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Deloitte - Service Tax in India PDF
Deloitte - Service Tax in India PDF
A Handbook
2
Preface
4
No. Finance Act,1994 Descriptions of Taxable Accounting Codes
erstwhile Section Services Tax Collection Other Receipts Penalties
65(105) (interest)
18 (t) Cost accountant service 00440096 00440097 00441320
19 (u) Company secretary service 00440100 00440101 00441321
20 (v) Real estate agent service 00440104 00440105 00441322
21 (w) Security/ detective agency service 00440108 00440109 00441323
22 (x) Credit rating agency service 00440088 00440089 00441318
23 (y) Market research agency service 00440112 00440113 00441324
24 (z) Underwriter service 00440084 00440085 00441317
(za) Mechanised slaughterhouse service 00440080 00440081 00441316
[omitted vide Finance Act, 2001]
25 (za) Scientific & technical consultancy 00440125 00440126 00441326
services
26 (zb) Photography service 00440129 00440130 00441327
(zc) Convention service 00440133 00440134 00441328
(zd) Telegraph authority- leased circuit 00440137 00440138 00441329
[omitted w.e.f.01.06.2007 and
clubbed under (zzzx)]
(ze) Telegraph authority- telegraph 00440141 00440142 00441330
service [omitted w.e.f.01.06.2007
27 and clubbed under (zzzx)]
(zf) Telegraph authority- telex service 00440145 00440146 00441331
[omitted w.e.f.01.06.2007 and
clubbed under (zzzx)]
(zg) Telegraph authority- facsimile 00440149 00440150 00441332
service [omitted w.e.f.01.06.2007
and clubbed under (zzzx)]
28 (zh) Online information and database 00440153 00440154 00441333
access service and/ or retrieval
service through computer network
29 (zi) Video production agency/ video 00440157 00440158 00441334
tape production service
30 (zj) Sound recording studio or agency 00440161 00440162 00441335
services
31 (zk) Broadcasting service 00440165 00440166 00441336
32 (zl) Insurance auxiliary service in 00440169 00440170 00441338
relation to general insurance
6
No. Finance Act,1994 Descriptions of Taxable Accounting Codes
erstwhile Section Services Tax Collection Other Receipts Penalties
65(105) (interest)
55 (zzk) Foreign exchange broker service 00440173 00440174 00441339
56 (zzl) Other port (minor port) service 00440177 00440178 00441341
57 (zzm) Airport services by airport authority 00440258 00440259 00441391
58 (zzn) Transport of goods by air 00440266 00440267 00441393
59 (zzo) Business exhibition service 00440254 00440255 00441390
60 (zzp) Transport of goods by road/goods 00440262 00440263 00441392
transport agency service
61 (zzq) Construction services other than 00440290 00440291 00441399
residential complex, including
commercial/industrial buildings or
civil structures
62 (zzr) Services by holder of intellectual 00440278 00440279 00441396
property right providing intellectual
property services other than
copyright
63 (zzs) Opinion poll agency service 00440274 00440275 00441395
64 (zzt) Outdoor catering 00440051 00440052 00441308
65 (zzu) Services by a programme producer 00440286 00440287 00441398
66 (zzv) Survey and exploration of mineral 00440270 00440271 00441394
67 (zzw) Pandal or shamiana service 00440054 00440055 00441309
68 (zzx) Travel agent for booking of 00440294 00440295 00441400
passage(other than air/rail travel
agents)
69 (zzy) Services provided by recognised/ 00440282 00440283 00441397
registered associations in relation to
forward contracts
70 (zzz) Transport of goods through pipeline 00440302 00440303 00441430
or other conduit
71 (zzza) Site formation and clearance, 00440306 00440307 00441431
excavation, earth moving and
demolition services
72 (zzzb) Dredging of rivers, ports harbours, 00440310 00440311 00441432
backwaters, estuaries, etc.
73 (zzzc) Survey and map making service 00440314 00440315 00441433
74 (zzzd) Cleaning services 00440318 00440319 00441434
8
No. Finance Act,1994 Descriptions of Taxable Accounting Codes
erstwhile Section Services Tax Collection Other Receipts Penalties
65(105) (interest)
91 (zzzu) Internet telecommunication services 00440382 00440383 00441451
(includes internet telephony Service
which became taxable from
01.05.2006)
92 (zzzv) Transport of persons by cruise ship 00440386 00440387 00441452
93 (zzzw) Credit card, debit card, charge 00440394 00440395 00441453
card or other payment card related
services
94 (zzzx) Services of telegraph authority 00440398 00440399 00441454
in relation to telecommunication
service
95 (zzzy) Mining of mineral, oil or gas service 00440402 00440403 00441455
96 (zzzz) Renting of immovable property 00440406 00440407 00441456
services
97 (zzzza) Works contract service 00440410 00440411 00441457
98 (zzzzb) Development and supply of 00440414 00440415 00441458
content for use in telecom services,
advertising agency, etc.
99 (zzzzc) Asset management including 00440418 00440419 00441459
portfolio management and fund
management
100 (zzzzd) Design service other than interior 00440422 00440423 00441460
decoration and fashion designing
101 (zzzze) Information technology software 00440452 00440450 00441461
service
102 (zzzzf) Services provided by an insurer of 00440430 00440431 00441462
life insurance under Unit Linked
Insurance Plan(ULIP)
103 (zzzzg) Services provided by a recognized 00440434 00440435 00441463
stock exchange in relation to
transaction in securities
104 (zzzzh) Services provided by recognised/ 00440438 00440439 00441464
registered associations in relation
to clearance or settlement of
transactions in goods or forward
contracts
10
Education Cess
Sl.no Description Tax collection Other receipts Penalties Deduct
(interest) refunds
1 Primary Education Cess 00440298 00440299 00441486 00440300
2 Secondary and Higher Education Cess 00440426 00440427 00441487 00440428
Due Date for Return Filing for Input Service Distributor (ISD)
For the Half Year To be Filed by
1st April to 30th September 31st October
1st October to 31st March 30th April
12
Service Tax Payment Dates (body corporates)
Due Date
Payable on amounts received during the month
Manual e-Payment
April 5th May 6th May
May 5th June 6th June
June 5th July 6th July
July 5th August 6th August
August 5th September 6th September
September 5th October 6th October
October 5th November 6th November
November 5th December 6th December
December 5th January 6th January
January 5th February 6th February
February 5th March 6th March
March 31st March 31st March
Note: e-payment of service tax is mandatory for the assessees who has paid service tax in excess of INR 10 lakhs (INR 1 lakhs with effect from 01-01-2014)
including the amount paid by utilization of CENVAT credit in the previous financial year.
List of Abatements
Sr. no. of Name of the Service Abatement % Taxable % Conditions
Notification
26/2012
1 Financial Leasing including hire purchase 90% 10% None
2 Transport of goods by rail 70% 30% None
3 Transport of passengers by rail 70% 30% None
4 Bundled service by way of supply of food or any drink, 30% 70% CENVAT credit
in a premises (including hotel, convention center, club, on any goods
pandal, shamiana or any other place, specially arranged classifiable
for organising a function) together with renting of such under Chapters
premises. 1 to 22 of the
Central Excise
Tariff Act, 1985
(5 of 1986) used
for providing
the taxable
service, has not
been taken.
14
Sr. no. of Name of the Service Abatement % Taxable % Conditions
Notification
26/2012
ii. Only arranging, booking, accomodation 90% 10% CENVAT credit on
inputs, capital goods
and input services,
used for providing the
taxable service, has
not been taken.
The invoice, bill
or challan issued
indicates that it
is towards the
charges for such
accommodation.
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.
iii. Services other than services specified in (i) and (ii) 60% 40% CENVAT credit on
above inputs, capital goods
and input services,
used for providing the
taxable service, has
not been taken.
The bill issued
indicates that the
amount charged in
the bill is the gross
amount charged for
such a tour.
16
Sr. no. Liability When and by Time period Form
whom
4 Appeal to Commissioner of Central Excise (Appeals) Assessee Within 2 months from ST-4
the date of receipt of
order
5 Appeal to CESTAT Assessee Within 3 months from ST-5
the date of receipt of
order
6 Cross objections Assessee/ Within 45 days from ST-6
Department the date of receipt of
notice
7 Appeal to CESTAT Department Within 4 months from ST-7
the date of receipt of
order
8 Payment of Service Tax Corporate Within 5 days from the GAR-7
Assessee end of month challan
Within 6 days from end
of month in case of
e-payment
For March, Tax
payment shall be made
on or before 31st
March.
9 Payment of Service Tax Non Corporate Within 5 days from the GAR-7
Assessee end of quarter challan
Within 6 days from end
of quarter in case of
e-payment
For quarter ending
March, Tax payment
shall be made on or
before 31st March.
Notes:
1. The person who pays or is liable to pay freight for transportation of goods by road in goods carriage, shall be treated as the recipient of service.
2. a) The service provider should be an individual or HUF or partnership firm (whether registered or not) including AOP; and
b) The service recepient should be a body corporate.
3. In case of services of renting of a motor vehicle, the service recepient should be any person who is not engaged in similar line of business.
18
Finance Act, 1994
Chapter V of the Finance Act, 1994 (2) "advertisement" means any form of
64 Extent, commencement and application presentation for promotion of, or bringing
(1) This Chapter extends to the whole of India awareness about, any event, idea, immovable
except the State of Jammu and Kashmir. property, person, service, goods or actionable
(2) It shall come into force on such date as the claim through newspaper, television, radio
Central Government may, by notification in the or any other means but does not include any
Official Gazette, appoint. presentation made in person;
(3) "agriculture" means the cultivation of plants
(3) It shall apply to taxable services provided on or and rearing of all life-forms of animals, except
after the commencement of this Chapter. the rearing of horses, for food, fibre, fuel, raw
material or other similar products;
65 Definitions (4) "agricultural extension" means application
Omitted of scientific research and knowledge to
agricultural practices through farmer education
65A Classification of taxable services or training;
Omitted (5) "agricultural produce" means any produce
of agriculture on which either no further
65B Interpretations processing is done or such processing is done
In this Chapter, unless the context otherwise as is usually done by a cultivator or producer
requires, which does not alter its essential characteristics
(1) "actionable claim" shall have the meaning but makes it marketable for primary market;
assigned to it in section 3 of the Transfer of (6) "Agricultural Produce Marketing Committee
Property Act, 1882 (4 of 1882); or Board" means any committee or board
20
or a distribution or transmission licensee under (28) "information technology software" means any
the said Act, or any other entity entrusted with representation of instructions, data, sound or
such function by the Central Government or, image, including source code and object code,
as the case may be, the State Government; recorded in a machine readable form, and
(24) "entertainment event" means an event or a capable of being manipulated or providing
performance which is intended to provide interactivity to a user, by means of a computer
recreation, pastime, fun or enjoyment, by or an automatic data processing machine or
way of exhibition of cinematographic film, any other device or equipment;
circus, concerts, sporting event, pageants, (29) "inland waterway" means national waterways
award functions, dance, musical or theatrical as defined in clause (h) of section 2 of the
performances including drama, ballets or any Inland Waterways Authority of India Act, 1985
such event or programme; (82 of 1985) or other waterway on any inland
(25) "goods" means every kind of movable water, as defined in clause (b) of section 2 of
property other than actionable claim and the Inland Vessels Act, 1917 (1 of 1917);
money; and includes securities, growing crops, (30) "interest" means interest payable in any
grass, and things attached to or forming part manner in respect of any moneys borrowed
of the land which are agreed to be severed or debt incurred (including a deposit, claim
before sale or under the contract of sale; or other similar right or obligation) but does
(26) "goods transport agency" means any person not include any service fee or other charges
who provides service in relation to transport of in respect of the moneys borrowed or debt
goods by road and issues consignment note, incurred or in respect of any credit facility
by whatever name called; which has not been utilized;
(27) "India" means, (31) "local authority" means-
(a) the territory of the Union as referred to (a) a Panchayat as referred to in clause (d) of
in clauses (2) and (3) of article 1 of the article 243 of the Constitution;
Constitution; (b) a Municipality as referred to in clause (e) of
(b) its territorial waters, continental shelf, article 243P of the Constitution;
exclusive economic zone or any other (c) a Municipal Committee and a District
maritime zone as defined in the Territorial Board, legally entitled to, or entrusted
Waters, Continental Shelf, Exclusive by the Government with, the control or
Economic Zone and other Maritime Zones management of a municipal or local fund;
Act, 1976 (80 of 1976); (d) a Cantonment Board as defined in section
(c) the seabed and the subsoil underlying the 3 of the Cantonments Act, 2006 (41 of
territorial waters; 2006);
(d) the air space above its territory and (e) a regional council or a district council
territorial waters; and constituted under the Sixth Schedule to
(e) the installations, structures and vessels the Constitution;
located in the continental shelf of India (f) a development board constituted under
and the exclusive economic zone of article 371 of the Constitution; or
India, for the purposes of prospecting or (g) a regional council constituted under article
extraction or production of mineral oil and 371A of the Constitution;
natural gas and supply thereof; (32) "metered cab" means any contract carriage on
22
his employment; Explanation 4. A person carrying on a business
(c) fees taken in any Court or tribunal through a branch or agency or representational
established under any law for the time office in any territory shall be treated as having an
being in force. establishment in that territory;
Explanation 1. For the removal of doubts, it is (45) "Special Economic Zone" has the meaning
hereby declared that nothing contained in this assigned to it in clause (za) of section 2 of
clause shall apply to, the Special Economic Zones Act, 2005 (28 of
(A) the functions performed by the Members 2005);
of Parliament, Members of State Legislative, (46) "stage carriage" shall have the meaning
Members of Panchayats, Members of assigned to it in clause (40) of section 2 of the
Municipalities and Members of other local Motor Vehicles Act, 1988 (59 of 1988);
authorities who receive any consideration in (47) "State Electricity Board" means the Board
performing the functions of that office as such constituted under section 5 of the Electricity
member; or (Supply) Act, 1948 (54 of 1948);
(B) the duties performed by any person who holds (48) "State Transmission Utility" shall have the
any post in pursuance of the provisions of the meaning assigned to it in clause (67) of
Constitution in that capacity; or section 2 of the Electricity Act, 2003 (36 of
(C) the duties performed by any person as a 2003);
Chairperson or a Member or a Director in a (49) "support services" means infrastructural,
body established by the Central Government operational, administrative, logistic, marketing
or State Governments or local authority and or any other support of any kind comprising
who is not deemed as an employee before the functions that entities carry out in ordinary
commencement of this section. course of operations themselves but may
obtain as services by outsourcing from others
Explanation 2. For the purposes of this clause, for any reason whatsoever and shall include
transaction in money shall not include any activity advertisement and promotion, construction
relating to the use of money or its conversion or works contract, renting of immovable
by cash or by any other mode, from one form, property, security, testing and analysis;
currency or denomination to another form, (50) "tax" means service tax leviable under the
currency or denomination for which a separate provisions of this Chapter;
consideration is charged. (51) "taxable service" means any service on which
service tax is leviable under section 66B;
Explanation 3. For the purposes of this (52) "taxable territory" means the territory to which
Chapter, the provisions of this Chapter apply;
(a) an unincorporated association or a body of (53) "vessel" has the meaning assigned to it in
persons, as the case may be, and a member clause (z) of section 2 of the Major Port Trusts
thereof shall be treated as distinct persons; Act, 1963 (38 of 1963);
(b) an establishment of a person in the taxable (54) "works contract" means a contract wherein
territory and any of his other establishment transfer of property in goods involved in the
in a non-taxable territory shall be treated as execution of such contract is leviable to tax
establishments of distinct persons. as sale of goods and such contract is for the
24
production of any agricultural produce law for the time being in force;
including cultivation, harvesting, threshing, (iii) education as a part of an approved
plant protection or testing; vocational education course;
(ii) supply of farm labour; (m) services by way of renting of residential
(iii) processes carried out at an agricultural dwelling for use as residence;
farm including tending, pruning, cutting, (n) services by way of
harvesting, drying, cleaning, trimming, (i) extending deposits, loans or advances in
sun drying, fumigating, curing, sorting, so far as the consideration is represented
grading, cooling or bulk packaging and by way of interest or discount;
such like operations which do not alter (ii) inter se sale or purchase of foreign
the essential characteristics of agricultural currency amongst banks or authorised
produce but make it only marketable for dealers of foreign exchange or amongst
the primary market; banks and such dealers;
(iv) renting or leasing of agro machinery or (o) service of transportation of passengers, with
vacant land with or without a structure or without accompanied belongings, by
incidental to its use; (i) a stage carriage;
(v) loading, unloading, packing, storage or (ii) railways in a class other than
warehousing of agricultural produce; (A) first class; or
(vi) agricultural extension services; (B) an air conditioned coach;
(vii) services by any Agricultural Produce (iii) metro, monorail or tramway;
Marketing Committee or Board or services (iv) inland waterways;
provided by a commission agent for sale or (v) public transport, other than predominantly
purchase of agricultural produce; for tourism purpose, in a vessel, between
(e) trading of goods; places located in India; and
(f) any process amounting to manufacture or (vi) metered cabs, radio taxis or auto
production of goods; rickshaws;
(g) selling of space or time slots for (p) services by way of transportation of goods
advertisements other than advertisements (i) by road except the services of
broadcast by radio or television; (A) a goods transportation agency; or
(h) service by way of access to a road or a bridge (B) a courier agency;
on payment of toll charges; (ii) by an aircraft or a vessel from a place
(i) betting, gambling or lottery; outside India upto the customs station of
(j) admission to entertainment events or access clearance in India; or
to amusement facilities; (iii) by inland waterways;
(k) transmission or distribution of electricity by an (q) funeral, burial, crematorium or mortuary
electricity transmission or distribution utility; services including transportation of the
(l) services by way of deceased.
(i) pre-school education and education up to
higher secondary school or equivalent;
(ii) education as a part of a curriculum for
obtaining a qualification recognised by any
26
element or elements of provision of any other (b) omitted;
service or services. (c) gross amount charged includes payment by
cheque, credit card, deduction from account
67 Valuation of taxable services for charging and any form of payment by issue of credit
service tax notes or debit notes and book adjustment,
(1) Subject to the provisions of this Chapter, and any amount credited or debited, as the
service tax chargeable on any taxable service case may be, to any account, whether called
with reference to its value, then such value Suspense account or by any other name, in
shall,- the books of account of a person liable to pay
(i) in a case where the provision of service is service tax, where the transaction of taxable
for a consideration in money, be the gross service is with any associated enterprise.
amount charged by the service provider
for such service provided or to be provided 67A Date of determination of rate of tax, value
by him; of taxable service and rate of exchange
(ii) in a case where the provision of service The rate of service tax, value of a taxable service
is for a consideration not wholly or partly and rate of exchange, if any, shall be the rate of
consisting of money, be such amount service tax or value of a taxable service or rate
in money as, with the addition of of exchange, as the case may be, in force or as
service tax charged, is equivalent to the applicable at the time when the taxable service has
consideration; been provided or agreed to be provided.
(iii) in a case where the provision of service
is for a consideration which is not Explanation. For the purposes of this section,
ascertainable, be the amount as may be "rate of exchange" means the rate of exchange
determined in the prescribed manner. referred to in the Explanation to section 14 of the
(2) Where the gross amount charged by a service Customs Act, 1962 (52 of 1962).
provider, for the service provided or to be
provided is inclusive of service tax payable, 68 Payment of service tax
the value of such taxable service shall be such (1) Every person providing taxable service to
amount as, with the addition of tax payable, any person shall pay service tax at the rate
is equal to the gross amount charged. specified in section 66B in such manner and
(3) The gross amount charged for the taxable within such period as may be prescribed.
service shall include any amount received (2) Notwithstanding anything contained in
towards the taxable service before, during or sub-section (1), in respect of such taxable
after provision of such service. services as may be notified by the Central
(4) Subject to the provisions of sub-sections (1), Government in the Official Gazette, the service
(2) and (3), the value shall be determined in tax thereon shall be paid by such person
such manner as may be prescribed. and in such manner as may be prescribed at
the rate specified in section 66B and all the
Explanation. For the purposes of this section, provisions of this chapter shall apply to such
(a) consideration includes any amount that is person as if he is the person liable for paying
payable for the taxable services provided or to the service tax in relation to such service.
be provided;
28
72 Best judgment assessment pay service tax (herein referred to as ''such
If any person, liable to pay service tax,- person''),
(a) fails to furnish the return under section 70; (i) has failed to declare or determine the
(b) having made a return, fails to assess the tax in value of a taxable service correctly; or
accordance with the provisions of this Chapter (ii) has availed and utilized credit of duty or
or rules made thereunder, tax paid-
the Central Excise Officer, may require the (a) which is not within the normal limits
person to produce such accounts, documents having regard to the nature of taxable
or other evidence as he may deem necessary service provided, the extent of capital
and after taking into account all the relevant goods used or the type of inputs
material which is available or which he has or input services used, or any other
gathered, shall by an order in writing, after relevant factors as he may deem
giving the person an opportunity of being appropriate; or
heard, make the assessment of the value of (b) by means of fraud, collusion, or any
taxable service to the best of his judgment and willful misstatement or suppression of
determine the sum payable by the assessee facts; or
or refundable to the assessee on the basis of (iii) has operations spread out in multiple
such assessment. locations and it is not possible or
practicable to obtain a true and complete
72A Special audit picture of his accounts from the registered
(1) If the Commissioner of Central Excise, has premises falling under the jurisdiction of
reasons to believe that any person liable to the said Commissioner, he may direct such
Explanation. For the purposes of this section, Explanation. Where the service of the notice is
(i) "chartered accountant" shall have the meaning stayed by an order of a court, the period of such
assigned to it in clause (b) of sub-section (1) of stay shall be excluded in computing the aforesaid
section 2 of the Chartered Accountants Act, period of eighteen months or five years, as the case
1949 (38 of 1949); may be.
(ii) "cost accountant" shall have the meaning
assigned to it in clause (b) of sub-section (1) of (1A) Notwithstanding anything contained in
section 2 of the Cost and Works Accountants sub-section (1) (except the period of eighteen
Act, 1959 (23 of 1959). months of serving the notice for recovery of
service tax), the Central Excise Officer may
73 Recovery of service tax not levied or paid serve, subsequent to any notice or notices
or short levied or short-paid or erroneously served under that sub-section, a statement,
refunded containing the details of service tax not
(1) Where any service tax has not been levied or levied or paid or short levied or short paid
paid or has been short-levied or short-paid or erroneously refunded for the subsequent
or erroneously refunded, the Central Excise period, on the person chargeable to service
Officer may, within eighteen months from tax, then, service of such statement shall
the relevant date, serve notice on the person be deemed to be service of notice on such
chargeable with the service tax which has not person, subject to the condition that the
30
grounds relied upon for the subsequent period Officer before service of notice on him under
are same as are mentioned in the earlier sub-section (1) in respect of such service tax,
notices. and inform the Central Excise Officer of such
(2) The Central Excise Officer shall, after payment in writing, who, on receipt of such
considering the representation, if any, made information shall not serve any notice under
by the person on whom notice is served sub-section (1) in respect of the amount so
under sub-section (1), determine the amount paid :
of service tax due from, or erroneously Provided that the Central Excise Officer may
refunded to, such person (not being in excess determine the amount of short payment of
of the amount specified in the notice) and service tax or erroneously refunded service tax,
thereupon such person shall pay the amount if any, which in his opinion has not been paid
so determined. by such person and, then, the Central Excise
(2A) Where any appellate authority or Tribunal Officer shall proceed to recover such amount
or court concludes that the notice issued in the manner specified in this section, and
under the proviso to sub-section (1) is not the period of eighteen months referred to in
sustainable for the reason that the charge of,- sub-section (1) shall be counted from the date
(a) fraud; or of receipt of such information of payment.
