1 ServiceTax Sample

CA CPT/IPCC/FINAL
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age 1 of 13
CA ICC - Serv|ce 1ax : 8y CA 8 S ICLL
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Service Tax Basic Concepts
Basic Concepts
Servlce Lax ls an lndlrecL Lax levled on provldlng Servlces.
Servlces Lax was lnlLlally lmposed by chapLer v of llnance AcL 1994 on 3 servlces (Lelephone, general
lnsurance and sLock broklng). Slnce Lhen more servlces are added Lo Lhe Laxable llsL every year and
currenLly more Lhan 100 servlces are llable Lo servlce Lax.
1here ls no separaLe Servlce 1ax AcL". Servlce Lax ls lmposed every year by maklng amendmenLs Lo Lhe
llnance AcL 1994.
AmendmenLs made by Lhe llnance 8lll, ln respecL of servlce Lax maLLers, come lnLo force from Lhe daLe
of enacLmenL of Lhe llnance 8lll l.e., Lhe daLe on whlch Lhe llnance 8lll recelves Lhe assenL of Lhe
resldenL of lndla.
Powever, wherever lL ls speclflcally provlded so ln Lhe llnance 8lll, cerLaln amendmenLs llke new Laxable
servlces lnLroduced vlde Lhe llnance 8lll and alLeraLlon ln Lhe scope of exlsLlng Laxable servlces, become
effecLlve from a daLe Lo be noLlfled afLer Lhe enacLmenL of Lhe llnance 8lll.
1he servlce Lax ls currenLly levled aL a unlform raLe of 10.3 (lncludlng cess).
Sources of law of Service Tax
1he followlng are Lhe maln sources of law of servlce Lax:-
(a) llnance AcL, 1994 [SecLlons 64 Lo 96] as amended from Llme Lo Llme by llnance AcL of currenL
year.
(b) Servlce 1ax 8ules, 1994
(c) Servlce 1ax (8eglsLraLlon of Speclal CaLegory of ersons) 8ules, 2003
(d) LxporL of Servlces 8ules, 2003
(e) Servlce 1ax (ueLermlnaLlon of value) 8ules, 2006
(f) CenvaL CredlL 8ules, 2004
(g) CenLral Lxclse 8ules relaLlng Lo Appeals
(h) Servlce Lax clrculars, noLlflcaLlons and case laws
(l) Crders and Lrade noLlces lssued by C8LC
Administrative Set-up of Service Tax
1he admlnlsLraLlon of servlce Lax ls enLrusLed Lo CenLral Lxclse deparLmenL. 1he cenLral auLhorlLy LhaL
regulaLes Lhe maLLers relaLlng Lo servlce Lax ls CenLral 8oard of Lxclse and CusLoms (C8LC). 1he role of
C8LC ls:-
(1) 1o monlLor Lhe collecLlon and assessmenL of servlce Lax,
(2) 1o sLudy Lhe lmplemenLaLlon of Servlce 1ax ln Lhe fleld and Lo suggesL measure Lo lncrease
revenue collecLlon,
(3) 1o underLake sLudy of law and procedures,
(4) 1o form a daLabase, and
(3) 1o lnspecL Lhe Servlce 1ax Cells ln Lhe ueparLmenL.
1he admlnlsLraLlve seL-up of Servlce 1ax ls as follows:-
(l) MlnlsLry of llnance
(ll) ueparLmenL of 8evenue
(lll) CenLral 8oard of Lxclse and CusLoms - Peaded by Chalrman of C8LC
(lv) CenLral Lxclse Zones - Peaded by Chlef Commlssloner of CenLral Lxclse
CA CPT/IPCC/FINAL
age 1 of 13
Basic Concepts
llnance AcL 1994.
resldenL of lndla.
year.
C8LC ls:-
revenue collecLlon,
CA CPT/IPCC/FINAL
age 1 of 13
Basic Concepts
llnance AcL 1994.
resldenL of lndla.
year.
C8LC ls:-
revenue collecLlon,
CA CPT/IPCC/FINAL
age 2 of 13
(v) CenLral Lxclse CommlssloneraLes - Peaded by Commlssloner of CenLral Lxclse asslsLed by
AddlLlonal and !olnL Commlssloners of CenLral Lxclse
(vl) CenLral Lxclse ulvlslons - Peaded by uepuLy Commlssloner or AsslsLanL Commlssloner of CenLral
Lxclse
(vll) CenLral Lxclse 8ange - Peaded by SuperlnLendenL of CenLral Lxclse asslsLed by lnspecLors
Conslderlng Lhe lncreaslng workload due Lo Lhe expandlng coverage of servlce Lax, an offlce of ulrecLor
Ceneral (Servlce 1ax) has been formed. 1he funcLlons and powers of ulrecLor Ceneral (Servlce 1ax) are
as follows:-
(1) 1o ensure LhaL proper esLabllshmenL and lnfrasLrucLure has been creaLed under dlfferenL CenLral
Lxclse CommlssloneraLes Lo monlLor Lhe collecLlon and assessmenL of servlce Lax.
(2) 1o sLudy Lhe sLaff requlremenL aL fleld level for proper and effecLlve lmplemenLaLlon of servlce
Lax.
(3) 1o sLudy as Lo how Lhe servlce Lax ls belng lmplemenLed ln Lhe fleld and Lo suggesL measures as
may be necessary Lo lncrease revenue collecLlon or Lo sLreamllne procedures.
(4) 1o underLake sLudy of law and procedures ln relaLlon Lo servlce Lax wlLh a vlew Lo slmpllfy Lhe
servlce Lax collecLlon and assessmenL and make suggesLlons Lhereon.
(3) 1o form a daLa base regardlng Lhe collecLlon of servlce Lax from Lhe daLe of lLs lncepLlon and Lo
monlLor Lhe revenue collecLlon from servlce Lax.
(6) 1o lnspecL Lhe servlce Lax cells ln Lhe CommlssloneraLe Lo ensure LhaL Lhey are funcLlonlng
effecLlvely.
(7) 1o underLake any oLher funcLlons as asslgned by Lhe 8oard from Llme Lo Llme.
1he ulrecLoraLe of Servlce 1ax coordlnaLes beLween Lhe C8LC and CenLral Lxclse CommlssloneraLes.
Role of Cbartered Accountants
1here ls a greaL scope for professlonals llke charLered accounLanLs ln Lhe fleld of servlce Lax slnce belng a
relaLlvely new area noL many oLher professlonals are pracLlclng ln Lhls fleld of lndlrecL Lax. 1he naLure of
servlces whlch a CharLered AccounLanL can provlde are:-
(1) Advlsory servlces ln respecL of naLure and appllcaLlon of law of servlce Lax
(2) Servlces for complylng wlLh procedural requlremenL, llke reglsLraLlon, flllng of reLurn (lncludlng e-
flllng), eLc.
(3) 8epresenLaLlon servlces - A charLered accounLanL ls allowed Lo appear before Lhe (a) AssessmenL
AuLhorlLles, (b) Ad[udlcaLlon AuLhorlLles, and (c) AppellaLe AuLhorlLles.
(4) Scope for cerLlflcaLlon and audlL under servlce Lax.
