Professional Documents
Culture Documents
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DISCLAIMER This presentation provides general information existing as at the time of preparation. The presentation is meant for general guidance and no responsibility for loss arising to any person acting or refraining from acting as a result of any material contained in this publication will be accepted by BMR Advisors/ Legal. It is recommended that professional advice be taken based on the specific facts and circumstances. This presentation does not substitute the need to refer to the original pronouncements
CHARGEABILITY
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CHARGEABILITY
Service tax is attracted on ALL SERVICES Except above Services provided in a non-taxable territory not liable to tax No requirement to fulfil the export conditions Services Agreed to be provided also taxable
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OVERVIEW
Exemptions under new law
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Performance of functions and the implementation of schemes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule
Services by way of public conveniences such as provision of facilities of bathroom, washrooms, lavatories, urinal or toilets
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Services by Employees State Insurance Corporation to persons governed under the Employees Insurance Act, 1948
Services by a performing artist in folk or classical art forms of (i) music, or (ii) dance, or (iii) theatre, excluding services provided by such artist as a brand ambassador
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Services by way of collecting or providing news by an independent journalist, Press Trust of India or United News of India
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(1) taxable service which is exempt from the whole of the service tax leviable thereon; or
(2) service, on which no service tax is leviable under section 66B of the Finance Act; or (3) taxable service whose part of value is exempted on the condition that no credit of inputs and input services, used for providing such taxable service, shall be taken; but shall not include a service which is exported in terms of rule 6A of the Service Tax Rules, 1994 Whether exempted service include activities which are not a service ?
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Compliance formalities required? Person liable for paying service tax to register etc
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Wholly Consumed
The services that are wholly consumed inside the SEZ would have to be determined based on Rule 4 and 5 of the PPS Rules (which pertain to performance and property based services)
In respect of other services (ie, services not falling under Rule 4 and 5) the same would be exempt upfront only in the case of entities carrying on operations entirely from an SEZ
The option of refund continues to apply for services not wholly consumed within the SEZ
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Impact / issues Types of services that can potentially qualify as wholly consumed to be re-determined for availing upfront exemption or refund To determine whether services partially performed within the SEZ would qualify as actually performed Earlier Form A-1 to be given only by standalone SEZ units Now by ALL units seeking ab initio exemption
Refund for exclusive services in full or proportionately to be examined? SEZ Circular clarified earlier that 100% refund for services used exclusively available
While the new formula shall impact amount claimed as refund, SEZ Unit to maintain proof of FIRC to substantiate computation of export turnover
Export turnover for refund purposes based on receipts from customers and completion of services
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THANK YOU
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ANNEXURES
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Services specified in Rule 4 of the PPS Rules, when these are actually performed within the SEZ Category II Services specified in Rule 5 of the PPS, when these are performed in respect of property located or intended to be located within the SEZ Category III When entity has no operations Services other other than in the SEZ than those When entity has operations Category I outside the SEZ and II above
Such services shall be upfront exempt from the levy of service tax
Such services shall be upfront exempt from the levy of service tax
Upfront exemption available on such services Upfront exemption not available and such services shall be eligible for refund of service tax paid as per conditions laid out
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an individual as an advocate or a partnership firm of advocates by way of legal services to, an advocate or partnership firm of advocates providing legal services ; any person other than a business entity; or a business entity with a turnover up to rupees ten lakh in the preceding financial year; or
legal service means any service provided in relation to advice, consultancy or assistance in any branch of law, in any manner and includes representational services before any court, tribunal or authority
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Services by way of sponsorship of sporting events organised by notified boards/ federations Services provided to or by an educational institution in respect of education exempted from service tax, by way of auxiliary educational services; or renting of immovable property;
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TRANSPORTATION SERVICES
Services by way of transportation by rail or a vessel from one place in India to another of the following goods petroleum and petroleum products relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap; defence or military equipments; postal mail or mail bags; household effects; newspaper or magazines registered with the Registrar of Newspapers; railway equipments or materials; agricultural produce; foodstuff including flours, tea, coffee, jaggery, sugar, milk products, salt and edible oil, excluding alcoholic beverages; or chemical fertilizer and oilcakes;
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TRANSPORTATION SERVICES
Services provided by a goods transport agency by way of transportation of
Fruits, vegetables, eggs, milk, food grains or pulses in a goods carriage; Gross amount charged on a consignment transported in a single goods carriage does not exceed INR 1500; Gross amount charged for transportation of all such goods for a single consignee does not exceed INR 750
Services by way of giving on hire to a state transport undertaking, a motor vehicle meant to carry more
than twelve passengers; or to a goods transport agency, a means of transportation of goods;
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TRANSPORTATION SERVICES
Transport of passengers, with or without accompanied belongings, by Air, embarking from or terminating in an airport located in the state of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or Tripura or at Bagdogra located in West Bengal; A contract carriage for the transportation of passengers, excluding tourism, conducted tour, charter or hire; or ropeway, cable car or aerial tramway
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manufacturer
Processes of electroplating, zinc plating, anodizing, heat treatment, powder coating, painting including spray painting or auto black, during the course of manufacture of parts of cycles or sewing machines upto an aggregate value of taxable service of the specified processes of INR 150 lacs in a financial year
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OTHER EXEMPTIONS
Telephone calls from departmentally run public telephone etc Slaughtering of bovine animals
Public libraries
Vehicle parking to general public
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CHARITABLE ACTIVITIES
Charitable activities means activities relating to Public health Advancement of religion or spirituality Advancement of specified educational programmes or skill development relating Preservation of environment including watershed, forests and wildlife; or Advancement of any other object of general public utility up to(a) INR 18.75 lacs for the year 2012-13 (b) INR 25 lacs in any other financial year (Total value of such activities had not exceeded INR 25 lacs during the preceding financial year)
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Receipt in Foreign Exchange to be within the time allowed by the Reserve Bank of India to claim the benefit of Cenvat/Rebate
CONTINUING EXEMPTIONS
Threshold Exemption of INR 10 lacs to service provider Research and Development Cess paid on import of technology Property tax paid in respect of renting of immovable property Services for the official use of foreign diplomatic missions Exemptions that have moved to Negative list (transmission of electricity, education, agriculture related etc) Exemptions under the Mega Exemption Notification Activities treated as provided in non-taxable territory as per PPS (transport of goods by air, transit goods etc) Abatements for various services Exemption/Refund for SEZ developers/Units Exemption/Rebate to exporters
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EXEMPTIONS RESCINDED
Services provided by banks & Financial Institutions in relation to collection of duties and taxes on behalf of government Services provided to the Reserve Bank of India in cases of reverse charge tax liability (domestic/import) Club or Association service - Exemption to association of dyeing units in relation to effluent treatment Import of Services by Hotel - Hotel accommodation booking by and for non-resident Value of goods/materials sold by the service provider to the service recipient (12/2003) Mere transfer? Packaged or canned software exemption from service tax where excise/customs duty paid
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EXEMPTIONS RESCINDED
Site formation and clearance, excavation and earthmoving and demolition and such other similar activities for roads, airports, railways, transport terminals, bridges, tunnels, dams, ports Transport of export goods by air within port or airport Repair of Ships/Boards/Vessels belonging to Govt. within port or airport Supply of Water, Electricity within the port or airport
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ORIGINAL WORKS
Original works has been defined to mean the following:
(i) all new constructions; (ii) all types of additions and alterations to abandoned or damaged structures on land that are required to make them workable; (iii) erection, commissioning or installation of plant, machinery or equipment or structures, whether pre-fabricated or otherwise
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