(b) collusion; or
(c) wilful misstatement; or Explanation 1.- For the removal of doubts, it is
(d) suppression of facts; or hereby declared that the interest under section
(e) contravention of any of the provisions of 75 shall be payable on the amount paid by
this Chapter or the rules made thereunder the person under this sub-section and also on
with intent to evade payment of service the amount of short payment of service tax or
tax, erroneously refunded service tax, if any, as may be
has not been established against the determined by the Central Excise Officer, but for
person chargeable with the service tax, to this sub-section.
whom the notice was issued, the Central
Excise Officer shall determine the service Explanation 2. - For the removal of doubts, it is
tax payable by such person for the period hereby declared that no penalty under any of the
of eighteen months, as if the notice was provisions of this Act or the rules made thereunder
issued for the offences for which limitation shall be imposed in respect of payment of service
of eighteen months applies under tax under this sub-section and interest thereon.
sub-section (1).
(3) Where any service tax has not been levied or (4) Nothing contained in sub-section (3) shall
paid or has been short-levied or short-paid or apply to a case where any service tax has not
erroneously refunded, the person chargeable been levied or paid or has been short-levied or
with the service tax, or the person to whom short-paid or erroneously refunded by reason
such tax refund has erroneously been made, of
may pay the amount of such service tax, (a) fraud; or
chargeable or erroneously refunded, on the (b) collusion; or
basis of his own ascertainment thereof, or on (c) willful mis-statement; or
the basis of tax ascertained by a Central Excise (d) suppression of facts; or
32
under the provisions of this Chapter or the or, as the case may be, refunded to the person
rules made thereunder from the recipient of who has borne the incidence of such amount,
taxable service in any manner as representing in accordance with the provisions of section
service tax, shall forthwith pay the amount 11B of the said Act and such person may
so collected to the credit of the Central make an application under that section in such
Government. cases within six months from the date of the
(2) Where any person who has collected any public notice to be issued by the Central Excise
amount, which is not required to be collected, Officer for the refund of such surplus amount.
from any other person, in any manner as
representing service tax, such person shall 73B Interest on amount collected in excess
forthwith pay the amount so collected to the Where an amount has been collected in excess
credit of the Central Government. of the tax assessed or determined and paid for
(3) Where any amount is required to be paid to any taxable service under this Chapter or the rules
the credit of the Central Government under made thereunder from the recipient of such service,
sub-section (1) or sub-section (2) and the the person who is liable to pay such amount as
same has not been so paid, the Central Excise determined under sub-section (4) of section 73A,
Officer shall serve, on the person liable to pay shall, in addition to the amount, be liable to pay
such amount, a notice requiring him to show interest at such rate not below ten per cent and
cause why the said amount, as specified in the not exceeding twenty-four per cent, per annum,
notice, should not be paid by him to the credit as is for the time being fixed by the Central
of the Central Government. Government, by notification in the Official Gazette,
(4) The Central Excise Officer shall, after from the first day of the month succeeding the
considering the representation, if any, made month in which the amount ought to have been
by the person on whom the notice is served paid under this Chapter, but for the provisions
under sub-section (3), determine the amount contained in sub-section (4) of section 73A, till the
due from such person, not being in excess date of payment of such amount:
of the amount specified in the notice, and
thereupon such person shall pay the amount Provided that in such cases where the amount
so determined. becomes payable consequent to issue of an order,
(5) The amount paid to the credit of the Central instruction or direction by the Board under section
Government under sub-section (1) or 37B of the Central Excise Act, 1944(1 of 1944),
sub-section (2) or sub-section (4), shall be and such amount payable is voluntarily paid in
adjusted against the service tax payable by the full, without reserving any right to appeal against
person on finalisation of assessment or any such payment at any subsequent stage, within
other proceeding for determination of service forty-five days from the date of issue of such order,
tax relating to the taxable service referred to in instruction or direction, as the case may be, no
sub-section (1). interest shall be payable and in other cases, the
(6) Where any surplus amount is left after the interest shall be payable on the whole amount,
adjustment under sub-section (5), such including the amount already paid:
amount shall either be credited to the
Consumer Welfare Fund referred to in section Provided further that in the case of a service
12C of the Central Excise Act, 1944(1 of 1944) provider, whose value of taxable services provided
34
or revision relating to an order referred to 75 Interest on delayed payment of service tax
in sub-section (1), the Central Excise Officer Every person, liable to pay the tax in accordance
passing such order may, notwithstanding with the provisions of section 68 or rules made
anything contained in any law for the time thereunder, who fails to credit the tax or any part
being in force, amend the order under that thereof to the account of the Central Government
sub-section in relation to any matter other within the period prescribed, shall pay simple
than the matter which has been so considered interest at such rate not below ten per cent and not
and decided. exceeding thirty-six per cent per annum, as is for
(3) Subject to the other provisions of this section, the time being fixed by the Central Government, by
the Central Excise Officer concerned notification in the Official Gazette for the period by
(a) may make an amendment under which such crediting of the tax or any part thereof
sub-section (1) of his own motion; or is delayed:
(b) shall make such amendment if any mistake
is brought to his notice by the assessee or Provided that in the case of a service provider,
the Commissioner of Central Excise or the whose value of taxable services provided in a
Commissioner of Central Excise (Appeals). financial year does not exceed sixty lakh rupees
(4) An amendment, which has the effect of during any of the financial years covered by the
enhancing the liability of the assessee or notice or during the last preceding financial year,
reducing a refund, shall not be made under as the case may be, such rate of interest, shall be
this section unless the Central Excise Officer reduced by three per cent per annum.
concerned has given notice to the assessee
of his intention so to do and has allowed the 75A Penalty for failure of registration
assessee a reasonable opportunity of being Omitted
heard.
(5) Where an amendment is made under this 76 Penalty for failure to pay service tax
section, an order shall be passed in writing by Any person, liable to pay service tax in accordance
the Central Excise Officer concerned. with the provisions of section 68 or the rules made
(6) Subject to the other provisions of this Chapter under this Chapter, who fails to pay such tax, shall
where any such amendment has the effect pay, in addition to such tax and the interest on that
of reducing the liability of an assessee or tax in accordance with the provisions of section 75,
increasing the refund, the Central Excise a penalty which shall not be less than one hundred
Officer shall make any refund which may be rupees for every day during which such failure
due to such assessee. continues or at the rate of one per cent, of such
(7) Where any such amendment has the effect tax, per month, whichever is higher, starting with
of enhancing the liability of the assessee the first day after the due date till the date of actual
or reducing the refund already made, the payment of the outstanding amount of service tax:
Central Excise Officer shall make an order
specifying the sum payable by the assessee Provided that the total amount of the penalty
and the provisions of this Chapter shall apply payable in terms of this section shall not exceed
accordingly. fifty per cent of the service tax payable.
77 Penalty for contravention of rules and which such failure continues, whichever
provisions of Act for which no penalty is is higher, starting with the first day after
specified elsewhere the due date, till the date of actual
(1) Any person,- compliance;
(a) who is liable to pay service tax, or required (d) who is required to pay tax electronically,
to take registration, fails to take registration through internet banking, fails to pay the
in accordance with the provisions of section tax electronically, shall be liable to a penalty
69 or rules made under this Chapter shall be which may extend to ten thousand rupees;
liable to pay a penalty which may extend to (e) who issues invoice in accordance with
ten thousand rupees; the provisions of the Act or rules made
(b) who fails to keep, maintain or retain books thereunder, with incorrect or incomplete
of account and other documents as required details or fails to account for an invoice in his
in accordance with the provisions of this books of account, shall be liable to a penalty
Chapter or the rules made thereunder, shall which may extend to ten thousand rupees.
be liable to a penalty which may extend to (2) Any person, who contravenes any of the
ten thousand rupees; provisions of this Chapter or any rules made
(c) who fails to- thereunder for which no penalty is separately
(i) furnish information called by an officer provided in this Chapter, shall be liable to a
in accordance with the provisions of this penalty which may extend to ten thousand
Chapter or rules made thereunder; or rupees.
(ii) produce documents called for by a
Central Excise Officer in accordance with 78 Penalty for suppressing, etc., of value of
the provisions of this Chapter or rules taxable services
made thereunder; or (1) Where any service tax has not been levied or
(iii) appear before the Central Excise paid or has been short-levied or short-paid or
Officer, when issued with a summon erroneously refunded, by reason of-
for appearance to give evidence or to (a) fraud; or
produce a document in an inquiry, (b) collusion; or
shall be liable to a penalty which may (c) willful mis-statement; or
extend to ten thousand rupees or two (d) suppression of facts; or
hundred rupees for every day during (e) contravention of any of the provisions of
36
this Chapter or of the rules made thereunder (2) Where the service tax determined to be payable
with the intent to evade payment of service is reduced or increased by the Commissioner
tax, (Appeals), the Appellate Tribunal or, as the case
the person, liable to pay such service tax may be, the court, then, for the purposes of this
or erroneous refund, as determined under section, the service tax as reduced or increased,
sub-section (2) of section 73, shall also be as the case may be, shall be taken into account:
liable to pay a penalty, in addition to such
service tax and interest thereon, if any, Provided that in case where the service tax to
payable by him, which shall be equal to the be payable is increased by the Commissioner
amount of service tax so not levied or paid (Appeals), the Appellate Tribunal or, as the case
or short-levied or short-paid or erroneously may be, the court, then, the benefit of reduced
refunded: penalty under the second proviso to subsection
Provided that where true and complete (1), shall be available, if the amount of service tax
details of the transactions are available in the so increased, the interest payable thereon and
specified records, penalty shall be reduced twenty-five per cent of the consequential increase
to fifty per cent of the service tax so not of penalty have also been paid within thirty days or
levied or paid or short-levied or short-paid or ninety days, as the case may be, of communication
erroneously refunded: of the order by which such increase in service tax
takes effect:
Provided further that where such service
tax and the interest payable thereon is Provided further that if the penalty is payable under
paid within thirty days from the date of this section, the provisions of section 76 shall not
communication of order of the Central apply.
Excise Officer determining such service tax,
the amount of penalty liable to be paid by Explanation.- For the removal of doubts, it is
such person under the first proviso shall be hereby declared that any amount paid to the
twenty-five per cent of such service tax: credit of the Central Government prior to the date
of communication of the order referred to in the
Provided also that the benefit of reduced second proviso to subsection (1) or the first proviso
penalty under the second proviso shall be to sub-section (2) shall be adjusted against the total
available only if the amount of penalty so amount due from such person.
determined has also been paid within the
period of thirty days referred to in that 78A Penalty for offences by director, etc., of
proviso: company
Where a company has committed any of the
Provided also that in case of a service following contraventions, namely:-
provider whose value of taxable services (a) evasion of service tax; or
does not exceed sixty lakh rupees during any (b)issuance of invoice, bill or, as the case may be, a
of the years covered by the notice or during challan without provision of taxable service in
the last preceding financial year, the period violation of the rules made under the provisions
of thirty days shall be extended to ninety
days.
79 Penalty for failure to comply with notice 83 Application of certain provisions of Act 1 of
Omitted 1944
The provisions of the following sections of the
80 Penalty not to be imposed in certain cases Central Excise Act, 1944 (1 of 1944), as in force
(1) Notwithstanding anything contained in the from time to time, shall apply, so far as may be, in
provisions of section 76, section 77 or first relation to service tax as they apply in relation to a
proviso to sub-section (1) of section 78, no duty of excise:-
penalty shall be impossible on the assessee for subsection (2) of section 9A, 9AA, 9B, 9C, 9D, 9E,
any failure referred to in the said provisions if 11B, 11BB, 11C, 12, 12A, 12B, 12C, 12D, 12E, 14,
the assessee proves that there was reasonable 15, 31, 32, 32A to 32P (both inclusive), 33A, 34A,
cause for the said failure. 35EE, 35F, 35FF to 35-0 (both inclusive), 35Q, 35R,
(2) Notwithstanding anything contained in the 36, 36A, 36B, 37A, 37B, 37C, 37D, 38A and 40.
provisions of section 76 or section 77 or section
78, no penalty shall be imposable for failure to 83A Power of adjudication
pay service tax payable, as on the 6th day of Where under this Chapter or the rules made
March, 2012, on the taxable service referred to thereunder any person is liable to a penalty, such
in sub-clause (zzzz) of clause (105) of section penalty may be adjudged by the Central Excise
65, subject to the condition that the amount Officer conferred with such power as the Central
of service tax along with interest is paid in full Board of Excise and Customs constituted under the
within a period of six months from the date on Central Boards of Revenue Act, 1963 (54 of 1963),
which the Finance Bill, 2012 receives the assent may, by notification in the Official Gazette, specify.
of the President.;
38
84 Appeals to Commissioner of Central Excise had not been substituted.
(Appeals)
(1) The Commissioner of Central Excise may, of his 85 Appeals to the Commissioner of Central
own motion, call for and examine the record Excise (Appeals)
of any proceedings in which an adjudicating (1) Any person aggrieved by any decision or order
authority subordinate to him has passed any passed by an adjudicating authority subordinate
decision or order under this Chapter for the to the Commissioner of Central Excise may
purpose of satisfying himself as to the legality or appeal to the Commissioner of Central Excise
propriety of any such decision or order and may, (Appeals).
by order, direct such authority or any Central (2) Every appeal shall be in the prescribed form and
Excise officer subordinate to him to apply to the shall be verified in the prescribed manner.
Commissioner of Central Excise (Appeals) for (3) An appeal shall be presented within three
the determination of such points arising out of months from the date of receipt of the decision
the decision or order as may be specified by the or order of such adjudicating authority, relating
Commissioner of Central Excise in his order. to service tax, interest or penalty under this
(2) Every order under sub-section (1) shall be made Chapter made before the date on which the
within a period of three months from the date Finance Bill, 2012 receives the assent of the
of communication of the decision or order of President:
the adjudicating authority. Provided that the Commissioner of Central
(3) Where in pursuance of any order under Excise (Appeals) may, if he is satisfied that the
sub-section (1), the adjudicating authority appellant was prevented by sufficient cause
or any other officer authorised in this behalf from presenting the appeal within the aforesaid
makes an application to the Commissioner of period of three months, allow it to be presented
Central Excise (Appeals) within a period of one within a further period of three months:
month from the date of communication of the
order under sub-section (1) to the adjudicating (3A) An appeal shall be presented within two
authority, such application shall be heard months from the date of receipt of the
by the Commissioner of the Central Excise decision or order of such adjudicating
(Appeals), as if such application were an appeal authority, made on and after the Finance Bill,
made against the decision or order of the 2012 receives the assent of the President,
adjudicating authority and the provisions of this relating to service tax, interest or penalty
Chapter regarding appeals shall apply to such under this Chapter:
application.
Provided that the Commissioner of Central
Explanation.- For the removal of doubts, it Excise (Appeals) may, if he is satisfied that the
is hereby declared that any order passed by appellant was prevented by sufficient cause
an adjudicating officer subordinate to the from presenting the appeal within the aforesaid
Commissioner of Central Excise immediately period of two months, allow it to be presented
before the commencement of clause (C) within a further period of one month.
of section 113 of the Finance (No. 2) Act,
2009, shall continue to be dealt with by the
Commissioner of Central Excise as if this section
40
sought to be appealed against is received by the demanded and penalty levied by any Central
Committee of Chief Commissioners or, as the Excise Officer in the case to which the
case may be, the Committee of Commissioners. appeal relates is more than five lakh rupees
(4) The Commissioner of Central Excise or any but not exceeding fifty lakh rupees, five
Central Excise Officer subordinate to him or thousand rupees;
the assessee, as the case may be, on receipt (c) where the amount of service tax and interest
of a notice that an appeal against the order demanded and penalty levied by any Central
of the Commissioner of Central Excise or the Excise Officer in the case to which the
Commissioner of Central Excise (Appeals) appeal relates is more than fifty lakh rupees,
has been preferred under sub-section (1) or ten thousand rupees:
sub-section (2) or sub-section (2A) by the Provided that no fee shall be payable in the
other party may, notwithstanding that he case of an appeal referred to in sub-section
may not have appealed against such order (2) or sub-section (2A) or a memorandum of
or any part thereof, within forty-five days of cross-objections referred to in sub-section
the receipt of the notice, file a memorandum (4).
of cross-objections, verified in the prescribed (6A) Every application made before the Appellate
manner, against any part of the order of Tribunal,
the Commissioner of Central Excise or the (a) in an appeal for grant of stay or for rectification
Commissioner of Central Excise (Appeals), of mistake or for any other purpose; or
and such memorandum shall be disposed (b) for restoration of an appeal or an application,
of by the Appellate Tribunal as if it were an shall be accompanied by a fee of five hundred
appeal presented within the time specified in rupees:
sub-section (3). Provided that no such fee shall be payable
(5) The Appellate Tribunal may admit an appeal or in the case of an application filed by the
permit the filing of a memorandum of cross- Commissioner of Central Excise or Assistant
objections after the expiry of the relevant period Commissioner of Central Excise or Deputy
referred to in sub-section (1) or sub-section (3) Commissioner of Central Excise, as the case may
or sub-section (4) if it is satisfied that there was be under this sub-section.
sufficient cause for not presenting it within that (7) Subject to the provisions of this Chapter,
period. in hearing the appeals and making orders
(6) An appeal to the Appellate Tribunal shall be in under this section, the Appellate Tribunal shall
the prescribed form and shall be verified in the exercise the same powers and follow the same
prescribed manner and shall, irrespective of the procedure as it exercises and follows in hearing
date of demand of service tax and interest or of the appeals and making orders under the
levy of penalty in relation to which the appeal is Central Excise Act, 1944 (1 of 1944).
made, be accompanied by a fee of,
(a) where the amount of service tax and interest 87 Recovery of any amount due to Central
demanded and penalty levied by any Central Government
Excise Officer in the case to which the Where any amount payable by a person to the
appeal relates is five lakh rupees or less, one credit of the Central Government under any of
thousand rupees; the provisions of this Chapter or of the rules made
(b) where the amount of service tax and interest thereunder is not paid, the Central Excise Officer
42
(a) knowingly evades the payment of service tax (2) If any person is convicted of an offence
under this Chapter; or punishable under-
(b) avails and utilises credit of taxes or duty without (a) clause (i) or clause (iii), then, he shall be
actual receipt of taxable service or excisable punished for the second and for every
goods either fully or partially in violation of the subsequent offence with imprisonment for
rules made under the provisions of this Chapter; a term which may extend to three years;
or (b) clause (ii), then, he shall be punished for the
(c) maintains false books of account or fails to second and for every subsequent offence
supply any information which he is required to with imprisonment for a term which may
supply under this Chapter or the rules made extend to seven years.
thereunder or (unless with a reasonable belief, (3) For the purposes of sub-sections (1) and (2),
the burden of proving which shall be upon him, the following shall not be considered as special
that the information supplied by him is true) and adequate reasons for awarding a sentence
supplies false information; or of imprisonment for a term of less than six
(d) collects any amount as service tax but fails to months, namely:-
pay the amount so collected to the credit of (i) the fact that the accused has been convicted
the Central Government beyond a period of six for the first time for an offence under this
months from the date on which such payment Chapter;
becomes due, (ii) the fact that in any proceeding under this
shall be punishable,- Act, other than prosecution, the accused has
(i) in the case of an offence specified in clauses been ordered to pay a penalty or any other
(a), (b) or (c) where the amount exceeds fifty action has been taken against him for the
lakh rupees, with imprisonment for a term same act which constitutes the offence;
which may extend to three years: (iii) the fact that the accused was not the
Provided that in the absence of special and principal offender and was acting merely
adequate reasons to the contrary to be as a secondary party in the commission of
recorded in the judgment of the court, such offence;
imprisonment shall not be for a term of less (iv) the age of the accused.
than six months; (4) A person shall not be prosecuted for any
(ii) in the case of the offence specified in clause offence under this section except with the
(d), where the amount exceeds fifty lakh previous sanction of the Chief Commissioner of
rupees, with imprisonment for a term which Central Excise.
may extend to seven years:
Provided that in the absence of special and 90 Cognizance of Offences
adequate reasons to the contrary to be (1) An offence under clause (ii) of section 89 shall
recorded in the judgment of the court, such be cognizable.
imprisonment shall not be for a term of less (2) Notwithstanding anything contained in the
than six months; Code of Criminal Procedure, 1973 (2 of 1974),
(iii) in the case of any other offences, with all offences, except the offences specified in
imprisonment for a term, which may extend sub-section (1), shall be non-cognizable and
to one year. bailable.
44
94 Power to Make Rules (f) provisions for determining export of
(1) The Central Government may, by notification in taxable services;
the Official Gazette, make rules for carrying out (g) grant of exemption to, or rebate of service
the provisions of this Chapter. tax paid on, taxable services which are
(2) In particular, and without prejudice to the exported out of India;
generality of the foregoing power, such rules (h) rebate of service tax paid or payable on
may provide for all or any of the following the taxable services consumed or duties
matters, namely:- paid or deemed to have been paid on
(a) collection and recovery of service tax goods used for providing taxable services
under section 66 and 68; which are exported out of India;
(aa) the determination of amount and value of (hh) rebate of service tax paid or payable on
taxable service under section 67; the taxable services used as input services
(b) the time and manner and the form in in the manufacturing or processing of
which application for registration shall be goods exported out of India under section
made under sub-sections (1) and (2) of 93A;
section 69 ; (hhh) the date for determination of rate of
(c) the form, manner and frequency of the service tax and the place of provision of
returns to be furnished under subsections taxable service under section 66C;
(1) and (2) and the late fee for delayed (i) provide for the amount to be paid
furnishing of return under sub-section (1) for compounding and the manner of
of section 70; compounding of offences;
(cc) the manner of provisional attachment of (j) provide for the settlement of cases, in
property under subsection (1) of section accordance with sections 31, 32 and 32A
73C; to 32P (both inclusive), in Chapter V of
(ccc) publication of name of any person and the Central Excise Act, 1944 (1 of 1944)
particulars relating to any proceeding as made applicable to service tax vide
under sub-section (1) of section 73D; section 83;
(d) the form in which appeal under section (k) any other matter which by this Chapter is
85 or under sub-section (6) of section 86 to be or may be prescribed
may be filed and the manner in which (3) The power to make rules conferred by this
they may be verified; section shall on the first occasion of the exercise
(e) the manner in which a memorandum of thereof include the power to give retrospective
cross-objections under sub-section (4) of effect to the rules or any of them from a
section 86 may be verified; date not earlier than the date on which the
(ee) Omitted provisions of this Chapter come into force.