(3) 1ax lannlng for cllenLs by keeplng abreasL of Lhe laLesL noLlflcaLlons and Lrade noLlces ln addlLlon Lo
Lhe changes ln law.
Approacbes to Levy of Service Tax
1he levy of a servlce Lax can be based on elLher of Lhe followlng 2 approaches:
1. Comprehens|ve coverage: 1he comprehenslve approach conLemplaLes LaxaLlon of all servlces and a
negaLlve llsL ls glven ln case some servlces are Lo be exempLed.
2. Se|ect|ve coverage: ln Lhe case of selecLlve approach, only selecLlve are sub[ecL Lo servlce Lax. ln Lhls
case, Lhe leglslaLor aLLempLs Lo speclfy and llsL Lhe servlces LhaL would be Laxable and Lhe scope of
coverage of each servlce. 1here ls no reslduary caLegory for Laxlng all servlces.
lndla ls followlng Lhe selecLlve approach of Laxlng servlces. Servlce Lax ls generally payable on speclfled
servlces by Lhe servlce provlder. Powever, ln cerLaln cases, servlce Lax ls payable by Lhe recelver of
servlces.
1here ls no requlremenL of deducLlon of servlce Lax aL source or paymenL of servlce Lax ln advance.
CA CPT/IPCC/FINAL
age 2 of 13
Lxclse
as follows:-
Lax.
effecLlvely.
flllng), eLc.
Lhe changes ln law.
servlces.
CA CPT/IPCC/FINAL
age 2 of 13
Lxclse
as follows:-
Lax.
effecLlvely.
flllng), eLc.
Lhe changes ln law.
servlces.
CA CPT/IPCC/FINAL
age 3 of 13
Applicability of Service Tax - Section 4
Servlce 1ax ls a desLlnaLlon based consumpLlon Lax.
Servlce Lax exLends Lo whole of lndla excepL Lhe sLaLe of !ammu and kashmlr.
lndla lncludes LerrlLorlal waLers exLended upLo 12 nauLlcal mlles from Lhe lndlan land mass.
1he provlslons of servlce Lax have been exLended Lo deslgnaLed areas ln ConLlnenLal shelf and excluslve
economlc zone of lndla. Lxcluslve Lconomlc Zone (LLZ) of lndla exLends upLo 200 nauLlcal mlles lnslde
Lhe sea from Lhe base llne. ln Lhls zone, lndla has excluslve rlghLs Lo explolL lL for economlc purposes llke
flshlng, mlneral resources and sclenLlflc research.
1here shall be no servlce Lax on Lhe servlces consumed ln Lhe sLaLe of !ammu and kashmlr.
Powever lf servlce provlder ls ln Lhe sLaLe of !ammu and kashmlr and provldes servlces Lo anyone
ouLslde Lhe sLaLe of !ammu and kashmlr Lhen servlce Lax shall be lmposed on such servlces rendered.
Fxumplex
Mr. A of AmrlLsar provldes servlces Lo Mr. ! aL !ammu - no Servlce Lax ls appllcable.
Mr. ! of !ammu provldes servlces Lo Mr. k of kanpur - Servlce Lax ls payable.
Scope of Service Tax
Servlce Lax ls a Lax on servlces and noL a Lax on any Lrade or professlon. lL ls levlable only lf Lhere ls
provlslon of servlce.
Servlce lmplles exlsLence of Lwo parLles, Servlce Lax ls aLLracLed when Lhere are Lwo parLles. Cne cannoL
glve servlce Lo hlmself.
lor charge of servlce Lax, lL ls necessary LhaL Lhe servlce provlder and servlce reclplenL should be Lwo
separaLe persons acLlng on prlnclpal-Lo-prlnclpal basls". Servlces provlded by an employee Lo hls
employer are noL covered under servlce Lax and, Lherefore, salarles or allowances pald Lo Lhem cannoL
be charged Lo servlce Lax.
A sub-conLracLor when provldes servlces Lo a rlnclpal ConLracLor, he ls llable Lo pay servlce Lax even lf
Lhe maln conLracLor ls paylng servlce Lax on Lhe enLlre value of Lhe conLracL. Powever, ln such a case, Lhe
prlnclpal conLracL can avall lnpuL credlL as per Lhe rules ln respecL of servlce Lax pald by Lhe sub-
conLracLor.
Servlce" means a useful resulL, producL of labour, whlch ls lnLanglble l.e. whlch cannoL be seen Lhrough
eyes. 1hus, servlce ls a value addlLlon LhaL can be felL only buL cannoL be seen.
1here ls no charge of servlce Lax on CosL of goods or MaLerlal sold by servlce provlder Lo Lhe recelver of
such servlces. Servlce 1ax ls payable only on Lhe servlces componenL.
Taxable Service
Servlce Lax ls lmposed on Laxable servlces already provlded or Lo be provlded ln fuLure by Lhe servlce
provlder.
Servlces Lo be provlded ln fuLure shall be chargeable Lo servlce Lax only lf Lhe advance paymenL for lL ls
recelved.
1axable servlces are menLloned ln secLlon 63(103) of llnance AcL, 1994. As of Loday, more Lhan 100
servlces llsLed are llable for servlce Lax.
Servlce Lax ls charged on Lhe value of servlce provlded whlch shall be compuLed ln accordance wlLh
secLlon 67 of llnance AcL, 2004 read wlLh Servlce 1ax (ueLermlnaLlon of value) 8ules, 2006.
no servlce Lax ls levlable upon Lhe servlces provlded free of cosL.
Servlce 1ax ls levlable [ 10 of Lhe value of Laxable servlces. LducaLlon Cess [ 2 and Secondary and
Plgher LducaLlon Cess [ 1 are chargeable on Lhe amounL of servlce Lax, Lhus, maklng Lhe effecLlve
raLe of servlce Lax aL 10.30 of Lhe value of Laxable servlce.
CA CPT/IPCC/FINAL
age 3 of 13
Fxumplex
conLracLor.
Taxable Service
provlder.
recelved.
CA CPT/IPCC/FINAL
age 3 of 13
Fxumplex
conLracLor.
Taxable Service
provlder.
recelved.
CA CPT/IPCC/FINAL
age 4 of 13
Charge of Service Tax
Cbarge of Service Tax - Section
Servlce 1ax ls charged aL a unlform raLe of 10 of Lhe value of Laxable servlces referred ln varlous sub-
clauses of SecLlon 63(103) of llnance AcL, 2004 and collecLed ln such manner as may be prescrlbed.
Servlce Lax ls furLher lncreased by an LducaLlon cess [ 2 and a Secondary and Plgher LducaLlon cess of
1. 1herefore, Lhe effecLlve raLe of servlce Lax ls 10.3.
Alternate Rate of Service Tax
Servlce Lax ls generally payable [ 10.3 of value of Laxable servlces. Powever, ln Lhe followlng cases an
opLlon ls avallable Lo pay an alLernaLlve raLe lnsLead of general raLe of 10.3:-
1. Life insuronce services - 1.03 of LoLal premlum
1he opLlon of Lax raLe of 1.03 on llfe lnsurance buslness ls appllcable only lf:-
(l) Lhe enLlre premlum pald by Lhe pollcy holder ls only Lowards rlsk cover ln llfe lnsurance, or
(ll) Lhe parL of Lhe premlum payable Lowards rlsk cover ln llfe lnsurance ls shown separaLely ln any
of Lhe documenLs lssued by Lhe lnsurer Lo Lhe pollcy holder.
