Procedural Aspects under Service Tax

Ghalla & Bhansali, Chartered Accountants
PROCEDURAL ASPECTS OF SERVICE TAX LAW
BY RAJ MUKESH KHONA
1
PRESENTATION BY - RAJ MUKESH KHONA
“Knowledge increases by sharing, not by saving”
PROCEDURAL ASPECTS UNDER SERVICE TAX LAW

Value of Taxable Service (Section 67)
Value of
Taxable
Service
Service Tax
Separately
Charged
Consideration
wholly in money
VOTS = Gross
Amount Charged
Consideration not
wholly or partly in
money
VOTS = Such
money or / and
Market Price of
Non Monetary
Consideration
Consideration is
not ascertainable
VOTS = Value of
Similar Service
but not less than
Cost of Provision
of Service
Bill Value is
inclusive of
Service Tax
VOTS = Gross Amount * 100
114
2

Value of Taxable Service (Section 67)
Inclusions
• Cost incurred in
the course of
providing taxable
service
• Value to include all
components even if
separately shown
by splitting
invoices
Exclusions
• Reimbursement
of expenses to
service provider
without any
profit margin or
any markup i.e.
as a Pure Agent.
3

Rate of Service Tax
4
Basic Rate – 14%
of Value of
Taxable Service
Swachh
Bharat Cess –
0.5 % of Value
of Taxable
Service
Round off
Service Tax
computed to
the Nearest
Rupee

5
Registration under Service Tax Law
(Section 69 of Finance Act, 1994 and
Rule 4 of Service Tax Rules, 1994

Who is required to apply for registration
under the Service Tax Law?
6
Persons required to
obtain Registration
Every person who has
provided a taxable service
of value exceeding Rs. 9
Lakhs in Last Financial
Year
A Recipient who is liable
to pay service tax
(Reverse Charge
Mechanism)
Input Service
Distributor
Note: Application for Registration should be made within 30 Days of the date
from which he is required to apply for registration under the Service Tax Law.

General Procedure to obtain Registration
7
Applicants seeking
Registration should
apply online in ACES
Website in Form ST-1
Permanent Account
Number should be
quoted in the online
Application
Government Department
shall not be required to
quote their PAN
Email ID and Mobile
Number should be
quoted in the online
Application Form
Registration will be
granted within 2 Days of
Filing of Completed
Online Application Form
Registration Certificate
shall be granted in Form
ST-2
RC downloaded from
ACES Website would be
accepted (No need for
signed copy)
Applicant required to
submit self attested copy
of prescribed documents
by Registered Post or
Speed Post within 7 Days
Verification of Premises
shall be conducted where
the need for verification
arises

Documents Required for Registration
8
Copy of PAN Card of the proprietor or the legal entity registered
Photograph and Photo ID Proof of Applicant – PAN Card, Passport, Voter ID,
Aadhar Card, Driving License
Address Proof of premises to be registered – Ownership Agreement, Lease or Rent
Agreement, Allotment Letter from Government, NOC from Legal Owner
Details of the Main Bank Account – Cancelled Cheque, Copy of First Page of
Passbook
Memorandum and Articles of Association, List of Directors (if company) or List of
Partners (if Firm)
Authorisation by Board of Directors / Partners / Proprietor for the person filing
the application
Business Transaction numbers obtained from Government Department or
Agencies such IEC, CIN, VAT TIN, CST TIN, Customs & Excise Registration No.

Premises to be Registered
If Assessee provides or
receives service from
One Premises
Obtain Registration
under Single Premise
(One Service or
Multiple Service)
More than One
Premises
Centralised Billing or
Centralised Accounting
System
May Obtained
Centralised Registration
(One Service or Multiple
Services)
No Centralised Billing
or Centralised
Accounting System
Multiple Registration
for each Premises
(One Service or
Multiple Services)
9

Other Points
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Revocation of Service Tax Registration
• The registration certificate may be revoked in any of the following situations -
• The premises are found to be non existent or not in possession of the
assessee.
• No documents are received within 15 days of the date of filing the online
registration application.
• The documents are found to be incomplete or incorrect in any respect.
Surrender of Service Tax Registration
• The Registered assessee who ceases to provide the taxable services for which
he had been registered shall surrender his certificate of registration to the
concerned Central Excise Officer (Superintendent of Central Excise)

Small Service Provider Exemption
(Notification No. 33/2012-S.T.)
11
If the Aggregate Value of Taxable Service
provided by a service provider in the Last
Financial Year does not exceed Rs.10 Lakhs
Such a Person is not liable to pay service tax
upto Rs. 10 Lakhs in Current Financial Year
i.e. 100% Exemption upto Rs.10 Lakhs in
Current Financial Year
A Small Service Provider (SSP) whose
Aggregate VOTS in a Financial Year exceeds
Rs. 9 Lakhs shall apply for registration within
a period of 30 Days from such date