(eee) the credit of service tax paid on the (4) Every rule made under this Chapter, Scheme
services consumed or duties paid or framed under section 71 and every notification
deemed to have been paid on goods used issued under section 93 shall be laid, as soon
for providing a taxable service; as may be, after it is made or issued, before
(eeee) the manner of recovery of any amount each House of Parliament, while it is in session
due to the Central Government under for a total period of thirty days which may
section 87; be comprised in one session or in tow more
46
difficulty: section 143 of the Finance Act, 2012, in
Provided that no such order shall be made so far as it relates to insertion of sections
after the expiry of a period of one year from 65B, 66B, 66C, 66D, 66E and section 66F in
the date on which the Finance Bill, 2008 Chapter V of the Finance Act, 1994, (32 of
receives the assent of the President. 1994) the Central Government may, by order
(1F) If any difficulty arises in respect of published in the Official Gazette, which is
implementing, classifying or assessing the not inconsistent with the provisions of this
value of any taxable service incorporated Chapter, make such provisions, as may be
in this Chapter by the Finance (No. 2) Act, necessary or expedient for the purpose of
2009, the Central Government may, by removing the difficulty from such date, which
order published in the Official Gazette, shall include the power to give retrospective
not inconsistent with the provisions of this effect from a date not earlier than the date
Chapter, remove the difficulty: of coming into force of the Finance Act,
Provided that no such order shall be made 2012;
after the expiry of a period of one year from Provided that no such order shall be made
the date on which the Finance (No. 2) Bill, after the expiry of a period of two years
2009 receives the assent of the President. from the date of coming into force of these
(1G) If any difficulty arises in respect of provisions.
implementing, classifying or assessing the (1-J) If any difficulty arises in giving effect to
value of any taxable service incorporated in section 93 of the Finance Act, 2013, in so
this Chapter by the Finance Act, 2010, the far as it relates to amendments made by
Central Government may, by order published the Finance Act, 2013 in Chapter V of the
in the Official Gazette, not inconsistent with Finance Act, 1994 (32 of 1994), the Central
the provisions of this Chapter, remove the Government may, by an order published in
difficulty: the Official Gazette, not inconsistent with
Provided that no such order shall be made the provisions of this Chapter, remove the
after the expiry of a period of one year from difficulty:
the date on which the Finance Bill, 2010 Provided that no such order shall be made
receives the assent of the President. after the expiry of a period of one year from
(1H) If any difficulty arises in respect of the date on which the Finance Bill, 2013
implementing, classifying or assessing the receives the assent of the President.
value of any taxable service incorporated in (2) Every order made under this section shall
this Chapter by the Finance Act, 2011, the be laid, as soon as may be after it is made,
Central Government may, by order published before each House of the Parliament
in the Official Gazette, not inconsistent with
the provisions of this Chapter, remove the 96 Consequential Amendment
difficulty: In the Economic Offences (Inapplicability of
Provided that no such order shall be made Limitation) Act, 1974 (12 of 1974), in the Schedule,
after the expiry of a period of one year from after entry 7 relating to the Central Excise Act,
the date on which the Finance Bill, 2011 1944 (1 of 1944), the following entry shall be
receives the assent of the President. inserted, namely:-
(1-I) If any difficulty arises in giving effect to 7A Chapter V of the Finance Act, 1994.
48
tax on a taxable service under the provisions examining such further material as may be
of Chapter V. placed before it by the applicant or obtained by
(3) The application shall be made in quadruplicate the Authority, pronounce its advance ruling on
and be accompanied by a fee of two thousand the question specified in the application.
five hundred rupees. (5) On a request received from the applicant, the
(4) An applicant may withdraw an application Authority shall, before pronouncing its advance
within thirty days from the date of the ruling, provide an opportunity to the applicant
application. of being heard, either in person or through a
duly authorised representative.
96D Procedures on receipt of application Explanation - For the purposes of this
(1) On receipt of an application, the Authority sub-section, authorised representative has
shall cause a copy thereof to be forwarded the meaning assigned to it in sub-section (2) of
to the Commissioner of Central Excise and, if section 35Q of the Central Excise Act, 1944 (1
necessary, call upon him to furnish the relevant of 1944).
records: (6) The Authority shall pronounce its advance ruling
Provided that where any records have been in writing within ninety days of the receipt of
called for by the Authority in any case, such application.
records shall, as soon as possible, be returned (7) A copy of the advance ruling pronounced by
to the Commissioner of Central Excise. the Authority, duly signed by the Members and
(2) The Authority may, after examining the certified in the prescribed manner shall be sent
application and the records called for, by order, to the applicant and to the Commissioner of
either allow or reject the application: Central Excise, as soon as may be, after such
Provided that the Authority shall not allow the pronouncement.
application where the question raised in the
application is, - 96E Applicability of Advance Ruling
(a) already pending in the applicants case (1) The advance ruling pronounced by the
before any Central Excise Officer, the Authority under section 96D shall be binding
Appellate Tribunal or any Court; only -
(b) the same as in a matter already decided by (a) on the applicant who had sought it;
the Appellate Tribunal or any Court: (b) in respect of any matter referred to in
Provided further that no application shall sub-section (2) of section 96C;
be rejected under this sub-section unless an (c) on the Commissioner of Central Excise, and
opportunity has been given to the applicant of the Central Excise authorities subordinate to
being heard: him, in respect of the applicant.
Provided also that where the application is (2) The advance ruling referred to in sub-section (1)
rejected, reasons for such rejection shall be shall be binding as aforesaid unless there is a
given in the order. change in law or facts on the basis of which the
(3) A copy of every order made under sub-section advance ruling has been pronounced.
(2) shall be sent to the applicant and to the
Commissioner of Central Excise. 96F Advance ruling to be void in certain
(4) Where an application is allowed under circumstances
sub-section (2), the Authority shall, after (1) Where the Authority finds, on a representation
50
(2) Refund shall be made of all such service tax (3) Notwithstanding anything contained in this
which has been collected but which would not Chapter, an application for the claim of refund
have been so collected if sub-section (1) had of service tax shall be made within a period of
been in force at all material times. six months from the date on which the Finance
(3) Notwithstanding anything contained in this Bill, 2012 receives the assent of the President.
Chapter an application for the claim of refund
of service tax shall be made within six months 99 Special provision for taxable services
from the date on which the Financial Bill, 2011 provided by Indian Railways
receives the assent of the President. (1) Notwithstanding anything contained in section
66, as it stood prior to the 1st day of July,
97 Special provision for exemption in certain 2012, or in section 66B, no service tax shall be
cases relating to management, etc., of roads levied or collected in respect of taxable services
(1) Notwithstanding anything contained in section provided by the Indian Railways during the
66, no service tax shall be levied or collected in period prior to the 1st day of October, 2012.
respect of management, maintenance or repair (2) No refund shall be made of service tax paid
of roads, during the period on and from the in respect of taxable services provided by the
16th day of June, 2005 to the 26th day of July, Indian Railways during the said period prior to
2009 (both days inclusive). the 1st day of October, 2012.
(2) Refund shall be made of all such service tax
which has been collected but which would not
have been so collected had sub-section (1) been
in force at all material times.
(3) Notwithstanding anything contained in this
Chapter, an application for the claim of refund
of service tax shall be made within a period of
six months from the date on which the Finance
Bill, 2012 receives the assent of the President.
52
in relation to advice, consultancy or who is registered under the
assistance in any branch of law, in any Central Excise Act, 1944 (1
manner and includes representational of 1944) or the rules made
services before any court, tribunal or thereunder;
authority; (V) any body corporate
(ccb) life insurance business has the meaning established, by or under any
assigned to it in clause (11) of section 2 law; or
of the Insurance Act, 1938 (4 of 1938); (VI) any partnership firm whether
(ccc) non-banking financial company has registered or not under any
the meaning assigned to it in clause (f) of law including association of
section 45-I of the Reserve Bank of India persons;
Act, 1934 (2 of 1934); any person who pays or is liable
(cd) partnership firm includes a limited to pay freight either himself
liability partnership; or through his agent for the
(d) person liable for paying service tax, - transportation of such goods by
(i) in respect of the taxable services road in a goods carriage :
notified under sub-section (2) of Provided that when such person is
section 68 of the Act, means,- located in a non-taxable territory,
(A) in relation to service provided the provider of such service shall
or agreed to be provided by an be liable to pay service tax.
insurance agent to any person (C) in relation to service provided or
carrying on the insurance business, agreed to be provided by way of
the recipient of the service; sponsorship to anybody corporate or
(B) in relation to service provided or partnership firm located in the taxable
agreed to be provided by a goods territory, the recipient of such service;
transport agency in respect of (D) in relation to service provided or
transportation of goods by road, agreed to be provided by,-
where the person liable to pay (I) an arbitral tribunal, or
freight is, (II) an individual advocate or a firm of
(I) any factory registered under or advocates by way of legal services,
governed by the Factories Act, to any business entity located in
1948 (63 of 1948); the taxable territory, the recipient
(II) any society registered under of such service;
the Societies Registration Act, (E) in relation to support services
1860 (21 of 1860) or under provided or agreed to be provided by
any other law for the time Government or local authority except,-
being in force in any part of (a) renting of immovable property, and
India; (b) services specified sub-clauses (i), (ii) and (iii)
(III) any co-operative society of clause (a) of section 66D of the Finance
established by or under any Act, 1994,
law; to any business entity located in the taxable
(IV) any dealer of excisable goods, territory, the recipient of such service;
54
application for registration on or before the November, 2006.
31st day of December, 1998: (3A) Where an assessee is providing a taxable
Provided also that a person liable for paying service from more than one premises or
the service tax in the case of taxable services offices, and does not have any centralized
referred to in sub-clause (zzp) of clause billing systems or centralized accounting
(105) of section 65 of the Act may make an systems, as the case may be, he shall make
application for registration on or before the separate applications for registration in
31st day of March, 2005. respect of each of such premises or offices to
(1A) For the purposes of sub-rule (1), the Central the jurisdictional Superintendent of Central
Board of Excise and Customs may, by an Excise.
order specify the documents which are to (4) Where an assessee is providing more than
be submitted by the assessee along with the one taxable service, he may make a single
application within such period, as may be application, mentioning therein all the taxable
specified in the said order. services provided by him, to the concerned
(2) Where a person, liable for paying service tax Superintendent of Central Excise.
on a taxable service, (5) The Superintendent of Central Excise shall
(i) provides such service from more than one after due verification of the application form,
premises or offices; or or an intimation under sub-rule (5A), as the
(ii) receives such service in more than one case may be, grant a certificate of registration
premises or offices; or in Form ST-2 within seven days from the date
(iii) is having more than one premises or of receipt of the application or the intimation.
offices, which are engaged in relation to If the registration certificate is not granted
such service in any other manner, making within the said period, the registration applied
such person liable for paying service tax, for shall be deemed to have been granted.
and has centralised billing system or centralised (5A) Where there is a change in any information or
accounting system in respect of such service, details furnished by an assessee in Form ST-1
and such centralised billing or centralised at the time of obtaining registration or he
accounting systems are located in one or more intends to furnish any additional information
premises, he may, at his option, register such or detail, such change or information or
premises or offices from where centralised details shall be intimated, in writing, by
billing or centralised accounting systems are the assessee, to the jurisdictional Assistant
located. Commissioner or Deputy Commissioner of
(3) The registration under sub-rule (2), shall be Central Excise, as the case may be, within a
granted by the Commissioner of Central Excise period of thirty days of such change.
in whose jurisdiction the premises or offices, (6) Where a registered assessee transfers his
from where centralised billing or accounting is business to another person, the transferee
done, are located: shall obtain a fresh certificate of registration.
Provided that nothing contained in this (7) Every registered assessee, who ceases to
sub-rule shall have any effect on the provide the taxable service for which he is
registration granted to the premises or offices registered, shall surrender his registration
having such centralised billing or centralised certificate immediately to the Superintendent
accounting systems, prior to the 2nd day of of Central Excise.
56
distributed, issue an invoice, a bill or, as the carriage, which is serially numbered, and contains
case may be, a challan signed by such person the names of the consignor and consignee,
or a person authorized by him, for each of the registration number of the goods carriage in
recipient of the credit distributed, and such which the goods are transported, details of the
invoice, bill or, as the case may be, challan goods transported, details of the place of origin
shall be serially numbered and shall contain the and destination, person liable for paying service
following, namely:- tax whether consignor, consignee or the goods
(i) the name, address and registration number transport agency.
of the person providing input services and
the serial number and date of invoice, bill, 5 Records
or as the case may be, challan issued under (1) The records including computerised data as
sub-rule (1); maintained by an assessee in accordance with
(ii) the name and address of the said input the various laws in force from time to time
services distributor; shall be acceptable.
(iii) the name and address of the recipient of the (2) Every assessee shall furnish to the
credit distributed; Superintendent of Central Excise at the time of
(iv) the amount of the credit distributed: filing of return for the first time or the 31st day
Provided that in case the input service distributor of January, 2008, whichever is later, a list in
is an office of a banking company or a financial duplicate, of -
institution including a non-banking financial (i) all the records prepared or maintained by
company providing service to any person an the assessee for accounting of transactions
invoice, a bill or, as the case may be, challan in regard to, -
shall include any document, by whatever name (a) providing of any service,
called, whether or not serially numbered but (b) receipt or procurement of input services
containing other information in such documents and payment for such input services;
as required under this sub-rule: (c) receipt, purchase, manufacture, storage,
sale, or delivery, as the case may be, in
4B Issue of consignment note regard of inputs and capital goods;
Any goods transport agency which provides service (d) other activities, such as manufacture and
in relation to transport of goods by road in a goods sale of goods, if any.
carriage shall issue a consignment note to the (ii) all other financial records maintained by
recipient of Service: him in the normal course of business.
Provided that where any taxable service in relation (3) All such records shall be preserved at least for
to transport of goods by road in a goods carriage a period of five years immediately after the
is wholly exempted under section 93 of the Act, financial year to which such records pertain.
the goods transport agency shall not be required to
issue the consignment note. 5A Access to a registered premises
Explanation - For the purposes of this rule and the (1) An officer authorised by the Commissioner in
second proviso to rule 4A, consignment note this behalf shall have access to any premises
means a document, issued by a goods transport registered under these rules for the purpose
agency against the receipt of goods for the of carrying out any scrutiny, verification and
purpose of transport of goods by road in a goods checks as may be necessary to safeguard the
58
Excise and Customs: payment of service tax on provisional basis
Provided that where an assessee has paid a on such value of taxable service as may be
total service tax of rupees ten lakh or more specified by him and the provisions of the
including the amount paid by utilisation of Central Excise (No. 2) Rules, 2001, relating to
CENVAT credit, in the preceding financial year, provisional assessment, except so far as they
he shall deposit the service tax liable to be relate to execution of bond, shall, so far as
paid by him electronically, through internet may be, apply to such assessment.
banking. (4A) Notwithstanding anything contained in
(2A) For the purpose this rule, if the assessee sub-rule (4), where an assessee has paid to
deposits the service tax by cheque, the the credit of Central Government any amount
date of presentation of cheque to the bank in excess of the amount required to be paid
designated by the Central Board of Excise and towards service tax liability for a month or
Customs for this purpose shall be deemed to quarter, as the case may be, the assessee may
be the date on which service tax has been adjust such excess amount paid by him against
paid subject to realization of that cheque. his service tax liability for the succeeding
(3) Where an assessee has issued an invoice, or month or quarter, as the case may be.
received any payment, against a service to (4B) The adjustment of excess amount paid, under
be provided which is not so provided by him sub-rule (4A), shall be subject to the condition
either wholly or partially for any reason, or that the excess amount paid is on account of
where the amount of invoice is renegotiated reasons not involving interpretation of law,
due to deficient provision of service, or any taxability, valuation or applicability of any
terms contained in a contract, the assessee exemption notification.
may take the credit of such excess service tax (4C) Notwithstanding anything contained in
paid by him, if the assesse, - sub-rules (4), (4A) and (4B), where the person
(a) has refunded the payment or part thereof, liable to pay service tax in respect of service
so received for the service provided to the of renting of immovable property has paid to
person from whom it was received; or the credit of Central Government any amount
(b) has issued a credit note for the value of the in excess of the amount required to be paid
service not so provided to the person to towards service tax liability for a month or
whom such an invoice had been issued. quarter, as the case may be, on account of
(4) Where an assessee is, for any reason, unable non-availment of deduction of property tax
to correctly estimate, on the date of deposit, paid in terms of Notification No. 29/2012-
the actual amount payable for any particular Service Tax, dated the 20th June, 2012, from
month or quarter, as the case may be, he may the gross amount charged for renting of the
make a request in writing to the Assistant immovable property for the said period at the
Commissioner of Central Excise or the Deputy time of payment of service tax, the assessee
Commissioner of Central Excise, as the case may adjust such excess amount paid by him
may be, giving reasons for payment of service against his service tax liability within one year
tax on provisional basis and the Assistant from the date of payment of such property
Commissioner of Central Excise or the Deputy tax and the details of such adjustment shall
Commissioner of Central Excise, as the case be intimated to the Superintendent of Central
may be, on receipt of such request, may allow Excise having jurisdiction over the service
60
(b) rupees 120 and 0.06 per cent of the (7C) The distributor or selling agent, liable to
gross amount of currency exchanged for pay service tax for the taxable service of
an amount of rupees exceeding rupees promotion, marketing, organising or in any
100,000 and upto rupees 10,00,000; and other manner assisting in organising lottery,
(c) rupees 660 and 0.012 per cent of the gross shall have the option to pay an amount at the
amount of currency exchanged for an rate specified in column (2) of the Table given
amount of rupees exceeding 10,00,000, below, subject to the conditions specified in
subject to maximum amount of rupees the corresponding entry in column (3) of the
6000: said Table, instead of paying service tax at the
Provided that the person providing the rate specified in section 66B of Chapter V of
service shall exercise such option for a the said Act:
financial year and such option shall not be
withdrawn during the remaining part of
that financial year.
Table
62
7 Returns 7B Revision of return
(1) Every assessee shall submit a half-yearly return An assessee may submit a revised return, in Form
in Form ST-3 or ST-3A, as the case may ST-3, in triplicate, to correct a mistake or omission,
be, along with a copy of the Form TR-6, in within a period of ninety days from the date of
triplicate for the months covered in the half- submission of the return under rule 7.
yearly return.
(2) Every assessee shall submit the half yearly Explanation. - Where an assessee submits a revised
return by the 25th of the month following the return, the relevant date for the purpose of
particular half-year. recovery of service tax, if any, under section 73
Provided that the Form ST-3 required to be of the Act shall be the date of submission of such
submitted by the 25th day of October, 2012 revised return.
shall cover the period between 1st April to
30th June, 2012 only. 7C Amount to be paid for delay in furnishing
Provided further that the Form ST- 3 for the the prescribed return
period between the 1st day of July 2012 to Where the return prescribed under rule 7 is
the 30th day of September 2012, shall be furnished after the date prescribed for submission
submitted by the 25th day of March, 2013 of such return, the person liable to furnish the
(3) Every assessee shall submit the half yearly said return shall pay to the credit of the Central
return electronically Government, for the period of delay of -
(4) The Central Board of Excise and Customs (i) fifteen days from the date prescribed for
may, by an order extend the period referred submission of such return, an amount of five
to in sub-rule (2) by such period as deemed hundred rupees;
necessary under circumstances of special (ii) beyond fifteen days but not later than thirty
nature to be specified in such order. days from the date prescribed for submission
of such return, an amount of one thousand
7A Returns in case of taxable service provided rupees; and
by goods transport operators and clearing and (iii) beyond thirty days from the date prescribed for
forwarding agents submission of such return an amount of one
Notwithstanding anything contained in rule 7, an thousand rupees plus one hundred rupees for
assessee, in case of service provided by - every day from the thirty first day till the date
(a) goods transport operator for the period of furnishing the said return:
commencing on and from the 16th day of Provided that the total amount payable in
November, 1997 to 2nd day of June, 1998; and terms of this rule, for delayed submission of
(b) clearing and forwarding agents for the period return, shall not exceed the amount specified in
commencing on and from the 16th day of July, section 70 of the Act:
1997 to 16th day of October, 1998, Provided further that where the assessee has
shall furnish a return within a period of six paid the amount as prescribed under this
months from the 13th day of May, 2003, in rule for delayed submission of return, the
Form ST-3B along with copy of Form TR-6 in proceedings, if any, in respect of such delayed
triplicate, failing which the interest and penal submission of return shall be deemed to be
consequences as provided in the Act shall concluded:
follow. Provided also that where the gross amount
8 Form of Appeals to Commissioner of Central 10 Procedure and facilities for large taxpayer.
Excise (Appeals) Notwithstanding anything contained in these rules,
(1) An appeal under section 85 of the Act to the the following shall apply to a large taxpayer, -
Commissioner of Central Excise (Appeals) shall (1) A large taxpayer shall submit the returns, as
be in Form ST-4. prescribed under these rules, for each of the
(2) The appeal shall be filed in duplicate and shall registered premises.
be accompanied by a copy of order appealed Explanation. - A large taxpayer who has
against. obtained a centralized registration under
sub-rule (2) of Rule 4, shall submit a
9 Form of appeals to Appellate Tribunal consolidated return for all such premises.
(1) An appeal under sub-section (1) of section (2) A large taxpayer, on demand, may be required
86 of the Act to the Appellate Tribunal shall to make available the financial, stores and
be made in Form ST-5 in quadruplicate and CENVAT credit records in electronic media,
shall be accompanied by a copy of the Order such as, compact disc or tape for the purposes
appealed against (one of which shall be a of carrying out any scrutiny and verification, as
certified copy). may be necessary.
(2) An appeal under sub-section (2) of section 86 (3) A large taxpayer may, with intimation of at
of the Act to the Appellate Tribunal shall be least thirty days in advance, opt out to be
made in Form ST-7 in quadruplicate and shall a large taxpayer from the first day of the
be accompanied by a copy of the order of the following financial year.
Commissioner of Central Excise (one of which (4) Any notice issued but not adjudged by any of
shall be a certified copy) and a copy of the the Central Excise Officer administering the Act
order passed by the Central Board of Excise or rules made thereunder immediately before
and Customs directing the Commissioner the date of grant of acceptance by the Chief
of Central Excise to apply to the Appellate Commissioner of Central Excise, Large Taxpayer
Tribunal. Unit, shall be deemed to have been issued by
64
Central Excise Officers of the said unit.
(5) Provisions of these rules, insofar as they are
not inconsistent with the provisions of this rule
shall mutatis mutandis apply in case of a large
taxpayer.
66
or when a service is taxed for the first be deemed to be the date of completion
time during the period between such of provision of service;
entry in books of accounts and its credit (ii) wherever the provider of taxable service
in the bank account; and receives a payment up to rupees one
(ii) the credit in the bank account is after thousand in excess of the amount
four working days from the date when indicated in the invoice, the point of
there is change in effective rate of tax or taxation to the extent of such excess
a service is taxed for the first time; and amount, at the option of the provider of
(iii) the payment is made by way of an taxable service, shall be determined in
instrument which is credited to a bank accordance with the provisions of clause
account, (a).
(B) if any rule requires determination of the Explanation.- For the purpose of this rule,
time or date of payment received, the wherever any advance by whatever name
expression date of payment shall be known, is received by the service provider
construed to mean such date on which towards the provision of taxable service, the
the payment is received; point of taxation shall be the date of receipt
of each such advance.
