Hiregange & Associates, Bangalore, Hyderabad - Chartered Accountants, Bangalore, India

Professionals Value Pack

Profession without Bribes – Is it possible?

Date: Monday, September 12, 2011

Author: Madhukar N Hiregange

Synopsis: We have in India seen that the taxmen are becoming very demanding as time is passing. Many areas where hitherto there was no corruption now are full of this disease. The need to meet the revenue targets set by higher ups adds to the effort of such officers to get their “ pound of flesh”. Over the past period of time we find that the unscrupulous officers numbers has been increasing day by day.

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General - Indirect Taxation

IMPORTANT CONCEPTS IN INDIRECT TAX

Date: Monday, September 12, 2011

Author: Madhukar N Hiregange

Synopsis: The tax is the price which we pay for a Civilised Society- Justice Holmes of US Supreme Court. In a civilised society a citizen demands law and order, basic infrastructure, social/health services etc., and for meeting his demands Government collects funds in various forms from various sources and indirect taxes is one of the main source of such revenue to the Government.

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Professionals Value Pack

Easy Steps To Drafting An Effective Opinion

Date: Thursday, June 02, 2011

Author: Madhukar N Hiregange

Synopsis: Firstly ,there should be a clear idea of what the client is doing, what are the products /services or processes involved.

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Professionals Value Pack

Auditors or Articles – Effective Listening /Learning

Date: Thursday, June 02, 2011

Author: Madhukar N Hiregange

Synopsis: Audit is a word derived from the latin word – auditus which means hearing which in the past was analogous to listening. In ancient times in India, Egypt audit existed. The accounts would be heard by a competent, highly regarded confidant of the king. The auditor would listen for inconsistencies, aberrations, mathematical accuracy, past and present comparison and the credibility of the person offering the statement and pass the accounts or require further investigation.

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Professionals Value Pack

Client Focus- A key to Success

Date: Thursday, June 02, 2011

Author: Madhukar N Hiregange

Synopsis: It is not uncommon to hear that the client is unwilling to pay the fees or delays the same inordinately. Even that all services in all taxes, advisory is all in one lumpsum. This appears to be more in the moffusil locations. It is the view of the paper writers that the more the value we offer the clients, the same is bound to be remunerated quite happily. To deliver this value we require to have client focus.

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Professionals Value Pack

Self-Motivation – A Key to Success

Date: Thursday, June 02, 2011

Author: Madhukar N Hiregange

Synopsis: In our professional or personal lives we have a number of wants including those we wish to achieve. Wanting is a passive exercise which could be equated to wishful thinking. Motivating oneself to do that is self motivation.

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Professionals Value Pack

Note on Writing a good {original} article

Date: Thursday, June 02, 2011

Author: Madhukar N Hiregange

Synopsis: Name your topic. Be specific.

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Professionals Value Pack

Competence – Fundamental to a Professional

Date: Thursday, June 02, 2011

Author: Madhukar N Hiregange

Synopsis: Many a times we are surprised that a client who was unwilling to pay a small fee for a service is willing to pay a large amount to another professional for a work which involves shorter time. This could be by reason of the perception of the professional or his firm in the eyes of the client. It could also be due to the fact that the professional provides the service diligently, considering the latest practices/ legal position while following the current technical and professional standards. That is to say he or his firm is more competent and therefore commands more respect as well as fees. Professionalism is equally important to one in employment as the competent one would progress faster and command respect of his peers and bosses.

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Professionals Value Pack

Delegation – A Key to Success

Date: Thursday, June 02, 2011

Author: Madhukar N Hiregange

Synopsis: Many of us CAs in practice as well as employment are very busy and find it difficult to achieve a work and life balance. We do all the work ourselves for a variety of reasons. We have no time for recreation, family, training ourselves. Our bosses/ clients are satisfied with our work but we wish we had little more time. There are a lot of jokes on our lack of humour and creativity.

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Professionals Value Pack

Note on Public Speaking

Date: Thursday, June 02, 2011

Author: Madhukar N Hiregange

Synopsis: In ancient Greece and Rome oratory was studied along with mathematics and science as essential skill.

