Generally, service-provider is liable to pay service tax but there are certain exceptions which are discussed below:
- Recipient of service liable to pay service tax: in the following cases, recipient of service will be liable to pay service tax;
- In relation to insurance auxiliary service by an insurance agent, the insurance company i.e. general insurance business or life insurance business will be liable to pay tax. The insurance agent will not be liable to pay tax.
- In relation to any taxable service provided or to be provided by any person from a country other than India and received by a person in India under section 66A of the Act, the recipient of such service shall be liable to pay tax.
- In relation to taxable service provided by a goods transport agency, the consignor or consignee who pays or is liable to pay freight will be liable to pay tax.
- In relation to business auxiliary service of distribution of mutual fund by a mutual distributor or an agent, as the case may be the mutual fund or the asset management company, as the case may be receiving such service shall be liable to pay tax.
- In relation to sponsorship service provided to anybody corporate or firm located in India, the body corporate or the firm as the case may be who receives sponsorship service shall be liable to pay tax.
Registration:
The following persons are required to take registration mandatorily:
Every person liable to pay service tax: Every person liable to pay service tax is required to take registration. According to section 68(1) every person providing taxable service is himself primarily made the person liable to pay service tax. However, section 68(2) empowers the Central Government to notify any taxable service in respect of which rules may provide for a designated person who will be treated as the person liable to pay service tax.
Input service provider: Input service provider will have to get himself registered. According to section 2(m) of the Central Credit Rules ‘input service provider’ means an office of the manufacturer or producer of final products or provider of output service, which receives invoices issued under rule 4A of the Service Tax Rules, 1994 towards purchase of input services and issues invoice, bill or as the case may be, challans for the purpose of distributing the credit of service tax paid on the said services to such manufacturer or producer or provider as the case may be.
Small service provider: Small service provider is required to take registration compulsorily if the aggregate value of taxable services provided by him in a financial year exceeds Rs 9 lakhs. In such a case, he is required to make an application for registration within 30 days of exceeding the value of taxable services of Rs 9 lakhs. It is to be noted that though registration is compulsory if the aggregate value of taxable services in a financial year exceeds Rs 9 lakhs, no service tax will be payable unless the aggregate value of taxable services exceeds Rs 10 lakhs.
Related posts:
- Service Tax – A Dummy Guide for Service Tax in India
- Service Tax on Builders
- Service Tax on Goods Transport Agency
- New Eight Services Added under Service Tax
- Service Tax Registration Procedure in India
Sponsored Links
Comments on this entry are closed.