Service  Tax & Income Tax Consultants Bangalore, Accounting Services, Audit Firm in India.

Service Tax & Income Tax Consultants Bangalore, Accounting Services, Audit Firm in India.

Service Tax & Income Tax Consultants Bangalore, Accounting Services, Audit Firm in India.

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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…