2. 4ir 1rove/ 4qents services - 0.618 of baslc fare ln case of domesLlc booklngs, 1.236 of baslc fare
ln case of lnLernaLlonal booklngs.
1he opLlon once exerclsed shall apply for all booklngs and shall noL be changed durlng a flnanclal
year.
3. loreiqn exchonqe broker - 0.2373 of gross amounL.
Such opLlon shall noL be avallable ln cases where Lhe conslderaLlon for Lhe servlce provlded or Lo be
provlded ls shown separaLely ln Lhe lnvolce/blll/challan lssued by Lhe servlce provlder.
Classification of Service
Servlce 1ax ls payable on Lhe basls of classlflcaLlon of servlces glven ln SecLlon 63(103) of Lhe llnance
AcL, 2004. lf any servlce ls covered under more Lhan one sub-clause Lhen classlflcaLlon ls chosen as per
followlng rules:-
(l) Clause provldlng speclflc descrlpLlon ls chosen over one provldlng general descrlpLlon
(ll) ln case of composlLe servlces - Lhe clause whlch maLches wlLh Lhe essenLlal characLer of servlce
provlded ls chosen
(lll) lf servlce cannoL be classlfled as above - Lhe servlce whlch occurs flrsL ln numerlcal order ls
chosen.
(lv) Powever, slnce Lhe raLe of servlce Lax ls unlform [ 10.3, classlflcaLlon of servlce ls noL of much
pracLlcal slgnlflcance excepL menLlonlng ln Lhe servlce Lax reLurns.
Reverse Cbarge of Service Tax
Lvery person provldlng Laxable servlce ls hlmself prlmarlly llable Lo pay servlce Lax. Powever, SecLlon 68
empowers CenLral CovL. Lo noLlfy cerLaln persons Lo pay servlce Lax ln respecL of servlces recelved.
Accordlngly 8ule 2(1)(d) of Servlce 1ax 8ules, 1994 provlde for 'reverse charge' of servlce Lax ln Lhe
followlng cases:-
Notified 5ervices Person /iob/e for poyinq 5ervice 1ox
1elecommunlcaLlon Servlce u.C. of osL and 1elegraph
Chalrman of M1nL
Any Llcensee under lndlan 1elegraph AcL
Ceneral lnsurance 8uslness lnsurer or 8elnsurer
CA CPT/IPCC/FINAL
age 4 of 13
year.
followlng rules:-
provlded ls chosen
chosen.
followlng cases:-
Chalrman of M1nL
CA CPT/IPCC/FINAL
age 4 of 13
year.
followlng rules:-
provlded ls chosen
chosen.
followlng cases:-
Chalrman of M1nL
CA CPT/IPCC/FINAL
age 3 of 13
Valuation of Taxable Service
Valuation of Services - Section 7
1he conslderaLlon of any Laxable servlce ls Lhe gross amounL charged by Lhe servlce provlder for Lhe
servlces rendered or Lo be rendered.
1he conslderaLlon may be recelved before, durlng or afLer Lhe provlslon of Laxable servlces.
1he value of servlce llable Lo servlce Lax shall be deLermlned as follows:-
5ituotion vo/ue of 5ervice
Where LoLal conslderaLlon ls
'moneLary'
Cross AmounL charged by servlce provlder excludlng Servlce Lax
Where LoLal conslderaLlon ls 'non-
moneLary' l.e.
- Wholly ln klnd, or
- arLly money-parLly ln klnd
MoneLary equlvalenL Lo 'non-moneLary conslderaLlon' as follows:-
(l) value of slmllar servlces provlded Lo Lhlrd parLy
(ll) lf slmllar servlces are noL provlded Lo Lhlrd parLy, markeL
value as deLermlned by assessee buL noL lower Lhan cosL of
provlslon
Where LoLal conslderaLlon ls noL
ascerLalnable
As deLermlned on Lhe basls of valuaLlon 8ules
Note: no meLhod has been prescrlbed so far. 1herefore, Lhe value
shall be as per above meLhods only.
Where Lhere ls no conslderaLlon l.e.
lree Servlces
nlL
Money lncludes any currency, cheque, promlssory noLe, leLLer of credlL, drafL, pay order, Lraveler's
cheque, money order, posLal remlLLance and oLher slmllar lnsLrumenLs buL does noL lnclude currency
LhaL held for lLs numlsmaLlc value.
Cross amounL charged lnclude paymenL by cheque, credlL card, deducLlon from accounL and any form of
paymenL by lssue of credlL noLes or deblL noLes and book ad[usLmenL.
Servlce 1ux lx puyuble lrrexpectlve of whether churgeJ or reullzeJ xepurutely or not
SecLlon 68 of Lhe llnance AcL, 1994 casLs Lhe llablllLy Lo pay servlce Lax upon Lhe servlce provlder or
upon Lhe person llable Lo pay servlce Lax as per rule 2(1)(d) of Lhe Servlce 1ax 8ules, 1994. 1hls llablllLy ls
noL conLlngenL upon Lhe servlce provlder reallzlng or charglng Lhe servlce Lax aL Lhe prevalllng raLe.
1he sLaLuLory llablllLy does noL geL exLlngulshed lf Lhe servlce provlder falls Lo reallze or charge Lhe
servlce Lax from Lhe servlce recelver.
Where a servlce provlder does noL charge servlce Lax on a Laxable servlce or Lhe amounL charged ls
lncluslve of servlce Lax payable, Lhe value of Laxable servlce shall be calculaLed as follows:-
1axable value of servlce = Cross AmounL charged x 100
100 + 8aLe of servlce Lax
Fxumple
lf a servlce provlder ralses a blll for 8s. 10,000/- and servlce Lax ls noL charged ln Lhe lnvolce, Lhe value of
Laxable servlce shall be calculaLed as follows:-
value of Laxable servlce = 10,000 x 100/110.3 = 9066.18
Servlce 1ax payable Lhereon [ 10.3 = 9066.18 x 10.3 = 8s. 934 (rounded off).
Exclusions in Valuation of Services
(l) Sule of 0ooJx
noLlflcaLlon 12/2003 daLed 20.6.2003
CA CPT/IPCC/FINAL
age 3 of 13
'moneLary'
moneLary' l.e.
provlslon
ascerLalnable
lree Servlces
nlL
Fxumple
(l) Sule of 0ooJx
CA CPT/IPCC/FINAL
age 3 of 13
'moneLary'
moneLary' l.e.
provlslon
ascerLalnable
lree Servlces
nlL
Fxumple
(l) Sule of 0ooJx
CA CPT/IPCC/FINAL
age 6 of 13
1he value of sale of goods dlsLlncL and separaLe from Lhe servlces provlded ls Lo be excluded. Powever,
Lhere should be documenLary proof speclflcally lndlcaLlng Lhe value of sald goods and maLerlals. Also,
CenvaL lnpuL credlL should noL have been avalled for such goods or maLerlals.
ln cerLaln cases, supply of goods ls lnLegral Lo Lhe renderlng of servlces. 1he sale conslderaLlon for such
supply of goods cannoL be dlssecLed from Lhe servlce elemenL and Lhe same shall be exposed Lo llablllLy
for servlce Lax.
ln case of commerclal Lralnlng and coachlng lnsLlLuLes, deducLlon wlll be noL be avallable for any sLudy
maLerlal or wrlLLen LexL provlded by Lhe lnsLlLuLe.
