INSP/2011]

C.No.IV(16)HQ/Tech/ST/TN/197/2011 dated 02-11-2012


Procedure and documents required in respect of Single/Centralized Registration under Rule 4 of Service Tax Rules, 1994 -Corrigendum/Addendum

Corrigendum/Addendum [C.No.IV(16)HQ/Tech/ST/TN/197/2011],

Dated 2-11-2012

Attention of all trade associations and stake holders is invited to the trade notice no. 16/ST/2012, dated 18-6-2012 issued by the Commissioner of Service Tax vide C.No. IV(16)HQ/Tech/ST/TN/197/2011.

In order to simplify the process of single & centralized registration, the requirements of documents vide Annexures-I & IA have been re-casted.

(Refer Annexures I & IA).

Annexure – (IA)

List of Documents and the check-list for Application of Single Registration

(For fresh single registration)

Sl.No.

Particulars

Yes/No

Page No.

1 Print out of the filled ST-1 form duly signed by the Director/partner/proprietor/authorized person at the end of the application
2 Copy of PAN Card of the assessee
3 Documents Required for the premises for which registration is sought;Proof of Address: Any one of the following.In case of self-owned property, any document like Annual Property tax payment return/receipt showing name of applicant, or copy of sale deed etc. may be provided.

or

In case of a rented premises, Lease License/rent agreement or rent receipt of Registered Co. Op. Housing Society.

or

In any other case, NOC (No objection certificate) from either the owner of property or the person in whose name the rent or lease agreement has been made along with evidence of ownership/tenancy as the case may be.

4 Memorandum of Association/Partnership deed as perCompanies Act, 1956, if applicable.
5 Power of attorney would be required in respect of authorized person(s) by the Partner/Proprietor/Director of the firm. In the case of a company, submit Board Resolution.

Annexure – (I)

List of Documents and the Check-List for Application of Single/Centralised Registration

(For fresh Centralized Registration or conversion from single registration to Centralized Registration)

Sl.No.

Particulars

Yes/No

Page No.

1.

Print out of the filled ST-1 form duly signed by the Director/partner/proprietor/authorized person at the end of the application

2.

Copy of PAN Card of the assessee

3.

Documents Required for new branches and Centralized Registration office which is not registered with Service Tax;a.  List of new branches, which are not registered so far (Name and Address of branches sought to be centrally registered). b.  Name and Address of the place from where centralized accounting /billing is sought to be done.

 c.   Address proof of (a) and (b) above.

(No address proof required for existing branches, for whichST-2 Certificate has been issued, if address remains the same as per the existing ST-2. Address proof is required only for branches and office which are not registered with Service Tax department and where there is any change in address of the branches already registered)

Proof of Address: Any one of the following.

(I) In case of self-owned property, any document like Annual Property tax payment return/receipt showing name of applicant, or copy of sale deed etc. may be provided.

or

(II)  In case of a rented premises. Lease License/rent agreement or rent receipt of Registered Co. Op. Housing Society.

or

Documents Required for the premises for which registration is sought;

Proof of Address: Any one of the following.

In case of self-owned property, any document like Annual Property tax payment return/receipt showing name of applicant, or copy of sale deed etc. may be provided.

or

In case of a rented premises, Lease License/rent agreement or rent receipt of Registered Co. Op. Housing Society.

or

In any other case, NOC (No objection certificate) from either the owner of property or the person in whose name the rent or lease agreement has been made along with evidence of ownership/tenancy as the case may be.

4.

Information with regard to the branches for which single registration has already been taken as per Annexure-II.

5.

Memorandum of Association/Partnership deed as perCompanies Act, 1956, if applicable.

6.

Notarized Affidavit certifying of keeping Centralized accounting or billing

7.

Power of attorney would be required in respect of authorized person(s) by the Partner/Proprietor/Director of the firm. In the case of a company, submit Board Resolution.

F. No. 137/22/2012-Service Tax – dated – 28-09-2012


F. No. 137/22/2012-Service Tax

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

(Service Tax Wing)

Room No 263A North Block,

New Delhi, 28th September, 2012

To

Chief Commissioner of Customs and Central Excise/Central Excise & Service Tax (All)

Directors General of Service Tax/Central Excise Intelligence/Audit/Systems;

Commissioner of Customs and Central Excise/Central Excise and Service Tax/Service Tax (All)

Madam/Sir,

Subject:  Filing of ST-3 only for the period 1st April to 30th June 2012

In terms of sub-rules (1) and (2) of Rule 7 of the Service Tax Rules, 1994, the half yearly return for the period 1st April to 30th September 2012, is to be filed by 25th October, 2012. In the current financial year, an assessee would have had to give data with respect to specific services and the corresponding legal provisions for the period 1-4-2012 to 30-6-2012. The data for the period   1-7-2012 to 30-9-2012, would have been with respect to different services and the corresponding legal provisions. Combination of all these provisions into one return would have made the return complex for   the assessees .

2. I am directed to inform you that it has been decided that assessees have to provide data only for the period 1-4-2012 to 30-6-2012 in the first half yearly return which is due on 25-10-2012. (The data for the period from 1-7-2012 to 30-9-2012 should not be filed. Modifications will be made in the ACES so that any data filed for this period is rejected. Till such time as the modifications are made, ACES will not be accepting returns) Accordingly notification 47/2012 dated 28-9-2012 has been issued today.

3. Data for the period 1-7-2012 to 30-9-2012 will have to be furnished in a return in a revised format. The revised format of the return and the last date for filing it will be indicated separately.

