This preview shows page 374 - 376 out of 456 pages.
Example 64:Answer the following:(a) A particular service has been brought into service tax net with effect from 1-5-2016. Ms.Gouri has provided this service on 10-05-2016 and invoice has been issued on the same date. The payment for the same was received on 30-4-2016. Is service tax payable on the same?(b) Mr. Saravanan has collected `15,000 as service tax from a client mistakenly, even though no service tax is chargeable for such service. Should the amount so collected be remitted to the credit of the Central Govern-ment?
Service Taxl INDIRECT TAXATION366(c) Briefly explain the nature of the service taxAnswer:(a) As per Rule 5(b) of the Point of Taxation Rules, 2011, no tax shall be payable if the payment has been received before the service becomes taxable and invoice has been issued within the period referred to in rule 4A of the Service Tax Rules, 1994.As per rule 4A of the Service Tax Rules, 1994, an invoice is required to be issued within 30 days from the date of completion of service or from the date of receipt of any payment of taxable service, whichever is earlier.In the given case Ms.Gouri is not liable to pay service tax.(b) Section 73A of the Finance Act, 1994 casts an obligation on every person who has collected service tax from any recipient of service in any manner as service tax, to remit the same to the credit of the Central Govern-ment. On account of this provision, where any person has collected any amount, which is not required to be collected from any other person, in any manner as representing service tax, he should also immediately pay the amount so collected to the credit of the Central Government.Hence, Mr. Saravanan has to remit the service tax collected by him on the non taxable services to the credit of Central Government of India.(c) Section 70 of the Finance Act, 1994 enjoins that every person liable to pay service tax shall himself assess the tax due on the services provided by him and shall furnish a return to the Superintendent of Central Excise.Example 65:Mr.Ranveer rendered taxable services to a client. A bill of `40,000 were raised on 29-4-2016. `15,000 were received from the client on 1-5-2016 and the balance on 23-5-2016. No service tax was separately charged in the bill.(a) Is Ms. P liable to pay service tax, even though the same has not been charged by her?(b) If so, what is the value of taxable services and the service tax?(c) Due date of payment of service tax? Note: previous year turnover is `25 lakhsAnswer:(a) Mr. Ranveer is liable to pay service tax even though he has not collected the service tax from his client, by con-sidering the service tax is inclusive in the value of the bill. The point of taxation is 29-4-2016. It means she is liable to pay service tax for the month of April, 2016.(b) Service tax liability is as follows:Value of taxable services = `40,000 x 100/115 = `34,783Service tax liability = `34,783 x 15/100 = `5,217(c) Due date of payment of service tax is 6th July 2016.