(ll) Relmburxement of Fxpenxex by Pure Agentx
8elmbursemenL of expenses by persons acLlng as 'ure AgenL' for servlce recelver ls excluded.
'ure AgenL' ls a person who has an agreemenL wlLh servlce recelver Lo procure goods or servlces or
lncurs expenses on behalf of Lhe servlce recelver. 1he sallenL feaLures of a pure agenL are:-
1. Pe has no LlLle over Lhe goods/servlces of Lhe prlnclpal.
2. Pe cannoL use Lhem for hls purpose.
3. Pe geLs from Lhe servlce recelver only Lhe acLual cosL of such purchases.
lor example, a bulldlng conLracLor may buy cerLaln bulldlng maLerlal on behalf of Lhe bullder company,
passes on Lhe acLual cosL Lo Lhe company, possesses no LlLle over Lhe maLerlals and leaves Lhe balance
maLerlals aL Lhelr slLe. ln such cases, Lhe value of Laxable servlces of bulldlng conLracLor shall be excluslve
of cosL of maLerlals.
CA CPT/IPCC/FINAL
age 6 of 13
for servlce Lax.
CA CPT/IPCC/FINAL
age 6 of 13
for servlce Lax.
CA CPT/IPCC/FINAL
age 7 of 13
Payment of Service Tax
Payment of Service Tax - Section 8
upon Lhe person llable Lo pay servlce Lax as per rule 2(1)(d) of Lhe Servlce 1ax 8ules, 1994.
lrrespecLlve of meLhod of accounLlng followed by Lhe assessee, servlce Lax ls payable Lo Lhe credlL of
CovernmenL only on Lhe recelpL of paymenL Lowards Lhe value of Laxable servlces.
Servlce Lax ls payable only on Lhe amounLs acLually recelved.
Servlce Lax ls payable even on advance paymenLs recelved for servlces yeL Lo be rendered.
lor Lhe servlce Lax Lo be levlable, on Lhe daLe on whlch Lhe servlce was rendered, lL should be exlglble Lo
Lhe levy.
lf any advance ls recelved for a non-Laxable servlce buL whlch becomes Laxable durlng Lhe course of
provlslon of servlce, Lhe advance shall be requlred Lo be apporLloned accordlngly.
lf advance ls recelved for Laxable servlces buL laLer on no servlces are provlded, Lhe servlce Lax pald shall
be llable Lo be refunded.
Servlce Lax ls payable on amounL recelved ln lnsLallmenLs or on parL paymenLs recelved ln respecL of
conLlnuous supply of servlces.
Lxamp|e
A charLered accounLanL ralses a blll for audlLlng servlces on 13
Lh
March, 2010 for 8s. 33,130 (lncludlng servlce
Lax of 8s. 3,130/-) and Lhe cllenL pays Lhls blll ln May, 2010, Lhe llablllLy Lo pay servlce Lax Lo Lhe CovernmenL
would arlse only ln May, 2010.
Provlxlonul Puyment of Servlce 1ux
ln case Lhe assessee cannoL correcLly esLlmaLe Lhe amounL of servlce Lax payable on any servlces, he can
apply ln wrlLlng Lo AsslsLanL/uepuLy Commlssloner of CenLral Lxclse for provlslonal paymenL of servlce
Lax along wlLh a memorandum and underLaklng ln lorm no. S1-3A.
Cn recelpL of lorm S1-3A, Lhe AsslsLanL/uepuLy Commlssloner may allow paymenL of servlce Lax on
provlslonal basls on such value of Lhe Laxable servlce as may be speclfled by Lhe servlce provlder.
Free Services
lf Lhe servlces have been provlded wlLhouL conslderaLlon (l.e. lree servlces) Lhen servlce Lax ls noL
payable.
Powever, dlsLlncLlon ls Lo be made beLween 'free servlces' and 'servlces where conslderaLlon ls
unascerLalnable'. Whlle Lhe former ls noL chargeable Lo servlce Lax, SecLlon 67 and valuaLlon rules
provlde for LaxaLlon on Lhe laLLer.
Also, Lhe servlces provlded musL be free and cosL ls noL recovered Lhrough oLher means.
Slmllarly, lf Lhe conslderaLlon of servlces provlded ls recelved from any oLher person (oLher Lhan Lhe
servlces recelver), Lhe value of servlce shall be Laxable. lor example, free servlce of moLor vehlcle
provlded by Lhe dealers Lo lLs cusLomers, buL relmbursemenL glven by moLor-vehlcle manufacLurlng
companles.
CA CPT/IPCC/FINAL
age 7 of 13
Lhe levy.
Lxamp|e
Lh
Free Services
payable.
companles.
CA CPT/IPCC/FINAL
age 7 of 13
Lhe levy.
Lxamp|e
Lh
Free Services
payable.
companles.
CA CPT/IPCC/FINAL
age 8 of 13
Registration for Service Tax
Persons required to Register - Section 9
Lvery person who ls llable Lo pay servlce Lax wlll have Lo geL Lhem reglsLered. 1herefore Lhe followlng
caLegory of persons musL obLaln servlce Lax reglsLraLlon:-
(l) Servlce provlders of Laxable servlces
(ll) Speclfled person as per SecLlon 68 read wlLh 8ule 2(1)(d) - 8everse charge caLegorles
AddlLlonally SecLlon 69(2) empowers CenLral CovernmenL Lo speclfy oLher persons or class of persons
who shall be requlred Lo reglsLer Lhem wlLh CenLral Lxclse. CenLral CovL. has noLlfled Lhe followlng
persons Lo make appllcaLlon for reglsLraLlons:-
(l) An lnpuL servlce dlsLrlbuLor
(ll) Small Servlce rovlder - Servlce provlder of Laxable servlce whose aggregaLe value of Laxable
servlce ln a flnanclal year exceeds 8s. 9 lakh
Who lx u Input Servlce lxtrlbutor - Rule 2(m) of Cenvut CreJlt Rulex
An 'lnpuL Servlce ulsLrlbuLor' means an offlce of:
(l) ManufacLurer or
(ll) roducer of flnal producLs or
(lll) rovlder of ouLpuL servlce
whlch recelves Lax pald lnvolces (under 8ule 4A of Servlce 1ax 8ules, 1994) Lowards purchases of lnpuL
servlces and lssues lnvolce, blll or challans for Lhe purpose of dlsLrlbuLlng Lhe credlL of servlce Lax pald on Lhe
sald servlces Lo such manufacLurer or producer or provlder.
