Reduction of threshold limit for mandatory e-payment of service tax to Rupees One lakh from ten lakh

Reduction of threshold limit for mandatory e-payment of service tax to Rupees One lakh from ten lakh

NOTIFICATION NO

16/2013 - ST., Dated: November 22, 2013

In exercise of the powers conferred by sub-section (1) read with sub-section (2) of section 94 of the Finance Act, 1994 ( 32 of 1994), the Central Government hereby makes the following rules further to amend the Service Tax Rules, 1994, namely:-

1. (1) These rules may be called the Service Tax Third ( Amendment) Rules, 2013.

(2) They shall come into force on the 1 st day of January, 2014.

2. In the Service Tax Rules, 1994 , in rule 6, in sub-rule (2), in the proviso, for the words "rupees ten lakh" , the words "rupees one lakh" shall be substituted.

F.No : 137/116/2012- Service Tax

Canteen -Exempted from Service Tax

[TO BE PUBLISHED IN PART II, SECTION 3, SUB-SECTION (i) OF THE GAZETTE OF INDIA, EXTRAORDINARY,]

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
NEW DELHI

NOTIFICATION NO

14/2013 - ST., Dated: October 22, 2013

In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994, (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.25/2012-Service Tax, dated the 20 th June, 2012, namely:-

In the said notification, in the opening paragraph, after entry 19, the following entry shall be inserted, namely:-

"19A. Services provided in relation to serving of food or beverages by a canteen maintained in a factory covered under the Factories Act, 1948 (63 of 1948), having the facility of air-conditioning or central air-heating at any time during the year.".

[F. No. B1/13/2013-TRU]

(Akshay Joshi)
Under Secretary to the Government of India

Note.- The principal notification was published in the Gazette of India, vide notification No.25/2012-Service Tax, dated the 20th June, 2012, vide G.S.R.467(E), dated the 20th June, 2012 and was last amended by notification No.13/2013-Service Tax, dated the 10th September, 2013 vide G.S.R.616(E), dated the 10th September, 2013.

CBEC on ST on Restaurants

Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs Tax Research Unit North Block, New Delhi CIRCULAR NO 173/8/2013-ST., Dated: October 7, 2013 To Chief Commissioners of Central Excise and Customs (All), Director General (Service Tax), Director General (Central Excise Intelligence), Director General (Audit), Commissioners of Service Tax (All) Commissioners of Central Excise (All), Commissioners of Central Excise and Customs (All). Madam/Sir, Subject: Restaurant Service- clarification -regarding As part of the Budget exercise 2013, the exemption for services provided by specified restaurants extended vide serial number 19 of Notification 25/2012-ST was modified vide para 1 (iii) of Notification 3/2013-ST. This has become operational on the 1 st of April, 2013. 2. In this context, representations have been received. On the doubts and questions raised therein clarifications are as follows: Doubts Clarifications 1. In a complex where air conditioned as well as non-air conditioned restaurants are operational but food is sourced from the common kitchen, will service tax arise in the non-air conditioned restaurant? Services provided in relation to serving of food or beverages by a restaurant, eating joint or mess, having the facility of air conditioning or central air heating in any part of the establishment, at any time during the year (hereinafter referred as 'specified restaurant') attracts service tax. In a complex, if there is more than one restaurant, which are clearly demarcated and separately named but food is sourced from a common kitchen, only the service provided in the specified restaurant is liable to service tax and service provided in a non air-conditioned or non centrally air- heated restaurant will not be liable to service tax. In such cases, service provided in the non air-conditioned / non-centrally air-heated restaurant will be treated as exempted service and credit entitlement will be as per the Cenvat Credit Rules. 2. In a hotel, if services are provided by a specified restaurant in other areas e.g. swimming pool or an open area attached to the restaurant, will service tax arise? Yes. Services provided by specified restaurant in other areas of the hotel are liable to service tax. 3. Whether service tax is leviable on goods sold on MRP basis across the counter as part of the Bill/invoice. If goods are sold on MRP basis (fixed under the Legal Metrology Act) they have to be excluded from total amount for the determination of value of service portion. 3. Trade Notice/Public Notice may be issued to the field formations and taxpayers. Please acknowledge receipt of this Circular. Hindi version follows. F.No.334/3/2013-TRU (S. Jayaprahasam) Technical Officer, TRU