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Central Excise Articles

New Products under Central Excise Levy

Date: Friday, March 04, 2011

Author: Madhukar N. Hiregange , Rajesh Kumar TR & Sudhir Vs

Synopsis: The Finance Minister as a move towards GST to be implemented by 2012 took a step in removing the exemption regime by levying duty on 130 items out of 370 where VAT is charged by the States. The items covered are mainly consumer goods. The balance 240 items would be roped in along with the implementation of GST in 2012.

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Service Tax General Articles

SERVICE TAX BUDGET UPDATES 2011

Date: Friday, March 04, 2011

Author: Madhukar N. Hiregange , Rajesh Kumar TR & Sudhir Vs

Synopsis: SERVICE TAX BUDGET UPDATES 2011 - PROPOSED NEW SERVICES

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Central Excise Articles

Introduction of Central Excise Levy

Date: Friday, March 04, 2011

Author: Madhukar N. Hiregange , Rajesh Kumar TR & Sudhir Vs

Synopsis: Introduction of Central Excise Levy under Notification 1/2011 and 2/2011

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Central Excise Articles

Approach to understand central excise

Date: Monday, November 01, 2010

Author: Madhukar N Hiregange

Synopsis: This paper provides the bird’s eye view of the law and practice of central excise and is focused on the individual who wishes to understand the basics. The definitions, case laws, explanations, notifications that are important are available in the excise manual/ commentaries by various authors.

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Karnataka VAT Articles

Introduction to KVAT

Date: Monday, November 01, 2010

Author: Madhukar N Hiregange

Synopsis: The concept of VAT (Value Added Taxation) was first implemented in France in 1954.More than 130 nations have embraced VAT beneficially. In India itself the adopting of VAT by Haryana has given it an edge and at the same time its revenue has also gone up. VAT is universally accepted and its principals ensure smooth tax collections as at each stage tax on the value addition only is to be paid.

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Service Tax General Articles

Overview of Service tax

Date: Monday, November 01, 2010

Author: Madhukar N Hiregange

Synopsis: Service tax was being collected in India 3000 years back for a plethora of services some of them being ferry tax, betting tax, courtesans, and many others. Service Tax in its present shape was bought into existence in the year 1994. Initially 3 services were brought into the net, which today has expanded to 115 categories covering millions of service providers. Eight more categories have been added in this year’s budget. It is expected that the number of service tax assessees would cross the number of income tax payers in a few years due to the fact that general exemption/ threshold limits have not been put into place for all categories. In recent times the Government has been looking at this sector to raise substantial resources and has fixed ambitious targets of collection.

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Service Tax General Articles

Classification Of Services - Issues

Date: Friday, October 01, 2010

Author: Madhukar N Hiregange & CA Srikantha Rao T

Synopsis: Classification of the sevices provided by service providers is onr of the critical aspects in ascertaining the liablity under service tax.

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General - Indirect Taxation

Tax Planning under Indirect Taxation

Date: Thursday, February 18, 2010

Author: Madhukar N Hiregange

Synopsis: Note on Tax Planning under Indirect Taxation

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General - Indirect Taxation

Cascading Effect of Tax in India

Date: Thursday, February 18, 2010

Author: Madhukar N Hiregange

Synopsis: The purpose of this article is to throw light on the cascading effect of taxation present in India and its impact and the possible remedy for the issues arising from the same. The main objective of any taxation in any part of the world is obviously not to levy tax on taxes or in simple words to avoid cascading effect. Cascading effect of tax is one of the major distortions that had crept into Indian taxation. In India, taxes are multi-layered as the central Government levies taxes like excise duty, service tax and central sales tax and State governments levies taxes like VAT/sales tax, entry tax, state excise, octroi etc. However, the fact that Indian Government is now moving towards eradicating this problem by adopting GST in a few years time cannot be overlooked. Some major developments took place in this regard in India in the recent past. Some of them are introduction of Value Added Tax in states by phasing out sales tax, decision taken to reduce the central sales tax over a period of time and phase out the tax by the year 2010 and most importantly the proposition made by the Finance Minister while presenting the budget 2006 to introduce Goods and Service tax with effect from April 2010. It is expected that this date may not be practicable and may have to be extended by a few years.