3 Determination of point of taxation
For the purposes of these rules, unless otherwise 4 Determination of point of taxation in case of
provided, point of taxation shall be- change in effective rate of tax
(a) the time when the invoice for the service Notwithstanding anything contained in rule 3, the
provided or agreed to be provided is issued: point of taxation in cases where there is a change
Provided that where the invoice is not issued in effective rate of tax in respect of a service, shall
within the time period specified in Rule 4A be determined in the following manner, namely:-
of the Service Tax Rules, 1994, the point of (a) in case a taxable service has been provided
taxation shall be the date of completion of before the change in effective rate of tax-
provision of the service. (i) where the invoice for the same has been
(b) in a case, where the person providing the issued and the payment received after the
service, receives a payment before the time change in effective rate of tax, the point
specified in clause (a), the time, when he of taxation shall be date of payment or
receives such payment, to the extent of such issuing of invoice, whichever is earlier; or
payment. (ii) where the invoice has also been issued
Provided that for the purposes of clauses (a) prior to change in effective rate of tax
and (b), but the payment is received after the
(i) in case of continuous supply of service change in effective rate of tax, the point
where the provision of the whole or part of taxation shall be the date of issuing of
of the service is determined periodically invoice; or
on the completion of an event in terms of (iii) where the payment is also received before
a contract, which requires the receiver of the change in effective rate of tax, but
service to make any payment to service the invoice for the same has been issued
provider, the date of completion of each after the change in effective rate of tax,
such event as specified in the contract shall the point of taxation shall be the date of
68
effective rate of tax prevalent at different points of
time, shall, by an order in writing, after giving an
opportunity of being heard, determine the point of
taxation to the best of his judgment.
9 Transitional Provisions
Nothing contained in these rules shall be
applicable,-
(i) where the provision of service is completed;
or
(ii) where invoices are issued
prior to the date on which these rules come
into force.
2 Definitions
In these rules, unless the context otherwise
requires,-
(a) Act means the Finance Act, 1994 (32 of
1994);
(b) account means an account bearing interest
to the depositor, and includes a non-resident
external account and a non-resident ordinary
account;
(c) banking company has the meaning assigned
to it in clause (a) of section 45A of the Reserve
Bank of India Act, 1934 (2 of 1934);
(d) continuous journey means a journey for
which a single or more than one ticket or
invoice is issued at the same time, either by one
service provider or through one agent acting
on behalf of more than one service provider,
and which involves no stopover between any
of the legs of the journey for which one or
more separate tickets or invoices are issued;
(e) financial institution has the meaning assigned
to it in clause (c) of section 45-I of the Reserve
Bank of India Act,1934 (2 of 1934);
(f) intermediary means a broker, an agent or any
other person, by whatever name called, who
arranges or facilitates a provision of a service
(hereinafter called the main service) between
two or more persons, but does not include a
person who provides the main service on his
account;
(g) leg of journey means a part of the journey
that begins where passengers embark or
disembark the conveyance, or where it is
stopped to allow for its servicing or refuelling,
and ends where it is next stopped for any of
those purposes;
70
(h) location of the service provider means- usual place of residence of the
(a) where the service provider has obtained recipient of service.
a single registration, whether centralized Explanation 1:- For the purposes of clauses (h) and
or otherwise, the premises for which such (i), usual place of residence in case of a body
registration has been obtained; corporate means the place where it is incorporated
(b) where the service provider is not covered or otherwise legally constituted.
under sub-clause (a): Explanation 2:- For the purpose of clause (i), in the
(i) the location of his business case of telecommunication service, the usual place
establishment; or of residence shall be the billing address.
(ii) where the services are provided (j) means of transport means any conveyance
from a place other than the business designed to transport goods or persons from
establishment, that is to say, a fixed one place to another;
establishment elsewhere, the location (k) non-banking financial company means-
of such establishment; or (i) a financial institution which is a company;
(iii) where services are provided from more or
than one establishment, whether (ii) a non-banking institution which is a
business or fixed, the establishment company and which has as its principal
most directly concerned with the business the receiving of deposits, under
provision of the service; and any scheme or arrangement or in any
(iv) in the absence of such places, the other manner, or lending in any manner;
usual place of residence of the service or
provider. (iii) such other non-banking institution or class
(i) location of the service receiver means:- of such institutions, as the Reserve Bank
(a) where the recipient of service has obtained of India may, with the previous approval
a single registration, whether centralized of the Central Government and by
or otherwise, the premises for which such notification in the Official Gazette specify;
registration has been obtained; (l) online information and database access or
(b) where the recipient of service is not retrieval services means providing data or
covered under sub-clause (a): information, retrievable or otherwise, to any
(i) the location of his business person, in electronic form through a computer
establishment; or network;
(ii) where services are used at a place (m) person liable to pay tax shall mean the
other than the business establishment, person liable to pay service tax under section
that is to say, a fixed establishment 68 of the Act or under sub-clause (d) of
elsewhere, the location of such sub-rule (1) of rule 2 of the Service Tax Rules,
establishment; or 1994;
(iii) where services are used at more than (n) provided includes the expression to be
one establishment, whether business provided;
or fixed, the establishment most (o) received includes the expression to be
directly concerned with the use of the received;
service; and (p) registration means the registration under rule
(iv) in the absence of such places, the 4 of the Service Tax Rules, 1994;
72
8 Place of provision of services where provider 12 Place of provision of services provided on
and recipient are located in taxable territory board a conveyance
Place of provision of a service, where the location Place of provision of services provided on board
of the provider of service as well as that of the a conveyance during the course of a passenger
recipient of service is in the taxable territory, shall transport operation, including services intended
be the location of the recipient of service. to be wholly or substantially consumed while
on board, shall be the first scheduled point of
9 Place of provision of specified services departure of that conveyance for the journey.
The place of provision of following services shall be
the location of the service provider:- 13 Powers to notify description of services or
(a) Services provided by a banking company, or a circumstances for certain purposes
financial institution, or a nonbanking financial In order to prevent double taxation or non-taxation
company, to account holders; of the provision of a service, or for the uniform
(b) Online information and database access or application of rules, the Central Government shall
retrieval services; have the power to notify any description of service
(c) Intermediary services; or circumstances in which the place of provision
(d) Service consisting of hiring of means of shall be the place of effective use and enjoyment
transport, upto a period of one month. of a service.
10 Place of provision of goods transportation
services 14 Order of application of rules
The place of provision of services of transportation Notwithstanding anything stated in any rule,
of goods, other than by way of mail or courier, where the provision of a service is, prima facie,
shall be the place of destination of the goods: determinable in terms of more than one rule, it
shall be determined in accordance with the rule
Provided that the place of provision of services of that occurs later among the rules that merit equal
goods transportation agency shall be the location consideration.
of the person liable to pay tax.
74
covered under sub-clauses (A) and 2B Determination of value of service in relation
(B), including maintenance, repair, to money changing
completion and finishing services such Subject to the provisions of section 67, the value of
as glazing, plastering, floor and wall taxable service provided for the services, so far as
tiling, installation of electrical fittings it pertains to purchase or sale of foreign currency,
of an immovable property, service including money changing, shall be determined by
tax shall be payable on sixty per cent the service provider in the following manner:-
of the total amount charged for the
works contract; For a currency, when exchanged from, or to,
Explanation 1. - For the purposes of this rule,- Indian Rupees (INR), the value shall be equal to the
(a) original works means- difference in the buying rate or the selling rate, as
(i) all new constructions; the case may be, and the Reserve Bank of India
(ii) all types of additions and alterations to (RBI), reference rate for that currency at that time,
abandoned or damaged structures on land multiplied by the total units of currency.
that are required to make them workable; Example I: US $ 1000 are sold by a customer at
(iii) erection, commissioning or installation the rate of Rupees 45 per US $.
of plant, machinery or equipment or RBI reference rate for US $ is Rupees
structures, whether pre-fabricated or 45.50 for that day.
otherwise; The taxable value shall be Rupees 500.
(b) total amount means the sum total of the Example II: INR 70000 is changed into Great
gross amount charged for the works contract Britain Pound (GBP) and the exchange
and the fair market value of all goods and rate offered is Rupees 70, thereby
services supplied in or in relation to the giving GBP 1000.
execution of the works contract, whether or not RBI reference rate for that day for GBP
supplied under the same contract or any other is Rupees 69.
contract, after deducting- The taxable value shall be Rupees 1000
(i) the amount charged for such goods or
services, if any; and Provided that in case where the RBI reference rate
(ii) the value added tax or sales tax, if any, for a currency is not available, the value shall be
levied thereon: 1% of the gross amount of Indian Rupees provided
Provided that the fair market value of goods or received, by the person changing the money:
and services so supplied may be determined in Provided further that in case where neither of
accordance with the generally accepted accounting the currencies exchanged is Indian Rupee, the
principles. value shall be equal to 1% of the lesser of the
Explanation 2. - For the removal of doubts, it is two amounts the person changing the money
clarified that the provider of taxable service shall would have received by converting any of the two
not take CENVAT credit of duties or cess paid on currencies into Indian Rupee on that day at the
any inputs, used in or in relation to the said works reference rate provided by RBI.
contract, under the provisions of CENVAT Credit
Rules, 2004.
Table
Explanation 1. - For the purposes of this rule, total Explanation 2. - For the removal of doubts, it is
amount means the sum total of the gross amount clarified that the provider of taxable service shall
charged and the fair market value of all goods and not take CENVAT credit of duties or cess paid on
services supplied in or in relation to the supply of any goods classifiable under Chapters 1 to 22 of
food or any other article of human consumption or the Central Excise Tariff Act, 1985 (5 of 1986).
any drink (whether or not intoxicating), whether or
not supplied under the same contract or any other
contract, after deducting -
(i) the amount charged for such goods or services,
if any; and
(ii) the value added tax or sales tax, if any, levied
thereon:
Provided that the fair market value of goods
and services so supplied may be determined in
accordance with the generally accepted accounting
principles.
76
3 Manner of determination of value the service provider in the course of providing
Subject to the provisions of section 67, the taxable service, all such expenditure or costs
value of taxable service, where such value is not shall be treated as consideration for the taxable
ascertainable, shall be determined by the service service provided or to be provided and shall
provider in the following manner:- be included in the value for the purpose of
(a) the value of such taxable service shall be charging service tax on the said service.
equivalent to the gross amount charged by Explanation.- For the removal of doubts,
the service provider to provide similar service it is hereby clarified that for the value of
to any other person in the ordinary course of the telecommunication service shall be the
trade and the gross amount charged is the sole gross amount paid by the person to whom
consideration; telecommunication service is actually provided.
(b) where the value cannot be determined in
accordance with clause (a), the service provider (2) Subject to the provisions of sub-rule (1), the
shall determine the equivalent money value of expenditure or costs incurred by the service
such consideration which shall, in no case be provider as a pure agent of the recipient of
less than the cost of provision of such taxable service, shall be excluded from the value of the
service. taxable service if all the following conditions are
satisfied, namely:-
4 Rejection of value (i) the service provider acts as a pure agent
(1) Nothing contained in rule 3 shall be construed of the recipient of service when he makes
as restricting or calling into question the power payment to third party for the goods or
of the Central Excise Officer to satisfy himself as services procured;
to the accuracy of any information furnished or (ii) the recipient of service receives and uses the
document presented for valuation. goods or services so procured by the service
(2) Where the Central Excise Officer is satisfied that provider in his capacity as pure agent of the
the value so determined by the service provider recipient of service;
is not in accordance with the provisions of the (iii) the recipient of service is liable to make
Act or these rules, he shall issue a notice to such payment to the third party;
service provider to show cause why the value of (iv) the recipient of service authorises the service
such taxable service for the purpose of charging provider to make payment on his behalf;
service tax should not be fixed at the amount (v) the recipient of service knows that the
specified in the notice. goods and services for which payment has
(3) The Central Excise Officer shall, after providing been made by the service provider shall be
reasonable opportunity of being heard, provided by the third party;
determine the value of such taxable service (vi) the payment made by the service provider
for the purpose of charging service tax in on behalf of the recipient of service has
accordance with the provisions of the Act and been separately indicated in the invoice
these rules. issued by the service provider to the
recipient of service;
5 Inclusion in or exclusion from value of certain (vii) the service provider recovers from the
expenditure or costs. recipient of service only such amount as has
(1) Where any expenditure or costs are incurred by been paid by him to the third party; and
78
6 Cases in which the commission, costs, etc., (x) the amount realised as demurrage or by
will be included or excluded any other name whatever called for the
(1) Subject to the provisions of section 67, the provision of a service beyond the period
value of the taxable services shall include - originally contracted or in any other
(i) the commission or brokerage charged by a manner relatable to the provision of
broker on the sale or purchase of securities service.
including the commission or brokerage (2) Subject to the provisions contained in sub-rule
paid by the stock-broker to any sub-broker; (1), the value of any taxable service, as the case
(ii) the adjustments made by the telegraph may be, does not include -
authority from any deposits made by the (i) initial deposit made by the subscriber
subscriber at the time of application for at the time of application for telephone
telephone connection or pager or facsimile connection or pager or facsimile (FAX) or
or telegraph or telex or for leased circuit; telegraph or telex or for leased circuit;
(iii) the amount of premium charged by the (ii) the airfare collected by air travel agent in
insurer from the policy holder; respect of service provided by him;
(iv) the commission received by the air travel (iii) the rail fare collected by rail travel agent in
agent from the airline; respect of service provided by him; and
(v) the commission, fee or any other sum (iv) interest on delayed payment of any
received by an actuary, or intermediary or consideration for the provision of services
insurance intermediary or insurance agent or sale of property, whether movable or
from the insurer; immovable;
(vi) the reimbursement received by the (v) the taxes levied by any Government on
authorised service station, from any passenger travelling by air, if shown
manufacturer for carrying out any service separately on the ticket, or the invoice for
of any motor car, light motor vehicle or such ticket, issued to the passenger;
two wheeled motor vehicle manufactured (vi) accidental damages due to unforeseen
by such manufacturer; actions not relatable to the provision of
(vii) the commission or any amount received by service; and
the rail travel agent from the Railways or (vii) subsidies and grants disbursed by the
the customer; Government, not directly affecting the
(viii) the remuneration or commission, by value of service.
whatever name called, paid to such agent
by the client engaging such agent for 7 Actual consideration to be the value of
the services provided by a clearing and taxable service provided from outside India
forwarding agent to a client rendering Omitted
services of clearing and forwarding
operations in any manner;
(ix) the commission, fee or any other sum, by
whatever name called, paid to such agent
by the insurer appointing such agent in
relation to insurance auxiliary services
provided by an insurance agent; and
1 Short title and commencement tax vide section 83 of the Act, shall be made in
(1) These rules may be called the Service Tax the Form SC(ST)-1.
(Settlement of Cases) Rules, 2012. (2) The application referred to in sub-rule (1), the
(2) They shall come into force on the date of verification contained therein and all relevant
publication in the Official Gazette. documents accompanying such application
shall be signed,-
2 Definitions (a) in the case of an individual, by the
In these rules, unless the context otherwise individual himself or where the individual
requires,- is absent from India, by the individual
(a) Act means Chapter V of the Finance Act, concerned or by some person duly
1994 (32 of 1994); authorised by him in this behalf; and where
(b) Excise Act means the Central Excise Act, the individual is a minor or is mentally
1944 (1 of 1944); incapacitated from attending to his affairs,
(c) Form SC(ST)-1 means the form appended to by his guardian or by any other person
these rules; competent to act on his behalf;
(d) Section means a section of the Act; (b) in the case of a Hindu undivided family,
(e) Words and expressions used herein and not by the Karta of such family and, where the
defined but defined in the Act or Excise Act, Karta is absent from India or is mentally
shall have the respective meanings assigned to incapacitated from attending to his affairs,
them in those Acts. by the senior most adult member of the
family available;
3 Form and manner of Application (c) in the case of a company or local authority,
(1) An application under sub-section (1) of section by the principal officer thereof;
32E of Excise Act, made applicable to service (d) in the case of a firm, by any partner
80
thereof, not being a minor; (2) On receipt of the order referred to in sub-rule
(e) in case of any other association, by any (1), the Commissioner may authorise any
member of the association or the principal officer subordinate to him and not below the
officer thereof; and rank of an Assistant Commissioner of Central
(f) in the case of any other person, by that Excise or Service Tax to take steps to attach
person or some person competent to act such property of the applicant.
on his behalf. (3) The officer authorised under sub-rule (2)
(3) Every application in the Form SC(ST)-1 shall be shall prepare an inventory of the property
filed in quintuplicate and shall be accompanied attached and specify in it, in the case of the
by a fee of one thousand rupees. immovable property, the description of such
(4) The additional amount of service tax accepted property sufficient to identify it and in case of
by the applicant along with interest due the movable property, the place where such
thereon, shall be deposited by him in any of property is lodged or kept and shall hand over
the authorised bank under TR-6, referred to in a copy of the same to the applicant or to the
the Service Tax Rules, 1994 (hereinafter referred person from whose charge the property is
to as TR-6 Challan) in quintuplicate, or G.A.R.-7 attached.
and shall be disclosed by him in the Form. (4) The officer authorised under sub-rule (2) shall
send a copy of the inventory so prepared each
4 Disclosure of information in the application to the Commissioner of Central Excise and the
for settlement of cases Settlement Commission.
The Settlement Commission shall, while calling for
a report from the Commissioner of Central Excise 6 Fee for copies of reports
having jurisdiction or Commissioner of Service Tax Any person who makes an application under
having jurisdiction, under sub-section (3) of section section 32J of Excise Act, made applicable to
32F of Excise Act, made applicable to service tax service tax vide section 83 of the Act, for obtaining
vide section 83 of the Act, forward a copy of the copies of reports made by any Central Excise
application referred to in sub-rule (1) of rule 3 Officer, shall pay a fee of five rupees per page of
along with the annexure to the application and the each report or part thereof.
statements and other documents accompanying
such annexure.
82
4 Procedure on receipt of application under (6) The compounding amount once paid shall not
rule 3 be refunded except in cases where the court
(1) On receipt of an application under rule 3, the rejects grant of immunity from prosecution.
compounding authority shall call for a report (7) The applicant shall not claim, as of right, that
from the reporting authority with reference his offence be compounded.
to the particulars furnished in the application,
or any other information, which may be 5 Fixation of the compounding amount
considered relevant for examination of such For the purpose of compounding of offences
application. under the provisions of the Act, the compounding
(2) Such report shall be furnished by the reporting amount shall be as provided in the following Table,
authority within a period of one month or namely:-
within such extended period as may be allowed
Table
by the compounding authority, from the
date of receipt of communication from the Sl. No. Offence Compounding amount
compounding authority. (1) (2) (3)
(3) The compounding authority, after taking into
1 Offence specified Up to fifty per cent of the amount of
account the contents of the said application,
under section 89 (1)(a) service tax evasion, subject to minimum
may, by order, either allow the application
of the Act of ten per cent of amount of tax evaded
indicating the compounding amount in terms of
2 Offence specified Upto fifty per cent. of the amount
rule 5 and grant him immunity from prosecution
under section 89 (1)(b) of CENVAT Credit wrongly taken or
in terms of rule 6 or reject such application:
of the Act utilised, subject to minimum of ten per
Provided that application shall not be rejected
cent of said amount.
unless an opportunity has been given to the
applicant of being heard and the grounds of 3 Offence specified Rupees fifty thousand for the first
such rejection are mentioned in such order: under section 89 (1)(c) offence and to be increased by hundred
Provided further that application shall not be of the Act per cent of this amount for each
allowed unless the service tax, penalty and subsequent offence
interest liable to be paid have been paid for the 4 Offence specified Upto twenty five per cent of the
case for which application has been made. under section 89 (1)(d) amount of service tax not deposited
(4) A copy of every order under sub-rule (3) shall be of the Act subject to a minimum of two per cent
sent to the applicant. for each month for which the amount
(5) The applicant shall, within a period of thirty has not been so deposited.
days from the date of receipt of order under
sub-rule (3) allowing the compounding of Provided that if a person has committed offences
offences, pay the compounding amount, falling under more than one category specified
as ordered to be paid by the compounding above and where the amount of service tax evasion
authority and shall furnish the proof of such or amount of CENVAT Credit wrongly taken or
payment to the compounding authority. utilised is the same for all such offences, the
compounding amount, in such cases, shall be the
amount as determined for the offence for which a
higher compounding amount has been prescribed.
84
Service Tax Voluntary
Compliance Encouragement
Scheme
Service Tax Voluntary Compliance payable under the Chapter or any other
Encouragement Scheme, 2013 amount due or payable under section 73A
104 Short Title thereof, for the period beginning from the
This Scheme may be called the Service Tax 1st day of October, 2007 and ending on the
Voluntary Compliance Encouragement Scheme, 31st day of December, 2012 including a cess
2013. leviable thereon under any other Act for the
time being in force, but not paid as on the
105 Definitions 1st day of March, 2013.
(1) In this Scheme, unless the context otherwise (2) Words and expressions used herein and not
requires,- defined but defined in the Chapter or the rules
(a) "Chapter" means Chapter V of the Finance made thereunder shall have the meanings
Act, 1994 (32 of 1994); respectively assigned to them in the Chapter or
(b) "declarant" means any person who makes a the rules made thereunder.
declaration under sub-section (1) of section
107; 106 Person who may make declaration of tax
(c) "designated authority" means an officer not dues
below the rank of Assistant Commissioner (1) Any person may declare his tax dues in respect
of Central Excise as notified by the of which no notice or an order of determination
Commissioner of Central Excise for the under section 72 or section 73 or section 73A
purposes of this Scheme; of the Chapter has been issued or made before
(d) "prescribed" means prescribed by rules the 1st day of March, 2013:
made under this Scheme; Provided that any person who has furnished
(e) "tax dues" means the service tax due or return under section 70 of the Chapter and
86
payment of the tax dues declared by him under section 73, or as the case may be, under section
sub-section (1) of section 107 and the interest 73A of the Chapter and the provisions of the
payable under the proviso to sub-section Chapter shall accordingly apply.
(4) thereof, shall get immunity from penalty,
interest or any other proceeding under the 112 Removal of doubts
Chapter. For the removal of doubts, it is hereby declared
(2) Subject to the provisions of section 111, a that nothing contained in this Scheme shall be
declaration made under sub-section (1) of construed as conferring any benefit, concession or
section 107 shall become conclusive upon immunity on the declarant other than the benefit,
issuance of acknowledgement of discharge concession or immunity granted under section 108.
under sub-section (7) of section 107 and no
matter shall be reopened thereafter in any 113 Power to remove difficulties
proceedings under the Chapter before any (1) If any difficulty arises in giving effect to
authority or court relating to the period covered the provisions of this Scheme, the Central
by such declaration. Government may, by order, not inconsistent
with the provisions of this Scheme, remove the
109 No refund of amount paid under the difficulty:
scheme Provided that no such order shall be made after
Any amount paid in pursuance of a declaration the expiry of a period of two years from the
made under sub-section (1) of section 107 shall not date on which the provisions of this Scheme
be refundable under any circumstances. come into force.