4. The above information may be communicated to departmental officers and assessees. Hindi version to follow.

Yours faithfully, 

(S.M. Tata)

Commissioner(Service Tax)

Tel/Fax: 011-23092275

 

Draft Circular – F. No.354 /146/2012 – TRU – dated – 27-09-2012


Draft Circular

F. No.354 /146/2012 – TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

(Tax Research Unit)

146-F, North Block,

New Delhi, 27th September, 2012

To

Chief Commissioner of Customs and Central Excise / Central Excise & Service Tax (All)

Director General of Service Tax /Central Excise Intelligence /Audit; Commissioner of Customs and Central Excise/ Central Excise and Service Tax/ Service Tax (All)

Madam/Sir,

Subject:  Draft circular — service tax — transport of passengers by air — regarding.

Representation has been received seeking clarification regarding certain doubts which arise during the course of levy and collection of service tax on transport of passengers by air.

2. The issues have been examined and the guidance is as follows:

Issue (a) : Whether service tax of 4.944% (60% abatement) will apply to related charges such as reconfirmation fee, upgrade fee, date change, additional collection, etc., levied by airlines to passengers?

Clarification: These charges could be levied in either of the following manners:

(a) as a consolidated charge without any break-up;

(b) with break-up for individual services or at a point later to the initial booking. In case of

(a) above the provisions of section 66F will apply and the service that imports the essential character will determine the applicability of both the Place of Provision of Services (POP) Rules as well as abatement. In the case of

(b) above, the individual components will need to be analyzed on their respective merits.

Various charges collected by airlines from a passenger can be broadly put into two categories:

(a) charges which are directly related to the journey; and

(b) charges which are not so related. Charges which are directly related will be covered by abatement. Re-confirmation fees, date-change fee, upgrade fee, preferred seat charges, additional collection in the nature of differential ticket fare towards the journey and unaccompanied minor charges are directly related charges.  For the charges which are not directly related to the particular journey, abatement is not available. Sky-meal-on-order and escort charges are not directly related to the journey.

Issue (b): Whether abatement meant for transport of passenger by air service, is applicable for excess baggage charges?

Where a passenger embarks on an international journey, excess baggage charges are not leviable to service tax as the place of provision of such service will be outside India under Rule 10 of POP Rules. However, in the case of journey within the taxable territory, excess baggage charge is leviable to service tax without abatement. Similar will be the tax treatment for pet charges.

Issue (c): When a passenger puts a ticket for refund, whether full rate of 12% will apply to cancellation fee, refund fee, no show fee, since the passenger is not availing air transportation service?

Clarification : In terms of section 66B of the Finance Act, 1994, service tax is leviable on service provided or agreed to be provided. Thus service tax becomes payable when a booking is made, i.e. when the service is agreed to be provided, the subsequent cancellation of the ticket does not take it outside the purview of tax absolutely.

However, Rule 6(3) of the Service tax Rules, 1994, provides that where an assessee has issued an invoice, or received any payment, against a service to be provided which is not so provided by him either wholly or partially for any reason, the assessee may take credit of such excess service tax paid by him, if the assessee,–

(a) has refunded the payment or part thereof, so received for the service provided to the person from whom it was received; or

(b) has issued a credit note for the value of the service not so provided to the person to whom such an invoice had been issued.

Thus the amount retained by the airlines in the event of cancellation of ticket, out of the original fare will remain liable to be taxed as originally taxed and hence is entitled to abatement applicable in this regard. However, if the ticketed amount is fully refunded to the passenger, but no-show (late cancellation charges) or cancellation fee is separately collected through an invoice or bill, abatement will not be applicable. Here, cancellation fee takes the nature of administrative charge.

Issue (d): (i) whether service tax will apply on related fees/charges on journeys starting outside India, even if the transaction for related charges is made in India? ;

(ii) Whether service tax will apply on related fee charges on journeys starting in India, even if the transaction for related charges is made outside India?

Clarification:  According to Rule 11 of Place of Provision of Services Rules, 2012, the place of provision of a passenger transportation service is the place where the passenger embarks on the conveyance for a continuous journey. Therefore, if place of embarkation of passenger is located within the taxable territory, service tax is leviable on the gross amount payable for such continuous journey, irrespective of where the ticket is booked and where fees/charges are collected. If the place of embarkation of a passenger on a continuous journey falls outside the taxable territory, service tax is not leviable, irrespective of where the tickets are booked and where fees/charges are collected. However, as mentioned at (a) above, only such charge will be determined under Rule 11 of POP as are directly related to the continuous journey. The POP of other charges will be judged on their own merits.

3. Field formations, business and industry chambers are requested to offer their comments, views and suggestions on the draft circular. It is requested that comments, views and suggestions may be forwarded to the undersigned on or before 15th October, 2012. The same also may be e-mailed to jm.kennedy@nic.in

(J.M. Kennedy)

Director, TRU

Tel/Fax: 011-23092634

 

 

164/15/2012-ST – dated – 28-08-2012


Circular No. 164/15/2012-ST

F. No. 356/17 /2012 – TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

(Tax Research Unit)

153, North Block,

New Delhi, 28th August, 2012

To

Chief Commissioner of Customs and Central Excise / Central Excise & Service Tax (All)

Director General of Service Tax /Central Excise Intelligence /Audit;

Commissioner of Customs and Central Excise/ Central Excise and Service Tax/ Service Tax (All)

 

Madam/Sir,

 

Subject:  service tax – vocational education/training course — regarding.

 

            Clarification has been sought in respect of levy of service tax on certain vocational education/training/ skill development courses (VEC) offered by the Government (Central Government or State Government) or local authority themselves or by an entity independently established by the Government under the law, as a society or any other similar body.

2.         The issue has been examined. When a VEC is offered by an institution of the Government or a local authority, question of service tax does not arise. In terms of section 66D (a), only specified services provided by the Government are liable to tax and VEC is excluded from the service tax.

