Fokia C e ST

SERVICE TAX
mail@swamyassociates.com
www.swamyassociates.com
Basic Features

Statutory provisions.
Levy on service provider
- Exceptions.
Levy on realisation.
mail@swamyassociates.com www.swamyassociates.com
Classification of Service

Specific description than general description.
Essential character.
Which occurs first in the definition.
Valuation

Gross amount.
Cum - tax.
Abatements.
Notification 12/2003.
Valuation

Services rendered free.
Consideration in kind.
Reimbursement of expenses.

Upto 18.04.2006 No liability.
Judgements and circulars.
From 19.04.2006 Concept of pure agent.
Malabar Management Services VS CCE
2008(9) STR 483
Proceedings in Service Tax
Issue of show cause notice.
Adjudication.
Appellate remedies.

Commissioner (Appeals)
CESTAT
High Court / Supreme Court
Procedures in Service Tax
Registration Centralised Registration.
Issue of invoice.
Maintenance of records.
Payment of service tax.
- Due date.
- Advance payment.
- e payment.
- Self adjustment if service not rendered.
- Provisional payment.
- Self adjustment of excess payments.

Procedures in Service Tax.
Filing of return ST 3.
- Due date / Half yearly.
- Revised return.
- Fine for delayed return.

Penalties in Service Tax.
Sec. 76 Delayed payment of S.Tax.
Sec. 77 General Penalty.
Sec. 78 Suppression, etc.
Rule 7 C Fine for delayed return.
Sec. 80 Power of waiver.
Certain important services.
Business Auxiliary Service.
Promotional activities.
Customer care services.
Procurement of goods or services.
Production or processing.
Provision of service on behalf of client.
Manufacture excluded.
Notification 8/2005.
Commercial / Industrial
construction Service.
Exclusion for roads, airports, railways
transport terminals, bridges, tunnels,
dams and ports.
67 % Abatement.
Construction of Residential
Complex Service.
More than 12 units..
Personal use - exempted.
Consulting Engineering
Service.
Foreign Technological transfers.
Novinon Ltd. VS CCE 2006 (3) STR 397
To cover software too.
Customs House Agents
Service.
Erection, Commissioning and
Installation Service.
Franchise Service.
Intellectual Property Service.
Management Consultant
Service.
Manpower recruitment /
Supply agencies.
Goods Transport Agency
Service.
Reverse Charge.
Abatement.
Exemption.
Payment mode.
No SSI exemption.
Renting of immovable
property.
Support Services for business.
Works Contract Service.
Re-classification.
Composition Scheme.
Vice of Notification 1/2006.
Diebold Systems (P) Ltd Vs CCE
2008 (9) STR 546.
Air Liquide Engg. India (P) Ltd. Vs CCE
2008 (9) STR 486.

Sale Vs Service.

S.No Citation Decision
1 BSNL Vs UOI 2006
(2) STR 161 SC
It has been held that the sale value of
goods shall not be subjected to the levy of
service tax.
2 Idea Mobile
Communications
Limited VS CCE
206 (4) STR 132 Tri
Bang
Levy of sales tax and service tax are
constitutionally mutually exclusive.
3 BPL Mobile
Communications
Limited VS CCE
2007 (7) STR 440
Sale of SIM cards is sale and sales tax is
paid. Hence service tax is not payable.
4 Imagic Creative (P)
Limited Vs CCE
2008 (9) STR 337
SC
Service tax and VAT are mutually exclusive.
5 Thermax Limited Vs
CCE 2007 (8) STR
487
Service tax not leviable when sales tax is
paid.
Small Scale exemption.
Threshold limit.
Conditions.
Commercial Concern
Vs
Any person.
Export of Service and Import
of Service.

