FAQs on Service Tax and Central Excise

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The Tax PublishersSection C FAQs on Service Tax and Central Excise R. Muralidharan The learned author has penned down some commonly Asked Questions on Service Tax and Central Excise. 1. My client does matrimony services through website. Is it covered under service tax ? Yes, it is covered under On line information and database access and/or retrieval services. Again, providing matrimonial service from portal/websites would prima facie come under the above said service category. This was the ratio laid down in Bharat Matrimony.Com (P) Ltd. 2006 (4) STR 27 (Trib-Chen). 2. In service tax, my client has paid service tax not before issuance of show-cause notice but after adjudication. Can he ask for stay of penalty and interest as the Tribunal? Yes, In American Power Conversion (P) Ltd. v. CCE 2009 (13) STR 682 (Trib-Bang), it was held that if entire amount of service tax is paid immediately after adjudication, pre-deposit of interest and penalties can be waived. Stay was granted. 3. A building is owned by two individuals. Can each one claim exemption separately under service-tax? Not possible. Notification No. 6/2005, ST, dated 1-3-2005 exempts only taxable service and not service provider. 4. Is there Central Excise Duty on wastes/scrap? Waste/scrap arising out of manufacture are liable to Central Excise duty.--Vide Khandelwal Metal v. CCE 1985 (20) ELT 222 (SC). 5. Can a proprietary concern be called an organization or institution? It has been held in Devilal Kutir Shop v. CCE 2001 (130) ELT A 255 (SC) that proprietary concern is neither an organization nor an institution. 6. We have filed service tax return on the due date. Can we revise it once. We find some mistakes in it? Yes, As per rule 7B, the revised return should be filed within 90 days from the date of filing the original return. 7. We are manufacturers. We have excisable products for value of Rs. 140 lakhs and non-excisable products turnover of Rs. 300 lakhs. Should we have to pay excise duty? Yes, If the turnover of excisable products crosses over Rs. 150 lakhs in the previous year, Central Excise Duty has to be paid during current year, otherwise also, if the total turnover of excisable and non-excisable products crosses over Rs. 400 lakhs in the previous year, excise duty has to be paid in the current year. 8. In Central Excise, for calculation of SSI limit of Rs. 150 /400 lakhs, should we have to consider exempted turnover/clearances also? For 150 lakhs, only dutiable clearances have to be considered. For 400 lakhs, dutiable and non-dutiable/nil rated/exempted are to be included.--Vide Arun Industries v. Commissioner 2005 (191) ELT 1041 (Trib-Bang). 9. Which is relevant in service-tax for taxation, the date of service or date of receipt of payment? For determination of tax liability, the relevant date is the date of service and not the date on which payment is received.--Vide Lumax Samlip Industries v. CST (2007) 8 STT 82 (Trib-Chen). However, service tax is to be paid only on receipt of consideration, for the taxable service rendered. 10. An assessee is doing multiple service. Can he file a single return giving the details of all services? Yes. A single return giving details of all services is sufficient [Based on CBEC Circular 72/2/2004-ST, dt. 2-1-2004]. SUBSCRIBE FOR FULL CONTENT

The Tax PublishersSection C

FAQs on Service Tax and Central Excise

R. Muralidharan
The learned author has penned down some commonly Asked Questions on Service Tax and Central Excise.

1. My client does matrimony services through website. Is it covered under service tax ?

Yes, it is covered under On line information and database access and/or retrieval services.

Again, providing matrimonial service from portal/websites would prima facie come under the above said service category. This was the ratio laid down in Bharat Matrimony.Com (P) Ltd. 2006 (4) STR 27 (Trib-Chen).

2. In service tax, my client has paid service tax not before issuance of show-cause notice but after adjudication. Can he ask for stay of penalty and interest as the Tribunal?

Yes, In American Power Conversion (P) Ltd. v. CCE 2009 (13) STR 682 (Trib-Bang), it was held that if entire amount of service tax is paid immediately after adjudication, pre-deposit of interest and penalties can be waived. Stay was granted.

3. A building is owned by two individuals. Can each one claim exemption separately under service-tax?

Not possible. Notification No. 6/2005, ST, dated 1-3-2005 exempts only taxable service and not service provider.

4. Is there Central Excise Duty on wastes/scrap?

Waste/scrap arising out of manufacture are liable to Central Excise duty.--Vide Khandelwal Metal v. CCE 1985 (20) ELT 222 (SC).

5. Can a proprietary concern be called an organization or institution?

It has been held in Devilal Kutir Shop v. CCE 2001 (130) ELT A 255 (SC) that proprietary concern is neither an organization nor an institution.

6. We have filed service tax return on the due date. Can we revise it once. We find some mistakes in it?

Yes, As per rule 7B, the revised return should be filed within 90 days from the date of filing the original return.

7. We are manufacturers. We have excisable products for value of Rs. 140 lakhs and non-excisable products turnover of Rs. 300 lakhs. Should we have to pay excise duty?

Yes, If the turnover of excisable products crosses over Rs. 150 lakhs in the previous year, Central Excise Duty has to be paid during current year, otherwise also, if the total turnover of excisable and non-excisable products crosses over Rs. 400 lakhs in the previous year, excise duty has to be paid in the current year.

8. In Central Excise, for calculation of SSI limit of Rs. 150 /400 lakhs, should we have to consider exempted turnover/clearances also?

For 150 lakhs, only dutiable clearances have to be considered.

For 400 lakhs, dutiable and non-dutiable/nil rated/exempted are to be included.--Vide Arun Industries v. Commissioner 2005 (191) ELT 1041 (Trib-Bang).

9. Which is relevant in service-tax for taxation, the date of service or date of receipt of payment?

For determination of tax liability, the relevant date is the date of service and not the date on which payment is received.--Vide Lumax Samlip Industries v. CST (2007) 8 STT 82 (Trib-Chen).

However, service tax is to be paid only on receipt of consideration, for the taxable service rendered.

10. An assessee is doing multiple service. Can he file a single return giving the details of all services?

Yes. A single return giving details of all services is sufficient [Based on CBEC Circular 72/2/2004-ST, dt. 2-1-2004].