Service Tax Basics Ajay Babu Bandi

M.Com,FCMA,ACA

Service Tax BasicsService Tax--- is an indirect tax levied by the Central

Government on services provided by any person

It extends to whole of India except Jammu & Kashmir

Objectives of Service TaxBroadening the tax base Increasing the revenue … andLarger participation of citizens in the

economic development of the Nation

Levy (Section 66B of the Finance Act, 1994

is levied on the value of all services provided in the Taxable territory, except those services specified in the Negative List

The term Negative List represents those services which are not liable for service tax

Requisites (Liable for Service Tax) Is it a service ?Is it covered in the Negative List ?

Value of taxable service…

Liability…who??Service Provider –remits and collects the taxIn some cases—the recipient(REVERSE

CHARGE)…Certain cases– both Small Service Providers – upto ` 10

lakhs.. exempted

Sources of Service Tax Law

Service [Sec.65B(44)]Service means… any activity carried out by a person for

another, for consideration and includes a Declared Service

ConsiderationConsideration includes … any amount that is payable for the taxable

services provided or to be provided

Form … Monetary, Non-Monetary or Deferred consideration

Person [Sec.65B(37)]

Money and Actionable Claims