Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Tuesday, April 23, 2013

Service Tax Return (ST-3) for Oct 12 - Mar 13 Last Date Extended to 31st August 2013


The Central Board of Excise & Customs has extended the date of submission of the Form ST-3, for the period from 1st October 2012 to 31st March 2013, from 25th April, 2013 to 31st August, 2013 as the Form ST-3 for this period is expected to be available on the Service Tax Department's website at aces.gov.in by 31st July, 2013.

(Notification No. 03/2013-Service Tax dated 23.04.2013)

Saturday, April 13, 2013

New Composition Scheme for dealers carrying out Works Contract

For dealers exclusively engaged in carrying out Works Contracts, a new Composition Scheme has been notified w.e.f. 1st April, 2013.

A works contract dealer who is paying tax under section 3 of the DVAT Act (not under composition scheme), can opt for this scheme by filing an application in Form WC 01 within thirty days from the first day of the financial year with effect from which composition is opted, i.e. on or before 30.04.2013.

Click here to download Form WC 01.

Friday, April 12, 2013

Service Tax Return (ST-3) Due Date Extended to 30th April, 2013


The last date for e-filing of the new Service Tax Return (ST-3) for the period July-September 2012 has been extended from 15th April to 30th April, 2013 (Order No. 2/2013 dated 12th April, 2013)

Click here to download the Service Tax Return (ST-3) e-filing utility. 

Thursday, April 11, 2013

Frequently Asked Questions on DVAT Form T-2

1)      What is Form T-2 and its requirements?
v  Form T-2 requires the dealers to furnish details of invoices and goods receipt note for goods purchased or received as stock transfer from outside Delhi.
v  This form has to be submitted online before goods enter Delhi.
v  If the Vehicle Number is not available in advance, Form T 2 would need to be filed without Vehicle Number and the Vehicle Number would need to be updated within 24 hours of receipt of the goods by the Delhi dealer.
v  If form T-2 is not filed online before the goods enter Delhi, the Delhi dealer may not dispose of/sell/dispatch such goods till the Vehicle Number in Form T-2 is updated online.
v  The Transporter is required to obtain a hard copy of Form T-2 and carry it with the goods, If the dealer updates the information in Form T-2 within 24 hours of receipt of the goods, the Transporter would obtain a revised hard copy of the Form T-2 also and retain it.
v  If a dealer claims that he is exempted from filing information in form T-2, Transporter would obtain a quarterly declaration from such dealers clearly mentioning their TIN in Delhi and a self-certificate that they are exempted from filing of information in form T-2.
v  Option to select Outside India has been included in the window for State. Option to indicate mode of transport i.e. by Road, Railways, Air Carrier, Pipelines, Internet has also been provided in the form. Vehicle number would be required only in cases of road transport. GR/RR/Airway Bill/Courier Receipt would be mandatory for transport by Road/Railways/Air/ Courier respectively in accordance with Form 7 & 8 of Carriage by Road Rules.

Monday, April 1, 2013

Applicability of Service Tax on Tour & Travel Operator


Who is a “Tour Operator” under the Service Tax Laws?
Tour operator means any person engaged in the business of planning, scheduling, organizing, arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours.


What is the value of taxable service provided by a tour operator?
The value of taxable service provided by a tour operator to a client is the gross amount charged by such operator from the client for services in relation to a tour and includes the charges for any accommodation, food or any other facilities provided in relation to such tour.


What are the rates of service tax applicable on various services provided by a tour operator?
S.No.
Taxable Service
Partial abatement/ Composition Scheme
Conditions
Statutory Reference
1
Accommodation booking service
10% of amount charged
1) No CENVAT Credit.
2) Invoice should be inclusive of cost of accommodation
S. No. 11(ii) of Notif. No. 26/2012-ST dt 20.6.12
2
Package tours - wherein transportation, accommodation for stay, food, tourist guide, entry to monuments and other similar services in relation to tour are provided as part of the package
Tax is payable on 25% of gross amount charged
1)  No CENVAT credit available.
2)  Bill to be inclusive of all charges for the tour.
S. No. 11(i) of Notif. No. 26/2012-ST dt 20.6.12
3
Tour operator – providing services solely of arranging or booking accommodation for any person in relation to a tour.
Tax is payable on 10% of  amount charged
1)  No CENVAT credit available.
2)  Bill to be inclusive of all charges for such accommodation.
3)  This exemption shall not apply in such cases where the invoice, bill or challan issued by the tour operator, in relation to a tour, only includes the service charges for arranging or booking accommodation for any person and does not include the cost of such accommodation.
S. No. 11(ii) of Notif. No. 26/2012-ST dt 20.6.12
4
Tour operator – Other than abovementioned services