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Service Tax General Articles

Goods and Services Tax - Expectaions

Date: Friday, January 01, 2010

Author: CA Srikantha Rao T

Synopsis: As far back as 1978, the Jha Committee recommended VAT in india to make india competitive and remove the ills of multi point taxation.

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Service Tax General Articles

Event Management and Service Tax

Date: Sunday, November 01, 2009

Author: CA Srikantha Rao T

Synopsis: The growth of the service sector since the opening up of the indian economy is the early 1990s as well as the contribution to the revenue from introduction of service tax in 1994 has had the effect of encouraging the government to look at more and more services as far as taxablity is considered in order to increase the revenue in last decade or so.

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Service Tax General Articles

Consulting Engineer - Taxability of Services

Date: Tuesday, September 01, 2009

Author: CA Srikantha Rao T

Synopsis: The taxable service category of consulting engineer is probably the most widely applicable category considering its scope and coverage.

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Service Tax General Articles

Export of Services

Date: Monday, April 13, 2009

Author: Madhukar N Hiregange & Srikantha Rao T

Synopsis: The worlds over export of goods or services are kept insulated from the local taxation not only of the tax on the goods/ services exported but also from the cost of local taxes in manufacturing/ providing the said services. Service providers may note that where services are exported from India, the same would be subject to levy of service tax unless they are taxable services and in accordance with the framework prevailing under service tax for regarding a service as having been exported outside India.

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General - Indirect Taxation

Representation on Specific Issues

Date: Tuesday, February 24, 2009

Author:

Synopsis: This exhaustive notation from our side covers the issues which have been bought to our notice or those where there is a doubt in the minds of the officers/ tax payers. These suggestions would also assure the tax payer that his interests are being emphasized and trust is being reposed in him to pay his just taxes. Issues which have resulted in litigation which could have been avoided had the provisions/ instructions been clear have also been included.

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Karnataka VAT Articles

Overview of K-VAT Law

Date: Thursday, February 19, 2009

Author: Madhukar N Hiregange

Synopsis: Karnataka Value Added Tax is a tax on sale of goods. The KVAT law provides for setting off of the tax paid on inputs (goods purchased) against the tax payable on sale of goods. This has been done in order to avoid the cascading effect of taxes. This concept was earlier used in Central Excise as Modvat and subsequently as Cenvat Credit scheme.

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Service Tax Individual Services

Non-taxability in case of Residential Complex

Date: Thursday, February 19, 2009

Author: Madhukar N Hiregange & Sudhir V S

Synopsis: In the Finance Act of 2004 commercial construction was introduced followed by site formation and residential complex construction in 2005. Due to disputes on service tax not applicable on composite contract under this entry a new entry of “works contract” was introduced w.e.f 1.6.2007. The department in the meantime issued several circulars/ trade notices were also issued by various Commissionerates. This led to more confusion. Recently the High Court also held that when there is a transfer of property at the end of a contract for immovable property sale then ST was not applicable.

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Karnataka VAT Articles

Common Errors Expected in K-VAT

Date: Thursday, February 19, 2009

Author: Madhukar Hiregange

Synopsis: The dealer or manufacturer or the professional either advising the client or conducting a management audit, internal audit, K-VAT audit, inputs/ capital goods set off audit, valuation audit, due diligence would be better equipped when he/ she is aware of the possible common errors by manufacturers and traders which could have an impact on the costs in case of errors. The saying “forewarned is forearmed” is apt in this circumstance.

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Service Tax Individual Services

Service Tax - Real estate

Date: Thursday, February 19, 2009

Author: Madhukar N Hiregange & Sudhir V S

Synopsis: This article gives a brief knowledge about the service tax impact on the Construction Industry. We shall discuss the legal provision of the services that affect the industry and later take up some issues involved in each type of service. The whole gamut of service tax for the construction Industry was started with Consulting Engineer in the year 1997, which was extended to include Interior Decorator, Architect so on till the latest service Works Contract.