Service Tax Return Due Date -25-10-2013

  Service Tax Return (ST-3) for the period April -September' 13 is now available in ACES for e-filing by the assesses in both offline and online version. The last date of filing the ST-3 return for the said period is 25th October, 2013. The assesses can file return either online or use the offline utility by downloading the latest version from http://acesdownload.nic.in/ or from 'DOWNLOADS' Section of ACES website. For details on how to e-file in ACES or any further information/assistance, assessees may read the Instructions given in the return form and the FAQs under 'Help' Section of the ACES website http://www.aces.gov.in/ (https://www.aces.gov.in) or contact their jurisdictional Service Tax Officer.

HC on VCES

The Government introduced Service tax Voluntary Compliance Encouragement Scheme (the Amnesty Scheme) vide Union Budget 2013. The purpose of this Scheme is to provide for one-time waiver in respect of interest, penalty and immunity from prosecution for tax defaults (non-payment of tax) upon settlement of tax dues in a specified manner.

 In this regard, in a recent ruling of Allahabad High Court (the High Court) in the case of Anand Caterer, the High Court has held that when any taxpayer has filed an application under the Amnesty Scheme even after a demand notice/ Order has been being issued, no recovery proceedings could be undertaken until such application has been disposed off.

ST Return Due Date Extended

ORDER NO 4/2013-Service Tax, Dated : August 30, 2013

In exercise of the powers conferred by sub-rule(4) of rule 7 of the Service Tax Rules, 1994, the Central Board of Excise & Customs hereby extends the date of submission of the Form ST-3 for the period from 1^st October 2012 to 31^st March 2013, from 31^st August, 2013 to 10^thSeptember, 2013.

The circumstances of a special nature, which have given rise to this extension of time, are as follows:

"Difficulties have been faced by assessees in uploading the offline utilities".

F.No.137/99/2011-Service Tax

Himani Bhayana
Under Secretary (Service Tax) 
Central Board of Excise and Customs

CBEC on VCES

Dear Members,

The CBEC has issued Circular No. 170/5 /2013 ST dated 08.08.2013 (as attached) clarifying references received by the Board seeking further clarifications as regards the scope and applicability of the VCES Scheme. Some of the issues raised with reference to the Scheme have been clarified by the Board vide circular No. 169/4/2013-ST, dated 13.5.2013. The Union Finance Minister, Mr P. Chidambaram, has also released a booklet containing Frequently Asked Questions (FAQ) on Service Tax Voluntary Compliance Encouragement Scheme, 2013 in New Delhi today in the presence of Revenue Secretary, Chairperson and other members of Central Board of Excise & Customs and media.

Service Tax Voluntary Compliance Encouragement Scheme (VCES) announced by the Finance Minister in his Budget speech has come into effect on 10 th May, 2013. The objective of the scheme is to encourage disclosure of Tax dues and compliance of Service Tax law by the persons who have not paid service tax dues for the period from Oct, 2007 to Dec, 2012, either on account of ignorance of law or otherwise. On payment of the tax dues relating to the said period there will be complete waiver of interest, penalty and other proceedings/ consequences.

Best Wishes

CA. V.M.V.SUBBA RAO
Chartered Accountant

Penalty was liable to be waived off under section 80 of the Service Tax Act

Where an assessee having limited operations had co-operated in proceedings and paid service tax along with interest, penalty was liable to be waived off under section 80 of the Service Tax Act. [Royal travels v/s commissioner of central excise [2013] 35 taxmann.com 19 (Ahmedabad – CESTAT)].