(2) Every order made under this section shall, as
110 Tax dues declared but not paid soon as may be after it is made, be laid before
Where the declarant fails to pay the tax dues, each House of Parliament.
either fully or in part, as declared by him, such dues
alongwith interest thereon shall be recovered under 114 Power to make Rules
the provisions of section 87 of the Chapter. (1) The Central Government may, by notification in
the Official Gazette, make rules for carrying out
111 Failure to make true declaration the provisions of this Scheme.
(1) Where the Commissioner of Central Excise has (2) Without prejudice to the generality of the
reasons to believe that the declaration made by foregoing power, such rules may provide for all
a declarant under this Scheme was substantially or any of the following matters, namely:-
false, he may, for reasons to be recorded in (a) the form and the manner in which a declaration
writing, serve notice on the declarant in respect may be made under sub-section (1) of section
of such declaration requiring him to show cause 107;
why he should not pay the tax dues not paid or (b) the form and the manner of acknowledging
short-paid. the declaration under sub-section (2) of section
(2) No action shall be taken under sub-section (1) 107;
after the expiry of one year from the date of (c) the form and the manner of issuing the
declaration. acknowledgement of discharge of tax dues
(3) The show cause notice issued under sub-section under sub-section (7) of section 107;
(1) shall be deemed to have been issued under (d) any other matter which is to be, or may be,
88
CENVAT Credit Rules, 2004
1 Short Title, Extent and Commencement (iv) moulds and dies, jigs and fixtures;
(1) These rules may be called the CENVAT Credit (v) refractories and refractory materials;
Rules, 2004. (vi) tubes and pipes and fittings thereof;
(2) They extend to the whole of India: (vii) storage tank; and
Provided that nothing contained in these rules (viii) motor vehicles other than those
relating to availment and utilization of credit falling under tariff headings 8702,
of service tax shall apply to the State of Jammu 8703, 8704, 8711 and their chassis
and Kashmir. but including dumpers and tippers
(3) They shall come into force from the date of used
their publication in the Official Gazette. (1) in the factory of the manufacturer
of the final products, but does not
2 Definitions include any equipment or appliance
In these rules, unless the context otherwise used in an office; or
requires,- (1A) outside the factory of the
(a) capital goods means: - manufacturer of the final products for
(A) the following goods, namely:- generation of electricity for captive
(i) all goods falling under Chapter 82, use within the factory; or
Chapter 84, Chapter 85, Chapter (2) for providing output service,
90, heading 6805, grinding wheels (B) motor vehicle designed for transportation
and the like, and parts thereof falling of goods including their chassis registered
under heading 6804 of the First in the name of the service provider, when
Schedule to the Excise Tariff Act; used for-
(ii) pollution control equipment; (i) providing an output service of renting of
(iii) components, spares and accessories of such motor vehicle; or
the goods specified at (i) and (ii); (ii) transportation of inputs and capital
90
structure or a part thereof; or removal, procurement of inputs, accounting,
(b) laying of foundation or making of auditing, financing, recruitment and quality
structures for support of capital control, coaching and training, computer
goods, networking, credit rating, share registry,
except for the provision of service security, business exhibition, legal services,
portion in the execution of a works inward transportation of inputs or capital
contract or construction service as goods and outward transportation upto the
listed under clause (b) of section place of removal;
66E of the Act; but excludes -
(C) capital goods except when used (A) service portion in the execution of a works
as parts or components in the contract and construction services including
manufacture of a final product; service listed under clause (b) of section 66E
(D) motor vehicles; of the Finance Act (hereinafter referred as
(E) any goods, such as food items, goods specified services) in so far as they are used
used in a guesthouse, residential for -
colony, club or a recreation facility (a) construction or execution of works
and clinical establishment, when such contract of a building or a civil
goods are used primarily for personal structure or a part thereof; or
use or consumption of any employee; (b) laying of foundation or making of
and structures for support of capital goods,
(F) any goods which have no relationship except for the provision of one or more
whatsoever with the manufacture of a of the specified services; or
final product. (B) services provided by way of renting of a
Explanation. For the purpose of this clause, motor vehicle, in so far as they relate to a
free warranty means a warranty provided motor vehicle which is not a capital goods;
by the manufacturer, the value of which is or
included in the price of the final product and is (BA) service of general insurance business,
not charged separately from the customer. servicing, repair and maintenance, in so far
(l) input service means any service, - as they relate to a motor vehicle which is
(i) used by a provider of output service for not a capital goods, except when used by -
providing an output service; or (a) a manufacturer of a motor vehicle
(ii) used by a manufacturer, whether in respect of a motor vehicle
directly or indirectly, in or in relation to manufactured by such person; or
the manufacture of final products and (b) an insurance company in respect of a
clearance of final products upto the place motor vehicle insured or reinsured by
of removal, such person; or
and includes services used in relation to (C) such as those provided in relation to
modernisation, renovation or repairs of outdoor catering, beauty treatment, health
a factory, premises of provider of output services, cosmetic and plastic surgery,
service or an office relating to such factory or membership of a club, health and fitness
premises, advertisement or sales promotion, centre, life insurance, health insurance and
market research, storage upto the place of travel benefits extended to employees on
92
(iii) the additional duty of excise leviable under (ixa) the service tax leviable under section 66A
section 3 of the Additional Duties of Excise of the Finance Act;
(Textiles and Textile Articles) Act, 1978 (40 (ixb) the service tax leviable under section 66B
of 1978); of the Finance Act;
(iv) the additional duty of excise leviable under (x) the Education Cess on taxable services
section 3 of the Additional Duties of Excise leviable under section 91 read with section
(Goods of Special Importance) Act, 1957 95 of the Finance (No. 2) Act, 2004 (23 of
(58 of 1957); 2004);
(v) the National Calamity Contingent duty (xa) the Secondary and Higher Education Cess
leviable under section 136 of the Finance on taxable services leviable under section
Act, 2001 (14 of 2001); 136 read with section 140 of the Finance
(vi) the Education Cess on excisable goods Act, 2007 (22 of 2007); and
leviable under section 91 read with section (xi) the additional duty of excise leviable under
93 of the Finance (No. 2) Act, 2004 (23 of section 85 of Finance Act, 2005 (18 of
2004); 2005),
(via) the Secondary and Higher Education paid on -
Cess on excisable goods leviable under (i) any input or capital goods received in the
section 136 read with section 138 of the factory of manufacture of final product
Finance Act, 2007 (22 of 2007); or by the provider of output service on or
(vii) the additional duty leviable under section 3 after the 10th day of September, 2004;
of the Customs Tariff Act, equivalent to the and
duty of excise specified under clauses (i), (ii) any input service received by the
(ii), (iii), (iv), (v), (vi) and (via); manufacturer of final product or by the
Provided that CENVAT credit shall not be provider of output services on or after the
allowed in excess of eighty-five per cent of 10th day of September, 2004,
the additional duty of customs paid under including the said duties, or tax, or cess paid
sub-section (1) of section 3 of the Customs on any input or input service, as the case may
Tariff Act, on ships, boats and other floating be, used in the manufacture of intermediate
structures for breaking up falling under products, by a job-worker availing the benefit
tariff item 8908 00 00 of the First Schedule of exemption specified in the notification of
to the Customs Tariff Act; the Government of India in the Ministry of
(viia) the additional duty leviable under Finance (Department of Revenue), No. 214/86-
sub-section (5) of section 3 of the Customs Central Excise, dated the 25th March, 1986,
Tariff Act: published in the Gazette of India vide number
Provided that a provider of taxable service G.S.R. 547(E), dated the 25th March, 1986,
shall not be eligible to take credit of such and received by the manufacturer for use in, or
additional duty; in relation to, the manufacture of final product,
(viii) the additional duty of excise, leviable on or after the 10th day of September, 2004.
under section 157 of the Finance Act, Provided that the CENVAT credit shall be
2003 (32 of 2003); allowed to be taken of the amount equal to
(ix) the service tax leviable under section 66 of central excise duty paid on the capital goods at
the Finance Act; the time of debonding of the unit in terms of
94
shall, respectively, be utilized only for payment to the credit availed in respect of such inputs or
of duty on final products, in respect of which capital goods and such removal shall be made
exemption under the said respective notifications is under the cover of an invoice referred to in rule
availed of : 9:
Provided that such payment shall not be
Provided also that no credit of the additional duty required to be made where any inputs [or
leviable under sub-section (5) of section 3 of the capital goods] are removed outside the
Customs Tariff Act, shall be utilised for payment of premises of the provider of output service for
service tax on any output service: providing the output service:
Provided further that such payment shall not
Provided also that the CENVAT credit of any duty be required to be made where any inputs are
specified in sub-rule (1), except the National removed outside the factory for providing free
Calamity Contingent duty in item (v) thereof, shall warranty for final products.
not be utilized for payment of the said National (5A) (a) If the capital goods, on which CENVAT
Calamity Contingent duty on goods falling credit has been taken, are removed after being
under tariff items 8517 12 10 and 8517 12 90 used, the manufacturer or provider of output
respectively of the First Schedule of the Central services shall pay an amount equal to the
Excise Tariff: CENVAT Credit taken on the said capital goods
reduced by the percentage points calculated
Provided also that the CENVAT credit of any duty by straight line method as specified below for
specified in sub-rule (1) shall not be utilized for each quarter of a year or part thereof from the
payment of the Clean Energy Cess leviable under date of taking the CENVAT Credit, namely:-
section 83 of the Finance Act, 2010 (14 of 2010): (i) for computers and computer peripherals :
for each quarter in the first year @ 10%
Provided also that the CENVAT credit of any duty
for each quarter in the second year @ 8%
mentioned in sub-rule (1), other than credit of
for each quarter in the third year @5%
additional duty of excise leviable under [section
85 of Finance Act, 2005 (18 of 2005)], shall not for each quarter in the fourth and fifth year @1%
be utilised for payment of said additional duty of
excise on final products. (ii) for capital goods, other than computers
and computer peripherals @ 2.5% for each
Explanation - CENVAT credit cannot be used for quarter:
payment of service tax in respect of services where Provided that if the amount so calculated is less
the person liable to pay tax is the service recipient. than the amount equal to the duty leviable on
transaction value, the amount to be paid shall
(5) When inputs or capital goods, on which be equal to the duty leviable on transaction
CENVAT credit has been taken, are removed value.
as such from the factory, or premises of the
provider of output service, the manufacturer of (b) If the capital goods are cleared as waste and
the final products or provider of output service, scrap, the manufacturer shall pay an amount
as the case may be, shall pay an amount equal equal to the duty leviable on transaction value.
96
on which such undertaking or unit has paid - (iv) the additional duty leviable under section
(A) excise duty leviable under section 3 of the 3 of the Customs Tariff Act, equivalent to
Excise Act read with serial number 2 of the the duty of excise specified under items (i),
notification no. 23/2003-Central Excise, (ii) and (iii) above;
dated 31st March, 2003 [G.S.R. 266(E), (v) the additional duty of excise leviable under
dated the 31st March, 2003]; and section 157 of the Finance Act, 2003 (32
(B) the Education Cess leviable under section 91 of 2003);
read with section 93 of the Finance (No. 2) (vi) the education cess on taxable services
Act, 2004 and the Secondary and Higher leviable under section 91 read with section
Education Cess leviable under section 136 95 of the Finance (No. 2) Act, 2004 (23 of
read with section 138 of the Finance Act, 2004);
2007, on the excise duty referred to in (A), (via) the Secondary and Higher Education Cess
shall be the aggregate of - on taxable services leviable under section
(I) that portion of excise duty referred to in 136 read with section 140 of the Finance
(A), as is equivalent to Act, 2007 (22 of 2007); and
(i) the additional duty leviable under (vii) the additional duty of excise leviable under
sub-section (1) of section 3 of the [section 85 of Finance Act, 2005 (18 of
Customs Tariff Act, which is equal 2005)], shall be utilised towards payment
to the duty of excise under clause of duty of excise or as the case may be,
(a) of sub-section (1) of section 3 of of service tax leviable under the said
the Excise Act; Additional Duties of Excise (Textiles and
(ii) the additional duty leviable under Textile Articles) Act, 1978 or the National
sub-section (5) of section 3 of the Calamity Contingent duty leviable under
Customs Tariff Act; and section 136 of the Finance Act, 2001
(II) the Education Cess and the Secondary and (14 of 2001), or the education cess on
Higher Education Cess referred to in (B). excisable goods leviable under section 91
(b) CENVAT credit in respect of - read with section 93 of the said Finance
(i) the additional duty of excise leviable (No. 2) Act, 2004 (23 of 2004), or the
under section 3 of the Additional Duties Secondary and Higher Education Cess on
of Excise (Textiles and Textile Articles) Act, excisable goods leviable under section
1978 (40 of 1978); 136 read with section 138 of the Finance
(ii) the National Calamity Contingent duty Act, 2007 (22 of 2007) or the additional
leviable under section 136 of the Finance duty of excise leviable under section 157
Act, 2001 (14 of 2001); of the Finance Act, 2003 (32 of 2003),
(iii) the education cess on excisable goods or the education cess on taxable services
leviable under section 91 read with section leviable under section 91 read with section
93 of the Finance (No. 2) Act, 2004 (23 of 95 of the said Finance (No. 2) Act, 2004
2004); (23 of 2004), or the Secondary and Higher
(iiia) the Secondary and Higher Education Cess Education Cess on taxable services leviable
on excisable goods leviable under section under section 136 read with section 140
136 read with section 138 of the Finance of the Finance Act, 2007 (22 of 2007), or
Act, 2007 (22 of 2007); the additional duty of excise leviable under
98
are cleared as such in the same financial year: Illustration. - A manufacturer received
Provided further that the CENVAT credit of the machinery on the 16th day of April, 2002 in
additional duty leviable under sub-section (5) of his factory. CENVAT of two lakh rupees is paid
section 3 of the Customs Tariff Act, in respect on this machinery. The manufacturer can take
of capital goods shall be allowed immediately credit up to a maximum of one lakh rupees in
on receipt of the capital goods in the factory of the financial year 2002-2003, and the balance
a manufacturer: in subsequent years.
Provided also that where an assessee is eligible (3) The CENVAT credit in respect of the capital
to avail of the exemption under a notification goods shall be allowed to a manufacturer,
based on the value of clearances in a financial provider of output service even if the capital
year, the CENVAT credit in respect of capital goods are acquired by him on lease, hire
goods received by such assessee shall be purchase or loan agreement, from a financing
allowed for the whole amount of the duty paid company.
on such capital goods in the same financial (4) The CENVAT credit in respect of capital goods
year: shall not be allowed in respect of that part of
Provided also that the CENVAT credit in the value of capital goods which represents the
respect of capital goods may be taken by the amount of duty on such capital goods, which
provider of output service when the capital the manufacturer or provider of output service
goods are delivered to such provider, subject claims as depreciation under section 32 of the
to maintenance of documentary evidence of Income-tax Act, 1961 (43 of 1961).
delivery and location of the capital goods. (5) (a) The CENVAT credit shall be allowed even
Explanation. - For the removal of doubts, it if any inputs or capital goods as such or after
is hereby clarified that an assessee shall be being partially processed are sent to a job
eligible if his aggregate value of clearances worker for further processing, testing, repair,
of all excisable goods for home consumption re-conditioning [, or for the manufacture
in the preceding financial year computed in the of intermediate goods necessary for the
manner specified in the said notification did manufacture of final products] or any other
not exceed rupees four hundred lakhs. purpose, and it is established from the records,
(b) The balance of CENVAT credit may be taken challans or memos or any other document
in any financial year subsequent to the financial produced by the manufacturer or provider of
year in which the capital goods were received output service taking the CENVAT credit that
in the factory of the manufacturer, or in the the goods are received back in the factory
premises of the provider of output service, if within one hundred and eighty days of their
the capital goods, other than components, being sent to a job worker and if the inputs or
spares and accessories, refractories and the capital goods are not received back within
refractory materials, moulds and dies and one hundred eighty days, the manufacturer or
goods falling under [heading 6805, grinding provider of output service shall pay an amount
wheels and the like, and parts thereof falling equivalent to the CENVAT credit attributable
under heading 6804] of the First Schedule to to the inputs or capital goods by debiting
the Excise Tariff Act, are in the possession of the CENVAT credit or otherwise, but the
the manufacturer of final products, or provider manufacturer or provider of output service can
of output service in such subsequent years. take the CENVAT credit again when the inputs
100
taken. 5 Refund of CENVAT Credit
Explanation III.- In case of a manufacturer who (1) A manufacturer who clears a final product
avails the exemption under a notification based or an intermediate product for export without
on the value of clearances in a financial year payment of duty under bond or letter of
and a service provider who is an individual undertaking, or a service provider who provides an
or proprietary firm or partnership firm, the output service which is exported without payment
expressions, following month and month of of service tax, shall be allowed refund of CENVAT
March occurring in sub-rule (7) shall be read credit as determined by the following formula
respectively as following quarter and quarter subject to procedure, safeguards, conditions and
ending with the month of March. limitations, as may be specified by the Board by
notification in the Official Gazette:
Refund amount = (Export turnover of goods+ Export turnover of services) x Net CENVAT credit
Total turnover
Where,-
(A) Refund amount means the maximum refund that is admissible;
(B) Net CENVAT credit means total CENVAT credit availed on inputs and input services by the
manufacturer or the output service provider reduced by the amount reversed in terms of sub-rule (5C)
of rule 3, during the relevant period;
(C) Export turnover of goods means the value of final products and intermediate products cleared during
the relevant period and exported without payment of Central Excise duty under bond or letter of
undertaking;
(D) Export turnover of services means the value of the export service calculated in the following manner,
namely:-
Export turnover of services = payments received during the relevant period for export services + export
services whose provision has been completed for which payment had been received in advance in any
period prior to the relevant period . advances received for export services for which the provision of
service has not been completed during the relevant period;
(E) Total turnover means sum total of the value of -
(a) all excisable goods cleared during the relevant period including exempted goods, dutiable goods
and excisable goods exported;
(b) export turnover of services determined in terms of clause (D) of sub-rule (1) above and the value of
all other services, during the relevant period; and
(c) all inputs removed as such under sub-rule (5) of rule 3 against an invoice, during the period for
which the claim is filed.
Provided further that no refund of credit shall be 5B Refund of CENVAT credit to service providers
allowed if the manufacturer or provider of output providing services taxed on reverse charge basis
service avails of drawback allowed under the A provider of service providing services notified
Customs and Central Excise Duties and Service Tax under sub-section (2) of section 68 of the Finance
Drawback Rules, 1995, or claims rebate of duty Act and being unable to utilise the CENVAT credit
under the Central Excise Rules, 2002, in respect of availed on inputs and input services for payment
such duty; or claims rebate of service tax under the of service tax on such output services, shall be
Service Tax Rules, 1994 in respect of such tax. allowed refund of such unutilised CENVAT credit
subject to procedure, safeguards, conditions and
Explanation 1- For the purposes of this rule,- limitations, as may be specified by the Board by
(1) export service means a service which is notification in the Official Gazette.
provided as per rule 6A of the Service Tax Rules
1994; 6 Obligation of a manufacturer or producer of
(2) relevant period means the period for which final products and a provider of output service
the claim is filed. (1) The CENVAT credit shall not be allowed on
such quantity of input used in or in relation
Explanation 2.-For the purposes of this rule, the to the manufacture of exempted goods or for
value of services, shall be determined in the same provision of exempted services, or input service
manner as the value for the purposes of sub-rule used in or in relation to the manufacture of
(3) and (3A) of rule 6 is determined. exempted goods and their clearance upto
the place of removal or for provision of
5A Refund of CENVAT credit to units in exempted services,] except in the circumstances
specified areas mentioned in sub-rule (2):
Notwithstanding anything contrary contained in Provided that the CENVAT credit on inputs
these rules, where a manufacturer has cleared final shall not be denied to job worker referred to
products in terms of notification of the Government in rule 12AA of the Central Excise Rules, 2002,
of India in the Ministry of Finance (Department on the ground that the said inputs are used
of Revenue) No. 20/2007-Central Excise, dated in the manufacture of goods cleared without
the 25th April, 2007 and is unable to utilize the payment of duty under the provisions of that
CENVAT credit of duty taken on inputs required for rule.
manufacture of final products specified in the said (2) Where a manufacturer or provider of output
notification, other than final products which are service avails of CENVAT credit in respect of
exempt or subject to nil rate of duty, for payment any inputs or input services and manufactures
102
such final products or provides such output (iii) maintain separate accounts for the receipt,
service which are chargeable to duty or tax as consumption and inventory of inputs as
well as exempted goods or services, then, the provided for in clause (a) of sub-rule (2),
manufacturer or provider of output service shall take CENVAT credit only on inputs under
maintain separate accounts for- subclauses (ii) and (iv) of said clause (a)
(a) the receipt, consumption and inventory of and pay an amount as determined under
inputs used- sub-rule (3A) in respect of input services.
