Some Service Tax riddles
DDT is scared to raise any issue on Service Tax for it may lead to a solution worse than the problem. As they say “For every problem, there is a solution that is simple, neat, and wrong”. Many netizens write to us demanding that we highlight the issues so that the problems get resolved. Here are a few riddles that have been bothering many a confused assessee.
1. Is there a cenvat return for the service providers taking credit? If so what is the form?
There is indeed a return required to be filed as per Rule 9(9) of the Cenvat Credit Rules, in a form specified by notification by the Government. The service provider is committing an offence by not filing this return but is not the Government a bigger offender in not specifying the form of this return so far? May be they have forgotten about the existence of this provision in the Rule.
2. What is the document under which credit can be taken for Service Tax on goods transport paid by consignor or consignee?
Sadly, there is no document prescribed under Rule 9 (1) of the Cenvat Credit Rules. So if you are taking credit on such tax, you are an offender - because the Government has not notified the document for this purpose under Rule 9(1).
3. Will the value of exempted services be taken into consideration for computing the aggregate value of SSI exemption of Rs. 4 Lakhs?
It seems many officials have taken a stand that the value of exempted services is also to be added to arrive at the Rs. 4 Lakhs value. But the Explanation to Notification No. 6/2005 dated 1.3.2005 clearly states but does not include payments received towards such gross amount which are exempt from whole of service tax leviable thereon under section 66 of the said Finance Act under any other notification.
4. Where do you register if you want centralized registration and your offices are spread right across the country?
As per Rule 4(3)(b) of the Service Tax Rules, this registration is to be done by an authority to be specified by the Board. Ask the Board when it is going to specify this authority. Till such time no centralized registration!
5. What is common to MTNL, BSNL IDEA CELLULAR, AIRTEL, HUTCH, RIM, TATA INDICOM?
You will say they are all telephone companies but they provide different kind of services. The common factor is, they are all Service Tax offenders. From 1.4.2005, as per Rule 4A of the Service Tax Rules, “Every person providing taxable service shall, not later than fourteen days from the date of completion of such taxable service or receipt of any payment towards the value of such taxable service, whichever is earlier issue an invoice”. Aren’t these phone companies issuing monthly invoices?
6. Is a consignor factory (manufacturing excisable goods) paying Service Tax on goods transported to the customer’s premises eligible for taking credit on the tax paid by him?
I will leave that to you. If you would like to share your answer, please mail it to me.