EXEMPTION TO SPECIAL ECONOMIC ZONE FROM SERVICE TAX

EXEMPTION TO SPECIAL ECONOMIC ZONE FROM SERVICE TAX

By: Mr. M. GOVINDARAJAN

In exercise of the powers conferred by Section 93(1) of the Finance Act, 1994 read with Section 95(3) of Finance Act, 2004 and Section 140(3) of Finance Act 2007 and in supersession of Notification No. 40/2012-Service tax, dated 20.06.2012 the Government by Notification No. 12/2013-Service tax, dated 01.07.2013 gave exemption to the services on which service tax is leviable under Section 66B of the Finance Act, 1994, received by a Unit located in a Special Economic Zone ('SEZ' for short) and Developer of SEZ ('Developer' for short) and used for the authorized operation from the whole of the service tax, education cess and secondary and higher education cess levied thereon. This notification came into effect from 01.07.2013. The exemption is provided as detailed below: The exemption shall be provided by way of refund of service tax paid on the specified services received by the SEZ Unit or the Developer and used for the authorized operations; Where the specified services received by the SEZ or the developer are used exclusively for the authorized operations, there is an option not to pay the service tax ab initio, subject to the conditions and procedures. Instead of availing exemption or claiming refund the SEZ unit is having the option to avail CENVAT credit on the specified services in accordance with the CENVAT credit Rules, 2004. Conditions The following are the conditions prescribed in this Notification are as follows: The SEZ unit or the developer is to get an approval of the Approval Committee of the list of services required for authorized operations; The ab initio exemption shall be allowed subject to the following procedure and conditions: A declaration shall be furnished in Form A1 verified by the specified officer of the SEZ along with the list of specified services; On receipt of the declaration the authorization shall be issued by the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be to the SEZ unit or the developer in Form – A2; The SEZ unit or the Developer has to provide a copy of the said authorization to the provider of specified services; On the basis of the authorization the service provider shall provide the specified services to the SEZ unit or the Developer without payment of service tax; The SEZ unit or the Developer has to file Quarterly report in Form A3 furnishing the details of specified services received by it without payment of duty; An undertaking in Form A1 is to be furnished that in case the specified services on which exemption has been claimed are not exclusively used for authorized operation or were found to have been used exclusively for authorized operation, it shall pay to the government an amount that is claimed by way of exemption from service tax and ceases along with interest as applicable on delayed payment of service tax; The refund of service tax on the specified services that are not exclusively used for authorized operation or the specified services on which ab-initio exemption is admissible but not claimed, shall be allowed subject to the following procedure and conditions: The service tax paid on the specified services common authorized to the authorized operation in SEZ and DTA units (Domestic Tariff Area) shall be distributed amongst the SEZ unit or the developer and DTA in the manner as prescribed in Rule 7 of CENVAT Credit Rules; For the purpose of distribution the turnover shall be taken during the relevant period; The eligibility of refund is of the service tax paid on- The specified service on which ab-initio exemption is admissible but not claimed; and The amount distributed to it. The claim for refund is to be made to the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be, in Form A4; The amount indicated in the invoice, bill or, as the case may be, challan, on the basis of which refund is being claimed, including the service tax payable thereon shall have been paid to the person liable to pay the service tax thereon, or as the case may be, the amount of service tax payable under reverse change shall have been paid under the provisions of the Act; The claim for refund shall be made within one year from the end of the month in which actual payment of service tax was made to the service provider or such extended period as the Authority shall permit; Only one claim of refund is to be made for every quarter; If already not registered, before filing a claim for refund under this Notification, an application for registration shall be made; If more than one SEZ unit registered under a common service tax registration, a common refund may be claimed at the option of the assessee. The units shall maintain proper account of receipt and use of the specified services, on which exemption or refund is claimed for authorized operations. Erroneous refund Where any sum of service tax paid on specified services is erroneously refunded for any reason whatsoever, such service tax refunded shall be recoverable under the provisions of the said Act and the rules made there under, as if the recovery of service tax is erroneously refunded.