Procedure for Registration
Appllcutlon for Reglxtrutlon
An appllcaLlon for reglsLraLlon has Lo be made Lo deslgnaLed SuperlnLendenL of CenLral Lxclse
accompanled along wlLh Lhe followlng documenLs:-
1. AppllcaLlon ln lorm S1-1 ln LrlpllcaLe duly slgned
2. ALLesLed Copy of Lhe An Card
3. roof of Address of Lhe premlses whlch ls requlred Lo be reglsLered
4. Copy of Lhe uocumenL governlng Lhe consLlLuLlon of Lhe organlzaLlon (arLnershlp deed ln case of a
parLnershlp flrm, Memorandum of AssoclaLlon ln case of a company, 1rusL ueed ln case of a LrusLs or
assoclaLlons)
3. AuLhorlLy LeLLers ln favor of Lhe person who ls Lo collecL Lhe reglsLraLlon cerLlflcaLe on Lhe LeLLer
head of Lhe organlzaLlon applylng for reglsLraLlon.
6. ower of ALLorney ln case Lhe documenLs are slgned by an auLhorlzed represenLaLlve
1he appllcaLlon has Lo be made wlLhln a perlod of 30 days from Lhe daLe of:-
(l) ln case of person llable Lo pay servlce Lax - When Lhe relevanL servlce becomes Laxable
(ll) ln case of lnpuL servlce dlsLrlbuLor - CommencemenL of buslness
(lll) ln case of small servlce provlder - When Lhe aggregaLe value of Laxable servlces exceed 8s. 9 lakh.
1he reglsLraLlon shall be granLed wlLhln 7 days of recelpL of appllcaLlon ln lorm S1-2.
ln case of Laxable servlces provlded by mulLlple roprleLorshlp llrms under dlfferenL names, Lhe
appllcanL shall reglsLer lndlvldually for each of such proprleLary llrm.
CA CPT/IPCC/FINAL
age 8 of 13
(l) ManufacLurer or
assoclaLlons)
CA CPT/IPCC/FINAL
age 8 of 13
(l) ManufacLurer or
assoclaLlons)
CA CPT/IPCC/FINAL
age 9 of 13
Return and Assessment
Self Assessment - Section 70
Lvery person llable Lo pay servlce Lax shall hlmself assess and pay Lhe Lax. 1hls process ls known as Self
AssessmenL.
llllng of servlce Lax reLurn for reglsLered assessees ls mandaLory, even lf Lhere ls no servlce provlded. ln
such case, he shall flle a 'nlL' reLurn by Lhe due daLe.
Provisional Assessment
ln case Lhe assessee cannoL correcLly esLlmaLe Lhe amounL of servlce Lax payable for any monLh or
quarLer, he can apply ln wrlLlng Lo AsslsLanL/uepuLy Commlssloner of CenLral Lxclse for provlslonal
paymenL of servlce Lax along wlLh a memorandum and underLaklng ln lorm no. S1-3A.
Form of Return and Due dates
lurLher, Lhe servlce provlder ls requlred Lo flle a reLurn (ln LrlpllcaLe) Lo SuperlnLendenL of CenLral Lxclse
on half yearly basls ln lorm S1-3 (lorm S1 - 3A for provlslonal assessmenL). 1he half yearly due daLes
are:-
(a) 23Lh CcLober for Lhe half year endlng 30Lh SepLember, and
(b) 23Lh Aprll for Lhe half year endlng 31sL March.
L-flllng of reLurns ls also permlsslble uslng Lhe 13-dlglL Servlce 1ax ayer Code.
1he reLurn can be flled by reglsLered posL provlded Lhe assessee should ensure LhaL lL reaches Lhe
ulvlslonal Cfflce on or before Lhe due daLe.
lf Lhe due daLe ls a publlc hollday Lhen Lhe reLurn should be flled on Lhe nexL worklng day.
Contents of Return
1he 8eLurn of Servlce 1ax conLalns deLalls such as:-
(l) amounL recelved Lowards Laxable servlce
(ll) amounL recelved ln advance Lowards Laxable servlce Lo be provlded
(lll) amounL bllled for exempLed servlces and servlces exporLed wlLhouL paymenL of Lax
(lv) amounL bllled for servlces on whlch Lax ls Lo be pald
(v) abaLemenL clalmed - value
(vl) noLlflcaLlon number of abaLemenL and exempLlon
(vll) servlce Lax payable
(vlll) educaLlon cess payable
(lx) 18-6 challan daLe and number
(x) credlL deLalls for servlce Lax provlder/reclplenL
Enclosures to Return
1he followlng documenLs are requlred Lo be enclosed wlLh Lhe 8eLurn of Servlce Lax:-
(l) Coples of 18-6 or CA8-7 challans ln respecL of paymenLs of servlce Lax
(ll) Copy of Memorandum ln lorm S1-3A ln case of provlslonal assessmenL
(lll) ln case of flrsL reLurn - LlsL of all accounLs malnLalned by assessee lncludlng memoranda
recelved from branch offlces.
CA CPT/IPCC/FINAL
age 9 of 13
AssessmenL.
are:-
Contents of Return
CA CPT/IPCC/FINAL
age 9 of 13
AssessmenL.
are:-
Contents of Return
CA CPT/IPCC/FINAL
age 10 of 13
TaxableServices
Taxable Services
Cnly Lhe followlng servlces whlch are provlded ln SecLlon 63(103) are llable Lo servlce Lax.
Value of Taxable Service
SecLlon 67 of llnance AcL, 1994 provldes LhaL value of any Laxable servlce shall be Lhe gross amounL
charged by Lhe servlce provlder for such servlce rendered by hlm.
CuL of pockeL expenses can be deducLed from Lhe gross value of Laxable servlce only lf Lhe followlng
condlLlons are fulfllled:-
(l) LxpendlLure ls lncurred flrsL by servlce provlder,
(ll) LxpendlLure ls lncurred on behalf of cllenL or cusLomer,
(lll) LxpendlLure (and noLhlng more) ls relmbursed by servlce recelver,
(lv) uocumenLary evldence ls malnLalned ln supporL of such acLual relmbursemenL.
1he servlce Lax elemenL should be shown separaLely on Lhe lnvolce/blll/challans lssued by Lhe servlce
provlder clearly separaLlng Lhe servlce Lax, educaLlon cess and secondary and hlgher educaLlon cess.
1uxuble Servlcex covereJ ln Syllubux of IPCC for Muy,Nov 2011 Fxumx
1. Legal consulLancy servlces
2. Commerclal Lralnlng or coachlng servlces
3. lnformaLlon Lechnology sofLware servlces
4. Cargo handllng servlces
3. CusLoms Pouse AgenL's servlces
6. racLlclng CharLered AccounLanL's servlces
7. ConsulLlng Lnglneer's servlces
8. Manpower recrulLmenL or supply agency's servlces
1. Legal consultancy service
Legal consulLancy servlce means Lhe servlce provlded or Lo be provlded
Lo a buslness enLlLy
by any buslness enLlLy
ln relaLlon Lo advlce, consulLancy or asslsLance
ln any branch of law
ln any manner.
Powever, any servlce provlded by way of appearance before any courL, Lrlbunal or auLhorlLy, shall noL
amounL Lo Laxable servlce.
'8uslness LnLlLy' lncludes an assoclaLlon of persons, body of lndlvlduals, company or flrm, buL does noL
lnclude an lndlvldual.