3.         When the VEC is offered by an institution, as an independent entity in the form of society or any other similar body, service tax treatment is determinable by the application of either sub-clause (ii) or (iii) of clause (l) of section 66D of the Finance Act, 1994. Sub-clause (ii) refers to “qualification recognized by any law” and sub-clause (iii) refers to “approved VEC”. In the context of VEC, qualification implies a Certificate, Diploma, Degree or any other similar Certificate. The words “recognized by any law” will include such courses as are approved or recognized by any entity established under a central or state law including delegated legislation, for the purpose of granting recognition to any education course including a VEC.

4.         This Circular may be communicated to the field formations and service tax assessees, through Public Notice/Trade Notice. Hindi version to follow.

Yours faithfully,

(S.Jayaprahasam)

Technical Officer, TRU

Tel/Fax: 011-23092037

1/2012 – dated – 21-08-2012


OFFICE OF THE INDIRECT TAX OMBUDSMAN, DELHI

(Customs, Central Excise & Service Tax)

Department of Revenue, Ministry of Finance, New Delhi

F NO. Ombuds (Delhi)/Policy/1/2012

PUBLIC NOTICE No. 1/2012

Dated 21/08/2012

Subject: Dispute Resolution and Tax-Payer Services through Indirect Tax Ombudsman, Delhi.

Attention of the Customs, Central Excise and Service Tax assesses, Importers, Exporters, Manufacturers, Service Providers and other members of Industry and Trade is invited to “Indirect Tax Ombudsman Guidelines, 2011” hereinafter referred to as ‘the Guidelines’, which is available in websites of both the Ministry of Finance and Central Board of Excise & Customs, (CBEC). In accordance with the said ‘Guidelines’, the Government of India has decided to set up the institution of ‘Indirect Tax Ombudsman’ at seven locations—Delhi, Mumbai, Chennai, Kolkata, Bangalore, Ahmedabad and Lucknow. The undersigned has been appointed as the Indirect Tax Ombudsman, Delhi with jurisdiction over the states of Delhi, Haryana, Punjab, Himachal Pradesh and Jammu & Kashmir.:

2. The post of Indirect Tax Ombudsman has been created with the objective of enabling resolution of complaints relating to grievances against Customs, Central Excise and Service Tax Department and facilitating settlement of such complaints with satisfaction of the complainant. Para 10 (III) of ‘the Guidelines’ explains as to who can come up with complaint or grievance to the Ombudsman. Certain basic conditions will have to be followed before lodging the complaint with the Ombudsman. First, the complainant will have to make a representation either to the Grievance Cell of the Department or to the officer superior to the one complained against in the field formation. The next condition is that either the complainant did not receive reply from the authority complained to, within one month of lodging the complaint or the complaint was rejected or he was not satisfied with the reply to the complaint. Para 9 of „the Guidelines‟ specifies the grounds on which a complaint may be filed. One of the main grounds is delay in the following – issuance of refunds or rebate beyond the prescribed time limit, adjudication, registration of tax-payers, giving effect to appellate orders, release of seized books of account and assets etc. The other ground is non-adherence to principle of ‘First Come First Served’ in sending refunds and to rules prescribed for disbursement of drawback etc. Then there are grounds like unwarranted rude behaviour of the official with the tax-payers, non-acknowledgement of letters and documents and violation of administrative instructions and circulars by the officials etc. Para 10 of the Guidelines explains the procedure for filing complaint. A representation or complaint has to be filed in writing by the complainant himself or his authorized representative. For complaints filed electronically, while action will be initiated by the Ombudsman, the print-out will have to be signed by the complainant at the earliest. The complaint must contain the details of the basic facts relating to the complaint and the relief sought.:

3. Power and duties of the Ombudsman have been outlined at Paras 8 (I, II, III) of the Guidelines. The Ombudsman shall have power to facilitate settlement of complaints either by agreement through conciliation and mediation between the Commissionerate and the complainant or by passing an „award‟. The details relating to passing an ‘award’ have been explained at Para 13 of the Guidelines. The ‘award’ would be a speaking order comprising the elements specified at sub-para (II) of aforesaid Para 13. The ‘award’ would be binding on the concerned office as well as the complainant subject to the conditions specified at sub- para ( IV ) of aforesaid Para 13. The Ombudsman will protect individual tax- payer’s rights and will maintain confidentiality of information and document except to the extent considered by him to be reasonably required for complying with the principles of natural justice and fair play in the proceedings.

4.Further, Paras 11 & 12 of the guidelines clarify that for the purpose of promoting settlement of the complaints by agreement, the Ombudsman may follow such procedure as he may consider appropriate and that the proceedings before the Ombudsman shall be summary in nature, and that the Ombudsman shall not be bound by any legal rules of evidence.

5. This is also to inform that being a newly created post, the office of the Indirect Tax Ombudsman, Delhi is in the process of being set up. Meanwhile, the Indirect Tax Ombudsman, Delhi has started functioning from his official residence at C II/ 101 A, Satya Marg, Chanakyapuri, New Delhi-21, and a few representations have already been disposed of. Till the time the regular office address is notified, representations/complaints relating to the jurisdiction of Indirect Tax Ombudsman, Delhi may be addressed to him at the aforesaid address of the official residence. He may also be contacted at Mobile phone number 09999099394, whenever felt necessary.

6. Any difficulty noticed in implementing this Public Notice may be brought to the notice of the undersigned in the address given at foregoing Para 5.