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Service Tax Individual Services

Service Tax - Goods Transport Agencies

Date: Thursday, February 19, 2009

Author: Madhukar N Hiregange & Srikantha Rao T

Synopsis: The taxing of services for the transport services has been a thorny issue for the Government. Service tax was earlier imposed on Goods Transport Operators but was discontinued with effect from 02.06.1998. Later, the services provided by Goods Transport Agency were made liable but kept in abeyance till 01.01.2005. Though there were strikes by the transporters they have not succeeded in preventing the Government from bring on this category under the service tax net though the actual liability may not be on the transporter. The service receivers are to bear the brunt of this tax payment and procedural complications and they would not be admissible for the Rs 10 lakhs exemption provided to small service providers. Therefore even receipt and payment for one consignment over the limit would suffice for any person other than an individual to be covered. The liability under this category would be with effect from 01.01.2005

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Service Tax Individual Services

Business Auxiliary Service

Date: Thursday, February 19, 2009

Author: Madhukar N Hiregange & Srikantha Rao T

Synopsis: This taxable service category is one of the most important categories because of the diverse nature of the services covered thereunder. If one considers the coverage, the taxability would extend not just to a pure service provider but even to a manufacturer who engages in processing not amounting to manufacture as per Central Excise Act 1944. Importance of this category also stems from the fact that very often assessees are also liable as service receivers when they receive a taxable service in India from abroad and this category falls under the recipient based categories under the Taxation of Services (Provided from outside India and Received in India) Rules 2006 for the purpose of determining whether a taxable service is received in India or not. I.e. service is taxed where the recipient is located in India and place of performance of the service is not relevant.

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Service Tax Individual Services

Works Contract

Date: Thursday, February 19, 2009

Author: Madhukar N Hiregange & Srikantha Rao T

Synopsis: The non compliance with service tax by the construction industry in general, added to the conflicting circulars and the decision in Daelim Industries (2004 (07) LCX 0004) case, (which has been followed recently in case of Murali Sesh Engineers Vs Commissioner of Service Tax Bangalore (2008 (02) LCX 00125)) regarding non applicability of service tax on indivisible contracts had led to this purportedly simpler alternative being introduced to encourage compliance. Initially bait of lower rate was dangled in 2007 and as expected in the 2008 budget doubled.

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Service Tax Individual Services

Business Support Service

Date: Thursday, February 19, 2009

Author: Madhukar N Hiregange & Srikantha Rao T

Synopsis: Business Support Service is one of the more important and relevant categories under service tax which are being taxed at present. This category was introduced with effect from 01.05.06. The main intention in introducing this category was to tax those services relevant for one's business or commerce which are outsourced to another entity. One of the important points to be remembered here is that in order to tax the outsourced activity, the service should have been provided in relation to the service receiver's business or commerce. This is one category which would be relevant for all those entities which handle outsourced activities and therefore is very relevant to a BPO. Assessees should however note that the definition of the service does not restrict the scope of this heading to services mentioned therein as there can be various services provided in relation to business or commerce. The services specifically finding a mention in the definition are only intended to provide clarity to the assessee rather than restricting the scope of the definition itself. i.e. in other words, the definition is not at all exhaustive and this has been made clear by the Circular DOF 334/4/2006 TRU dated 28.02.2006. Assessees seeking to classify their services under this heading are also advised to find out whether there is any other category of taxable service which provides a more appropriate description of the service concerned as the service involved might have to be classified under such other heading if one goes by the principles laid down in Section 65A a view which has also been upheld by the High Court of Punjab and Haryana in Dr Lal Path Labs (P) Ltd Vs CCE Ludhiana (2007 (09) LCX0011).

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Service Tax Individual Services

Maintenance and Repair Service

Date: Thursday, February 19, 2009

Author: Madhukar N Hiregange & Srikantha Rao T

Synopsis: In respect of the immovable and movable properties one acquires it is quite common to find assessees who provide services in relation to maintenance and repair of goods on a one off basis or under a contract for a year or more. High value capital goods could come with a long warranty which is serviced by third parties. The assessees who do so may either be manufacturers who are registered under the Central Excise Act or pure service providers who may also be providing a wide variety of services. Though this category of service was introduced with effect from 01.07.2003, it is not uncommon to come across cases where assessees happen to provide services classifiable under this category but are ignorant of their liability under service tax with regard to their earnings from the same. In quite a few cases, the assessees have also been found to be under the notion that their service is classifiable under the category of Business Auxilliary Service while the same could also be classifiable under the category of maintenance, management or repair services. This has resulted in assessees claiming the benefit of exemption notification 8/2005 ST and ending up with a demand from the department. The category has not remained the same since its introduction and has undergone modifications and additions in scope over the years.

