LEARNING

OUTCOME
Introduction to Service Tax:
1) Levy
2) Collection
3) Taxable Event

Why Service Tax?

1. Additional Source of Revenue.
2. Boom in Service Industry (rising
base in GDP)
3. Tax equity

History and Present

Recommended in 1990: Dr. Raja J. Chelliah
(Tax Reforms Committee).
Implemented in 1994: Through Finance Act,
1994
Tax on: 03 Services:
- Telephone Services,
- General Insurance services
- Stock Brokers services
There are 119 TAXABLE SERVICES
Finance Act, 2012: All services taxable
EXCEPT those specified in NEGATIVE LIST.

TAXABLE EVENT?
Service Tax imposed U/s 66 of Finance
Act, 1994
(Charging Section)
Services provided or to be provided
It is payable when advance is received
Destination based consumption tax

Levy?
Service Tax levied/ imposed under Entry 97 of
List 1 of Schedule VII- Constitution of India.

Taxable Services

Value of Taxable Services

Must be two parties.

Tax on Value of Services not on goods () VAT
and Service Tax mutually exclusive).
Charged GROSS AMOUNT: Inclusive/ Exclusive
of tax
Taxable Territory

SERVICES?
Activity carried out person another for
consideration (monetary/ non-monetary)
Declared to be a Service U/s 66 E
Example: A, a singer, received award
(including cheque of Rs. 20,00,000 and a
memento). Find out service tax liability of A.

Negative List (Section 66 D)

Services provided by:
Category 1: Govt./ Local authority
Category 2: RBI
Category 3: foreign diplomatic mission
located in India
Category 4: agricultural/ agricultural produce
Category 5: trading of goods
Category 6: any process manufacturing/
production of goods
Category 7: selling of space or time slots for
advertisement TV or Radio

Negative List (Section 66 D)

Services:
Category 8: by way of access to a road/ bridgepayment of toll charges
Category 9: betting/ gambling or lottery
Category 10: admission to entertainment event
Category 11: transmission/ distribution electricity
Category 12: Education
Category 13: residential dwellings residence use
Category 14: financial sector
Category 15: transportation of passenger
Category 16: Transportation of goods
Category 17: funeral services