(S. DUTT MAJUMDER)

Indirect Tax Ombudsman, Delhi

Department of Revenue

Ministry of Finance

 

F.No 354/127/2012-TRU – dated – 27-07-2012


DRAFT CIRCULAR 

F.No 354/127/2012-TRU

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
Tax Research Unit

146 North Block, New Delhi
Dated 27th July 2012

 

Subject: - Draft Circular on leviability of service tax on staff benefits and employment related transactions- reg

Subsequent to the operationlisation of the Negative List, a number of issues have been raised in relation to the manpower supply or the services provided by the directors of a company or by the employer to the employees.  These issues have been examined and are proposed to be clarified as follows:

A.        Scope of manpower supply

2.         After the operationlisation of the Negative List, the erstwhile definition of the manpower recruitment or supply agency is no more applicable.  Thus, the words manpower supply would have to be given their natural meaning.  The manpower supply is understood to mean when one person provides another person with the use of one or more individuals who are contractually employed or otherwise engaged by the first person. The essence of the employment should be that the individuals should be employed by the provider of the service and not by the recipient of the service.

3.         There could be certain contracts in which such manpower is made available to execute another independent contract by the service provider.  For example, a person may agree to carry out construction or a manufacture for another in which certain manpower may be engaged.  As long as such manpower is not placed operationally under the superintendence or control of the recipient, it shall not be a case of manpower supply, though it will continue to be judged independently whether it comprises any other taxable service.

4.         There are also cases of secondment whereby certain staff belonging to an organization is placed at the disposal of a subsidiary company or any other associate company.  Such cases will be covered by the definition of manpower supply as the contractual employment continues to be with the parent company.

B.        Joint Employment

5.         There can also be cases where staff is employed by one or more employers who normally share the cost of such employment.   The services provided by such employee will be covered by the exclusion provided in the definition of service. However, if the staff has been engaged by one employer and only made available to other for a consideration, it shall not be a case of joint employment.

6.         Another arrangement could be where one entity pays the salary and other expenses of the staff on behalf of other joint employers which are later recouped from the other employers on an agreed basis on actuals.  Such recoveries will not be liable to service tax as it is merely a case of cost reimbursement.

C.        Directors

7.         Services of a director on the board of a company have now become taxable.  A director may be appointed either in an individual capacity or to represent an entity (including government) who has either invested in the company or is otherwise authorized to nominate a director.   When a director receives payment in his personal capacity, the same is liable to be taxed in the hands of the director.  However, where the fee is charged by the entity appointing the director and is paid to such entity, the services shall be deemed to be supplied by such an entity and not by the individual director.  Thus in the case of Govt. nominees, the services shall be deemed to be provided by the Govt. and liable to be taxed under the exclusion sub- (iv) of clause (a) of section 66D of the Finance Act, 1994 i.e. support services by Government to business.  Such services are liable to be taxed on reverse charge basis.

D.        Treatment of supplies made by the employer to employees

8.         A number of activities are carried out by the employers for the employees for a consideration.  Such activities fall within the definition of “service” and are liable to be taxed unless specified in the Negative List or otherwise exempted.

9.         One of the ingredients for the taxation is that such activity should be provided for consideration.  Where the employees pays for such services or where the amount is deducted from the salary, there does not seem to be any doubt.  However, in certain situations, such services may be provided against a portion of the salary foregone by the employee.  Such activities will also be considered as having been made for a consideration and thus liable to tax. Cenvat credit for inputs and input services used to provide such services will be eligible under extant rules. The said goods or services would now not be construed to be for personal use or consumption of an employee per se and rather shall be a constituent to the taxable service provided to an employee.  The status of the employee would be as a service recipient rather than as a mere employee when consuming such output service. The valuation of the service so provided by the employer to the employee shall be determined as per the extant rules in this regard.

10.       However, any activity available to all the employees free of charge without any reduction from the emoluments shall not be considered as an activity for consideration and will thus remain outside the purview of the service tax liability (facilities like crèche, gymnasium or a health club which all employees may use without any charge or reduction from the salary will be outside the tax net). However the Cenvat credit for such inputs and input services will be guided by the extant rules.

11.        Moreover, it would need to be seen whether the services provided by the employer are otherwise covered by the Negative List or exempt.  For example, the services of food and catering provided by the employer in a canteen would normally fall outside the tax net unless such canteen has both the facility of air-conditioning as well as license to serve liquor (S. No. 19 of the Mega exemption).  Likewise, services provided by way of guest house will also not be liable to tax if the tariff for such unit of accommodation is below Rs. 1000 per day or equivalent (S. No. 18 of the Mega exemption).  Similarly, services of telephone and motorcar for personal use will be covered by the service tax.

E.        Treatment of reimbursements made by the employer to the employee.

12.        Provision of service by an employee to the employer in the course of or in relation to his employment is excluded from the definition of the “service”. Thus reimbursements of expenditure incurred on behalf of the employer in course of employment would not amount to a “service” per se and hence are non-taxable.

F.        Treatment of supplies and reimbursements made by the employer to ex-employees/ pensioners.

13.        The supplies made by the employer to the ex-employees or pensioners will be of same status as those to an employee and thus would accordingly attract taxability as per discussion in D above. The reimbursements to pensioners will also be treated at par with those of current employees when such reimbursements arise out of the initial employment contract or are in relation to that employment.

14.       Chambers, trade, industry and field formations are requested to go through the draft Circular and offer their comments, views and suggestions.  It is requested that comments, views and suggestions on the same may be forwarded to the undersigned on or before 24thAugust 2012. The same may also be emailed to shobhit.jain@nic.in

(Dr Shobhit Jain)

OSD TRU

 

10/2012, – dated – 13-07-2012


rade Notice No. 10/2012, dated 13-7-2012

Issued by Chandigarh Commissionerate of Central Excise & Service Tax

It is brought to the notice of all the members of Trade and Industry that large scale evasion of service tax by service providers providing Security Agency Service and Manpower Supply Agency Service have come to light in this Commissionerate where the Service Providers have collected Service Tax from the Service Recipients but they have not deposited the service tax into the account of the Central Government as required under sub-section (1) of section 73A ofChapter V of the Finance Act, 1994 read as :

“73A. Service Tax collected from any person to be deposited with Central Government.—(1) Any person who is liable to pay service tax under the provisions of this Chapter or the rules made thereunder, and has collected any amount in excess of the service tax assessed or determined and paid on any taxable service under the provisions of this Chapter or the rules made thereunder from the recipient of taxable service in any manner as representing service tax, shall forthwith pay the amount so collected to the credit of the Central Government.”