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Service Tax Individual Services

Information Technology Services

Date: Thursday, February 19, 2009

Author: Madhukar N Hiregange & Srikantha Rao T

Synopsis: The industry which has contributed for placing our country on the global map in the past decade has been slowly being bought into the mainstream of normal tax rules and restrictions albeit on a voluntary basis. It is expected that the domestic software service providers would face difficulty in complying with service tax provisions. This would be partly due to the nature of services being provided by this sector as well as the fact that “service tax” as a tax is still evolving even after 14 years of its introduction in the year 1994. The insertion of the new service category “Information Technology Software Service” as a taxable service with effect from 16.05.08 is however been an entry bought in at the behest of the industry as the government would end up with more than Rs. 6000 crores as refund payable for the year 2008-09 itself.

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Service Tax Individual Services

NAS

Date: Thursday, February 19, 2009

Author: Madhukar N Hiregange

Synopsis: Packaging today is a very important activity as there are competing products and only that which catches the eye would be purchased. In some products the cost of packaging exceeds the cost of the basic product itself. Example abound in mineral water, aerated drinks, some medicines etc. Packaging other than adding to the visual appeal is also uised to avoid duplications, to preserve the product from dust and atmosphere. All products today be they liquids, gases or solids come in attractive and sometimes reusable packaging. The activity of packaging products from gases ( aerosols, bottles), arrack ( pouches), food products(ipacks/ tetrapacks, bottles), even mere labeling or imprinting would be a taxable activity as long as all are done on the product. All those packaging/ packing activities, which are not covered under central excise as deemed manufacture are now sought to be covered under Service Tax in this category.

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Service Tax Individual Services

Supply of Tangible Goods for Use

Date: Thursday, February 19, 2009

Author: Madhukar N Hiregange & Srikantha Rao T

Synopsis: Finance Act 2008 has introduced among many, a new category of service which would be subjected to levy of service tax and that is supply of tangible goods for use. This category has been introduced with effect from 16.05.08 and is another instance where a transaction of supply of goods is sought to be subjected to service tax levy. The intention here seems to be to tax such supply of goods where no VAT/sales tax is levied/ leviable. This has been clarified by the departmental letter F.No. 334/1/2008 TRU dated 29.02.08 which goes to the extent of saying that transaction of allowing another person to use the goods without giving legal right of possession and effective control which is not treated as a sale of goods is treated as a service, thereby deeming such transaction as one amounting to service. This seems to be a fallout of the decision of the Karnataka High Court in Lakshmi Audio Visual Vs ACCT ( 2001 (124) STC 426 (Kar) case as well as similar decision in other states wherein it was held – “there is no deemed sale under KST in providing audio visual services for any program or event without delivering any equipment to the customer.” One would have to analyze each case ( agreements, invoices, conduct of parties etc.) to find out whether there is transfer of possession and effective control as it would determine whether the transaction is to be taxed as one of sale, or one of service.

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Service Tax Individual Services

Packaging Services

Date: Thursday, February 19, 2009

Author: Madhukar N Hiregange

Synopsis: Packaging today is a very important activity as there are competing products and only that which catches the eye would be purchased. In some products the cost of packaging exceeds the cost of the basic product itself. Example abound in mineral water, aerated drinks, some medicines etc. Packaging other than adding to the visual appeal is also uised to avoid duplications, to preserve the product from dust and atmosphere. All products today be they liquids, gases or solids come in attractive and sometimes reusable packaging. The activity of packaging products from gases ( aerosols, bottles), arrack ( pouches), food products( flexipacks/ tetrapacks, bottles), even mere labeling or imprinting would be a taxable activity as long as all are done on the product. All those packaging/ packing activities, which are not covered under central excise as deemed manufacture are now sought to be covered under Service Tax in this category.

