Service Tax The Negative List Regime www swamyassociates

Service Tax The Negative List Regime www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Scheme ? • • • Broad definition for ‘service’. Negative List. Declared Services. Specific Exemptions. Place of Provision of Service Rules. & • Existing Rules on Valuation, Point of Taxation and Cenvat credit. www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

“Service” – Sec. 65 B Means… • Any activity carried out by a person for another for consideration and includes declared services. www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

“Service” – Sec. 65 B Excludes… • Transfer of title in goods or immovable property in any manner. • Deemed sales. • Transaction in money or actionable claims. • Service by employee to employer. • Fees taken in court, tribunal etc. • Duties performed by MPs, MLA and other authorities. www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Charge of Service Tax www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Service provided in taxable territory – neither in negative list nor exempted Service provider in taxable territory If no reverse charge – Service Provider shall pay If reverse charge – service recipient or both, as the case may be shall pay Service provider not in taxable territory Service recipient shall pay www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Negative List – Sec. 66 D • Services provided by Govt / Local Authority except, speed post, aircraft/vessel related, transport of goods / passengers, support services. • Services by RBI, Foreign Diplomatic missions. • Specified services relating to agriculture. • Trading. • Process amounting to manufacture or production of goods. www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Negative List – Sec. 66 D • • Space selling for Advt, except radio / tv. Access to road / bridge. Betting, gambling, lottery. Admission to entertainment events / amusement facilities. • Transmission / distribution of electricity, by transmission or distribution utility. www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Negative List – Sec. 66 D • Education. - Pre school, upto higher secondary. - part of curriculum for recognised qualification. - approved vocational education. • Renting for residential purpose. • Loans, advances, deposits for interest / discount, sale or purchase of forex by banks and authorised dealers. www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Negative List – Sec. 66 D • Transportation of passengers, by - stage carriage. - railways other than I Class / AC. - metro, monorail, tramway, inland waterways. - public transport other than tourism. - autos and metered cabs. www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Negative List – Sec. 66 D • Goods transport, except GTA and courier, by aircraft / vessel from a place outside India to India, inland waterways. • Funeral, burial, crematorium, mortuary. negative list. doc www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Declared Services – Sec. 66 E • • • Renting of immovable property. Construction of complex, building, etc. Temporary transfer of IPR. IT software services. Agreeing to refrain from an act or tolerate an act or do an act. Declared services. doc www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Declared Services – Sec. 66 E • Hiring, Leasing or licensing without transfer of right to use. • Hire purchase transactions. • Service portion in execution of works contract and supply of food and drinks. • Declared services. doc www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Bundled Services – Sec. 66 F • Reference to main service does not include a service used for providing the main service. • Specific description to be preferred to general description. • Naturally bundled – essential character. • Not naturally bundled – highest liability. www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Important exemptions • Healthcare services. • Charitable activities by Sec. 12 AA entities. • Services provided by individual advocates, firm of advocates, arbitral tribunal to other than business entities, business entities having turnover of less than Rs. 10 lakhs in previous year. • . . S. TaxNoti 25 to 4025 (mega exemption). doc www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Important exemptions • Auxiliary education services and renting of immovable property services provided by or to educational institution. • Services provided to a recognised sports body, by players, etc. and by another recognised sports body. • Sponsorship of specified sports. • . . S. TaxNoti 25 to 4025 (mega exemption). doc www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Important exemptions • Construction related exemptions. S. Nos. 12 to 14. doc www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Important exemptions • Performing artists except brand promotion. • Hotel room accommodation less than Rs. 1000 tariff. • Restaurants not having central air conditioning and bar facility. • . . S. TaxNoti 25 to 4025 (mega exemption). doc www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Important exemptions • Hiring of passenger vehicles to state transport undertakings and goods transport vehicles to GTAs. • Parking facility. • Outsourced municipal functions. • Housing society upto Rs. 5, 000 pm. • SIM card distributors. • . . S. TaxNoti 25 to 4025 (mega exemption). doc www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Important exemptions • Job workers where “appropriate duty” is paid by principal. • Services provided by persons outside taxable territory and received by Individual / Govt / Local authority / Govt authority. • Transfer of business. • . . S. TaxNoti 25 to 4025 (mega exemption). doc www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Reverse charge • • Existing and continuing Insurance Agents. GTA (abatement entitled). Sponsorship. Services provided by persons in non taxable territory. . . S. TaxNoti 25 to 4030 (reverse charge). doc www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Reverse charge New introductions • Advocates / Arbitral Tribunal to business entity. You have to pay SA’s ST directly under reverse charge. • Support services by Govt. / Local authority to business entity. • Renting of motor vehicle, manpower supply and works contracts services by individuals / partnership firms / AOPs / HUFs to business entity. • . . S. TaxNegative Blues V - Reverse charge. doc www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

PPS Rules Rule 3: Default Rule – Location of Service recipient. Rule 4: Performance based services – Location of performance. Rule 5: Immovable property related services – Location of the immovable property. Rule 6: Events related services – Location of the event. Rule 7: Services provided in more than one location – Where maximum service is provided. www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

PPS Rules Rule 8: Where the provider and receiver, both are in taxable territory – Location of Service recipient. Rule 9: Specified services - Location of service provider. Rule 10: Goods transportation – Destination. For GTA - location of the person liable to pay the tax. Rule 11: Passenger transportation – location of embarkation. www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

PPS Rules Rule 13: Power to notify. Rule 14: Order of application. . . S. TaxNoti 25 to 4028 (PPS Rules). doc www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Missing exemptions • Notification 50/2010 – IT Service, where ED / CVD paid – what next? packaged software. doc • Composition scheme for Works Contract Service – no panic. • Exemption for commission agents services received from abroad – Notification 18/2009. • Rebate of ST paid on export of Services - do you know why? www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Export of Service • • Rule 6 A of ST Rules. Provider in taxable territory. Receiver is outside India. Service not in negative list. PPS is outside India. Receipt in forex. Branch transactions would not be exports. www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

Jammu and Kashmir • Service between establishments in J & K and taxable territory would be service between two persons. • PPS to be determined. • Tax payable if PPS in taxable territory. • If provider is in non taxable territory – service recipient liable to pay ST. www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur

THANKS mail@swamyassociates. com www. swamyassociates. com chennai coimbatore bengaluru hyderabad pune ahmedabad nagpur