As per proviso sub-rule (6) of Rule 9 of CENVAT Credit Rules, 2004, read as under :

“(6) The manufacturer of final products or the provider of output service shall maintain proper records for the receipt and consumption of the input services in which the relevant information regarding the value, tax paid, CENVAT credit taken and utilized, the person from whom the input service has been procured is recorded and the burden of proof regarding the admissibility of the CENVAT credit shall lie upon the manufacturer or provider of output service taking such credit.”

All the trade associations/chambers of commerce and the members of the RAC (Regional Advisory Committee)/PGRC (Public Grievance Redressal Committee) and field formations are advised to take reasonable steps to ensure that Service Tax has been paid by the input service provider before final manufacturer/service provider utilizes the Cenvat Credit.

 

163/ 14/2012 – dated – 10-07-2012


Circular No. 163/ 14/2012 –ST

F. No. 354/ 119/2012- TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

(Tax Research Unit)

*******

Room No 146, North Block, New Delhi-1,

Dated the 10th July 2012.

To

Chief Commissioner of Customs and Central Excise (All)

Chief Commissioner of Central Excise & Service Tax (All)

Director General of Service Tax

Director General of Central Excise Intelligence

Director General of Audit

Commissioner of Customs and Central Excise (All)

Commissioner of Central Excise and Service Tax (All)

Commissioner of Service Tax (All)

Madam/Sir,

Subject: Clarification on service tax on remittances – regarding.

Concerns have been expressed in various forums regarding the leviability of service tax on the remittance of foreign currency in India from overseas.

2. The matter has been examined and it is clarified that there is no service tax per se on the amount of foreign currency remitted to India from overseas. In the negative list regime, ‘service’ has been defined in clause (44) of section 65B of the Finance Act 1994, as amended, which excludes transaction in money. As the amount of remittance comprises money, the activity does not comprise a ‘service’ and thus not subjected to service tax.

3. In case any fee or conversion charges are levied for sending such money, they are also not liable to service tax as the person sending the money and the company conducting the remittance are located outside India. In terms of the Place of Provision of Services Rules, 2012, such services are deemed to be provided outside India and thus not liable to service tax.

4. It is further clarified that even the Indian counterpart bank or financial institution who charges the foreign bank or any other entity for the services provided at the receiving end, is not liable to service tax as the place of provision of such service shall be the location of the recipient of the service, i.e. outside India, in terms of Rule 3 of the Place of Provision of Services Rules, 2012.

5. This Circular may be communicated to the field formations and service tax assessees, through Public Notice/ Trade Notice. Hindi version to follow.

Yours faithfully,

(Dr. Shobhit Jain)

O.S.D. (TRU)

Fax: 23095590

 

162/13 /2012 – dated – 06-07-2012


Circular No. 162/13 /2012 –ST

 

F. No. 354/111/2012-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

(Tax Research Unit)

*******

Room No 146, North Block, New Delhi-1,

Dated the 6th July 2012.

To

 

Chief Commissioner of Customs and Central Excise (All)

Chief Commissioner of Central Excise & Service Tax (All)

Director General of Service Tax

Director General of Central Excise Intelligence

Director General of Audit

Commissioner of Customs and Central Excise (All)

Commissioner of Central Excise and Service Tax (All)

Commissioner of Service Tax (All)

 

Madam/Sir,

 

Subject:  Clarification on Point of Taxation Rules – regarding.

            Consequent to the changes introduced at the time of Budget 2012 in the Point of Taxation Rules, 2011, together with revision of the service tax rate from 10% to 12% and the subsequent changes that have been made effective from 01.07.2012, the following clarifications have been desired:

     (a)   Point of taxation and the rate applicable in respect of continuous supply of services at the time of change in rates effective from 01.04.2012;

     (b)  Applicability of the revised  rule 2A of the Service Tax (Determination of Value) Rules, 2006 to ongoing works contracts for determination of value when the value was being determined under the erstwhile Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007; and

     (c)  Applicability of partial reverse charge provisions in respect of specified services.

2.1  The issues have been examined.  The continuous supply of services was governed by rule 6 until 31.03.2012.  The rule started with the wordings “notwithstanding anything contained in rules 3, 4 …” Therefore, the point of taxation in respect of services provided in terms of the said rule on or before 31.03.2012 would remain unaffected by rule 4.

2.2  To clarify the matter further, if the invoice had been issued or payment received in respect of such services on or before 31.03.2012, the point of taxation would stand determined under rule 6 accordingly and shall not alter due to the subsequent changes in the Point of Taxation Rules, 2011 that became effective only from 1.4.2012.

3.1 However the position has undergone a change at the time of transition towards the Negative List and the introduction of other accompanying changes in Service Tax (Determination of Value) Rules, 2006 and partial reverse charge.  At the said time rule 6 stood omitted and the point of taxation was required to be determined ordinarily in such cases under the main rule i.e. rule 3.   This rule is, however, overridden by rule 4 when there is a change in effective rate of tax.  The “change in effective rate of tax” has been defined in clause (ba) of rule 2 to include a change in the portion of value on which tax is payable.

3.2   To illustrate, the following would be changes in effective rate of tax:-

     (i)    the change in the portion of total value liable to tax in respect of works contract other than original works (from @ 4.8% earlier to @ 12% on 60% of the total amount charged, or effectively @ 7.2% now).

     (ii)  exemption granted to certain works contracts w.e.f. 1st July 2012 which were earlier taxable.

     (iii)  taxability of certain works contracts which were hitherto exempted.