Cnly servlce provlded by a buslness enLlLy Lo anoLher buslness enLlLy ls covered by servlce Lax.
1herefore, servlces provlded by an lndlvldual advocaLe Lo any person, or a corporaLe legal flrm Lo an
lndlvldual wlll noL be Laxable.
2. Commercial Training or Coacbing
Any servlce provlded or Lo be provlded
Lo any person,
CA CPT/IPCC/FINAL
age 10 of 13
TaxableServices
Taxable Services
ln any manner.
Lo any person,
CA CPT/IPCC/FINAL
age 10 of 13
TaxableServices
Taxable Services
ln any manner.
Lo any person,
CA CPT/IPCC/FINAL
age 11 of 13
by a 'commerclal Lralnlng or coachlng cenLre'
ln relaLlon Lo commerclal Lralnlng or coachlng
ls a Laxable servlce.
'Commerclal Lralnlng or Coachlng cenLre' means
any lnsLlLuLe or esLabllshmenL
provldlng commerclal Lralnlng or coachlng for lmparLlng sklll or knowledge or lessons on any
sub[ecL or fleld oLher Lhan sporLs,
wlLh or wlLhouL lssuance of a cerLlflcaLe
and lncludes coachlng or LuLorlal classes
buL does noL lnclude:-
(l) reschool coachlng and Lralnlng cenLre, or
(ll) Any lnsLlLuLlon or esLabllshmenL whlch lssues any cerLlflcaLe or dlploma or degree or any
educaLlonal quallflcaLlon recognlzed by law for Lhe Llme belng ln force.
Commerclal Lralnlng or coachlng cenLre shall lnclude any cenLre or lnsLlLuLe by whaLever name called,
where Lralnlng or coachlng ls lmparLed for conslderaLlon, wheLher or noL such cenLre or lnsLlLuLe ls
reglsLered as a LrusL or a socleLy or slmllar oLher organlzaLlon under any law for Lhe Llme belng ln force
and carrylng on lLs acLlvlLy wlLh or wlLhouL proflL moLlve.
Any sLudy maLerlal or wrlLLen LexL provlded by lnsLlLuLe as an lnLegral parL of lLs Lralnlng or coachlng
servlces wlll noL be allowed as deducLlon. Powever lf sale of sLandard LexL books prlced separaLely ls noL
sub[ecL of servlce Lax.
Coachlng provlded by commerclal lnsLlLuLlons for compeLlLlve examlnaLlons, dlploma or degree of
forelgn unlverslLles are covered under servlce Lax lrrespecLlve of wheLher servlces are provlded
personally or Lhrough posL or onllne/lnLerneL.
lollowlng lnsLlLuLes are noL sub[ecL Lo servlce Lax:-
(l) All recognlzed or afflllaLed colleges, unlverslLles, boards, auLonomous lnsLlLuLlons provldlng
recognlzed degrees/cerLlflcaLes
(ll) rofesslonal lnsLlLuLlons such as lCAl, lCSl, lCWAl
(lll) vocaLlonal Lralnlng lnsLlLuLes
(lv) 8ecreaLlonal Lralnlng relaLlng Lo acLlvlLles such as dance, slnglng, marLlal arLs or hobbles
(v) lndlvlduals provldlng coachlng servlces aL Lhe premlses of Lhe recelver
uefinition of vocotiono/ 1roininq lnstitute
[As amended by Not|f|cat|on No. 3]2010-S1 dated 27.02.2010]
vocaLlonal Lralnlng lnsLlLuLe" means an lndusLrlal 1ralnlng lnsLlLuLe (l1l) / lndusLrlal 1ralnlng CenLre (l1C)
afflllaLed Lo Lhe naLlonal Councll for vocaLlonal 1ralnlng, offerlng courses ln deslgnaLed Lrades as noLlfled
under Lhe ApprenLlces AcL, 1961.
Notes
(1) 1he l1l and l1C have equlvalenL recognlLlon and Lhe cerLlflcaLes/dlploma's granLed by Lhem have
Lhe same recognlLlon. 1he only dlfference beLween l1C and l1l ls LhaL l1l are Lhe lnsLlLuLes owned
by Lhe CovernmenL whlle Lhe l1C are Lhe lnsLlLuLes owned by Lhe prlvaLe parLles.
(2) LlsL flgurlng under Schedule l of Lhe ApprenLlces AcL, 1961 covers englneerlng as well as non-
englneerlng Lrades. lew of Lhe deslgnaLed Lrades covered are:-
cuLLlng and Lallorlng Lrades
beauLlclan Lrades
agrlculLural Lrades
elecLrlcal Lrades
glass and ceramlc Lrades
heaL englne Lrades
hl-Lech Lrades
CA CPT/IPCC/FINAL
age 11 of 13
Notes
beauLlclan Lrades
agrlculLural Lrades
elecLrlcal Lrades
heaL englne Lrades
hl-Lech Lrades
CA CPT/IPCC/FINAL
age 11 of 13
Notes
beauLlclan Lrades
agrlculLural Lrades
elecLrlcal Lrades
heaL englne Lrades
hl-Lech Lrades
CA CPT/IPCC/FINAL
age 12 of 13
Questions from Previous Examinations
Concept unJ 0enerul Prlnclplex of Servlce 1ux
1. ls an unlncorporaLed assoclaLlon, formed afLer 1sL !une, 2009, llable Lo pay any servlce Lax? (2
Marks) (May, 2007)
2. 8rlefly explaln Lhe naLure of servlce Lax. (2 marks) (May, 2008)
3. Lxplaln as Lo how and when Lhe amendmenLs made ln llnance 8lll, ln respecL servlce Lax maLLers
come lnLo force? (2 Marks) (Nov, 2008)
4. WhaL are Lhe sources of servlce Lax law? (3 Marks) (Iune, 2009)
3. Whlch AcL and 8ule govern Lhe levy of servlce Lax ln lndla? (3 Marks) (Nov, 2009)
6. ls servlce Lax payable ln respecL of servlces provlded ln Lhe lndlan LerrlLorlal waLers? (2 Marks)(May,
2010)
7. ls servlce Lax levlable on fee collecLed by publlc auLhorlLles whlle performlng sLaLuLory funcLlons
under Lhe provlslons of law? (2 Marks)(May, 2010)
8. A Company locaLed ln Lhe SLaLe of !ammu & kashmlr rendered servlce ln uelhl. ls Lhe servlce
provlded by Lhe Company llable for Servlce Lax? (2 Marks)(May, 2010)
Churge of Servlce 1ux
1. Wlll Lhe paymenL Lo a hoLeller of 8s.10,000 on behalf of an archlLecL by a servlce recelver be
lncluded ln Lhe value of Laxable servlces? (2 Marks) (May, 2007)
2. Who ls llable Lo pay servlce Lax ln relaLlon Lo servlces provlded by a goods LransporL agency? (3
Marks) (Nov, 2007)
3. 8rlefly explaln abouL Lhe charge of servlce Lax. (3 Marks) (May, 2008)
4. WheLher llfe lnsurer carrylng on llfe lnsurance buslness has opLlon Lo calculaLe servlce Lax aL
dlfferenL raLe? (2 Marks) (Nov, 2008)
3. WheLher exporL servlce provlded by a servlce provlder ls excluded for Lhe purpose of paymenL of
servlce Lax? (3 Marks) (Nov, 2009)
6. uoes a servlce provlder have an opLlon Lo pay Servlce Lax aL a raLe dlfferenL from Lhe general raLe
appllcable on gross value of Laxable servlces, ln Lhe case of purchase and sale of forelgn currency? (3
Marks) (May, 2010)
Vuluutlon of 1uxuble Servlce
1. Can lL be sald LhaL lf Lhe Laxable servlce ls noL capable of ascerLalnmenL, Lhe same cannoL form parL
of value of Laxable servlces? (3 Marks) (May, 2007)
2. Pow ls Lhe value of Laxable servlces deLermlned when Lhe conslderaLlon agalnsL Laxable servlces ls
recelved ln oLher Lhan moneLary Lerms? (3 Marks) (Iune, 2009)
