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Service tax was first imposed on three services: telephone services, non-life insurance services, & stockbrokers’ services, eventually expanding to 119 services. The notion of service taxation was altered from such a Positive List of services approach to either a ‘Negative List regime’ on July 1, 2012. This transformed the service taxation system out of a tax on designated services to something like a tax on all services, with the exception of those mostly on Negative List as well as those exempted by notice. The levy & collection of goods and services tax in India is managed by the Government of India’s Department of Revenue. Because the service tax is indeed an indirect tax, this is administered by the Central Board of Excise and Customs (CBEC)
Provisions
- Section 65B(44) of something like the Finance Act 1994 provides a broad definition of service;
- Currently, all services given or agreed to be delivered in the taxable area, i.e. (India save the status to Jammu and Kashmir), including reported services, besides those indicated in the negative list, and otherwise exempted, are liable to service tax at a rate of 14%. Furthermore, 0.5 Swacch Bharat Cess @0.5
- The location of provision determines whether or not a service was supplied in the taxable territory. The Place for Delivery of Services Regulations, 2012, spells out how to figure out where a service was delivered or intended to be provided.
Payment of Service Tax
After 1.4.2011, service tax is paid on an accrual basis. It is based on receipts for those assessees whose taxable services value shall not increase Rs. 50 lakhs in the previous financial year. This opportunity is only available for taxable services worth up to Rs. 50 lakhs. Individuals, proprietorship firms, partnership firms, and other designated small taxpayers must submit quarterly payments by the 6th day after the month following the quarter if indeed the tax is submitted electronically.
If tax is submitted electronically, the submission deadline is the 6th day of month directly afterward the month wherein the services are regarded to be rendered; if other methods of payment are used, the due date is indeed the 5th day of month directly afterward the quarter as well as month as when the case may be.
Service Tax Rate
Mr. Arun Jaitley, the chancellor, proposed imposing the Krishi Kalyan Cess on any and all taxable goods and services during the Union Budget of 2016. The suggested amount was calculated at a rate of 0.5 percent, resulting in an effective services tax rate of 15%. Beginning July 1, 2017, the Service Tax was replaced mostly by Goods & Services Tax (GST).
The Finance Minister increased the services tax rate from 12.36 percent to 14 percent in the 2015 budget, which took effect on June 1, 2015. Furthermore, on November 15th, 2015, an extra Swachh Bharat Cess of 0.5 percent was applied, bringing the service tax to 14.5 percent.
Swachh Bharat Cess of 0.50 percent + Krishi Kalyan Cess of 0.50 percent + 14 percent Service Tax = 15%
The existing service rate of tax is 15%, thanks to a new proposal included in the 2016 Union Budget. Which will take effect on June 1, 2016. On building services given by contractors to purchasers, the central government levies a service tax. The overall cost of both the property includes the cost of building as well as the cost of land, having service tax applied exclusively to the construction expenses. Residences are subject to a 4.5 percent service tax since there is a 70 percent rebate “for services of building of complexes, building, civil engineering works, or a part hereof, subject to fulfilment of the existing requirements.”
Conclusion
Service tax will be applied to all additional expenditures, such as Floor Rise Charges, Preference Location Charges, clubhouses, as well as initial maintenance charges. The service tax burden will not include infrastructure development costs, parking charges, and international development charges, along with leasing rent paid towards the state legislature up to a certain amount. Service tax should only be imposed on property acquired directly from contractors; it will not be levied on resold properties because no service is provided in such circumstances.