     (iv)  change in the manner of payment of tax from composition scheme under the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 to payment on actual value under clause (i) of rule 2A of the Service Tax (Determination of Value) Rules, 2006.

3.3  However, the following will not be a change in effective rate of tax:-

     (i)  works contracts earlier paying service tax @ 4.8% under Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 and now required to pay service tax @12% on 40% of the total amount charged, keeping the effective rate again at 4.8% (as only the manner of expression has been altered).

     (ii)  works contracts which were outside the scope of taxation (and not merely exempted) but have become now taxable e.g. construction of residential complex comprising of  2 to 12 residential units,  construction of buildings meant for use by NGOs etc. (Rule 5 of the Point of Taxation Rules, 2011 shall apply to such services.)

3.4   Thus the point of taxation for services provided in respect of taxable works contracts in progress on 01.07.2012 would need to be determined under rule 4 of the Point of Taxation Rules unless there is no change in effective rate of tax.

4.  It is further clarified that the provisions of partial reverse charge would also be applicable in respect of such services where point of taxation is on or after 01.07.2012 under the applicable rule in respect of the service provider.

5.  This Circular may be communicated to the field formations and service tax assessees, through Public Notice/ Trade Notice. Hindi version to follow.

 Yours faithfully,

(Dr. Shobhit Jain)

O.S.D. (TRU)

Fax: 23093037

161/12/2012 – dated – 06-07-2012


Circular No.161/12/2012 -ST

F.No.341/21/2012-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

Tax Research Unit

153, North Block,

New Delhi, 6th July, 2012

To

Chief Commissioners of Customs and Central Excise (All),

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

Director General (Service Tax), Director General(Systems), 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:  Accounting Code for payment of service tax under the Negative List approach to taxation of services, with effect from the first day of July 2012 – regarding.

          Negative List based comprehensive approach to taxation of services came into effect from the first day of July, 2012. For payment of service tax under the new approach, a new Minor Head – ‘All taxable Services’ has been allotted under the Major Head “0044-Service Tax”.

2.  Accounting codes for the purpose of payment of service tax under the Negative List approach, with effect from 1st July, 2012 is as follows:

 

Name of Services

Accounting codes

Tax collection Other Receipts Penalties Deduct refunds
All Taxable Services 00441089 00441090 00441093 00441094

 

NOTE: (i) service specific accounting codes will  also continue to operate, side by side, for accounting of service tax  pertaining to the past period (meaning, for the period prior to 1stJuly, 2012); (ii) Primary Education Cess on all taxable services will be booked under 00440298 and Secondary and Higher Education Cess on all taxable services will be booked under 00440426; (iii) a new sub-head has been created for payment of “penalty”; the sub-head “other receipts” is meant only for payment of interest etc. leviable on delayed payment of service tax; (iv) the sub-head “deduct refunds” is not to be used by the assessees, as it is meant for use by the Revenue/Commissionerates while allowing refund of tax.

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

(S. Jayaprahasam)

Technical Officer

Tel: 011-23092037

 

 

Office Memorandum No. Coord/13-6/H/A/cs/Vol.VII/86, – dated – 02-07-2012


New Accounting Code for the purpose of Accounting of collection of Service Tax

Office Memorandum No. Coord/13-6/H/A/cs/Vol.VII/86, dated 2-7-2012 issued by principal controller of accounts, cbec

Under the present accounting system, separate Minor Head is opened for each taxable services under major head “0044 – Service Tax” with 3 sub-heads for accounting of :

(a)  Tax Collection,

(b)  Other Receipts (like penalty/interest) and

(c)  Refunds.

But, under proposed negative list based comprehensive approach to taxation of services, it is not practically possible to use service-wise accounting code numbers. All collections made under Service Tax will require to be accounted for through One single Minor Head/sub-heads.

In this regard, new Head to Account under the Major Head “0044-Service Tax” as been opened by O/o the Controller General of Accounts vide Correction Slip No. 725, dated 29-6-2012 for accounting of Service Tax levied on all taxable services. Details of Head of Accounts and their accounting code are as under:-

Head of Accounts Minor Head – All Taxable Services Serial Code SCCD Code
004400224010000 Sub-head – Tax Collection 00441089 112
004400224020000 Sub-head – Other Receipts 00441090 112
004400224030000 Sub-head – Deduct Refunds 00441094 118
004400224040000 Sub-head – Penalties 00441093 111

 

Note

A.  *The Sub Head “Other Receipts” is meant for interest etc., leviable on delayed payment of service tax.
    **The Sub Head “Deduct Refunds” is not to be used by the assessees, as it is meant for the Excise Deptt. while allowing refund to tax.
  B.  Primary Education Cess on all taxable services will be booked under 00440298 and Secondary and Higher Education Cess will be booked under 00440426.
  C.  Service Tax in respect of all services pertaining to the period 1st July, 2012 onwards will be booked under the above new accounting code.
  D.  Service specific minor-heads will also continue to operate, side by side, for accounting of service tax under sub-heads pertaining to the past period till 31st March, 2014, where after existing heads will cease to operate. After 31st March, 2014, the arrears pertaining to the past periods would be accounted for under the new accounting code as above.

Eight digit reduced accounting codes (Major Head Serial Codes) as mentioned under column No. 3 may please be intimated to all the Commissionerates (Customs, Central Excise & Service Tax) with the advise to issue a Trade Notice for information of the assessees.

D.O.F.No.334/1/2012-TRU – dated – 29-06-2012


GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE & CUSTOMS

(TAX RESEARCH UNIT)

*****

V.K. Garg

Joint Secretary (TRU-II)

Tel: 23093027; Fax: 23093037

Email:  garg.vk@nic.in

D.O.F.No.334/1/2012-TRU

 

New Delhi dated the 29th June, 2012.