ICAI cannot be deemed to be pursuing commercial activities by coaching classes

ICAI cannot be deemed to be pursuing commercial activities by taking coaching classes or campus placements for a fee exemption under 10(23C)(iv) cannot be denied to ICAI on account of fees received by it for providing coaching classes and campus placement for its students. [ ICAI v/s Director General of Income-tax (exemptions) [2013] 35 taxmann.com 140 (Delhi)].

Kerala HC on ST on AC Restuarants

Kerala HC rules service tax on AC restaurants invalid

The Kerala High Court on Wednesday held that the Centre's decision to impose service tax on food and beverages supplied by air-conditioned restaurants with licences to serve alcoholic beverages in the 2011-12 budget was beyond the legislative competence of Parliament.

Justice A.M. Shaffique passed the verdict while allowing a batch of writ petitions filed by Kerala Bar Hotels Association and certain bar hoteliers.

The service tax was imposed on air-conditioned restaurants with licence to serve alcoholic beverages in the 2011-12 Union Budget. A service tax of 12.36 per cent applicable on 30 per cent of the bill had been imposed on such restaurants, which came into effect on April 1 last year.

The petitioners contended that Article 366 Section 29 (f) of the Constitution defined supply of food and drinks in hotels as 'deemed sales' and empowered the State governments to collect sales tax on the total value of sales. Therefore, the Centre has no authority or power to collect such service tax.

The court observed that the every purpose of incorporating the definition of tax on sale or purchase of goods in Article 366 was to empower the State government to impose tax on the supply, whether it was by way of or as part of any service of goods either being food or any other article for human consumption or any drink, intoxicating or not.

The Constitution permitted sale of goods during service as taxable. Necessarily, service formed part of sale of goods. Therefore, the State government alone has the legislative competence to enact a law imposing a tax on service elements forming part of sales of goods, the court ruled.

The court also ordered that if the petitioners had made any payments on the basis of the impugned clauses, they were entitled to seek refund of the amount.

sr

Service tax department has issued notification

Service tax department has issued notification no. 12/2013-ST dated 01-07-2013 along with forms A-1, A-2, A-3 and A-4 regarding exemption on services provided to SEZ authorised operations.

No penalty under section 76 was leviable if service tax was paid belatedly

No penalty under section 76 was leviable if service tax was paid belatedly with interest prior to issue of show cause notice – [professional couriers vs commissioner of customs, central excise & service tax[2013] 34 taxmann.com 120 (Bangalore - CESTAT)].

The refund of interest paid on delayed payment of service tax

The refund of interest paid on delayed payment of service tax, which is not liable to pay , shall not allowed if the liability of service tax has been admitted. Custom Excise Service Tax Appellate Tribunal, Mumbai in case of Skoda Auto India Private Limited versus Commissioner of Central Excise, Aurangabad (2012) 28 taxmann.com 58 (Mumbai-CESTAT) in Order No.-A/382/2012-WZB/C-I(CSTB), dated 05 June, 2012.

Service Tax Amnesty acknowledgement

Service Tax Department to issue acknowledgement of discharge in Form VCES-3 in 7 days from furnishing of details of payment of tax and interest. Service Tax Amnesty Scheme.

Service Tax Returns, (ST- 3) for July -September, 2012

Service Tax Returns, (ST- 3) for July -September, 2012, e-filed in ACES can now be viewed under View Original ST3 and View ST-3 options under RET module of ACES.

Date for filing the ST-3 return, for the period from October, 2012 to March, 2013

Date for filing the ST-3 return, for the period from October, 2012 to March, 2013 has been extended from 25th April, 2013 to 31st August, 2013. Order No. 03/2013-ST, [F.No.137/99/2011-Service Tax], dated 23-04-2013.

