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Thread: PCC - Service Tax Notes.

  1. #31
    rohan
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    Q.NO.32. BRIEFLY EXPLAIN EXPORT OF SERVICES?

    Export: A service shall be considered as Export if following conditions are satisfied:

    1. service should be performed from India and used outside India,

    2. payment for such service should be received in Convertible Foreign Exchange.

  2. #32
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    Q.NO.33. WRITE SHORT NOTES ON CLASSIFICATION OF SERVICES?

    Classification of Services:

    1. Classification: Classification of taxable services shall be determined according to the terms of Section 65(105) i.e., by the definition of various services.

    2. More than one classification: Where the service falls under more than one category of service -

    a. Perfect specific description to general description.

    b. In the case of composite service, go by the service that gives the essential character.

    c. Where classification is not possible under the above two route, and the service falls under more than one category u/s 65(105), then it shall be classified under the sub-clause which occurs first among the subclauses, which equally merit consideration. (Sec. 65A of the Act).

  3. #33
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    Q.NO.34. BRIEFLY EXPLAIN SERVICE TAX RETURN PREPARERS SCHEME?

    Service Tax Return preparers Scheme:

    1. Definitions:


    a. Service Tax Return Preparer: It refers to an individual who has been authorized to act as a “Service Tax Return Preparer” under a scheme framed under this section.

    b. Specified Classes of persons
    : It refers to persons specified in the Scheme, who are required to furnish a return required to be field under section 70.

    2. Power of Board: The CBEC is empowered to frame a scheme for furnishing return of income by any specified classes through a Service Tax Return Preparer.

    3. Duty of Service Tax Return Preparer: Every Service Tax Return Preparer should assist the specified classes of persons to prepare and furnish the service tax return in the manner specified in the scheme.

    4. Structure of the Scheme: The scheme framed by the Board may provide for the following –

    a. Manner in which and the period for which the Service Tax Return Preparer shall be authorized,
    b. Educational and other qualifications to be possessed, and the training and other conditions required to be fulfilled, by a person to act as a Service Tax Return, Preparer,
    c. Code of Conduct for the Service Tax Return Preparer,
    d. Duties and Obligations of the Service Tax Return Preparer,
    e. Circumstances under which the authorization given to a Service Tax Return Preparer may be withdrawn,
    f. Any other matter which is required to be specified by the Scheme for the purposes of this section.

  4. #34
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    Q.NO.35. WHAT ARE THE STATUTORY GOVERNING SERVICE TAX?

    An understanding of the service tax law requires the study of the following:

    1. Chapter V and V A of the Finance Act, 1994 amended upto date.

    2. Rules on Service Tax.

    3. Notifications issued by the Central Government from time to time.

    4. Circulars and clarifications issued by Central Board of Excise and Customs (CBEC).

    5. Trade Notice issued by respective Jurisdictional Commissionerate.

    6. Definitions given under other statutes.

    7. Judicial decisions.

  5. #35
    rohan
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    Q.NO.36. HOW ADMINISTRATION OF SERVICE TAX?

    Administration of Service Tax: The CBEC administers service tax.

    The main functions assigned to this Directorate are –

    1. to monitor the collection and assessment of service tax,

    2. to study the implementation of Service Tax in the field and to suggest measure to increase revenue collection;

    3. to undertake study of law and procedures,

    4. to form a data base, and

    5. to inspect the Service Tax Cells in the Commissionerates.

  6. #36
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    Q.NO.37. WHAT IS THE ROLE OF CHARTERED ACCOUNTANTS?

    Role of Chartered Accountants: Service tax is an indirect tax and being a new legislation, there a great scope for professionals like chartered accountants, company secretaries and others. Unlike income tax only few professionals are practicing in the field of indirect tax.

    1. Consultancy services.

    2. Services for complying with procedural requirement, like registration, filing of return (including efiling), etc.

    3. representation services: A chartered accountant is allowed to appear before the
    (a) Assessment Authorities, (b) Adjudication Authorities, and (c) Appellate Authorities.

    4. Scope for certification and audit under service tax in the near future.

  7. #37
    rohan
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    Q.NO.38. WHAT IS THE PROCEDURE AND FACILITIES FOR LAREGE TAXPAYER?

    The following rule shall apply to large tax payer:

    1. Large taxpayer shall submit the returns, as prescribed under these rules, for each of the registered premises.

    2. A large taxpayer, on demand, may be required to make available the financial, stores and CENVAT credit records in electronic media, such as, compact disc or tape for the purposes of carrying out any scrutiny and verification, as may be necessary.

    3. A large taxpayer may, with intimation of at least thirty days in advance, opt out to be a large taxpayer from the first day of the following financial year.

    4. Any notice issued but not adjudged by any of the Central Excise officer administering the Act or rules made there under immediately before the date of grant of acceptance by the Chief Commissioner of Central Excise, Large Taxpayer Unit, shall be deemed to have been issued by Central Excise officers of the said unit.

    5. Provisions of these rules, in so far as they are not inconsistent with the provisions of this rule shall mutatis apply in case of a large taxpayer.

    Additional Points

    1. Circular No.41/2007 dated 06/10/07


    This Circular Allows refund of service tax paid on specified services used for export of goods. it stipulates that a merchant exporter shall file the claim of refund to the Assistant Commissioner/Deputy Commissioner of Central Excise having jurisdiction over the registered office or the head office.

    Case Studies:

    1. When the service is provided, it was not taxable; However, the same service becomes taxable when the payment is received. Is the tax payable?

    Ans: No, Any service, which is not a taxable service at the time of providing such service, cannot be taxed merely because it becomes taxable at the time of receipt of consideration.

    2. Service is provided but money has not been received. Is tax payable?

    Ans: No tax is payable when consideration is not yet received.

  8. #38
    rohan
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    Q.NO.39. EXPLAIN THE APPLICABILITY OF GEOGRAPHICAL AREAS OF SARVICE TAX?

    1. Destination Based: Service tax is destination based and service is taxable only if provided in India. Hence, in the following cases, there is no service tax liabilitya.

    Technical Consultancy provided by Foreign Collaborator (Illustrative).

    b. If Indian service provider provides services abroad.
    c. Services consumed for the purpose of Export

    2. Special Consideration for J & K: The levy of Service Tax extends to the whole of India except Jammu & Kashmir. The following are the observations in this regard

    a. Services rendered in Jammu and Kashmir will not be liable to Service Tax.
    b. Service rendered by a person established in Jammu and Kashmir, but rendered outside the state is liable to Service Tax

    3. Service provided in Exclusive Economic Zone and Continental shelf: India includes territorial waters and exclusive economic zone. Therefore Service Tax provisions are applicable to designated areas of continental shelf and exclusive economic zone of India.

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