Service Tax under erstwhile provision in Positive List Concept
till 1st July 2012 :
Under
positive list based taxation, the question of taxing a service would arise
where the service that is provided by the service provider happens to be
covered under the any of the sub-clauses of section 65(105). Once the relevant
clause is identified, the concept of “service provider” and “service receiver”
would also have to be satisfied in order to tax the concerned service.
Where
the criteria mentioned above are satisfied, the tax would be levied on the service
provider who would be liable to collect the service tax amount from the service
receiver and remit it to the government in the manner prescribed.
Since
the levy of service tax is on the provision of service, the services provided
before the date on which such services were brought under the tax net, would
not be subjected to service tax. It may noted that even if the bills for the
services provided are raised by the service provider after the date on which
the service became taxable, there would be no liability as the services had
been provided during the period when the service was not taxable at all.
Classification :
The service provider should ensure that the service / activity is
classified properly as this would enable him to ascertain his liability
properly. Correct classification is critical and if the classification is not
proper, the service provider may either end up paying more than what is
required or even face a liability.
Service Tax under new provision in Negative List Concept from 1st
July 2012 :
- Now, the Service Tax law has undergone a sea change with the term ‘service’ by itself being defined and all the activities which satisfy the definition criterion fall under the service tax net. The term ‘Service’ has been defined. Also the charge of service is specifies on all the services provided or agreed to provide from Taxable Territory.
- Negative list of Services is specifies.
- The rules of Point of Taxation & Place of Provision of services are specified.
- Declared services are introduced to remove the confusion on certain services.
- Some exempted services are put in Mega Exemption Notification.
