CHARGE OF SERVICE TAX, TAXABLE SERVICES AND VALUATION

CHARGE OF SERVICE TAX, TAXABLE SERVICES AND VALUATION

III.          CHARGE OF SERVICE TAX

As per Section 66 Service tax shall be computed by using 3 components:

1. TAX RATE
2. TAXABLE SERVICES REFERRED TO IN SECTION 65(105).
3. VALUE

1. Tax Rate

As per section 66 of Chapter V of Finance Act 1994, Service tax is levied at the rate of 12%. However, vide Notification No. 8/2009 ST dated 24.02.2009 the rate of tax has been changed from 12% to 10%. Therefore, the new Service tax rate is 10%.

Education Cess: With effect from 10.09.2004, an education cess has been levied @ 2%, calculated on the service tax on all taxable services.

Secondary and Higher Education Cess: With effect from 11.05.2007, a secondary and higher education cess i.e. SHEC @ 1% shall also be charged on services liable to service tax.

Effective rate of service tax is 10.30% [10% + 2% of 10 + 1% of 10 = 10.30%].

Illustration

Mr. A renders services worth Rs. 1,00,000 to Green Chillies Entertainment. Service tax liability is calculated as follows:-

Particulars	Amount	Workings
Value of Services (i)	100000
Service tax @ 10%	10000	100000 x 10%
Education Cess @ 2% of Service tax	200	10000 x 2%
Secondary and Higher Education Cess @ 1%	100	10000 x 1%
Total tax including EC & SHEC (ii)	10300
Price payable by Green chilies to Mr. A    (i) + (ii)	110300

Illustration

Mr. A renders services worth Rs. 2,00,000 to Green Chillies Entertainment. Service tax liability is calculated as follows:-

Particulars	Amount	Workings
Value of Services (i)	200000
Service tax @ 10%	20000	200000 x 10%
Education Cess @ 2% of Service tax	400	20000 x 2%
Secondary and Higher Education Cess @ 1%	200	20000 x 1%
Total tax including EC & SHEC (ii)	20600
Price payable by Green chilies to Mr. A (i) + (ii)	220600

1. List of Taxable Services

As per section 66, Service tax shall be applicable on services referred to in section 65(105) of Finance Act, 1994.

List of Services referred in section 65(105).

1. Stock broking services
2. General insurance services
3. Advertising agency services
4. Courier services
5. Consulting engineer’s services
6. Custom house agent’s services
7. Steamer agent’s services
8. Clearing & forwarding agent’s services
9. Manpower recruitment agent’s services
10. Air travel agent’s services
11. Mandap keeper’s services
12. Tour operator’s services
13. Rent-a-cab scheme operator’s services
14. Architect’s services
15. Interior decorators services
16. Management or business consultant’s services
17. Practising chartered accountant’s services
18. Practising cost accountant’s services
19. Practising company secretary’s services
20. Real estate agent’s services
21. Security agency’s services
22. Credit rating agency’s services
23. Market research agency’s services
24. Underwriter’s services
25. Scientific or technical consultancy services
26. Photography services
27. Convention services
28. On-line information and database access and/or retrieval services
29. Video tape production services
30. Sound recording services
31. Broadcasting (radio and television) services
32. Insurance auxiliary services
33. Banking and other financial services
34. Port services by major ports and other ports
35. Authorised service station’s services
36. Beauty Parlour’s services
37. Cargo handling services
38. Cable operator’s services
39. Dry cleaning services
40. Event management services
41. Fashion designer’s services
42. Health club and fitness centre services
43. Life insurance services
44. Rail travel agent’s services
45. Storage and warehousing services
46. Business auxiliary services
47. Commercial training or coaching services
48. Erection, commissioning and installation services
49. Franchise services
50. Internet café’s services
51. Management, maintenance or repair services
52. Technical testing and analysis services
53. Technical inspection and certification services
54. Airport services
55. Transport of goods by air services
56. Business exhibition services
57. Transport of goods by road (by a goods transport agency)
58. Construction services in respect of commercial or industrial buildings or civil structures
59. Intellectual property service other than copyrights
60. Opinion poll services
61. Outdoor catering
62. TV or radio programme production services
63. Survey and exploration of mineral services
64. Pandal or shamiana services
65. Travel agent’s services (other than air/rail travel agents)
66. Forward contract services
67. Transport of goods through pipeline or other conduit
68. Site preparation and clearance, excavation, earth moving and demolition services
69. Dredging services of rivers, ports, harbours, backwaters and estuaries
70. Survey and map-making services other than by Government departments
71. Cleaning services other than in relation to agriculture, horticulture, animal husbandry or dairying
72. Services in respect of membership of clubs or associations
73. Packaging services
74. Mailing list compilation and mailing services
75. Construction services in respect of residential complexes
76. Registrar to an issue’s services
77. Share transfer agent’s services
78. Automated teller machine operations, maintenance or management services
79. Recovery agent’s services
80. Sale of space or time for advertisement, other than in print media
81. Sponsorship services provided to anybody corporate or firm, other than sponsorship of sports events
82. Transport of passengers embarking on international journey by air, other than economy class passengers
83. Transport of goods in containers by rail by any person, other than government railway
84. Business support services
85. Auctioneers' services, other than auction of property under directions or orders of a court of law or auction by the Central Government
86. Public relations services
87. Ship management services
88. Internet telecommunication services
89. Transport of persons by cruise ship
90. Credit card, debit card, charge card or other payment card related services
91. Telecommunication services
92. Mining services
93. Services of renting of immovable property
94. Services involved in the execution of a works contract
95. Development and supply of content services

96Asset management including portfolio management and all forms of fund management services

97. Design services
98. Information technology software services
99. Investment management services provided under ULIP
100. Stock exchange services in relation to securities
101. Commodity exchange services
102. Processing and clearing house services
103. Supply of tangible goods services
104. Transport of coastal goods and goods transported through inland water including National Waterways [New services have been brought under the service tax net by the Finance (No.2) Act, 2009]
105. Cosmetic surgery or plastic surgery [New services have been brought under the service tax net by the Finance (No.2) Act, 2009]
106. Legal consultancy services [New services have been brought under the service tax net by the Finance (No.2) Act, 2009]
107. Games of chance service [New services have been brought under the service tax net by the Finance Act, 2010]
108. Health care service [New services have been brought under the service tax net by the Finance Act, 2010]
109. Services provided for maintenance of medical records of employees of a business entity. [New services have been brought under the service tax net by the Finance Act, 2010]
110. Service of promoting a ‘brand’ of goods, events, business entity etc. [New services have been brought under the service tax net by the Finance Act, 2010]
111. Service of permitting commercial use or exploitation of any event organized by a person or an organization. [New services have been brought under the service tax net by the Finance Act, 2010]
112. Services provided by Electricity Exchanges. [New services have been brought under the service tax net by the Finance Act, 2010]
113. Services related to copyrights on cinematographic films and sound recording. [New services have been brought under the service tax net by the Finance Act, 2010]
114. Special services provided by builder etc. to prospective buyers. [New services have been brought under the service tax net by the Finance Act, 2010]

We are required to only know the name of these services. Details of these services have no relevance with Service Tax. Our course is limited to only few services which will be discussed in detail in the coming chapters.

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