CHARGE OF SERVICE TAX, TAXABLE SERVICES AND VALUATION

CHARGE OF SERVICE TAX, TAXABLE SERVICES AND VALUATION

1. ARRANGEMENT OF SECTIONS IN CHAPTER V OF FINANCE ACT, 1994 PERTAINING TO SERVICE TAX LAW

SECTION	SECTION NAME
Sec 64.	Extent, commencement and application
Sec 65.	Definitions
Sec. 65A	Classification of taxable services
Sec 66.	Charge of service tax
Sec. 66A	Charge on Service Tax from services provided from outside India
Sec 67.	Valuation of taxable services for charging Service tax
Sec 68.	Payment of service tax
Sec 69.	Registration
Sec 70.	Furnishing of Returns
Sec 71.	Scheme for Submission of Returns through Service Tax Preparers
Sec 72.	Best judgment assessment
Sec 73.	Recovery of Service tax not levied or paid or short levied or short paid or erroneously refunded
Sec 73A.	Service Tax collected from any person to be deposited with Central Government
Sec 73B.	Interest on amount collected in excess
Sec 73C.	Provisional attachment to protect revenue in certain cases
Sec 73D.	Publication of information in respect of persons in certain cases
Sec 74.	Rectification of mistake
Sec 75.	Interest on delayed payment of Service Tax
Sec 76.	Penalty for failure to pay Service Tax
Sec 77.	Penalty for contravention of rules and provisions of Act for which no penalty is specified elsewhere
Sec 78.	Penalty for suppressing value of taxable service.
Sec 79.	Omitted
Sec 80.	Penalty not to be imposed in certain cases.
Sec 81.	Omitted
Sec 82.	Power to search premises
Sec 83.	Application of certain provisions of Central Excise Act.
Sec 83A.	Power of adjudication.
Sec 84.	Revision of orders by the Commissioner of Central Excise
Sec 85.	Appeals to the Commissioner of Central Excise (Appeals)
Sec 86.	Appeals to Appellate Tribunal
Sec 87.	Recovery of any amount due to Central Government
Sec 88.	Omitted
Sec 89.	Omitted
Sec 90.	Omitted
Sec 91.	Omitted
Sec 92.	Omitted
Sec 93	Power to grant exemption from Service Tax
Sec 94.	Power to make Rules
Sec 95.	Power to remove difficulties in implementing new services

1. APPLICABILITY OF SERVICE TAX

Service Tax extends to the whole of India except the State of Jammu and Kashmir[1].

Place of business of service provider is irrelevant for the levy of service tax i.e. the service tax is applicable on the basis of destination principle.

Services provided by a person having his business premises in Jammu & Kashmir and providing taxable services to his clients in other parts of India would be liable for payment of service tax. In other words, office of service provider is irrelevant for determining liability to pay service tax.

Illustration

S. no.	Office of Service Provider.	Office of Service Receiver	Taxability
1.	Delhi	Delhi	Service tax would be applicable.
2.	Delhi	Jammu and Kashmir	Service tax would not be applicable.
3.	Jammu and Kashmir	Delhi	Service tax would be applicable.
4.	Jammu and Kashmir	Jammu and Kashmir	Service tax would not be applicable.
5.	Jammu and Kashmir	Any place other than J&K	Service tax would be applicable.
6.	Any place other than  J&K	Jammu and Kashmir	Service tax would not be applicable.
7.	Not Known	Jammu and Kashmir	Service tax would not be applicable.
8.	Jammu and Kashmir	Not Known	Applicability of Service tax cannot be determined in this situation.

 

Indian territorial waters

Service provided within the territorial waters will be liable to service tax as levy of service tax extends to whole of India except Jammu and Kashmir and ‘India includes territorial waters. Indian territorial waters extend upto 12 nautical miles from the Indian land mass.

Notification No. 14/2010-ST., Dated: February 27, 2010

Central Government extends the provisions of Chapter V of the Finance Act, 1994, to the areas specified in column (2) of the Table below, in the continental shelf and exclusive economic zone of India for the purposes as mentioned in column (3) of the said Table:

Sl. No.	The areas in the Continental Shelf and the Exclusive Economic Zone of India	Purpose
(1)	(2)	(3)
A	Whole of continental shelf and exclusive economic zone of India	Any service provided for all activities pertaining to construction of installations, structures and vessels for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof.
B	The installations, structures and vessels within the continental shelf and the exclusive economic zone of India, constructed for the purposes of prospecting or extraction or production of mineral oil and natural gas	Any service provided or to be provided by or to such installations, structures and vessels and for supply of any goods connected with the said activity.

General knowledge:

As per the territorial waters, continental shelf, exclusive economic zone and other maritime zones act, 1976.

The exclusive economic zone of India is an area beyond and adjacent to the territorial waters, and the limit of such zone is two hundred nautical miles from the baseline.

The continental shelf of India comprises the seabed and subsoil of the submarine to a distance of two hundred nautical miles from the baseline.

[1] As per Article 370 of the Constitution, any Act of Parliament applies to Jammu & Kashmir only with concurrence of State Government. Since, no such concurrence has been obtained in respect of Finance Act, 1994; service tax provisions are not applicable in Jammu and Kashmir.

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