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Central Excise Articles

Job Work Central Excise

Date: Wednesday, February 18, 2009

Author: Madhukar N Hiregange & Srikantha Rao T

Synopsis: Job work is one of the most important aspects that a manufacturer registered under Central Excise should be familiar with not just because it enables him to plan his processes in order to optimise the benefits available under the Central Excise Act 1944 but would also enable him to cut costs on his manufacturing. This is so as the processes which pose problems or which are not cost effective at his end can be sub-contracted or delegated to another manufacturer or processor who is referred to here as the job worker. Many a time, the job worker may be more efficient both in terms of the quality and cost as compared to the main manufacturer due to pursuance of core competencies. Most of the big manufacturers in fact make very good use of this concept and assign processes to more than one vendor which enables them to cut down on manufacturing costs.

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Central Excise Articles

Cenvat Credit Rules

Date: Wednesday, February 18, 2009

Author: Srikanth T Rao

Synopsis: The Cenvat Credit Rules 2004 enable a manufacturer under central excise to avail the credit on "input services" which are used directly or indirectly in relation to the manufacture of the final products and clearance of the same from the place of removal. A large proportion of the services consumed by manufacturers therefore would now be an input service. Similarly the service provider is eligible for the cenvat credit on the inputs and capital goods used for providing the output service.

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Central Excise Articles

Rule 6 of Cenvat Credit Rules 2004

Date: Wednesday, February 18, 2009

Author: Madhukar N Hiregange & Srikantha Rao T

Synopsis: Rule 6 of Cenvat Credit Rules 2004 is perhaps one of the most important rules from the point of view of a manufacturer of both dutiable and exempted goods and a service provider who provides both taxable as well as exempted services for the simple reason that the said rule contains and exemplifies the core concept of cenvat credit and that is denial of cenvat credits of excise duties paid on inputs and service tax paid on input services used for exempted activity. Interestingly, since the notification of Cenvat Credit Rules 2004 with effect from 10.09.04, Rule 6 has never specifically dealt with the issue of a manufacturer of dutiable goods providing exempted services or for that matter providing taxable services and manufacturing exempted goods. Though the broad guidelines to be followed in such a case by way of separate accounts had been suggested, where, in a scenario the assessee did not maintain such records, the scheme prescribed for apportioning the credits was hardly covering the entire problem. This had led to the industry in some cases following the practice of apportioning the credits on the basis of turnover of sale of goods and provision of services and then explaining the rationale for the same to the department when all the while what was required was a change in Rule 6. This year, the change has come about in Rule 6 though some may wonder whether it leaves scope for more confusion.

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Central Excise Articles

Overview of Central Excise

Date: Wednesday, February 18, 2009

Author: Madhukar N Hiregange

Synopsis: The Service Tax law following the draconian Central Excise methodology had numerous circulars issued by the Board, Chief Commissioners, Commissioners which led to confusion as also revenue losing cases due to this reason. A part of the reform process has been to reduce circulars. In 2007,two circulars were issued in service tax in order to clarify the procedural issues faced by assessees as also certain technical issues as well under service tax. The two separate circulars issued for this purpose were Circular 97/6/2007 ST dated August 23, 2007 on procedural issues and Circular 96/6/2007 ST dated August 23, 2007 clarifying technical issues under service tax. The assessee would be better off following the provisions stated in the Finance Act and the relevant set of rules and refer these circulars only where information is not available in the Finance Act/rules. In this article, we look at these two circulars separately with the discussion being on areas where the circulars differ from the earlier circulars/clarifications/instructions or the rules.

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Service Tax General Articles

Service Tax Master Circulars - A Review

Date: Wednesday, February 18, 2009

Author: Madhukar N Hiregange

Synopsis: The Service Tax law following the draconian Central Excise methodology had numerous circulars issued by the Board, Chief Commissioners, Commissioners which led to confusion as also revenue losing cases due to this reason. A part of the reform process has been to reduce circulars. In 2007,two circulars were issued in service tax in order to clarify the procedural issues faced by assessees as also certain technical issues as well under service tax. The two separate circulars issued for this purpose were Circular 97/6/2007 ST dated August 23, 2007 on procedural issues and Circular 96/6/2007 ST dated August 23, 2007 clarifying technical issues under service tax. The assessee would be better off following the provisions stated in the Finance Act and the relevant set of rules and refer these circulars only where information is not available in the Finance Act/rules. In this article, we look at these two circulars separately with the discussion being on areas where the circulars differ from the earlier circulars/clarifications/instructions or the rules.