Dear Madam/Sir,

 

You will be already aware that the Negative List, together with many other accompanying changes, comes into operation from July 1, 2012.

2. The necessary notifications from 25/2012-ST to 40/2012-ST and Notification No. 28/2012-CX (NT) were issued on June 20, 2012 and have comprehensive changes relating to exemptions, Place of Provision Rules, 2012, changes to Service Tax Rules, 1994, Cenvat Credit Rules, 2004 and details of all the notifications that are being rescinded.

3. Notification No 52/2011-ST dated 30.12.2011 relating to refunds on specified services has also been revised in accordance with the new regime and the new notification No.41/2012-ST dated 29.06.2012 has been issued under the revised section 93A.  Services of commission agents to exporters on the existing lines have also been validated by the issue of Notification No.42/2012-ST dated 29.06.2012.

4. There has been some doubt regarding the applicability of provisions of the Finance Act, 2004relating to education cess and the Finance Act, 2007 relating to secondary and higher education cess as the concerned acts make reference to section 66 of the Finance Act, 1994, which shall cease to have effect from July 1, 2012.  In this connection, as also in general, you may kindly refer to the sub-section (1) of section 8 of the General Clauses Act, 1897 which reads as under:

“Where this Act, or any Central Act or Regulation made after reference to the commencement of this Act, repeals and re-enacts, with or without modification, any provision of a former enactment, then references in any other enactment or in any instrument to the provision so repealed shall, unless a different intention appears, be construed as references to the provisions so re-enacted.”

Thus any reference to section 66 of the Finance Act, 1994 shall be construed as reference to the newly re-enacted provision i.e. section 66B of the same Act.  Despite the stated position of law, the matter has been settled by the issue of Removal of Difficulties Order No. 2/2012 dated 29.06.2012.

5. It may be noted that Notification No. 11/2005-ST dated 19.04.2005 has not been rescinded to enable sanction of pending rebates.  It shall, however, automatically cease to have effect for exports on or after July 1, 2012 as the Export of Services Rules, 2005 will stand superseded from the said date.

6. You may kindly go through all the changes and let me know at the earliest if anything is required in any manner for the smooth implementation of the new provisions.

7. The successful implementation of this reform requires an involved approach at all levels, in particular in the initial months. It is necessary that these changes are well understood by the tax payers as well as our staff. To this end CBEC has released an elaborate Educational Guide (with further improvisation over the draft Guidance Papers that were released at the time of budget) and adequate copies of the same should be available to you already or shortly. You may also like to download the same from CBEC website (from the dropdown menu under the title service tax).

8. It is clarified that any Board circular that is contrary to the revised law will stand automatically superseded.  In case you have any doubt about any specific circular the same may be referred to the Board.

9. CBEC has already held five seminars during this month at Delhi, Chennai, Kolkata, Ahmedabad and Hyderabad for both the trade and some of the officers in and around these places.  Seminar at Mumbai is scheduled on July 13, 2012.

10. It will be desirable if similar events are held locally, supplemented also by training of our officers who have to implement the new provisions. If you need, some of the TRU officers could also assist subject a little bit to the exigencies of work here.  Those who desire may source a copy of the power point presentation from TRU (by sending a request at garg.vk@nic.in).

11. Despite a very elaborate consultative process starting from August, 2011, when the first concept paper was released, it is likely that the actual implementation of negative list will throw some issues that appear a little complex.  You may like to discuss them appropriately within your own set up and in appropriate cases refer them to the Board for suitable examination. Any precipitated action will be ill-advised at the early stages of implementation unless the revenue is at immediate stakes.

12. A list of services that are likely to come into the tax net in your charge may be drawn and communicated to me. This would help us to share the same with other formations as also provide information from other formations to you so that a coordinated approach is followed until the system gets streamlined.

13. In general any case resulting in taxation of an activity that is not liable to tax under the present regime should at least receive the attention of the Commissioner in charge before it is taken up for any further action.

14. Of equal importance is to devote attention to activities that are presently liable to tax and may cease to be taxed in future.  Some of these have been clearly exempted.  There could be others where, either due to a particular interpretation or due to applicability of Place of Provision Rules, 2012 or in some other manner, an interpretation may be taken that the same are no more liable to tax.  Such cases may be immediately identified and in case of doubt referred to the Board.

15. The allotment of accounting heads is being communicated by a separate communication.

16. A spirit of Helpfulness, Understanding and Guidance (HUG for short) should guide us in balancing our task keeping in perspective the enormity of changes that are being implemented shortly.

With regards,

Yours sincerely,

(V.K. Garg)

To

All Chief Commissioners/Directors General

All Commissioners of Central Excise

All Commissioners of Customs and Central Excise

All Commissioners of Service Tax

—-X—-

 

160/11/2012 – dated – 29-06-2012


F.No.334/1/2012-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

(Tax Research Unit)

*****

Room No. 153, North Block,

New Delhi, 29th June, 2012.

To

Chief Commissioners of Customs and Central Excise (All)

Chief Commissioners of Central Excise & Service Tax (All)

Directors General of Service Tax/Central Excise Intelligence/Audit

Commissioners of Central Excise & Service Tax (All)

Commissioners of Service Tax (All)

Commissioners of Customs and Central Excise (All)

Madam/Sir,

 

 

Subject: Applicability of provisions of the Finance Act, 2004 relating to education cess and the Finance Act, 2007 relating to secondary and higher education cess– regarding.

 

            There has been some doubt regarding the applicability of provisions of the Finance Act, 2004 relating to education cess and the Finance Act, 2007 relating to secondary and higher education cess as the concerned Acts make reference to section 66 of the Finance Act, 1994, which shall cease to have effect from July 1, 2012.  In this connection, as also in general, you may kindly refer to the sub-section (1) of section 8 of the General Clauses Act, 1897 which reads as under:

“Where this Act, or any Central Act or Regulation made after reference to the commencement of this Act, repeals and re-enacts, with or without modification, any provision of a former enactment, then references in any other enactment or in any instrument to the provision so repealed shall, unless a different intention appears, be construed as references to the provisions so re-enacted.”