CENTRAL EXCISE

by

g. natarajan
advocate & cost accountant

CENTRAL EXCISE
AND CENVAT
MANUFACTURE
Section 2 (f)
Deemed manufacture.
Third schedule.
VALUATION
Section 4 Transaction Value
SECTION 4 & Valuation Rules
Rule 4 - Comparable goods.
Rule 5 - Freight and Insurance.
Rule 6 - Additional consideration.
Rule 7 - Depot clearance.
Rule 8 - Captive consumption.
Rule 9 - Related person.
Rule 10 - Interconnected undertaking.
Rule 10A Jobwork.
Rule 11 - Best judgement
SECTION 4 A
Weights and Measures.
OE Exemption.
Different MRP.
EXPORTS
Exports without payment of duty.
Exports under claim for rebate.
Protection of Cenvat Credit.
APPELLATE / OTHER REMEDIES
Commissioner (Appeals).
CESTAT.
Settlement Commission.
Pre deposit.
PENAL MEASURES
Various penalties.
Provisional attachment of property.
Prosecution.
Basic Features

Concept of Cenvat credit.
Landmarks 1986, 1994 & 2004.
Cenvat Credit Rules, 2004.
Applicability

Manufacturers.
Service providers.
Certain terms.
Input.
Capital goods.
Input Services.
Input Service Distributor.
First / Second stage dealer.
Cenvatable duties / taxes

Basic Excise Duty.
CVD.
NCCD.
Education CESS.
Addl. Duty of Customs Sec. 3(5).
Service Tax and CESS thereon.
Utilisation and Restrictions on
utilisation
Payment of Excise duty.
Payment of Service tax.
Other payments.

Cross utilisation.
Other conditions.
Removal of inputs / capital goods
- the story as such.
Capital goods 50 % restriction.
No to having the cake and eating it too
- Depreciation / Cenvat Credit.
Other conditions.
Removal for job work.
Write off.
Service Tax Credit - Pay and use.
Documents for availing credit.
Rule 6 Algebra.
Position upto 31.03.2008.
Position from 01.04.2008.
Rule 6.
Protection to certain clearances.
Protected Services.
Chandrapur Magnet Wires (P) Ltd Vs CCE.
1996 (81) ELT 3 SC
- Recent developments.
Certain common disputes
Credit for mobile phone.
India Rayon Industries Ltd. Vs CCE
2006 (4) STR 79.
Credit for outdoor catering.
Victor Gaskets India Ltd Vs CCE
2008 TIOL 409.
Certain common disputes
Credit for outward transportation.
- Gujarat Ambuja Cements Ltd. Vs CCE.
2007 (6) STR 249.
- India Cements Limited Vs CCE
2007 (8) STR 43.
- Master Circular and recent amendments.
CUSTOMS
Role of customs
Collection of import & export duties
enforcement of customs act
enforcing prohibitions/restrictions
prevention of smuggling
Imports
IGM (by shipping lines)
cargo declaration
Bill of Entry
assessment
duty Payment
Exports
Shipping bill, Invoice, ARE#
assessment
duty Payment (if any)
EGM (by shipping lines)
Customs Valuation Rules, 2007

The Customs Valuation (Determination of
Value of Imported Goods) Rules, 2007
- Notfn. No. 94/2007-Cus(NT) dated 13-9-07

The Customs Valuation (Determination of
Value of Exported Goods) Rules, 2007
- Notfn. No. 95/2007-Cus(NT) dated 13-9-07

Value of imported goods

transaction value Section 14 (1) of
CA, 1962
deductive value Rule 7
computed value Rule 8
residual method Rule 9
similar goods / identical goods
related person
provisionally assessed value is not
transaction value.
Value of exported goods

transaction value Section 14 (1) of CA,
1962
computed value Rule 5
residual method Rule 6
refunds

claim to be filed within six months.
one year for some persons.
no time limit for duty / interest paid
under protest
unjust enrichment
RE-IMPORT OF EXPORTED GOODS

indigenously manufactured
1. cancellation of export order
2. return from overseas exhibition
3. completion of overseas contract

imported
1. sent abroad for repairs
2. for special processes

UNLESS a specific exemption is issued,
import duties are leviable Section 12 of CA,
1962.
RE-EXPORT OF IMPORTED GOODS

98% of Customs duties drawback
within 2 years from the date of import
Export promotion schemes
duty drawback

all india industry rate

brand rate

simplified scheme
Advance licence

actual user condition
physical exports
intermediate supplies
deemed exports
invalidation
export obligation


Other export promotion schemes

DFRC

DEPB

EPCG

export oriented units
customs bonded ware house
duty free imports
B-17 bond
procurement of indigenous goods
CT-3 procedure
DTA sale - valuation section 3 of
CA, 1962.
export oriented units
sale of surplus / un-utilised goods
clearance under ARO/inland letter/DFRC
sub-contracting
inter-unit transfer
de-bonding

SPECIAL
ECONOMIC
ZONES
Basic Features

duty free imports
indigenous procurement
sub-contracting
DTA clearances
Exports
mail@swamyassociates.com www.swamyassociates.com

duty free imports of
goods and services

exempt from customs duties customs act.
exempt from service tax finance act, 04
securities transaction tax finance act, 04
exempt from most cesses.