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Service Tax General Articles

Information Technology Service – Rebate and Related Issues

Date: Wednesday, February 18, 2009

Author: Madhukar N Hiregange & Srikantha Rao T

Synopsis: The introduction of Information Technology Services as a separate category liable to service tax with effect from 16.05.08 has introduced a new dimension to legal compliance by the IT sector which has been mainly due to the opening up of the opportunities with regard to either securing the refund of the Cenvat Credits or the rebate of service tax on exports of taxable service. The Cenvat Credits could be of excise duty on inputs or of service tax paid on input services used in providing output service which is exported while the rebate could be of the service tax paid on such taxable service exported or of service tax paid on input services and excise duty on inputs used in providing the output service exported. This benefit was not available earlier to a pure IT software service provider for the simple reason that the concerned service provided by him was an exempted service not subject to service tax at all while in order to claim the benefit of refund or rebate as stated above, the services exported was to be a taxable services finding a mention u/s 65(105) though such services may have been exported without payment of service tax u/r 4 of Export of Services Rules 2005.

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Service Tax General Articles

Taxation of Services Received from Abroad

Date: Wednesday, February 18, 2009

Author: Madhukar N Hiregange & Srikantha Rao T

Synopsis: Service tax levy was introduced for the first time in 1994 vide Chapter V of Finance Act 1994 seeking to tax services provided in the country. The service providers were made responsible to collect the service tax from the service receivers and remit the same to the government. For several years the liability was only for service providers in the country with the exception of Jammu and Kashmir. But with the passage of time and the increased contribution of the service sector to the Indian GDP, the Government started looking at increasing the revenue from the services sector.

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Service Tax General Articles

Service Tax FAQs

Date: Wednesday, February 18, 2009

Author: Madhukar N Hiregange & Srikantha Rao T

Synopsis: The department came out with an FAQ in December 2007 on service tax covering the various aspects under service tax. In this article we shall take a look at some of the more important aspects and the points to be noted with regard thereto in the form of our comments. The reader is also advised to refer the detailed FAQ ( downloadable from the website www.cbec.gov.in) as this article covers only those aspects which are normally relevant from an assessee’s point of view. In this article, the discussions covered by FAQ are given in italics with additional comments from the authors being inserted as felt necessary/ appropriate.

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Service Tax General Articles

Overview of Service Tax Laws

Date: Wednesday, February 18, 2009

Author: Madhukar N Hiregange

Synopsis: Service tax was being collected in India 3000 years back for a plethora of services some of them being ferry tax, betting tax, courtesans, and many others. Service Tax in its present shape was bought into existence in the year 1994. Initially 3 services were brought into the net, which today has expanded to 73 categories (77 clauses) covering millions of service providers. Nine more categories have been added in this budget. It is expected that the number of service tax assessees would cross the number of income tax payers in a few years due to the fact that general exemption/ threshold limits have not been put into place for all categories. In recent times the Government has been looking at this sector to raise substantial resources and has fixed ambitious targets of collection.

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Service Tax General Articles

Taxtion Of Services Received From outside India

Date: Sunday, February 01, 2009

Author: Madhukar N Hiregange & CA Srikantha Rao T

Synopsis: The scheme pertaining to service tax as laid down in chpter V of finance act 1994 as amended from time to time not only deals with taxation of services provided in india by a service provider but also deals with taxation of services received in india from abroad.

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Service Tax General Articles

Business Support Service

Date: Thursday, January 01, 2009

Author: Madhukar N Hiregange & CA Srikantha Rao T

Synopsis: Business support service is one of th more important and relevant categories under service tax which are being tax at present

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Service Tax General Articles

Management, Maintenence or Repair Services

Date: Monday, December 01, 2008

Author: Madhukar N Hiregange & CA Srikantha Rao T

Synopsis: The immovable and movable propwerties one acqires its is common to find assessees who provide services in relation to maintenence and repair of goods on a one off basis or under a contract for year or more.

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