Tax is payable on 40% of amount charged.
1)  No CENVAT credit available.
2)  Bill to be inclusive of all charges for the tour.
3)  The bill issued indicates that the amount charged in the bill is the gross amount charged for such a tour.
S. No. 11(iii) of Notif. No. 26/2012-ST dt 20.6.12
5
Air Travel Agent
Option to pay service tax at flat rate on ‘basic fare’ @0.6% in case of domestic booking and 1.2% in case of international booking – plus E. Cess
No restriction on availment of CENVAT credit.
Option, once exercised, will apply uniformly in respect of all the bookings of passage for travel by air made during the financial year.
Rule 6(7) of Service Tax Rules

Who is an Air Travel Agent? Are his services chargeable to Service Tax?
An “Air Travel Agent” is any person engaged in providing any service connected with the booking of passage for travel by air.
Any service provided or to be provided to any person, by an air travel agent in relation to booking of passage for travel by air is a taxable service.


How is the taxable value of service provided by an air travel agent to be computed? What are the specific inclusions or exclusions?
In case of air travel agent, the value of taxable service is the gross amount charged by such agent from the customer for services in relation to the booking of passage for travel by air, excluding the air fare but including the commission, if any received from airline in relation to such booking.
Thus, the value of taxable services will include the commission received by the travel agent from the airline. However, it will exclude the fare amount collected from the customer.
The air travel agents receive certain commission for domestic and international tickets from the airlines. The details of the commissions payable by the airlines is indicated in the agency agreement entered into between the airline and the air travel agent. The travel agent files a fortnightly return to the airlines indicating the details of tickets booked, fare collected and the commission earned along with other particulars. After adjusting the commission, he remits the balance amount to the airlines. This fortnightly return would be the basis for assessment of Service Tax in respect of air travel agents.


Can the air travel agent pay service tax under any composition scheme?
An option has been given to the air travel agents to pay the Service Tax under the composition scheme as follows:
·         For booking domestic tickets: @ 0.6% of the basic fare
·         For booking international tickets: @ 1.2% of the basic fare
The basic fare is defined as that part of the fare on which commission is payable by the airlines.
E. Cess and S. H. E. Cess @3% of the tax amount determined as above will be payable additionally.



Which are the specified categories of persons, providing services to whom are exempt from service tax?
Services provided to the following persons are fully exempt:
·         United Nations or any such specified International Organization
·         Office of a foreign diplomatic mission or consular post in India
·         Personal use or for the use of family members of diplomatic agents or career consular officers posted in a foreign diplomatic mission or consular post in India

What is the place of provision of passenger transportation services?
The place of provision of a passenger transportation service is the place where the passenger embarks on the conveyance for a continuous journey.


What does a “continuous journey” mean?
A “continuous journey” means a journey for which:-
(i)                  a single ticket has been issued for the entire journey; or
(ii)                more than one ticket or invoice has been issued for the journey, by one service provider, or by an agent on behalf of more than one service providers, at the same time, and there is no scheduled stopover in the journey.


What is the meaning of a stopover? Do all stopovers break a continuous journey?
“Stopover” means a place where a passenger can disembark either to transfer to another conveyance or break his journey for a certain period in order to resume it at a later point of time. All stopovers do not cause a break in continuous journey. Only such stopovers will be relevant for which one or more separate tickets are issued. Thus a travel on Delhi-London-New York-London-Delhi on a single ticket with a halt at London on either side, or even both, will be covered by the definition of continuous journey. However if a separate ticket is issued, say New York-Boston-New York, the same will be outside the scope of a continuous journey.

Whether service tax will apply on related fees/charges on journeys starting outside India, even if the transaction for related charges is made in India?
and
Whether service tax will apply on related fee charges on journeys starting in India, even if the transaction for related charges is made outside India?

As per Clarification given in Draft Circular F. No.354 /146/2012 – TRU dated 27.09.2012:

According to Rule 11 of Place of Provision of Services Rules, 2012, the place of provision of a passenger transportation service is the place where the passenger embarks on the conveyance for a continuous journey. Therefore, if place of embarkation of passenger is located within the taxable territory, service tax is leviable on the gross amount payable for such continuous journey, irrespective of where the ticket is booked and where fees/charges are collected. If the place of embarkation of a passenger on a continuous journey falls outside the taxable territory, service tax is not leviable, irrespective of where the tickets are booked and where fees/charges are collected. However, only such charge will be determined under Rule 11 of POP as are directly related to the continuous journey. The POP of other charges will be judged on their own merits.”
However, it is to be noted that as per Rule 8 of Place of Provision for Service Rules, 2012, where the service receiver and service provider are located in the taxable territory, the provision of service would be the location of service receiver irrespective of where the service is performed, delivered or consumed.
For determining “location of service” as above, if the service recipient has obtained service tax registration, it is the registered premises of the service receiver. However, if the service receiver is not registered under service tax, his location will be determined as follows:
1.       Location of business establishment
2.       Location of fixed establishment
3.       Where services are used at more than one establishment, the establishment most directly concerned with the use of service
4.       In the absence of above, the usual place of residence.