            Thus any reference to section 66 of the Finance Act, 1994 shall be construed as reference to the newly re-enacted provision i.e. section 66B of the same Act.  Despite the stated position of law, the matter has been settled by the issue of Removal of Difficulties Order No. 2/2012 dated 29.06.2012.

2. This circular may be communicated to the field formations and service tax assessees through Public Notice/Trade Notice. Hindi version would follow.

Yours faithfully,

 

(S. Jayaprahasam)

Technical Officer (TRU)

Tel/Fax: 011-23092037

 

159/10/2012 – dated – 19-06-2012


F.No.354/89/2012-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

(Tax Research Unit)

*****

Room No. 153, North Block,

New Delhi, 19th June, 2012.

To

 

Chief Commissioners of Customs and Central Excise (All)

Chief Commissioners of Central Excise & Service Tax (All)

Directors General of Service Tax/Central Excise Intelligence/Audit

Commissioners of Central Excise & Service Tax (All)

Commissioners of Service Tax (All)

Commissioners of Customs and Central Excise (All)

Madam/Sir,

 

Subject: Audit fees collected by the Comptroller and Auditor General (CAG) – regarding.

            A doubt has been raised whether service tax is leviable on the audit fees collected by the CAG for conducting directly, audit of corporations.   Reportedly some field formations are inclined to take a view that such ‘audit fee’ collected by the CAG is leviable to service tax under the authority of the inclusive portion of the definition of “practicing chartered accountant” read with the relevant definition of the taxable service [Section 65(83) read withsection 65(105)(s) of Finance Act, 1994].

2.         The issue has been examined.  The definition of the practicing chartered accountant insection 65(83) of Finance Act, 1994 reads as follows:

“practicing chartered accountant” means person who is a member of the Institute of Chartered Accountants of India and is holding a certificate of practice granted under the provisions of the Chartered Accountants Act, 1949 (38 of 1949) and includes any concern engaged in rendering services in the field of chartered accountancy” [emphasis added].

3.         According to the Law Lexicon [by Shri P. Ramanatha Aiyar] the expression “concern” means: “an organization or establishment for business”.  It further elaborates that the word “concern” is a mercantile term.  CAG being a constitutional authority cannot be considered as a concern in the same manner as a firm of chartered accountants. CAG is a constitutional authority and by no stretch of imagination be covered by the meaning of expression “concern” appearing in the definition of “practicing chartered accountant”.

4.         It is further added that the words “in the field of chartered accountancy” would mean such services as are ordinarily rendered by a chartered accountant.  The services of CAG are not services as are rendered by a chartered accountant even though both may be engaged in the sphere of the auditing.  The scope of work of the CAG goes far beyond that of a statutory company auditor and is often carried out by persons who may not even be professional chartered accountants.  These audits are done in terms of section 18 of the CAG (Duties, Powers and Conditions of Service) Act, 1971, which is entirely different from the powers vested in a chartered accountant under the Chartered Accountant Act, 1949.

5.         The services of CAG are also not covered by the heading Business Support Services specified in clause (zzzq) of section 65. When the business support services were taxed for the first time in the year 2006, the TRU circular stated as follows:

“Business entities outsource a number of services for use in business or commerce. These services include transaction processing, routine administration or accountancy, customer relationship management and tele-marketing. There are also business entities which provide infrastructural support such as providing instant offices along with secretarial assistance known as “Business Centre Services”.  It is proposed to tax all such outsourced services.  If these services are provided on behalf of a person, they are already taxed under Business Auxiliary Service.  Definition of support services of business or commerce gives indicative list of outsourced services.”

It is evident that this circular has clarified that the new service was meant to capture such services as are ordinarily outsourced by business entities.  The audit activity is not an outsourced function but is carried out in statutory fulfillment of duties.  Thus the services by CAG would also not be covered by the service head “Business Support Service”.

6.         This circular may be communicated to the field formations and service tax assessees through Public Notice/Trade Notice.   Hindi version would follow.

Yours faithfully,

(S. Jayaprahasam)

Technical Officer (TRU)

Tel/Fax: 011-23092037

Trade Notice No. 13/ST/2012 – dated – 11-06-2012


OFFICE OF THE COMMISSIONER OF SERVICE TAX

17-B, IAEA House, Indraprastha Estate, NEW DELHI — 110 002

Phone No.- 40785809 (www.servicetaxdelhi.gov.in) Fax no.- 23705673

Trade Notice No. 13/ST/2012

Dated 11.06.2012

The kind attention of trade is invited that the Finance Bill 2012 has become the Finance Act 2012 (No. 23 of 2012) following Presidential Assent on 28Th May, 2012. The portion of finance Act relevant to Service Tax is enclosed herewith. Further Notification No. 19Notification No. 20Notification No 21Notification No 22, and Notification No 23/2012-ST dated 5th June, 2012have been issued. The Central Govt. appoints the 1 st day of July, 2012 as the date with effect from which the new scheme of levy (commonly known as the negative list based levy) would come into effect.

All the trade associations are requested to give wide publicity to the contents of this Trade Notice amongst their member & constitutes.

Encls. Portion of finance Act relevant to

Service Tax &  Notification No. 19Notification No. 20Notification No 21Notification No 22, and Notification No 23/2012-ST dated 5th June, 2012

 (GAUTAM BHATTACHARYA)

COMMISSIONER

SERVICE TAX

C.No. IV(16)Hq/Tech/ Trade Notice/ 91/ST/2012/8814

 

updating…