CBEC clarifies certain issues on Service Tax Amnesty Scheme

CBEC clarifies certain issues on Service Tax Amnesty Scheme

SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT SCHEME - CBEC CLARIFIES CERTAIN ISSUES – MERE PENDENCY OF LETTER SEEKING GENERAL INFORMATION NOT AN IMPEDIMENT TO PERSON SEEKING THIS SCHEME

CIRCULAR NO. 169/4/2013-ST [F.NO.B1/19/2013-TRU], DATED 13-5-2013

The Service Tax Voluntary Compliance Encouragement Scheme (VCES) has come into effect upon enactment of the Finance Bill, 2013 on the 10th May, 2013. The Service Tax Voluntary Compliance Encouragement Rules, 2013 has been issued to bring into effect the Scheme. Some references have been received seeking clarification as regards the scope and applicability of the Scheme.

2. The issues have been examined and clarifications thereto are as follows:

S. No.	Issues	Clarification
1	Whether a person who has not obtained service tax registration so far can make a declaration under VCES?	Any person who has tax dues to declare can make a declaration in terms of the provisions of VCES. If such person does not already have a service tax registration he will be required to take registration before making such declaration.
2	Whether a declarant shall get immunity from payment of late fee/penalty for having not taken registration earlier or not filed the return or for delay in filing of return.	Yes. It has been provided in VCES that, beside interest and penalty, immunity would also be available from any other proceeding under the Finance Act, 1994 and Rules made thereunder.
3	Whether an assessee to whom show-cause notice or order of determination has been issued can file declaration in respect of tax dues which are not covered by such SCN or order of determination?	In terms of section 106 (1) of the Finance Act, 2013 and second proviso thereto, the tax dues in respect of which any show cause notice or order of determination under section 72, section 73 or section 73A has been issued or which pertains to the same issue for the subsequent period are excluded from the ambit of the Scheme. Any other tax dues could be declared under the Scheme subject to the other provisions of the Scheme.
4	What is the scope of section 106(2)(a)(iii)? Whether a communication from department seeking general information from the declarant would lead to invoking of section 106 (2) (a)(iii) for rejection of declaration under the said section?	Section 106(2)(a)(iii) of the Finance Act, 2013 provides for rejection of declaration if such declaration is made by a person against whom an inquiry or investigation in respect of service tax not levied or not paid or short-levied or short paid, has been initiated by way of requiring production of accounts, documents or other evidence under the chapter or the rules made thereunder, and such inquiry or investigation is pending as on the 1st day of March, 2013. The relevant provisions, beside section 14 of the Central Excise Act as made applicable to service tax vide section 83 of the Finance Act, 1994, under which accounts, documents or other evidences can be requisitioned by the Central Excise Officer for the purposes of inquiry or investigation, are as follows,- (i) Section 72 of the Act envisages requisition of documents and evidences by the Central Excise Officer if any person liable to pay service tax fails to furnish the return or having made a return fails to assess the tax in accordance with the provision of the Chapter or rules made thereunder. (ii) Rule 5A of the Service Tax Rules, 1994 prescribes for requisition of specified documents by an officer authorised by the Commissioner for the purposes specified therein. The provision of section 106(2)(a)(iii) shall be attracted only in such cases where accounts, documents or other evidences are requisitioned by the authorised officer from the declarant under the authority of any of the above stated statutory provisions and the inquiry so initiated against the declarant is pending as on the 1st day of March, 2013. No other communication from the department would attract the provisions of section 106(2)(a)(iii) and thus would not lead to rejection of the declaration.

3. Trade Notice/Public Notice may be issued to the field formations and tax payers.

Amendment to Abatement Notification on Construction Complex Service

Note on Change in Abatement in Construction Complex Service

Abatement Notification No.02/2013 dt.01/03/2013 has been amended.

To avail the abatement of 75% in the case of Construction of Complex Service both the following conditions to be satisfied:

1.in carpet area of the unit is less than 2000 square feet; and

2.the amount charged for the unit is less than rupees one core

Security Service Service tax

Security services used for securing office premises are eligible as input service under Service Tax Act. [CESTAT Bangalore bench, C. Cubed Solutions (P) Ltd.]