Service Tax

  • New rate of Service Tax w.e.f 1st June, 2015

    May 20 2015

    The Finance Ministry has issued Notification No.14/2015-Service Tax, dated 19th May, 2015. The rate of Service Tax is being increased from 12% to 14% (including cesses). The increase in Service Tax rate will come into effect from 1st June, 2015.

    Link for brief summary for determination of Point of Taxation (POT) vis-a-vis change in effective rate of tax.

    Read More
  • Availment of CENVET Credit -within Six Months – A welcome Clarification

    November 20 2014

    During the Budget 2014 Central Excise and Service Tax department had amended the CENVAT credit rules prescribe that manufacturer or output service provider shall not take CENVAT credit after six months of the date of issue of any of the documents specified in sub-rule (1) of Rule 9.(Ref. Circular No. 21/2014-CE (NT) dated 11.07.2014)

    However the concern have been expressed by the Industry while taking re-credit in the following situation the limitation of six months may be hit and the entire credit cannot be taken.

    Read More
  • Service Tax on Secondment/Deputation of Employees

    November 10 2014

    Secondment/ Deputation of employees within group has been a very common feature in almost all major business houses in India. Further, the globalization of Indian economy has resulted in substantially increased presence of Multi-National Companies (MNC) in India. This gives rise to cross-border secondment/ deputation of employees within a group. The tax (income tax) controversy surrounded to such secondment/deputation is a known phenomenon amongst the industry and professionals.  Recently, the service tax department in several such secondment cases raised their hands and claimed that such secondment/deputation is chargeable to service tax (under the category "supply of manpower") as well.

    The Allahabad High Court (HC) in the case of Commissioner of Central Excise v. M/s Computer Sciences Corporation India Pvt Ltd (2014-TIOL-1896-HC-ALL-ST) held that in order for the transaction to be a taxable service within the meaning of (erstwhile) Section 65(105 )( k) of the Finance Act, the services must meet the following requirements:
    Read More
  • Refund of Unutilized Cenvat Credit for service provider under partial reverse charge under rule 5B of Cenvat Credit Rules, 2004

    March 8 2014

    At the time of introducing the system of partial reverse charge mechanism i.e. 1st July 2012, the cenvat credit rules were also amended and new rule 5B was inserted to provide for the refund of unutilized cenvat credit for the service provider under the partial reverse charge mechanism. Rule 5B provided that the refund of unutilized cenvat credit can be claimed subject to certain procedures. However those procedures were not prescribed. Now CBEC has issued notification 12/2014 dated 3rd March 2014 prescribing the procedure for claiming such refund.

    Read More
  • Submission of Form A-3 by SEZs and its Time Limit

    November 27 2013

    As per notification 12/2013 service provided to the SEZ developer or to the service tax unit shall be exempted from the levy of service tax . The modalities of  providing the said exemption was as follows:

    Read More