(i) in or in relation to the manufacture of The provisions of sub-clauses (i) and (ii)
exempted goods; of clause (b) and subclauses (i) and (ii) of
(ii) in or in relation to the manufacture of clause (c) of sub-rule (3A) shall not apply for
dutiable final products excluding exempted such payment:
goods; Provided that if any duty of excise is paid
(iii) for the provision of exempted services; on the exempted goods, the same shall be
(iv) for the provision of output services reduced from the amount payable under clause
excluding exempted services; and (i):
(b) the receipt and use of input services- Provided further that if any part of the value
(i) in or in relation to the manufacture of of a taxable service has been exempted on
exempted goods and their clearance upto the condition that no CENVAT credit of inputs
the place of removal; and input services, used for providing such
(ii) in or in relation to the manufacture of taxable service, shall be taken then the amount
dutiable final products, excluding exempted specified in clause (i) shall be six per cent of the
goods, and their clearance upto the place value so exempted:
of removal; Provided that in case of transportation of
(iii) for the provision of exempted services; and goods or passengers by rail the amount
(iv) for the provision of output services required to be paid under clause (i) shall be
excluding exempted services, an amount equal to 2 per cent of value of the
and shall take CENVAT credit only on inputs exempted services.
under sub-clauses (ii) and (iv) of clause (a) Explanation I. - If the manufacturer of goods
and input services under sub-clauses (ii) and or the provider of output service, avails any
(iv) of clause (b).; of the option under this sub-rule, he shall
exercise such option for all exempted goods
(3) Notwithstanding anything contained in manufactured by him or, as the case may be,
sub-rules (1) and (2), the manufacturer of all exempted services provided by him, and
goods or the provider of output service, opting such option shall not be withdrawn during the
not to maintain separate accounts, shall follow remaining part of the financial year.
any one of the following options, as applicable Explanation II. - For removal of doubt, it is
to him, namely :- hereby clarified that the credit shall not be
(i) pay an amount equal to six per cent of value allowed on inputs used exclusively in or in
of the exempted goods and exempted relation to the manufacture of exempted goods
services; or or for provision of exempted services and on
(ii) pay an amount as determined under input services used exclusively in or in relation
sub-rule (3A); or to the manufacture of exempted goods and
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of exempted services = (J/K) multiplied annum from the due date, i.e., 30th June
by L, where J denotes the total value of till the date of payment, where the amount
exempted services provided during the short-paid is not paid within the said due
financial year, K denotes the total value date;
of dutiable goods manufactured and (f) where the amount determined as per
removed plus the total value of output condition (c) is less than the amount
services provided plus the total value determined and paid as per condition (b),
of exempted services provided, during the said manufacturer of goods or the
the financial year and L denotes total provider of output service may adjust the
CENVAT credit taken on inputs during excess amount on his own, by taking credit
the financial year minus H; of such amount;
(iii) the amount attributable to input (g) the manufacturer of goods or the provider
services used in or in relation to of output service shall intimate to the
manufacture of exempted goods jurisdictional Superintendent of Central
and their clearance up to the place Excise, within a period of fifteen days from
of removal or provision of exempted the date of payment or adjustment, as
services = (M/N) multiplied by P, where per condition (d) and (f) respectively, the
[M] denotes total value of exempted following particulars, namely :-
services provided plus the total value (i) details of CENVAT credit attributable
of exempted goods manufactured to exempted goods and exempted
and removed during the financial year, services, monthwise, for the whole
1[N] denotes total value of output and financial year, determined provisionally
exempted services provided, and total as per condition (b),
value of dutiable and exempted goods (ii) CENVAT credit attributable to exempted
manufactured and removed, during the goods and exempted services for the
financial year, and 1[P] denotes total whole financial year, determined as per
CENVAT credit taken on input services condition (c),
during the financial year; (iii) amount short paid determined as per
(d) the manufacturer of goods or the provider condition (d), alongwith the date of
of output service, shall pay an amount payment of the amount short-paid,
equal to the difference between the (iv) interest payable and paid, if any, on the
aggregate amount determined as per amount short-paid, determined as per
condition (c) and the aggregate amount condition (e), and
determined and paid as per condition (v) credit taken on account of excess
(b), on or before the 30th June of the payment, if any, determined as per
succeeding financial year, where the condition f);
amount determined as per condition (c) is (h) where the amount equivalent to CENVAT
more than the amount paid; credit attributable to exempted goods or
(e) the manufacturer of goods or the provider exempted services cannot be determined
of output service, shall, in addition to the provisionally, as prescribed in condition
amount short-paid, be liable to pay interest (b), due to reasons that no dutiable goods
at the rate of twenty-four per cent. per were manufactured and no output service
106
Explanation IV.- In case of a manufacturer who use or supplied to projects funded by them,
avails the exemption under a notification based on which exemption of duty is available
on the value of clearances in a financial year under notification of the Government of
and a service provider who is an individual India in the Ministry of Finance (Department
or proprietary firm or partnership firm, the of Revenue) No. 108/95-Central Excise,
expressions, following month and month of dated the 28th August, 1995, number
March occurring in sub-rules (3) and (3A) shall G.S.R. 602 (E), dated the 28th August,
be read respectively as following quarter and 1995; or
quarter ending with the month of March. (iva) supplied for the use of foreign diplomatic
(3B) Notwithstanding anything contained in missions or consular missions or career
sub-rules (1), (2) and (3), a banking company consular offices or diplomatic agents in
and a financial institution including a terms of the provisions of notification No.
non-banking financial company, engaged 12/2012-Central Excise dated the 17th
in providing services by way of extending March, 2012, number G.S.R. 163(E), dated
deposits, loans or advances , shall pay for every the 17th March, 2012; or
month an amount equal to fifty per cent of (v) cleared for export under bond in terms of
the CENVAT credit availed on inputs and input the provisions of the Central Excise Rules,
services in that month. 2002; or
(4) No CENVAT credit shall be allowed on (vi) gold or silver falling within Chapter 71
capital goods which are used exclusively in of the said First Schedule, arising in the
the manufacture of exempted goods or in course of manufacture of copper or zinc by
providing exempted services, other than the smelting; or
final products which are exempt from the (vii) all goods which are exempt from the duties
whole of the duty of excise leviable thereon of customs leviable under the First Schedule
under any notification where exemption is to the Customs Tariff Act, 1975 (51 of
granted based upon the value or quantity of 1975) and the additional duty leviable
clearances made in a financial year. under sub-section (1) of section 3 of the
(5) Omitted. said Customs Tariff Act when imported into
(6) The provisions of sub-rules (1), (2), (3) and (4) India and are supplied,
shall not be applicable in case the excisable (a) against International Competitive
goods removed without payment of duty are Bidding; or
either - (b) to a power project from which power
(i) cleared to a unit in a special economic zone supply has been tied up through tariff
or to a developer of a special economic based competitive bidding; or
zone for their authorized operations; or (c) to a power project awarded to
(ii) cleared to a hundred per cent export- a developer through tariff based
oriented undertaking; or competitive bidding,
(iii) cleared to a unit in an Electronic Hardware in terms of notification No. 12/2012-
Technology Park or Software Technology Central Excise, dated the 17th March,
Park; or 2012.
(iv) supplied to the United Nations or an (viii) supplies made for setting up of solar power
international organization for their official generation projects or facilities
108
of output service. premises, as the case may be, is registered
in terms of the provisions of Central
8 Storage of input outside the factory of the Excise Rules, 2002;
manufacturer (iv) a first stage dealer or a second stage
The Deputy Commissioner of Central Excise or the dealer, as the case may be, in terms of
Assistant Commissioner of Central Excise, as the the provisions of Central Excise Rules,
case may be, having jurisdiction over the factory 2002; or
of a manufacturer of the final products may, in (b) a supplementary invoice, issued by a
exceptional circumstances having regard to the manufacturer or importer of inputs or capital
nature of the goods and shortage of storage space goods in terms of the provisions of Central
at the premises of such manufacturer, by an order, Excise Rules, 2002 from his factory or depot
permit such manufacturer to store the input in or from the premises of the consignment
respect of which CENVAT credit has been taken, agent of the said manufacturer or importer
outside such factory, subject to such limitations and or from any other premises from where
conditions as he may specify: the goods are sold by, or on behalf of,
the said manufacturer or importer, in case
Provided that where such input is not used in the additional amount of excise duties or
manner specified in these rules for any reason additional duty leviable under section 3
whatsoever, the manufacturer of the final products of the Customs Tariff Act, has been paid,
shall pay an amount equal to the credit availed in except where the additional amount of duty
respect of such input. became recoverable from the manufacturer
or importer of inputs or capital goods on
9 Documents and accounts account of any non-levy or short-levy by
(1) The CENVAT credit shall be taken by the reason of fraud, collusion or any wilful
manufacturer or the provider of output misstatement or suppression of facts or
service or input service distributor, as the case contravention of any provisions of the Excise
may be, on the basis of any of the following Act, or of the Customs Act, 1962 (52 of
documents, namely:- 1962) or the rules made there under with
(a) an invoice issued by - intent to evade payment of duty.
(i) a manufacturer for clearance of - Explanation. - For removal of doubts, it is
(I) inputs or capital goods from his factory clarified that supplementary invoice shall also
or depot or from the premises of include challan or any other similar document
the consignment agent of the said evidencing payment of additional amount of
manufacturer or from any other additional duty leviable under section 3 of
premises from where the goods the Customs Tariff Act; or
are sold by or on behalf of the said (bb) a supplementary invoice, bill or challan
manufacturer; issued by a provider of output service,
(II) inputs or capital goods as such; in terms of the provisions of Service Tax
(ii) an importer; Rules, 1994 except where the additional
(iii) an importer from his depot or from the amount of tax became recoverable from the
premises of the consignment agent of provider of service on account of non-levy or
the said importer if the said depot or the non-payment or short-levy or short-payment
110
submit within ten days from the close of each 9A Information relating to principal inputs
month to the Superintendent of Central Excise, (1) A manufacturer of final products shall furnish
a monthly return in the form specified, by to the Superintendent of Central Excise,
notification, by the Board : annually by 30th April of each Financial Year,
Provided that where a manufacturer is availing a declaration in the Form specified, by a
exemption under a notification based on the notification, by the Board, in respect of each
value or quantity of clearances in a financial of the excisable goods manufactured or to be
year, he shall file a quarterly return in the form manufactured by him, the principal inputs and
specified, by notification, by the Board within the quantity of such principal inputs required
ten days after the close of the quarter to which for use in the manufacture of unit quantity of
the return relates. such final products:
(8) A first stage dealer or a second stage dealer, Provided that for the year 2004-05, such
as the case may be, shall submit within fifteen information shall be furnished latest by 31st
days from the close of each quarter of a year to December, 2004:
the Superintendent of Central Excise, a return (2) If a manufacturer of final products intends
in the form specified, by notification, by the to make any alteration in the information so
Board : furnished under sub-rule (1), he shall furnish
Provided that the first stage dealer or second information to the Superintendent of Central
stage dealer, as the case may be, shall submit Excise together with the reasons for such
the said return electronically. alteration before the proposed change or
(9) The provider of output service availing CENVAT within 15 days of such change in the Form
credit, shall submit a half yearly return in form specified by the Board under sub-rule (1).
specified, by notification, by the Board to the (3) A manufacturer of final products shall submit,
Superintendent of Central Excise, by the end of within ten days from the close of each
the month following the particular quarter or month, to the Superintendent of Central
half year. Excise, a monthly return in the Form specified,
(10) The input service distributor, shall furnish by a notification, by the Board, in respect
a half yearly return in such form as may be of information regarding the receipt and
specified, by notification, by the Board, giving consumption of each principal inputs with
the details of credit received and distributed reference to the quantity of final products
during the said half year to the jurisdictional manufactured by him :
Superintendent of Central Excise, not later than (4) The Central Government may, by notification
the last day of the month following the half and subject to such conditions or limitations,
year period. as may be specified in such notification, specify
(11) The provider of output service, availing CENVAT manufacturers or class of manufacturers who
credit referred to in sub-rule (9) or the input may not be required to furnish declaration
service distributor referred to in sub-rule (10), mentioned in sub-rule (1) or monthly return
as the case may be, may submit a revised mentioned in sub-rule (3).
return to correct a mistake or omission (5) Every assessee shall file electronically the
within a period of sixty days from the date of declaration or the returns, as the case may be,
submission of the return under sub-rule (9) or specified in this rule.
sub-rule (10), as the case may be. Explanation.- For the purposes of this rule,
112
(iv) No. 56/2002-Central Excise, dated the 14th be required to pay an amount equivalent to
November, 2002 [G.S.R. 764(E), dated the the CENVAT credit, if any, allowed to him in
14th November, 2002]; respect of inputs lying in stock or in process or
(v) No. 57/2002-Central Excise, dated the 14th contained in final products lying in stock on the
November, 2002 [G.S.R.. 765(E), dated the date when such option is exercised and after
14th November, 2002]; deducting the said amount from the balance,
(vi) No. 56/2003-Central Excise, dated the 25th if any, lying in his credit, the balance, if any,
June, 2003 [G.S.R. 513 (E), dated the 25th still remaining shall lapse and shall not be
June, 2003]; allowed to be utilized for payment of duty on
(vii) No. 71/2003-Central Excise, dated the 9th any excisable goods, whether cleared for home
September, 2003 [G.S.R. 717 (E), dated the consumption or for export.
9th September, 2003]; (3) A manufacturer or producer of a final product
(viii) No.20/2007-Central Excise, dated the 25th shall be required to pay an amount equivalent
April, 2007 [G.S.R. 307 (E), dated the 25th to the CENVAT credit, if any, taken by him
April, 2007]; and in respect of inputs received for use in the
(ix) No. 1/2010-Central Excise dated the 6th manufacture of the said final product and is
February, 2010 [G.S.R. 62 (E), dated the 6th lying in stock or in process or is contained in
February, 2010]. the final product lying in stock, if,-
(2) The manufacturer or producer shall submit (i) he opts for exemption from whole of the
the monthly return, as specified under these duty of excise leviable on the said final
rules, separately in respect of transferring and product manufactured or produced by him
recipient registered premises. under a notification issued under section
5A of the Act; or
11 Transitional provision (ii) the said final product has been exempted
(1) Any amount of credit earned by a absolutely under section 5A of the Act, and
manufacturer under the CENVAT Credit Rules, after deducting the said amount from the
2002, as they existed prior to the 10th day of balance of CENVAT credit, if any, lying in
September, 2004 or by a provider of output his credit, the balance, if any, still remaining
service under the Service Tax Credit Rules, shall lapse and shall not be allowed to be
2002, as they existed prior to the 10th day of utilized for payment of duty on any other
September, 2004, and remaining unutilized on final product whether cleared for home
that day shall be allowed as CENVAT credit to consumption or for export, or for payment
such manufacturer or provider of output service of service tax on any output service,
under these rules, and be allowed to be utilized whether provided in India or exported.
in accordance with these rules. (4) A provider of output service shall be required
(2) A manufacturer who opts for exemption to pay an amount equivalent to the CENVAT
from the whole of the duty of excise leviable credit, if any, taken by him in respect of inputs
on goods manufactured by him under a received for providing the said service and is
notification based on the value or quantity lying in stock or is contained in the taxable
of clearances in a financial year, and who has service pending to be provided, when he opts
been taking CENVAT credit on inputs or input for exemption from payment of whole of the
services before such option is exercised, shall service tax leviable on such taxable service
114
shall contain the registration number, of Government of India in the Ministry of
name, address of the large tax payer, Finance (Department of Revenue), -
description, classification, time and date (i) No. 32/99-Central Excise, dated the 8th
of removal, mode of transport and vehicle July, 1999 [G.S.R. 508(E), dated 8th July,
registration number, quantity of the goods 1999];
and registration number and name of the (ii) No. 33/99-Central Excise, dated the 8th
consignee: July, 1999 [G.S.R. 509(E), dated 8th July,
1999];
Provided that if the final products (iii) No. 39/2001-Central Excise, dated the
manufactured or produced using the said 31st July, 2001 [G.S.R. 565(E), dated the
inputs are not cleared on payment of 31st July, 2001];
appropriate duties of excise leviable thereon (iv) No. 56/2002-Central Excise, dated the
or are not exported out of India within the 14th November, 2002 [G.S.R. 764(E),
said period of six months from the date of dated the 14th November, 2002];
receipt of the input goods in the recipient (v) No. 57/2002-Central Excise, dated 14th
premises, or such inputs are cleared as such November, 2002 [G.S.R.. 765(E), dated
from the recipient premises, an amount the 14th November, 2002];
equal to the credit taken in respect of such (vi) No. 56/2003-Central Excise, dated the
inputs by the sender premises shall be paid 25th June, 2003 [G.S.R. 513(E), dated
by the recipient premises with interest in the the 25th June, 2003];
manner and rate specified under rule 14 of (vii) No. 71/2003-Central Excise, dated the
these rules. 9th September, 2003 [G.S.R. 717(E),
dated the 9th September, 2003];
Provided further that if such capital goods (vii) No. 20/2007-Central Excise, dated the
are used exclusively in the manufacture of 25th April, 2007 [GSR 307(E), dated the
exempted goods, or such capital goods are 25th April, 2007]; and :
cleared as such from the recipient premises, (ix) No. 1/2010-Central Excise, dated the
an amount equal to the credit taken in 6th February, 2010 [G.S.R. 62 (E), dated
respect of such capital goods by the sender the 6th February, 2010]
premises shall be paid by the recipient
premises with interest in the manner and Provided also that nothing contained in
rate specified under rule 14 of these rules. this sub-rule shall be applicable to a export-
oriented unit or a unit located in a Electronic
Explanation 2. If a large tax payer fails Hardware Technology Park or Software
to pay any amount due in terms of the first Technology Park.
and second provisos, it shall be recovered 2) The first recipient premises may take CENVAT
along with interest in the manner as credit of the amount paid under first proviso
provided under rule 14 of these rules: to sub-rule (1) as if it was a duty paid by the
sender premises who removed such goods on
Provided also that nothing contained in this the basis of a document showing payment of
sub-rule shall be applicable if the recipient such duties.
premises is availing following notifications (3) CENVAT credit of the specified duties taken by
116
12AAA Power to impose restrictions in certain 14 Recovery of CENVAT credit wrongly taken or
types of cases erroneously refunded
Notwithstanding anything contained in these rules, Where the CENVAT credit has been taken and
where the Central Government, having regard utilized wrongly or has been erroneously refunded,
to the extent of misuse of CENVAT credit, nature the same along with interest shall be recovered
and type of such misuse and such other factors as from the manufacturer or the provider of the
may be relevant, is of the opinion that in order to output service and the provisions of sections 11A
prevent the misuse of the provisions of CENVAT and 11AA of the Excise Act or sections 73 and 75
credit as specified in these rules, it is necessary in of the Finance Act, shall apply mutatis mutandis for
the public interest to provide for certain measures effecting such recoveries.
including restrictions on a manufacturer, first stage
and second stage dealer or an exporter, may by 15 Confiscation and penalty
a notification in the Official Gazette, specify the (1) If any person, takes or utilises CENVAT credit
nature of restrictions including restrictions on in respect of input or capital goods or input
utilization of CENVAT credit and suspension of services, wrongly or in contravention of any
registration in case of a dealer and type of facilities of the provisions of these rules, then, all such
to be withdrawn and procedure for issue of such goods shall be liable to confiscation and
order by an officer authorized by the Board such person, shall be liable to a penalty not
exceeding the duty or service tax on such
13 Power of Central Government to notify goods or services, as the case may be, or two
goods for deemed CENVAT credit thousand rupees, whichever is greater.
Notwithstanding anything contained in rule 3, the (2) In a case, where the CENVAT credit in respect
Central Government may, by notification, declare of input or capital goods or input services has
the input or input service on which the duties of been taken or utilised wrongly by reason of
excise, or additional duty of customs or service fraud, collusion or any wilful mis-statement or
tax paid, shall be deemed to have been paid at suppression of facts, or contravention of any
such rate or equivalent to such amount as may be of the provisions of the Excise Act, or of the
specified in that notification and allow CENVAT rules made thereunder with intent to evade
credit of such duty or tax deemed to have been payment of duty, then, the manufacturer shall
paid in such manner and subject to such conditions also be liable to pay penalty in terms of the
as may be specified in that notification even if, provisions of Section 11AC of the Excise Act.
in the case of input, the declared input, or in the (3) In a case, where the CENVAT credit in respect
case of input service, the declared input service, of input or capital goods or input services has
as the case may be, is not used directly by the been taken or utilised wrongly by reason of
manufacturer of final products, or as the case may fraud, collusion or any wilful mis-statement
be, by the provider of output service, declared in or suppression of facts, or contravention of
that notification, but contained in the said final any of the provisions of these rules or of the
products, or as the case may be, used in providing Finance Act or of the rules made thereunder
the output service. with intent to evade payment of service tax,
16 Supplementary provision
(1) Any notification, circular, instruction, standing
order, trade notice or other order issued
under the CENVAT Credit Rules, 2002 or the
Service Tax Credit Rules, 2002, by the Central
Government, the Central Board of Excise and
Customs, the Chief Commissioner of Central
Excise or the Commissioner of Central Excise,
and in force at the commencement of these
rules, shall, to the extent it is relevant and
consistent with these rules, be deemed to
be valid and issued under the corresponding
provisions of these rules.
(2) References in any rule, notification, circular,
instruction, standing order, trade notice or
other order to the CENVAT Credit Rules, 2002
and any provision thereof or, as the case may
be, the Service Tax Credit Rules, 2002 and any
provision thereof shall, on the commencement
of these rules, be construed as references
to the CENVAT Credit Rules, 2004 and any
corresponding provision thereof.
118
Relevant Provisions of Central
Excise Act, 1944
120
the purpose of proving, in any prosecution for the Assistant Commissioner of Central Excise or
an offence under this Act, the truth of the facts Deputy Commissioner of Central Excise before
which it contains, - the expiry of one year from the relevant date
(a) when the person who made the statement in such form and manner as may be prescribed
is dead or cannot be found, or is incapable and the application shall be accompanied by
of giving evidence, or is kept out of such documentary or other evidence (including
the way by the adverse party, or whose the documents referred to in section 12A) as
presence cannot be obtained without an the applicant may furnish to establish that the
amount of delay or expense which, under amount of duty of excise and interest, if any,
the circumstances of the case, the Court paid on such duty in relation to which such
considers unreasonable; or refund is claimed was collected from, or paid
(b) when the person who made the statement by, him and the incidence of such duty and
is examined as a witness in the case before interest, if any, paid on such duty had not been
the Court and the Court is of opinion that, passed on by him to any other person :
having regard to the circumstances of the Provided that where an application for refund
case, the statement should be admitted in has been made before the commencement
evidence in the interests of justice. of the Central Excises and Customs Laws
(2) The provisions of sub-section (1) shall, so far (Amendment) Act, 1991, such application shall
as may be, apply in relation to any proceeding be deemed to have been made under this
under this Act, other than a proceeding sub-section as amended by the said Act and
before a Court, as they apply in relation to a the same shall be dealt with in accordance with
proceeding before a Court. the provisions of sub-section (2) as substituted
by that Act:
9E Application of section 562 of the Code of Provided further that the limitation of one year
Criminal Procedure, 1898, and of the Probation shall not apply where any duty and interest,
of Offenders Act, 1958. if any, paid on such duty has been paid under
(1) Nothing contained in section 562 of the Code protest.
of Criminal Procedure, 1898 (5 of 1898), or in (2) If, on receipt of any such application, the
the Probation of Offenders Act, 1958 (20 of Assistant Commissioner of Central Excise or
1958), shall apply to a person convicted of an Deputy Commissioner of Central Excise is
offence under this Act unless that person is satisfied that the whole or any part of the duty
under eighteen years of age. of excise and interest, if any, paid on such duty
(2) The provisions of sub-section (1) shall have paid by the applicant is refundable, he may
effect notwithstanding anything contained in make an order accordingly and the amount so
sub-section (3) of section 9. determined shall be credited to the Fund :
Provided that the amount of duty of excise
11B Claim for refund of duty and interest, if and interest, if any, paid on such duty as
any, paid on such duty determined by the Assistant Commissioner
(1) Any person claiming refund of any duty of of Central Excise or Deputy Commissioner of
excise and interest, if any, paid on such duty Central Excise under the foregoing provisions of
may make an application for refund of such this sub-section shall, instead of being credited
duty and interest, if any, paid on such duty to to the Fund, be paid to the applicant, if such
122
are loaded, leaves India, or provisionally under this Act or the
(ii) if the goods are exported by land, rules made there under, the date of
the date on which such goods pass adjustment of duty after the final
the frontier, or assessment thereof;
(iii) if the goods are exported by post, (ec) in case where the duty becomes
the date of despatch of goods by refundable as a consequence of
the Post Office concerned to a judgment, decree, order or direction
place outside India; of appellate authority, Appellate
(b) in the case of goods returned for being Tribunal or any court, the date of such
remade, refined, reconditioned, or judgment, decree, order or direction;
subjected to any other similar process, (f) in any other case, the date of payment
in any factory, the date of entry into of duty.
the factory for the purposes aforesaid;
(c) in the case of goods to which 11BB Interest on delayed refunds
banderols are required to be affixed If any duty ordered to be refunded under
if removed for home consumption sub-section (2) of section 11B to any applicant is
but not so required when exported not refunded within three months from the date
outside India, if returned to a factory of receipt of application under sub-section (1) of
after having been removed from such that section, there shall be paid to that applicant
factory for export out of India, the date interest at such rate, not below five per cent and
of entry into the factory; not exceeding thirty per cent per annum as is for
(d) in a case where a manufacturer is the time being fixed by the Central Government,
required to pay a sum, for a certain by Notification in the Official Gazette, on such duty
period, on the basis of the rate fixed by from the date immediately after the expiry of three
the Central Government by notification months from the date of receipt of such application
in the Official Gazette in full discharge till the date of refund of such duty:
of his liability for the duty leviable on Provided that where any duty ordered to be
his production of certain goods, if refunded under sub-section (2) of section 11B
after the manufacturer has made the in respect of an application under sub-section
payment on the basis of such rate for (1) of that section made before the date on
any period but before the expiry of that which the Finance Bill, 1995 receives the assent
period such rate is reduced, the date of of the President, is not refunded within three
such reduction; months from such date, there shall be paid to the
(e) in the case of a person, other than the applicant interest under this section from the date
manufacturer, the date of purchase of immediately after three months from such date, till
the goods by such person; the date of refund of such duty.