Small Service Provider Exemption
(Notification No. 33/2012-S.T.)
Important Notes
a) Aggregate Value is the sum of 1st consecutive invoices issued
during the Financial Year.
b) Aggregate Value does not include the value of services which are
exempt from service tax.
c) SSP Exemption is optional. But once exercised, it cannot be
withdrawn during the Financial Year.
12

Records to be Maintained
(Rule 5 of Service Tax Rules, 1994)
13
List of Records
• Invoices, Bills, Challans and Books of Accounts.
• Invoices of Inputs, Input Service and Capital Goods.
• Other Financial Records maintained by S.P. in the normal course
of business.
Preservation of Records
• Records to be preserved atleast for a period of 5 years
immediately after the financial year to which such records
pertain.
• Records can also be maintained by the assessee in Electronic
Form.

Payment of Service Tax
14
Category Frequency Due Date
Individual,
Proprietors or
Partnership Firms
Quarterly
For Q.E. 30th June
For Q.E. 30th Sept
For Q.E. 31st Dec
For Q.E. 31st March
- By 5th / 6th July
- By 5th / 6th October
- By 5th / 6th January
- By 31st March
Others (Companies,
Societies, Trusts etc.)
Monthly
For April to February
For March
- By 5th / 6th of Next Month
- By 31st March
Note:
a) As per Rule 6(2) of Service Tax Rules, 1994 every assessee shall
electronically pay the service tax payable by him, through internet
banking.
b) Assessee shall deposit service tax liability with the bank designated by
CBEC in Form GAR-7 Challan.

Interest on Delayed Payment of Service
Tax (Section 75)
15
Extend of Delay Simple Interest Rate Per Annum
Upto 6 months 18% p.a.
More than 6 months and upto 1 year 18% p.a. for first 6 months and 24%
p.a. for the period of delay beyond 6
months
More than 1 year 18% p.a. for first 6 months, 24% p.a.
for next 6 months and 30% p.a. for
the period of delay beyond 1 year
a) In case of Service Provider whose VOTS exceeds Rs.60 Lakhs in
Preceding Financial Year

Interest on Delayed Payment of Service
Tax (Section 75)
16
Extend of Delay Simple Interest Rate Per Annum
Upto 6 months 15% p.a.
More than 6 months and upto 1 year 15% p.a. for first 6 months and 21%
p.a. for the period of delay beyond 6
months
More than 1 year 15% p.a. for first 6 months, 21% p.a.
for next 6 months and 27% p.a. for
the period of delay beyond 1 year
b) In case of Service Provider whose VOTS does not exceed Rs.60 Lakhs
in Preceding Financial Year

Filing of Service Tax Returns
17
Returns under
Service Tax
Form for filing S.T.
Returns
Form ST-3
Frequency and Mode
of Filing
Frequency - Half Yearly
Mode - E-filing
Mandatory
Due Date for filing
S.T. Returns
Apr to Sep – 25th October
Oct to March – 25th April
Revised Return
(Rule 7B)
File within 90 days of
original return to rectify
mistakes

Late Filing Fees
(Rule 7C of Service Tax Rules, 1994)
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Period of Delay Fees
Upto 15 Days Rs.500/-
Beyond 15 Days but not later than 30 Days Rs. 1000/-
Beyond 30 Days Rs. 1000 + Rs. 100 per day
from 31st Day or Rs. 20,000
whichever is lower

Penalties under Service Tax (Section 77)
19
Section
Number
Nature of Violation Amount of Penalty
Section 77(1)(a) Failure to take Registration Maximum Rs. 10,000/-
Section 77(1)(b) Failure to Maintain BOA’s and Documents Maximum Rs. 10,000/-
Section 77(1)(c) Failure to -
- Furnish Information called by CEO or
- Produce Documents or
- Appear before CEO where summons are
issued
Rs. 10,000/- or Rs.200
per day for the period of
delay, whichever is
higher
Section 77(1)(d) Failure to pay tax electronically Maximum Rs. 10,000/-
Section 77(1)(e) Failure to -
- Issue Invoice or
- Account Invoice in BOA’s or
Issues Invoice with incorrect or incomplete
details
Maximum Rs. 10,000/-
Section 77(1)(f) Contravention where no penalty separately
provided
Maximum Rs. 10,000/-

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Presentation by : Raj Mukesh Khona
Reach me at : rajkhona1@gmail.com
Connect with me on : Linked In | Facebook | Twitter

Procedural Aspects under Service Tax

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