Indigenous procurement

exempt from excise duty (from 11-5-2004),
service tax and most Cesses.
DTA suppliers benefit export entitlements
Cenvat credit on materials used in goods
supplied to SEZ units. (Rule 6(6) of CCR)
Sub-contracting
Rules 41 to 44 of SEZ rules
can under take job-work of DTA units (for
exports only)
trading units not allowed
SEZ developer/Co-developer/contractor
may subcontract a process into DTA
permission of DC/AC Customs required.
DTA Clearance
Section 30 of SEZ Act.
to be cleared on payment of
customs duties as if imported.
valuation as per CV(DoPoI)R,88
quantity or value - no limit on sale
exports
direct exports
through third parties
39/2001-CE dated
31-7-2001
Exemption to excisable goods
manufactured in Kutchh (Gujarat)
applicable to new industrial units
commercial production before 31-
12-2005
not applicable to SSI units
exceptions
pay excise duty through cenvat
credit account
after exhausting cenvat account,
pay through PLA (cash)
take re-credit of PLA amount on
15
th
of next month.
1
st
amendment
42/2001-CE dated 21-9-2001
Original value of plant & machinery to be
as certified by CA (under head fixed assets)
2nd amendment - 5/2003-CE
dated 13-2-2003
refund shall not exceed the amount of
duty paid LESS the amount of cenvat
credit availed of, used in relation to the
manufacture of goods.
3
rd
amendment - 16/2003-CE
dated 1-3-2003
refund shall not exceed the amount of
duty paid LESS the amount of cenvat
credit availed of, used in relation to the
manufacture of goods.
4th amendment - 65/2003-CE
dated 6-8-2003
para 1A (i) to (iii),
para 2A (a) to g, inserted
5
th
amendment - 16/2008-CE
dated 27-3-2008
new words replaces old words

to the duty payable on the value addition
undertaken in the manufacture of the said
goods by the said unit.
rebate of excise duty on exports

682/73/2002-CX dated 19-12-2002
refund of duty paid in cash.

842/19/2006-CX dated 8-12-2006
contents of circular dated 19-12-2002
applies to kutchh also.

209/11/2005-CX-6 dated 8-12-2006
rebate on goods manufactured in kutchh.
209/11/2005-CX-6 dated 3-4-2007
clarification to boards instruction dated
8-12-2006

37/2007-CE(NT) dated 17-9-2007
bans rebate on export for units availing
benefits of 39/2001.

209/11/2005-CX-6 dated 13-10-2007
boardclarifies export after 17-9-2007
may be done only under bond.
rebate of excise duty on export
Rule 18 of CER, 2001 amended - Rebate
allowed from 1-7-2001 to 28-2-2002
Fifth schedule of Finance Bill enacted on
10-5-2008

Rule 18 of CER, 2002 amended - Rebate
allowed from 1-3-2002 upto 7-12-2006
Sixth schedule of Finance Bill enacted on
10-5-2008
rebate of excise duty on export
thanks
ASK SA:

Chennai - #21, rams flats, ashoka avenue, directors colony,
Kodambakkam, chennai 600024 : tel: 044-24811147
Ahmedabad - #B-8, satya triveni tower, opp. karnavati club, s.g.
highway, ahmedabad 380052 : tel/fax: 079-26920291
Bengaluru - # G-8, Fortuna Icon Apartments, Jodidar Ashwathappa
Farm, Saharkaranagar, bengaluru 560092 : tel/fax: 080-41303434
Coimbatore - #402, presidium woods vale, no. 1, bharathi Park 1st
cross, sai baba colony, coimbatore-641043 : tel/fax: 0422-4378622
Hyderabad - #307, block B, sri sai land mark, street no. 8,
habshiguda, hyderabad 500007 : tel/fax: 040-65526879
Rajkot - #401, shukan flats, limbudiwadi, b/h neptune towers,
kalawad road, rajkot 360007 : tel/fax: 0281-2451547

Fokia C e ST

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SERVICE TAX

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