(ea) in the case of goods which are exempt Explanation. - Where any order of refund is made
from payment of duty by a special by the Commissioner (Appeals), Appellate Tribunal,
order issued under sub-section (2) of National Tax Tribunal or any court against an order
section 5A, the date of issue of such of the Assistant Commissioner of Central Excise
order; or Deputy Commissioner of Central Excise, under
(eb) in case where duty of excise is paid sub-section (2) of section 11B, the order passed by
124
goods. imposed under this Act on any other Central
Excise Officer who is subordinate to him.
12C Consumer Welfare Fund (2) Notwithstanding anything contained in
(1) There shall be established by the Central sub-section (1), the Commissioner of Central
Government a fund, to be called the Consumer Excise (Appeals) shall not exercise the powers
Welfare Fund. and discharge the duties conferred or imposed
(2) There shall be credited to the Fund, in such on a Central Excise Officer other than those
manner as may be prescribed, - specified in section 14 or Chapter VI-A.
(a) the amount of duty of excise referred
to in sub-section (2) of section 11B 14 Power to summon persons to give evidence
or sub-section (2) of section 11C or and produce documents in inquiries under this
sub-section (2) of section 11D; Act
(b) the amount of duty of customs referred (1) Any Central Excise Officer duly empowered by
to in sub-section (2) of section 27 the Central Government in this behalf, shall
or sub-section (2) of section 28A, or have power to summon any person whose
sub-section (2) of section 28B of the attendance he considers necessary either to
Customs Act, 1962 (52 of 1962); give evidence or to produce a document or
(c) any income from investment of the amount any other thing in any inquiry which such
credited to the Fund and any other monies officer is making for any of the purposes of
received by the Central Government for the this Act. A summons to produce documents
purposes of this Fund. or other things may be for the production of
(d) the surplus amount referred to in certain specified documents or things or for
sub-section (6) of section 73A of the the production of all documents or things of a
Finance Act, 1994 (32 of 1994). certain description in the possession or under
the control of the person summoned.
12D Utilisation of the Fund (2) All persons so summoned shall be bound to
(1) Any money credited to the Fund shall be attend, either in person or by an authorised
utilised by the Central Government for the agent, as such officer may direct; and all
welfare of the consumers in accordance with persons so summoned shall be bound to state
such rules as that Government may make in the truth upon any subject respecting which
this behalf. they are examined or make statements and to
(2) The Central Government shall maintain or, if produce such documents and other things as
it thinks fit, specify the authority which shall may be required:
maintain, proper and separate account and Provided that the exemptions under Sections
other relevant records in relation to the Fund in 132 and 133 of the Code of Civil Procedure,
such form as may be prescribed in consultation 1908 (5 of 1908) shall be applicable to
with the Comptroller and Auditor-General of requisitions for attendance under this section.
India. (3) Every such inquiry as aforesaid shall be deemed
to be a judicial proceeding within the
12E Powers of Central Excise Officers meaning of Section 193 and Section 228 of the
(1) A Central Excise Officer may exercise the Indian Penal Code, 1860 (45 of 1860).
powers and discharge the duties conferred or
126
or a Vice-Chairman and shall consist of two hearing of any such case or matter, referred
other Members. to in the first proviso, the Chairman may, if
(3) The Bench for which the Chairman is the he thinks that the case or matter is of such a
presiding officer shall be the principal Bench nature that it ought to be heard by a Bench
and other Benches shall be known as additional consisting of three Members, constitute such
Benches. Bench and if Vice-Chairman is not one of the
(4) Notwithstanding anything contained in Members, the senior among the Members shall
sub-section (1) and sub-section (2), the act as the presiding officer of such Bench.
Chairman may authorise the Vice-Chairman (7) Notwithstanding anything contained in
or other Member appointed to one Bench the foregoing provisions of this section,
to discharge also the functions of the Vice- the Chairman may, for the disposal of any
Chairman or, as the case may be, other particular case, constitute a special Bench
Member of another Bench. consisting of more than three Members.
(5) The principal Bench shall sit at Delhi and the (8) Subject to the other provisions of this Chapter,
Central Government shall, by notification in the the special Bench shall sit at a place to be fixed
Official Gazette, establish additional Benches at by the Chairman.
such places as it considers necessary.
(6) Notwithstanding anything contained in the 32B Vice-Chairman to act as Chairman or to
foregoing provisions of this section, and subject discharge his functions in certain circumstances
to any rules that may be made in this behalf, (1) In the event of the occurrence of any vacancy
when one of the persons constituting a Bench in the office of the Chairman by reason of
(whether such person be the presiding officer his death, resignation or otherwise, the
or other Member of the Bench) is unable to Vice-Chairman or, as the case may be, such
discharge his functions owing to absence, one of the Vice-Chairmen as the Central
illness or any other cause or in the event of Government may, by notification in the Official
the occurrence of any vacancy either in the Gazette, authorise in this behalf, shall act as
office of the presiding officer or in the office of the Chairman until the date on which a new
one or the other Members of the Bench, the Chairman, appointed in accordance with the
remaining Members may function as the Bench provisions of this Chapter to fill such vacancy,
and if the presiding officer of the Bench is not enters upon his office.
one of the remaining Members, the senior (2) When the Chairman is unable to discharge
among the remaining Members shall act as the his functions owing to absence, illness or any
presiding officer of the Bench: other cause, the Vice-Chairman or, as the case
Provided that if at any stage of the hearing may be, such one of the Vice-Chairmen as the
of any such case or matter, it appears to the Central Government may, by notification in the
presiding officer that the case or matter is of Official Gazette, authorise in this behalf, shall
such a nature that it ought to be heard of by a discharge the functions of the Chairman until
Bench consisting of three Members, the case or the date on which the Chairman resumes his
matter may be referred by the presiding officer duties.
of such Bench to the Chairman for transfer to
such Bench as the Chairman may deem fit.
Provided further that at any stage of the
128
thereunder, the assessee shall not be entitled report along with the relevant records from
to make an application under sub-section (1), the Commissioner of Central Excise having
before the expiry of one hundred and eighty jurisdiction and the Commissioner shall furnish
days from the date of the seizure. the report within a period of thirty days of the
(3) Every application made under sub-section (1) receipt of communication from the Settlement
shall be accompanied by such fees as may be Commission:
prescribed. Provided that where the Commissioner does
(4) An application made under sub-section (1) not furnish the report within the aforesaid
shall not be allowed to be withdrawn by the period of thirty days, the Settlement
applicant. Commission shall proceed further in the matter
without the report of the Commissioner.
32F Procedure on receipt of an application (4) Where a report of the Commissioner called for
under section 32E under sub-section (3) has been furnished within
(1) On receipt of an application under sub-section the period specified in that sub-section, the
(1) of section 32E, the Settlement Commission Settlement Commission may, after examination
shall, within seven days from the date of of such report, if it is of the opinion that any
receipt of the application, issue a notice to the further enquiry or investigation in the matter
applicant to explain in writing as to why the is necessary, direct, for reasons to be recorded
application made by him should be allowed in writing, the Commissioner (Investigation)
to be proceeded with, and after taking into within fifteen days of the receipt of the report,
consideration the explanation provided by the to make or cause to be made such further
applicant, the Settlement Commission, shall, enquiry or investigation and furnish a report
within a period of fourteen days from the date within a period of ninety days of the receipt
of the notice, by an order, allow the application of the communication from the Settlement
to be proceeded with, or reject the application Commission, on the matters covered by the
as the case may be, and the proceedings application and any other matter relating to the
before the Settlement Commission shall abate case:
on the date of rejection : Provided that where the Commissioner
Provided that where no notice has been (Investigation) does not furnish the report
issued or no order has been passed within within the aforesaid period, the Settlement
the aforesaid period by the Settlement Commission shall proceed to pass an order
Commission, the application shall be deemed under sub-section (5) without such report.
to have been allowed to be proceeded with. (5) After examination of the records and the
(2) A copy of every order under sub-section report of the Commissioner of Central Excise
(1), shall be sent to the applicant and to received under sub-section (3), and the report,
the Commissioner of Central Excise having if any, of the Commissioner (Investigation) of
jurisdiction. the Settlement Commission under sub-section
(3) Where an application is allowed or deemed (4), and after giving an opportunity to the
to have been allowed to be proceeded applicant and to the Commissioner of Central
with under sub-section (1), the Settlement Excise having jurisdiction to be heard, either
Commission shall, within seven days from the in person or through a representative duly
date of order under sub-section (1), call for a authorised in this behalf, and after examining
130
may be prescribed. (2) Where an application made under section 32E
(2) Every provisional attachment made by the has been allowed to be proceeded with under
Settlement Commission under sub-section (1) section 32F, the Settlement Commission shall,
shall cease to have effect from the date, the until an order is passed under sub-section (5)
sums due to the Central Government for which of section 32F, have, subject to the provisions
such attachment is made are discharged by of sub-section (4) of that section, exclusive
the applicant and evidence to that effect is jurisdiction to exercise the powers and perform
submitted to the Settlement Commission. the functions of any Central Excise Officer,
under this Act in relation to the case.
32H Power of Settlement Commission to (3) In the absence of any express direction by
reopen completed proceedings the Settlement Commission to the contrary,
If the Settlement Commission is of the opinion (the nothing in this Chapter shall affect the
reasons for such opinion to be recorded by it in operation of the provisions of this Act in so far
writing) that, for the proper disposal of the case as they relate to any matters other than those
pending before it, it is necessary or expedient to before the Settlement Commission.
reopen any proceeding connected with the case (4) The Settlement Commission shall, subject to
but which has been completed under this Act the provisions of this Chapter, have power to
before application for settlement under section regulate its own procedure and the procedure
32E was made, it may, with the concurrence of of Benches thereof in all matters arising out of
the applicant, reopen such proceeding and pass the exercise of its powers, or of the discharge
such order thereon as it thinks fit, as if the case in of its functions, including the places at which
relation to which the application for settlement the Benches shall hold their sittings.
had been made by the applicant under that section
covered such proceeding also: 32J Inspection, etc. of reports
No person shall be entitled to inspect, or obtain
Provided that no proceeding shall be reopened by copies of, any reports made by any Central Excise
the Settlement Commission under this section after Officer to the Settlement Commission; but the
the expiry of five years from the date of application. Settlement Commission may, in its discretion
furnish copies thereof to any such person on
Provided further that no proceeding shall be an application made to it in this behalf and on
reopened by the Settlement Commission under payment of the prescribed fee :
this section in a case where an application under Provided that, for the purpose of enabling any
section 32E is made on or after the 1st day of June, person whose case is under consideration to rebut
2007. any evidence brought on record against him in any
such report, the Settlement Commission shall, on
32 I Powers and procedure of Settlement an application made in this behalf, and on payment
Commissions of the prescribed fee by such person, furnish him
(1) In addition to the powers conferred on the with a certified copy of any such report or part
Settlement Commission under this Chapter, it thereof relevant for the purpose.
shall have all the powers which are vested in a
Central Excise Officer under this Act or the rules
made thereunder.
132
Central Excise Officer shall be excluded. relation to a case, such person is convicted
of any offence under this Act in relation to
32M Order of settlement to be conclusive that case; or
Every order of settlement passed under sub-section (iii) the case of such person is sent back to the
(5) of section 32F shall be conclusive as to the Central Excise Officer having jurisdiction by
matters stated therein and no matter covered by the Settlement Commission under section
such order shall, save as otherwise provided in this 32L,
Chapter, be reopened in any proceeding under this then, he shall not be entitled to apply for
Act or under any other law for the time being in settlement under section 32E in relation to
force. any other matter.
32N Recovery of sums due under order of 32P Proceedings before Settlement Commission
settlement to be judicial proceedings
Any sum specified in an order of settlement passed Any proceedings under this Chapter before the
under sub-section (5) of section 32F may, subject to Settlement Commission shall be deemed to be a
such conditions if any, as may be specified therein, judicial proceeding within the meaning of Sections
be recovered, and any penalty for default in 193 and 228, and for the purposes of Section 196
making payment of such sum may be imposed and of the Indian Penal Code (45 of 1860).
recovered as sums due to the Central Government
in accordance with the provisions under section 33A Adjudication procedure
11 by the Central Excise Officer having jurisdiction (1) The Adjudicating authority shall, in any
over the person who made the application for proceeding under this Chapter or any other
settlement under section 32E. provision of this Act, give an opportunity of
being heard to a party in a proceeding, if the
32O Bar on subsequent application for party so desires.
settlement in certain cases (2) The Adjudicating authority may, if sufficient
(1) Where- cause is shown, at any stage of proceeding
(i) an order of settlement passed under referred to in sub-section (1), grant time, from
sub-section (7) of section 32F, as it stood time to time, to the parties or any of them and
immediately before the commencement of adjourn the hearing for reasons to be recorded
section 122 of the Finance Act ,2007(22 in writing:
of 2007) or sub- section 5 of section 32F, Provided that no such adjournment shall be
provides for the imposition of a penalty granted more than three times to a party
on the person who made the application during the proceeding.
under section 32E for settlement, on the
ground of concealment of particulars of his 34A Confiscation or penalty not to interfere
duty liability; or with other punishments
(ii) after the passing of an order of settlement No confiscation made or penalty imposed under
under the said sub-section (7), as it stood the provisions of the Act or of any rule made
immediately before the commencement of thereunder shall prevent the infliction of any other
section 122 of the Finance Act ,2007(22 of punishment to which the person affected thereby is
2007) or sub- section 5 of section 32F, in liable under the provisions of this Act or under any
134
decision or order appealed against relates to referred to as the appellate authority), under
any duty demanded in respect of goods which the first proviso to section 35F, is required to
are not under the control of Central Excise be refunded consequent upon the order of the
authorities or any penalty levied under this Act, appellate authority and such amount is not
the person desirous of appealing against such refunded within three months from the date of
decision or order shall, pending the appeal, communication of such order to the adjudicating
deposit with the adjudicating authority the authority, unless the operation of the order of the
duty demanded or the penalty levied: appellate authority is stayed by a superior court or
Provided that where in any particular case, tribunal, there shall be paid to the appellant interest
the Commissioner (Appeals) or the Appellate at the rate specified in section 11BB after the expiry
Tribunal is of opinion that the deposit of of three months from the date of communication
duty demanded or penalty levied would of the order of the appellate authority, till the date
cause undue hardship to such person, the of refund of such amount.
Commissioner (Appeals) or, as the case may be,
the Appellate Tribunal, may dispense with such 35G Appeal to High Court
deposit subject to such conditions as he or it (1) An appeal shall lie to the High Court from
may deem fit to impose so as to safeguard the every order passed in appeal by the Appellate
interests of revenue: Tribunal on or after the 1st day of July, 2003
Provided further that where an application is (not being an order relating, among other
filed before the Commissioner (Appeals) for things, to the determination of any question
dispensing with the deposit of duty demanded having a relation to the rate of duty of excise
or penalty levied under the first proviso, the or to the value of goods for purposes of
Commissioner (Appeals) shall, where it is assessment), if the High Court is satisfied that
possible to do so, decide such application the case involves a substantial question of law.
within thirty days from the date of its filing. (2) The Commissioner of Central Excise or the
Explanation. For the purposes of this section other party aggrieved by any order passed by
duty demanded shall include, the Appellate Tribunal may file an appeal to
(i) amount determined under section 11D; the High Court and such appeal under this
(ii) amount of erroneous Cenvat credit taken; sub-section shall be -
(iii) amount payable under rule 57CC of Central (a) filed within one hundred and eighty days
Excise Rules, 1944; from the date on which the order appealed
(iv) amount payable under rule 6 of Cenvat against is received by the Commissioner of
Credit Rules, 2001 or Cenvat Credit Rules, Central Excise or the other party;
2002 or Cenvat Credit Rules, 2004; (b) accompanied by a fee of two hundred
(v) interest payable under the provisions of this rupees where such appeal is filed by the
Act or the rules made thereunder. other party;
(c) in the form of a memorandum of appeal
35FF Interest on delayed refund of amount precisely stating therein the substantial
deposited under the proviso to Section 35F question of law involved.
Where an amount deposited by the appellant in (2A) The High Court may admit an appeal after the
pursuance of an order passed by the Commissioner expiry of the period of one hundred and eighty
(Appeals) or the Appellate Tribunal (hereinafter days referred to in clause (a) of sub-section (2),
136
in sub-section (1). be decided according to the opinion of the
(3A) The High Court may admit an application or majority of the judges who have heard the case
permit the filing of a memorandum of cross including those who first heard it.
objections after the expiry of the relevant
period referred to in sub-section (1) or * This section is to be omitted (from a date to be notified)
by s.30 read with Schedule to the National Tax Tribunal
sub-section (3), if it is satisfied that there was Act, 2005 (49 of 2005)
sufficient cause for not filing the same within
that period. 35K Decision of High Court or Supreme Court
(4) If, on an application made under sub-section on the case stated
(1), the High Court directs the Appellate (1) **[The High Court or] the Supreme Court
Tribunal to refer the question of law raised in hearing any such case shall decide the question
the application, the Appellate Tribunal shall, of law raised therein and shall deliver its
within one hundred and twenty days of the judgment thereon containing the grounds on
receipt of such direction, draw up a statement which such decision is founded and a copy of
of the case and refer it to the High Court. the judgment shall be sent under the seal of
the Court and the signature of the Registrar to
35-I Power of High Court or Supreme Court to the Appellate Tribunal which shall pass such
require statement to be amended* orders as are necessary to dispose of the case
If the High Court or the Supreme Court is not in conformity with such judgment.
satisfied that the statements in a case referred (1A) Where the High Court delivers a judgment in
to it are sufficient to enable it to determine the an appeal filed before it under section 35G,
questions raised thereby, the Court may refer the effect shall be given to the order passed on
case back to the Appellate Tribunal for the purpose the appeal by the concerned Central Excise
of making such additions thereto or alterations Officer on the basis of a certified copy of the
therein as it may direct in that behalf. judgment.
(2) The costs of any reference to **[the High
* This section is to be omitted (from a date to be notified) by
s.30 read with Schedule to the National Tax Tribunal Act, 2005 Court or] an appeal to **[the High Court or]
(49 of 2005) the Supreme Court, ***[as the case may be]
which shall not include the fee for making
35J Case before High Court to be heard by not the reference, shall be in the discretion of the
less than two judges* Court.
(1) When any case has been referred to the High ** The words the High Court or shall be omitted (from
a date to be notified) by s.30 read with Schedule to the
Court [under section 35G or section 35H , it National Tax Tribunal Act, 2005 (49 of 2005)
shall be heard by a Bench of not less than two *** The words as the case may be shall be omitted (from
judges of the High Court and shall be decided a date to be notified) by s.30 read with Schedule to the
National Tax Tribunal Act, 2005 (49 of 2005)
in accordance with the opinion of such judges
or of the majority, if any, of such judges.
35L Appeal to the Supreme Court
(2) Where there is no such majority, the judges
An appeal shall lie to the Supreme Court from-
shall state the point of law upon which they
(a) any judgment of the High Court delivered -
differ and the case shall then be heard upon
(i) in an appeal made under section 35G; or
that point only by one or more of the other
(ii) on a reference made under section 35G by
judges of the High Court, and such point shall
138
as the case may be. respect of any person unless he has been
(4) No person, given a reasonable opportunity of being
(a) who has been dismissed or removed from heard;
Government service; or (b) any person against whom any such order
(b) who is convicted of an offence connected or direction is made may, within one month
with any proceeding under this Act, the of the making of the order or direction,
Customs Act, 1962 (52 of 1962) or the appeal to the Board to have the order or
Gold (Control) Act, 1968 (45 of 1968); or direction cancelled; and
(c) who has become an insolvent, (c) no such order or direction shall take effect
shall be qualified to represent any person under until the expiration of one month from the
sub-section (1), for all times in the case of a making thereof, or, where an appeal has
person referred to in clause (a), and for such been preferred, until the disposal of the
time as the Commissioner of Central Excise or appeal.
the competent authority under the Customs
Act, 1962 or the Gold (Control) Act, 1968, as 35R Appeal not to be filed in certain cases
the case may be, may, by order, determine in (1) The Central Board of Excise and Customs may,
the case of a person referred to in clause (b), from time to time, issue orders or instructions
and for the period during which the insolvency or directions fixing such monetary limits, as it
continues in the case of a person referred to in may deem fit, for the purposes of regulating
clause (c). the filing of appeal, application, revision or
(5) If any person, reference by the Central Excise Officer under
(a) who is a legal practitioner, is found guilty the provisions of this Chapter.
of mis-conduct in his professional capacity (2) Where, in pursuance of the orders or
by any authority entitled to institute instructions or directions, issued under
proceedings against him, an order passed sub-section (1), the Central Excise Officer has
by that authority shall have effect in relation not filed an appeal, application, revision or
to his right to appear before a Central reference against any decision or order passed
Excise Officer or the Appellate Tribunal as under the provisions of this Act, it shall not
it has in relation to his right to practise as a preclude such Central Excise Officer from filing
legal practitioner; appeal, application, revision or reference in any
(b) who is not a legal practitioner, is found other case involving the same or similar issues
guilty of mis-conduct in connection or questions of law.
with any proceedings under this Act by (3) Notwithstanding the fact that no appeal,
the prescribed authority, the prescribed application, revision or reference has been
authority may direct that he shall filed by the Central Excise Officer pursuant to
thenceforth be disqualified to represent any the orders or instructions or directions issued
person under sub-section (1). under sub-section (1), no person, being a party
(6) Any order or direction under clause (b) of in appeal, application, revision or reference
sub-section (4) or clause (b) of sub-section (5) shall contend that the Central Excise Officer
shall be subject to the following conditions, has acquiesced in the decision on the disputed
namely: issue by not filing appeal, application, revision
(a) no such order or direction shall be made in or reference.
