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Introduction
The Central Excise department administers Service Tax. A separate cell called the Service Tax Cell, under each commisssionorate, has been created for the purpose. Formerly, the entire Service Tax administration was centralized in these cells. The setup has been decentralized recently. Now various Central Excise Divisional offices, which have specific territorial jurisdiction, are empowered to administer the levy.
Service
Tax Rate
10% + 2% cess of the value of Taxable
Services.
Brief
Basic rules of thumb related to the levy of Service Tax.
Service Tax is not payable on payments that are received in India in convertible foreign exchange, provided the payment is not repatriated outside India.
Service Tax is not levied on reimbursement of out-of-pocket expenses.
Service Tax is levied only on the final party who renders service to the client. Thus, sub-contractors are not within the ambit of levy of the Service Tax.
Services that are rendered outside India are not subject to Service Tax.
Hence Service Tax is not payable on free services.
When is Service Tax payable
Service tax is charged on the value of taxable services, and such tax is payable once the money is received by the service provider for rendering such taxable service.
Categories of assessees who have to pay Service Tax :
Actuary or intermediary or insurance intermediary or insurance agent;
Advertising agency;
Air travel agent (Also an option is provided to the air travel agent to pay service tax @ 0.25% of the basic fare in the case of domestic booking and 0.5% of the basic fare in the case of international booking);
Architect;
Authorised automobile service stations services to be extended to multi utility vehicles viz. Maxi Cabs:
Authorized automobile service station;
Banking company or financial institution or a non-banking financial institution;
Beauty parlour;
Broadcasting agency;
Business auxiliary service [business promotion and support services including customer care services (excluding any information technology service)];
Cable operator;
Cargo handling agency;
Clearing and forwarding agent;
Commercial concern offering convention service;
Commercial concern providing online information and data base access and/or retrieval services;
Commercial training and coaching centres - private tutorials;
Commissioning and installation services;
Consulting engineer;
Courier agency;
Credit rating agency;
Custom house agent;
Dry cleaner;
Event manager;
Fashion designer;
Foreign exchange broking by any person now included i.e. Individuals, partnership firms (hitherto it was limited to banking company, financial institutions, non-banking finance companies (NBFC) covered (w.e.f. 16/07/2001) & body corporate (w.e.f- 16/08/2002);
Franchise services;
Health club and fitness center;
Insurer carrying on general insurance business services;
Insurer carrying on life insurance business;
Interior decorator;
Internet Cafe - (Cyber Cafe);
Maintenance and repair services excluding motor vehicles;
Management consultant;
Mandap keeper;
Manpower recruitment agency;
Market research agency;
Photography studio;
Port or person authorized by the port for conducting port services;
Port services to be extended to all minor ports also (hitherto, it was limited to major ports);
Practicing chartered accountant;
Practicing company secretary;
Practicing cost accountant;
Rail travel agent;
Real estate agent;
Rent-a-cab operator;
Scientist or technocrat or science or technology institution;
Security agency;
Sound recording studio;
Steamer agent;
Stock broker;
Storage or warehouse keeper;
Technical inspection and certification services excluding inspection and certification of pollution levels;
Technical testing and analysis, excluding health and diagnostic testing in relation to human beings and animals;
Telegraph authority providing facsimile services;
Telegraph authority providing lease circuit services;
Telegraph authority providing pager services;
Telegraph authority providing telegraph services;
Telegraph authority providing telephone services;
Telegraph authority providing telex services;
Tour operator;
Underwriter;
Video production agency.
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