3. Ms. rlya rendered a Laxable servlce Lo a cllenL. A blll for 8s. 40,000 was ralsed on 29.4.2009, 8s.
13,000 was recelved from Lhe cllenL on 1.3.2009 and Lhe balance on 23.3.2009. no servlce Lax was
separaLely charged ln Lhe blll. 1he quesLlons are:
(a) ls Ms. rlya llable Lo pay servlce Lax, even Lhough Lhe same has noL been charged by her?
(b) ln case she ls llable, whaL ls Lhe value of Laxable servlce and Lhe servlce Lax payable? (2+4 Marks)
(May, 2008)
[Answer - value of Laxable servlce 8s. 36,263, Servlce 1ax payable 8s. 3,733]
4. !.C. rofesslonals, a parLnershlp flrm, glves Lhe followlng parLlculars relaLlng Lo Lhe servlces provlded
Lo varlous cllenLs by Lhem for Lhe half-year ended as on 30.09.09:
(l) 1oLal bllls ralsed for 8s. 8,73,000 ouL of whlch blll for 8s. 73,000 was ralsed on an approved
lnLernaLlonal CrganlsaLlon and paymenLs of bllls for 8s. 1,00,000 were noL recelved Llll 30.09.09.
CA CPT/IPCC/FINAL
age 12 of 13
Marks) (May, 2007)
2010)
Marks) (Nov, 2007)
Marks) (May, 2010)
(May, 2008)
CA CPT/IPCC/FINAL
age 12 of 13
Marks) (May, 2007)
2010)
Marks) (Nov, 2007)
Marks) (May, 2010)
(May, 2008)
CA CPT/IPCC/FINAL
age 13 of 13
(ll) AmounL of 8s. 30,000 was recelved as an advance from x?Z LLd. on 23.09.09 Lo whom Lhe
servlces were Lo be provlded ln CcLober,2009.
?ou are requlred Lo work ouL Lhe:
(a) Laxable value of servlces
(b) amounL of servlce Lax payable. (3 Marks) (Nov, 2007)
[Answer - value of Laxable servlce 8s. 7,30,000, Servlce 1ax payable 8s. 77,230]
3. Mr. x, a servlce provlder who pays servlce Lax regularly, was of Lhe oplnlon LhaL a parLlcular servlce
was noL llable for servlce Lax. Pe, Lherefore, dld noL charge servlce Lax ln hls blll. Pe recelved Lhe blll
amounL wlLhouL servlce Lax. Pow wlll servlce Lax llablllLy of Mr. x be deLermlned ln such case? (2
Marks) (Iune, 2009)
6. Ms. rlyanka, a proprleLress of 8oyal SecurlLy Agency recelved 8s.1,00,000 by an accounL payee
cheque as advance whlle slgnlng a conLracL for provldlng Laxable servlce. She recelved 8s.3,00,000
by credlL card whlle provldlng Lhe servlce and anoLher 8s.3,00,000 by a pay order afLer compleLlon of
servlce on !anuary 31, 2010. All Lhree LransacLlons Look place durlng flnanclal year 2009-10. She
seeks your advlce abouL her llablllLy Lowards value of Laxable servlce and Lhe servlce Lax payable by
her. (3 Marks) (Nov, 2009)
[Answer - value of Laxable servlce 8s. 11,00,000, Servlce 1ax payable 8s. 1,13,300]
7. SLaLe wlLh reason ln brlef wheLher Lhe followlng sLaLemenL ls Lrue or false wlLh reference Lo Lhe
provlslons of servlce Lax:
Mr. Sallm, an archlLecL has recelved Lhe fees of 8s.4,48,300 afLer Lhe deducLlon of lncome-Lax of
8s.31,300. Servlce Lax wlll be payable on 8s.4,48,300. (2 Marks) (Nov, 2009)
[Answer - lalse, Servlce Lax wlll be payable on 8s. 3 lakh]
8. vlraL kohll & Co., a parLnershlp flrm, ls provldlng Laxable legal consulLancy servlces for Lhe second
consecuLlve assessmenL year. 1he flrm furnlshes Lhe followlng lnformaLlon relaLlng Lo Lhe servlces
rendered, bllls ralsed, amounLs recelved relaLlng Lo Lhls servlce for Lhe year ended 31
sL
March, 2010.
Porticu/ors 4mount - ks.
(l) lree servlces rendered Lo poor people (value of Lhe servlces compuLed on
comparaLlve basls)
40,000
(ll) Advances recelved from cllenLs for whlch no Laxable servlce has been rendered
so far
3,00,000
(lll) Servlces bllled Lo cllenLs Cross amounL (Servlce Lax has been charged separaLely
ln all Lhe bllls, Lhe flrm follows mercanLlle sysLem of accounLlng)
12,00,000
(lv) 1he flrm has recelved Lhe followlng amounLs durlng Lhe year :
8elaLlng Lo Laxable servlces rendered ln March, 2009 (excludlng servlce Lax aL
appllcable raLes and 1uS under secLlon 194-! of Lhe l1 AcL, 1961 Lo Lhe Lune of
8s. 43,320)
8elaLlng Lo Laxable servlces rendered ln currenL year 2009(excludlng Servlce Lax
aL appllcable raLes and 1uS under secLlon 194-! of Lhe l1 AcL, 1961 Lo Lhe Lune
of 8s. 1,20,000)
(*lncludes 8s. 30,000 for appearance fee before Labour CourL recelved from
anoLher flrm)
3,44,680
9,80,000*
Servlce Lax has been recelved separaLely for appllcable lLems ln (lv) above.
