TAXABILITY OF SERVICE
The taxability of services or the charge of service tax has been specified in section 66B of the Act. To be a taxable a service should be –
- provided or agreed to be provided by a person to another
- in the taxable territory and
- should not be specified in the negative list.
PROVIDED OR AGREED TO BE PROVIDED
1. Services which have only been agreed to be provided but are yet to be provided are taxable.
2. Receipt of advances for services agreed to be provided become taxable before the actual provision of service.
3. Advances that are retained by the service provider in the event of cancellation of contract of service by the service receiver become taxable as these represent consideration for a service that was agreed to be provided.
POINT OF TAXATION
Point of taxation is –
– the time when the invoice for the service provided or agreed to be provided is issued;
– if invoice is not issued within prescribed time period of completion of provision of service then the
– date of completion of service;
– the date of receipt of payment where payment is received before issuance of invoice or completion of service
TAXABLE TERRITORY – To which act applies is whole INDIA EXCLUDING JAMMU & KASHMIR and India includes
SERVICE SHOULD NOT BE IN NEGATIVE LIST
To be taxable a service should not be specified in the negative list. The negative list of services has been specified in section 66D of the Act.(will discuss later)
HOW TO IDENTIFY WHETHER IT IS A TAXABLE SERVICE OR NOT
STEP 1
Determine whether you are providing a ‘Service’
| S. NO. |
QUESTION |
ANS |
|
1 |
Am I doing an activity for another person ? |
Yes |
|
2 |
Am I doing such activity for a consideration? |
Yes |
|
3 |
Does this activity consist only of transfer of title in goods or immovable property by way of sale, gift or in any other manner? |
No |
|
4 |
Does this activity constitute only a transfer, delivery or supply of goods which is deemed to be a sale of goods within the Constitution |
No |
|
5 |
Does this activity consist only of a transaction in money or actionable claim? |
No |
|
6 |
Is the consideration for the activity in the nature of court fees for a court or a tribunal? |
No |
|
7 |
Is such an activity in the nature of a service provided by an employee of such person in the course of employment? |
No |
STEP 2
Determine whether service provided by you is taxable
| S. No. |
QUESTION |
ANS |
|
1 |
Have I provided or agreed to provide the service? |
Yes |
|
2 |
Have I provided or agreed to provide the service in the taxable territory? |
Yes |
|
3 |
Is this activity entirely covered in any of the services described in the negative list? |
No |
If the answer to the above questions is also as per the answers given in column 3 of the table above THEN you are providing a ‘taxable service’
SOME MORE POINTS RELATED TO THAT CONCEPT
1. You will not have to pay service tax if in the previous financial year the aggregate value of taxable services provided by you was less than Rs.10 lakh and in the present financial year the aggregate value of taxable services provided by you is also less than Rs.10 lakh.
2. You will not have to pay service tax If the taxable service provided by you is covered under any one of the exemptions issued under section 93 of the Act.
3. Declared services are also covered by exemptions.
4. All services, whether declared or not, which are covered under Section 66B of the Act are taxable if elements of taxability are present.
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MOHIT JINDAL
I have taken a place for rent for 60000 per month and having my clinic…I am a doctor.. should I have to pay service tax of 18% on rent as my clinic is and individual setup and we don’t charge any gst on treatments provided for patients
A Penalty imposed on account of breach of contract and recovered from B service tax leved or not
I work in an IT Organization (MNC), and the office is under an SEZ building. We have cafeterias inside our office, so considering SEZ area we gets meals on subsidized rates. But few of the counters charge Service Tax over the price, could you please confirm if Service Tax is chargeable to consumers inside an SEZ.
Thanks.
res sir
Presently i take contract as a works contract with govt. of Gujarat. Sir I WOULD LIKE TO KNOW WEATHER SERVICE TAX IS APPLICABLE TO ME OR NOT. PLEASE KINDLY LET ME KNOW IF APPLICABLE THAN FROM WHICH DATE I HAVE TO PAY SERVICE TAX.
security service of MBA College is as service tax applicable?
Dear Mr.Mohit,
If Online Information services are provided to Oversease client whether they are taxable ?
since the same is provided to client who is in non-taxable territory or since the online information service is specified service in POP rules , the location of service provider is to be checked. if the same is in taxable terriotory then it will be taxable.
pls provide your feedback on it.
thanks,
Bhavesh
9820763322