Circular on Service Tax procedure
Board has issued a circular on procedure. This is basically a reiteration of the Rules, but the Board has in detail asserted that
1. The consigner and consignee has to pay tax in cash on goods transport by road service – [Tribunal had in held that it can be paid from credit account. Board obviously does not agree]
2. Here is very important and useful clarification.Whether a consignee can take the credit of the amount paid as service tax either by himself (as consignee), or by the consignor or by the Goods Transport Agency? The good Board says, “YES”
3. Outward transport – credit only up to place of removal – CESTAT is also with the Board!
4. credit of service tax paid in respect of mobile telephone service is admissible, provided the mobile phone is used for providing out put service or used in or in relation to manufacture of finished goods. [How is to be proved?]
That of course leaves several issues yet to be clarified. Some of them are:-
1. Should the Head Office of a factory take registration as Service Tax Distributor if there is only one office and one factory?
2. Is every service provided by any one in a port, port service?
3. Is Service Tax leviable on Services provided from outside and received in India before 19.4.2006?
4. Are the amounts reimbursed for postage, printing, stationery, conveyance etc, to a service provider includible in the value?
5. Under the service "renting of immoveable property" whether rent payable for lease of vacant land be service taxable if after taking the land on lease, some building is constructed on the vacant land by the lessee?
Well questions will always be there and answers can be found. The Board deserves all kudos for this great exercise. Now at least we know what the instructions are. And they are all in one place. Only Board should ensure that all future clarifications are incorporated into this scheme and necessary corrections are carried out immediately.
Please send in your comments on the procedures to geebeetru@rediffmail.com or gdlohani@gmail.com by 29th June 2007.