?ou are requesLed Lo compuLe Lhe value of Laxable servlces for Lhe year ended 31
sL
March, 2010 and
servlce Lax payable, brlefly explalnlng Lhe LreaLmenL of each such lLem above. (8 Marks) (May, 2010)
Puyment of Servlce 1ux
1. Should servlce Lax be pald even lf noL collecLed from Lhe cllenL or servlce recelver? (2 Marks) (May,
2007, Nov, 2009)
CA CPT/IPCC/FINAL
age 13 of 13
Marks) (Iune, 2009)
sL
March, 2010.
comparaLlve basls)
40,000
so far
3,00,000
12,00,000
8s. 43,320)
of 8s. 1,20,000)
anoLher flrm)
3,44,680
9,80,000*
sL
March, 2010 and
2007, Nov, 2009)
CA CPT/IPCC/FINAL
age 13 of 13
Marks) (Iune, 2009)
sL
March, 2010.
comparaLlve basls)
40,000
so far
3,00,000
12,00,000
8s. 43,320)
of 8s. 1,20,000)
anoLher flrm)
3,44,680
9,80,000*
sL
March, 2010 and
2007, Nov, 2009)
CA CPT/IPCC/FINAL
age 14 of 13
2. Where a servlce provlder malnLalns books of accounLs on mercanLlle basls relaLlng Lo Laxable
servlces provlded by hlm, wlll servlce Lax be payable on accrual basls? (2 Marks) (Nov, 2007)
3. ls a servlce provlder allowed Lo pay servlce Lax on a provlslonal basls? (2 Marks) (Nov, 2007)
4. A parLlcular servlce has been broughL lnLo Lhe servlce Lax neL wlLh effecL from 1.6.2009. Mr. vlgnesh
has provlded Lhls servlce on 20.3.2009, Lhe paymenL for Lhe same was recelved on 10.6.2009. ls
servlce Lax payable on Lhe same? (2 Marks) (May, 2008)
3. Mr. Saravanan has collecLed a sum of 8s. 13,000 as servlce Lax from a cllenL mlsLakenly, even Lhough
no servlce Lax ls chargeable for such servlce. Should Lhe amounL so collecLed be remlLLed Lo Lhe
credlL of Lhe CenLral CovernmenL? (2 Marks) (May, 2008)
6. Who ls llable Lo pay e-paymenL of servlce Lax? (2 Marks) (Nov, 2008)
7. Pow can Lhe excess paymenL of servlce Lax be ad[usLed? (2 Marks) (Iune, 2009)
8. An assessee who has collecLed servlce Lax from a cllenL ls unable Lo perform Lhe servlce. 8rlefly
explaln Lhe slLuaLlons ln whlch and Lhe condlLlons sub[ecL Lo whlch he can ad[usL Lhe servlce Lax
relaLlng Lo above, agalnsL hls forLhcomlng servlce Lax llablllLy. (3 Marks) (May, 2007)
9. Mr. vasudevan has rendered freely, a servlce Lo a cllenL whlch ls Laxable, buL has noL charged or
recelved any fee from Lhe cllenL. ls servlce Lax payable on such free servlce? (3 Marks) (May, 2008)
10. WhaL are Lhe due daLes for paymenL of servlce Lax? (3 Marks) (nov, 2007) (Nov, 2008)
11. A[ay LLd. has agreed Lo render servlces Lo Mr. Curu. 1he followlng are Lhe chronologlcal evenLs:
ConLracL for servlces enLered lnLo on 31.8.2009
Advance recelved ln SepLember, 2009 Lowards all servlces 60,000
1oLal value of servlces, bllled ln lebruary, 2010 2,10,000
Above lncludes non-Laxable servlces of 70,000
8alance amounL ls recelved ln March, 2010
When does Lhe llablllLy Lo pay servlce Lax arlse and for whaL amounL? ConLracL conLalns clear deLalls
of servlces, conslderaLlon and servlce Lax are charged separaLely, as muLually agreed upon. (6 Marks)
(May, 2007)
[Answer - Servlce 1ax payable on 3
Lh
CcLober, 2009 8s. 4,120, on 31
sL
March, 2010 - 8s. 10,300]
12. Mr. ?, a consulLlng englneer ralsed a blll of 8s. 2,24,720 (lncludlng servlce Lax) on hls cllenL for
consulLlng servlces rendered by hlm ln !une, 2009. A parLlal paymenL of 8s. 1,68,340 was recelved by
Mr. ? ln March, 2010. CompuLe Lhe servlce Lax amounL payable by Mr. ? and Lhe due daLe by whlch
servlce Lax can be deposlLed. (3 Marks) (Nov, 2008)
[Answer - Servlce 1ax payable on or before 31
sL
March, 2010 - 8s. 13,739]
13. WhaL ls Lhe due daLe for paymenL ln case of e-paymenL of servlce Lax? (3 Marks)(Nov, 2009)
14. ls Servlce Lax payable on free-servlce? (2 Marks) (May, 2010)
13. SLaLe Lhe due daLes for paymenL of Servlce Lax ln Lhe case of an lndlvldual renderlng Laxable servlce.
(2 Marks) (May, 2010)
16. Mr. 8a[ rendered Laxable servlce ln lebruary, 2010. 1he amounL was however reallzed on 18.4.2010.
WhaL ls Lhe due daLe for paymenL of Servlce Lax? (2 Marks) (May, 2010)
17. x & Co. recelved Lhe followlng amounLs:-
uote Noture of keceipt 4mount - ks. 1iminq of providinq service
20.4.2009 lor servlce 1,00,000 Servlces were rendered ln !uly, 2009
30.6.2009 Advance for servlce 3,00,000 Servlces were rendered ln !uly & Aug,2009
3.8.2009 lor servlce 30,000 Servlces were rendered ln March, 2009
10.9.2009 Advance for servlce 3,30,000 A sum of 8s.30,000 was refunded ln Aprll,
2010 afLer LermlnaLlon of agreemenL. lor
Lhe balance amounL, servlce was provlded
ln SepLember, 2009.
CA CPT/IPCC/FINAL
age 14 of 13
(May, 2007)
Lh
CcLober, 2009 8s. 4,120, on 31
sL
March, 2010 - 8s. 10,300]
sL
March, 2010 - 8s. 13,739]
(2 Marks) (May, 2010)
ln SepLember, 2009.
CA CPT/IPCC/FINAL
age 14 of 13
(May, 2007)
Lh
CcLober, 2009 8s. 4,120, on 31
sL
March, 2010 - 8s. 10,300]
sL
March, 2010 - 8s. 13,739]
(2 Marks) (May, 2010)
ln SepLember, 2009.
CA CPT/IPCC/FINAL
age 13 of 13
Tbis is a sample document only. You can purcbase full notes at
bttp:JJcoursemateonline.com
1his is o somp/e document on/y. You con purchose fu// notes ot http://coursemoteon/ine.com
1hls ls a sample documenL only. ?ou can purchase full noLes aL hLLp://coursemaLeonllne.com. 1hls ls a
sample documenL only. ?ou can purchase full noLes aL hLLp://coursemaLeonllne.com. 1hls ls a sample
documenL only. ?ou can purchase full noLes aL hLLp://coursemaLeonllne.com. 1hls ls a sample documenL
only. ?ou can purchase full noLes aL hLLp://coursemaLeonllne.com. 1hls ls a sample documenL only. ?ou can
purchase full noLes aL hLLp://coursemaLeonllne.com. 1hls ls a sample documenL only. ?ou can purchase full
noLes aL hLLp://coursemaLeonllne.com. 1hls ls a sample documenL only. ?ou can purchase full noLes aL
hLLp://coursemaLeonllne.com. 1hls ls a sample documenL only. ?ou can purchase full noLes aL
hLLp://coursemaLeonllne.com.
CA CPT/IPCC/FINAL
age 13 of 13
CA CPT/IPCC/FINAL
age 13 of 13

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