140
by a computer (hereinafter referred to as course of the said activities.
a computer printout), if the conditions (3) Where over any period, the function of storing
mentioned in sub-section (2) and the other or processing information for the purposes
provisions contained in this section are of any activities regularly carried on over that
satisfied in relation to the statement and period as mentioned in clause (a) of sub-section
the computer in question, (2) was regularly performed by computers,
shall be deemed to be also a document whether
for the purposes of this Act and the rules a) by a combination of computers operating
made thereunder and shall be admissible over that period; or
in any proceedings thereunder, without b) by different computers operating in
further proof or production of the original, succession over that period; or
as evidence of any contents of the original c) by different combinations of computers
or of any fact stated therein of which direct operating in succession over that period; or
evidence would be admissible. d) in any other manner involving the
(2) The conditions referred to in sub-section (1) successive operation over that period, in
in respect of a computer printout shall be the whatever order, of one or more computers
following, namely: and one or more combinations of
a) the computer printout containing the computers,
statement was produced by the computer all the computers used for that purpose
during the period over which the computer during that period shall be treated for the
was used regularly to store or process purposes of this section as constituting
information for the purposes of any a single computer; and references in this
activities regularly carried on over that section to a computer shall be construed
period by the person having lawful control accordingly.
over the use of the computer; (4) In any proceedings under this Act and the rules
b) during the said period, there was regularly made thereunder where it is desired to give a
supplied to the computer in the ordinary statement in evidence by virtue of this section,
course of the said activities, information a certificate doing any of the following things,
of the kind contained in the statement or that is to say,
of the kind from which the information so a) identifying the document containing the
contained is derived; statement and describing the manner in
c) throughout the material part of the said which it was produced;
period, the computer was operating b) giving such particulars of any device
properly or, if not, then any respect in involved in the production of that
which it was not operating properly or document as may be appropriate for the
was out of operation during that part purpose of showing that the document
of that period was not such as to affect was produced by a computer;
the production of the document or the c) dealing with any of the matters to which
accuracy of the contents; and the conditions mentioned in sub-section (2)
d) the information contained in the statement relate,
reproduced or is derived from information and purporting to be signed by a person
supplied to the computer in the ordinary occupying a responsible official position
Explanation. For the purposes of this section, 37B Instructions to Central Excise Officers
a) computer means any device that receives, The Central Board of Excise and Customs
stores and processes data, applying stipulated constituted under the Central Boards of Revenue
processes to the information and supplying Act, 1963 (54 of 1963), may, if it considers it
results of these processes; and necessary or expedient so to do for the purpose
b) any reference to information being derived of uniformity in the classification of excisable
from other information shall be a reference goods or with respect to levy of duties of excise
to its being derived therefrom by calculation, on such goods, issue such orders, instructions and
comparison or any other process. directions to the Central Excise Officers as it may
deem fit, and such officers and all other persons
employed in the execution of this Act shall observe
142
and follow such orders, instructions and directions been served on the date on which the decision,
of the said Board : order, summons or notice is tendered or
Provided that no such orders, instructions or delivered by post or courier referred to in
directions shall be issued sub-section (1) or a copy thereof is affixed in
a) so as to require any Central Excise Officer to the manner provided in sub-section (1).
make a particular assessment or to dispose of a
particular case in a particular manner; or 37D Rounding off of duty, etc
b) so as to interfere with the discretion of the The amount of duty, interest, penalty, fine or any
Commissioner of Central Excise (Appeals) in the other sum payable, and the amount of refund or
exercise of his appellate functions. any other sum due, under the provisions of this Act
shall be rounded off to the nearest rupee and, for
37C Service of decisions, orders, summons, etc this purpose, where such amount contains a part
(1) Any decision or order passed or any summons of a rupee consisting of paise then, if such part
or notices issued under this Act or the rules is fifty paise or more, it shall be increased to one
made thereunder, shall be served, - rupee and if such part is less than fifty paise it shall
a) by tendering the decision, order, summons be ignored.
or notice, or sending it by registered post
with acknowledgment due or by speed 38A Effect of amendments, etc. of rules,
post with proof of delivery or by courier notifications or orders
approved by the Central Board of Excise Where any rule, notification or order made or
and Customs constituted under the Central issued under this Act or any notification or order
Boards of Revenue Act, 1963, to the person issued under such rule, is amended, repealed,
for whom it is intended or his authorised superseded or rescinded, then, unless a different
agent, if any; intention appears, such amendment, repeal,
b) if the decision, order, summons or notice supersession or rescinding shall not -
cannot be served in the manner provided a) revive anything not in force or existing at
in clause (a), by affixing a copy thereof to the time at which the amendment, repeal,
some conspicuous part of the factory or supersession or rescinding takes effect; or
warehouse or other place of business or b) affect the previous operation of any rule,
usual place of residence of the person for notification or order so amended, repealed,
whom such decision, order, summons or superseded or rescinded or anything duly done
notice, as the case may be, is intended; or suffered thereunder; or
c) if the decision, order, summons or notice c) affect any right, privilege, obligation or liability
cannot be served in the manner provided acquired, accrued or incurred under any rule,
in clauses (a) and (b), by affixing a copy notification or order so amended, repealed,
thereof on the notice board of the officer superseded or rescinded; or
or authority who or which passed such d) affect any penalty, forfeiture or punishment
decision or order or issued such summons incurred in respect of any offence committed
or notice. under or in violation of any rule, notification
(2) Every decision or order passed or any summons or order so amended, repealed, superseded or
or notice issued under this Act or the rules rescinded; or
made thereunder, shall be deemed to have e) affect any investigation, legal proceeding or
144
Negative List of Services
The negative list shall comprise of the following Marketing Committee or Board or services
services, namely: provided by a commission agent for sale or
(a) services by Government or a local authority purchase of agricultural produce;
excluding the following services to the extent (e) trading of goods;
they are not covered elsewhere (f) any process amounting to manufacture or
(i) services by the Department of Posts by production of goods;
way of speed post, express parcel post, life (g) selling of space or time slots for advertisements
insurance and agency services provided to a other than advertisements broadcast by radio
person other than Government; or television;
(ii) services in relation to an aircraft or a vessel, (h) service by way of access to a road or a bridge
inside or outside the precincts of a port or on payment of toll charges;
an airport; (i) betting, gambling or lottery;
(iii) transport of goods or passengers; or (j) admission to entertainment events or access
(iv) support services, other than the services to amusement facilities;
covered under clauses (i) to (iii) above, (k) transmission or distribution of electricity by an
provided to business entities; electricity transmission or distribution utility;
(b) services by the Reserve Bank of India; (l) services by way of
(c) services by a foreign diplomatic mission located (i) pre-school education and education up to
in India; higher secondary school or equivalent;
(d) services relating to agriculture or agricultural (ii) education as a part of a curriculum for
produce by way of obtaining a qualification recognised by any
(i) agricultural operations directly related to law for the time being in force;
production of any agricultural produce (iii) education as a part of an approved
including cultivation, harvesting, threshing, vocational education course;
plant protection or testing; (m) services by way of renting of residential
(ii) supply of farm labour; dwelling for use as residence;
(iii) processes carried out at an agricultural (n) services by way of
farm including tending, pruning, cutting, (i) extending deposits, loans or advances in so
harvesting, drying, cleaning, trimming, sun far as the consideration is represented by
drying, fumigating, curing, sorting, grading, way of interest or discount;
cooling or bulk packaging and such like (ii) inter se sale or purchase of foreign currency
operations which do not alter the essential amongst banks or authorised dealers of
characteristics of agricultural produce but foreign exchange or amongst banks and
make it only marketable for the primary such dealers;
market; (o) service of transportation of passengers, with or
(iv) renting or leasing of agro machinery or without accompanied belongings, by
vacant land with or without a structure (i) a stage carriage;
incidental to its use; (ii) railways in a class other than
(v) loading, unloading, packing, storage or (A) first class; or
warehousing of agricultural produce; (B) an air conditioned coach;
(vi) agricultural extension services; (iii) metro, monorail or tramway;
(vii) services by any Agricultural Produce (iv) inland waterways;
146
Exempted List of Services
Notification No. 25/2012 Service Tax dated (b) an individual as an advocate or a partnership
20 June 2012 (as amended) firm of advocates by way of legal services
1. Services provided to the United Nations or a to,
specified international organization; (i) an advocate or partnership firm of
2. Health care services by a clinical establishment, advocates providing legal services ;
an authorised medical practitioner or (ii) any person other than a business entity;
para-medics; or
3. Services by a veterinary clinic in relation to (iii) a business entity with a turnover up to
health care of animals or birds; rupees ten lakh in the preceding financial
4. Services by an entity registered under section year; or
12AA of the Income-tax Act, 1961 (43 of 1961) (c) a person represented on an arbitral tribunal
by way of charitable activities; to an arbitral tribunal;
5. Services by a person by way of 7. Services by way of technical testing or analysis
(a) renting of precincts of a religious place of newly developed drugs, including vaccines
meant for general public; or and herbal remedies, on human participants
(b) conduct of any religious ceremony; by a clinical research organisation approved to
6. Services provided by conduct clinical trials by the Drug Controller
(a) an arbitral tribunal to General of India;
(i) any person other than a business entity; 8. Services by way of training or coaching in
or recreational activities relating to arts, culture or
(ii) a business entity with a turnover up sports;
to rupees ten lakh in the preceding 9. Services provided to an educational institution
financial year; in respect of education exempted from service
148
Act, 1961 (43 of 1961) and meant 17. Services by way of collecting or providing
predominantly for religious use by general news by an independent journalist, Press
public; Trust of India or United News of India;
(d) a pollution control or effluent treatment 18. Services by way of renting of a hotel,
plant, except located as a part of a factory; inn, guest house, club, campsite or other
or commercial places meant for residential or
a structure meant for funeral, burial or lodging purposes, having declared tariff of
cremation of deceased; a unit of accommodation below rupees one
14. Services by way of construction, erection, thousand per day or equivalent;
commissioning, or installation of original works 19. Services provided in relation to serving of
pertaining to, food or beverages by a restaurant, eating
(a) an airport, port or railways, including joint or a mess, other than those having
monorail or metro; the facility of air-conditioning or central
(b) a single residential unit otherwise than as a air-heating in any part of the establishment,
part of a residential complex; at any time during the year;
(c) low- cost houses up to a carpet area of 19A. Services provided in relation to serving of
60 square metres per house in a housing food or beverages by a canteen maintained
project approved by competent authority in a factory covered under the Factories Act,
empowered under the 'Scheme of 1948 (63 of 1948), having the facility of
Affordable Housing in Partnership' framed air-conditioning or central air-heating at any
by the Ministry of Housing and Urban time during the year;
Poverty Alleviation, Government of India; 20. Services by way of transportation by rail or a
(d) post-harvest storage infrastructure for vessel from one place in India to another of
agricultural produce including a cold the following goods
storages for such purposes; or (a) relief materials meant for victims of
(e) mechanised food grain handling system, natural or man-made disasters, calamities,
machinery or equipment for units accidents or mishap;
processing agricultural produce as food stuff (b) defence or military equipments;
excluding alcoholic beverages; (c) newspaper or magazines registered with
15. Services provided by way of temporary transfer the Registrar of Newspapers;
or permitting the use or enjoyment of a (d) railway equipments or materials;
copyright, (e) agricultural produce;
(a) covered under clause (a) of sub-section (1) (f) foodstuff including flours, tea, coffee,
of section 13 of the Copyright Act, 1957 jaggery, sugar, milk products, salt and
(14 of 1957), relating to original literary, edible oil, excluding alcoholic beverages;
dramatic, musical or artistic works; or or
(b) of cinematograph films for exhibition in a (g) chemical fertilizer and oilcakes;
cinema hall or cinema theatre; 21. Services provided by a goods transport agency,
16. Services by a performing artist in folk or by way of transport in a goods carriage of,-
classical art forms of (i) music, or (ii) dance, or (a) agricultural produce;
(iii) theatre, excluding services provided by such (b) goods, where gross amount charged for the
artist as a brand ambassador; transportation of goods on a consignment
150
lakh rupees during the preceding financial 30. Carrying out an intermediate production
year; and process as job work in relation to
(b) a period of three years has not been elapsed (a) agriculture, printing or textile processing;
from the date of entering into an agreement (b) cut and polished diamonds and gemstones;
as an incubatee; or plain and studded jewellery of gold and
28. Service by an unincorporated body or a non- other precious metals, falling under Chapter
profit entity registered under any law for the 71 of the Central Excise Tariff Act ,1985 (5
time being in force, to its own members by of 1986);
way of reimbursement of charges or share of (c) any goods on which appropriate duty is
contribution payable by the principal manufacturer; or
(a) as a trade union; (d) processes of electroplating, zinc plating,
(b) for the provision of carrying out any activity anodizing, heat treatment, powder coating,
which is exempt from the levy of service tax; painting including spray painting or auto
or black, during the course of manufacture of
(c) up to an amount of five thousand rupees parts of cycles or sewing machines upto an
per month per member for sourcing of aggregate value of taxable service of the
goods or services from a third person for the specified processes of one hundred and fifty
common use of its members in a housing lakh rupees in a financial year subject to the
society or a residential complex; condition that such aggregate value had not
29. Services by the following persons in respective exceeded one hundred and fifty lakh rupees
capacities during the preceding financial year;
(a) sub-broker or an authorised person to a 31. Services by an organiser to any person in
stock broker; respect of a business exhibition held outside
(b) authorised person to a member of a India;
commodity exchange; 32. Services by way of making telephone calls
(c) mutual fund agent to a mutual fund or asset from
management company; (a) departmentally run public telephone;
(d) distributor to a mutual fund or asset (b) guaranteed public telephone operating only
management company; for local calls; or
(e) selling or marketing agent of lottery tickets (c) free telephone at airport and hospital where
to a distributer or a selling agent; no bills are being issued;
(f) selling agent or a distributer of SIM cards or 33. Services by way of slaughtering of animals;
recharge coupon vouchers; 34. Services received from a provider of service
(g) business facilitator or a business located in a non- taxable territory by
correspondent to a banking company or an (a) Government, a local authority, a
insurance company, in a rural area; or governmental authority or an individual
(h) sub-contractor providing services by way in relation to any purpose other than
of works contract to another contractor commerce, industry or any other business or
providing works contract services which are profession;
exempt; (b) an entity registered under section 12AA
152
other institution by, whatever name the Motor Vehicles Act, 1988 (59 of 1988);
called, that offers services or facilities (n) "declared tariff" includes charges for
requiring diagnosis or treatment or care all amenities provided in the unit of
for illness, injury, deformity, abnormality accommodation (given on rent for stay) like
or pregnancy in any recognised system of furniture, air-conditioner, refrigerators or
medicines in India, or a place established any other amenities, but without excluding
as an independent entity or a part of an any discount offered on the published
establishment to carry out diagnostic or charges for such unit;
investigative services of diseases; (o) "distributor or selling agent" has the
(k) "charitable activities" means activities meaning assigned to them in clause (c) of
relating to rule 2 of the Lottery (Regulation) Rules,
(i) public health by way of 2010 notified by the Government of India
(a) care or counseling of (i) terminally in the Ministry of Home Affairs, published in
ill persons or persons with severe the Gazette of India, Extraordinary, Part-II,
physical or mental disability, (ii) Section 3, Sub-section (i), vide number
persons afflicted with HIV or G.S.R. 278(E), dated the 1st April, 2010
AIDS, or (iii) persons addicted to a and shall include distributor or selling agent
dependence-forming substance such authorised by the lottery- organising State;
as narcotics drugs or alcohol; or (p) "general insurance business" has the
(b) public awareness of preventive meaning assigned to it in clause (g) of
health, family planning or prevention section 3 of General Insurance Business
of HIV infection; (Nationalisation) Act, 1972 (57 of 1972);
(ii) advancement of religion or spirituality; (q) "general public" means the body of people
(iii) advancement of educational at large sufficiently defined by some
programmes or skill development common quality of public or impersonal
relating to,- nature;
(a) abandoned, orphaned or homeless (r) "goods carriage" has the meaning assigned
children; to it in clause (14) of section 2 of the Motor
(b) physically or mentally abused and Vehicles Act, 1988 (59 of 1988);
traumatized persons; (s) "governmental authority'' means a
(c) prisoners; or board, or an authority or any other body
(d) persons over the age of 65 years established with 90% or more participation
residing in a rural area; by way of equity or control by Government
(iv) preservation of environment including and set up by an Act of the Parliament or a
watershed, forests and wildlife; State Legislature to carry out any function
(l) "commodity exchange" means an entrusted to a municipality under article
association as defined in section 2(j) and 243W of the Constitution;
recognized under section 6 of the Forward (t) "health care services" means any service
Contracts (Regulation) Act,1952 (74 of by way of diagnosis or treatment or care
1952); for illness, injury, deformity, abnormality
(m) "contract carriage" has the meaning or pregnancy in any recognised system of
assigned to it in clause (7) of section 2 of medicines in India and includes services by
154
meaning assigned to it in clause (42) of
section 2 of the Motor Vehicles Act, 1988
(59 of 1988);
(zh) "sub-broker" has the meaning assigned
to it in sub-clause (gc) of clause 2 of the
Securities and Exchange Board of India
(Stock Brokers and Sub-brokers) Regulations,
1992;
(zi) "trade union" has the meaning assigned
to it in clause (h) of section 2 of the Trade
Unions Act, 1926 (16 of 1926).
In exercise of the powers conferred by sub-section column (2) of the Table below, from so much
(1) of section 93 of the Finance Act, 1994 (32 of the service tax leviable thereon under section
of 1994) (hereinafter referred to as the said 66B of the said Act, as is in excess of the service
Act), and in supersession of notification number tax calculated on a value which is equivalent to a
13/2012- Service Tax, dated the 17th March, 2012, percentage specified in the corresponding entry
published in the Gazette of India, Extraordinary, in column (3) of the said Table, of the amount
Part II, section 3, Sub-section (i) vide number G.S.R. charged by such service provider for providing the
211 (E), dated the 17th March, 2012, the Central said taxable service, unless specified otherwise,
Government, being satisfied that it is necessary subject to the relevant conditions specified in the
in the public interest so to do, hereby exempts corresponding entry in column (4) of the said
the taxable service of the description specified in table.
Table
Sl. No. Description of taxable service Percentage Conditions
(1) (2) (3) (4)
1 Services in relation to financial leasing including 10 Nil
hire purchase
2 Transport of goods by rail 30 Nil
3 Transport of passengers, with or without 30 Nil
accompanied belongings by rail
4 Bundled service by way of supply of food 70 (i) CENVAT credit on any goods classifiable under
or any other article of human consumption Chapters 1 to 22 of the Central Excise Tariff Act,
or any drink, in a premises (including hotel, 1985 (5 of 1986) used for providing the taxable
convention center, club, pandal, shamiana service, has not been taken under the provisions
or any other place, specially arranged for of the CENVAT Credit Rules, 2004.
organizing a function) together with renting of
such premises
5 Transport of passengers by air, with or without 40 CENVAT credit on inputs and capital goods, used
accompanied belongings for providing the taxable service, has not been
taken under the provisions of the CENVAT Credit
Rules, 2004.
6 Renting of hotels, inns, guest houses, clubs, 60 Same as above.
campsites or other commercial places meant
for residential or lodging purposes.
7 Services of goods transport agency in relation 25 CENVAT credit on inputs, capital goods and input
to transportation of goods. services, used for providing the taxable service,
has not been taken under the provisions of the
CENVAT Credit Rules, 2004.
8 Services provided in relation to chit 70 Same as above.
156
9 Renting of any motor vehicle designed to carry 40 Same as above.
passengers
10 Transport of goods in a vessel 50 Same as above.
11 Services by a tour operator in relation to,- 25 (i) CENVAT credit on inputs, capital goods and
(i) a package tour input services, used for providing the taxable
service, has not been taken under the provisions
of the CENVAT Credit Rules, 2004.
(ii) a tour, if the tour operator is providing 10 (i) CENVAT credit on inputs, capital goods and
services solely of arranging or booking input services, used for providing the taxable
accommodation for any person in relation to service, has not been taken under the provisions
a tour of the CENVAT Credit Rules, 2004.
(iii) any services other than specified at (i) and 40 (i) CENVAT credit on inputs, capital goods and
(ii) above. input services, used for providing the taxable
service, has not been taken under the provisions
of the CENVAT Credit Rules, 2004.
(ii)The bill issued indicates that the amount
charged in the bill is the gross amount charged
for such a tour.
12 Construction of a complex, building, civil (i) CENVAT credit on inputs used for providing
structure or a part thereof, intended for a the taxable service has not been taken under the
sale to a buyer, wholly or partly except where provisions of the CENVAT Credit Rules, 2004.
entire consideration is received after issuance (ii) The value of land is included in the amount
of completion certificate by the competent charged from the service receiver.
authority,-
(a) for a residential unit satisfying both the 25
following conditions, namely:-
(i) the carpet area of the unit is less than 2000
square feet; and
(ii) the amount charged for the unit is less than
rupees one crore;
(b) for other than the (a) above 30
158
Reverse Charge Notifictaion
In exercise of the powers conferred by sub-section (e) any body corporate established, by or
(2) of section 68 of the Finance Act, 1994 (32 of under any law; or
1994), and in supersession of (i) notification of the (f) any partnership firm whether registered or
Government of India in the Ministry of Finance not under any law including association
(Department of Revenue), No. 15/2012-Service of persons;
Tax, dated the 17th March, 2012, published in the (iii) provided or agreed to be provided by way
Gazette of India, Extraordinary, Part II, Section 3, of sponsorship to anybody corporate or
Sub-section (i),vide number G.S.R 213(E), dated partnership firm located in the taxable
the 17th March, 2012, and (ii) notification of the territory;
Government of India in the Ministry of Finance (iv) provided or agreed to be provided by,-
(Department of Revenue), No. 36/2004-Service Tax, (A) an arbitral tribunal, or
dated the 31st December, 2004, published in the (B) an individual advocate or a firm of advocates by
Gazette of India, Extraordinary, Part II, Section 3, way of legal services, or
Sub-section (i), vide number G.S.R 849 (E), dated (C) Government or local authority by way of
the 31st December, 2004, except as respects support services excluding,-
things done or omitted to be done before such (1) renting of immovable property, and
supersession, the Central Government hereby (2) services specified in sub-clauses (i), (ii)
notifies the following taxable services and the and (iii) of clause (a) of section 66D of the
extent of service tax payable thereon by the person Finance Act, 1994, to any business entity
liable to pay service tax for the purposes of the said located in the taxable territory;
sub-section, namely:- (iva) provided or agreed to be provided by
a director of a company to the said
I. The taxable services,- company;
(A) (i) provided or agreed to be provided by an (v) provided or agreed to be provided
insurance agent to any person carrying on by way of renting of a motor vehicle
the insurance business; designed to carry passengers to any
(ii) provided or agreed to be provided by person who is not in the similar line of
a goods transport agency in respect of business or supply of manpower for any
transportation of goods by road, where the purpose or security services or service
person liable to pay freight is, portion in execution of works contract
(a) any factory registered under or governed by any individual, Hindu Undivided
by the Factories Act, 1948 (63 of 1948); Family or partnership firm, whether
(b) any society registered under the Societies registered or not, including association
Registration Act, 1860 (21 of 1860) or of persons, located in the taxable
under any other law for the time being in territory to a business entity registered
force in any part of India; as body corporate, located in the
(c) any co-operative society established by or taxable territory;
under any law; (B) provided or agreed to be provided by any
(d) any dealer of excisable goods, who is person which is located in a non-taxable
registered under the Central Excise Act, territory and received by any person located in
1944 (1 of 1944) or the rules made the taxable territory;
thereunder; (II) The extent of service tax payable thereon by
160
8 in respect of services provided or agreed to be 25% 75%
provided by way of supply of manpower for any
purpose or security services
9 in respect of services provided or agreed to be 50% 50%
provided in service portion in execution of works
contract
10 in respect of any taxable services provided or Nil 100%
agreed to be provided by any person who is
located in a non-taxable territory and received by
any person located in the taxable territory
Explanation-I. - The person who pays or is liable to CORRIGENDUM Dated 29th June, 2012
pay freight for the transportation of goods by road In the notification of the Government of India
in goods carriage, located in the taxable territory in the Ministry of Finance (Department of
shall be treated as the person who receives the Revenue), No. 30/2012-Service Tax, dated the 20
service for the purpose of this notification. th June, 2012 published in the Gazette of India,
Extraordinary, Part II, Section 3, Sub-section (i) vide
Explanation-II. - In works contract services, where number G.S.R. 472 (E), dated the 20 th June, 2012,
both service provider and service recipient is the in para I, in clause (A), in sub-clause (iv), in item
persons liable to pay tax, the service recipient has (B),-
the option of choosing the valuation method as per for " support", read " legal".
choice, independent of valuation method adopted
by the provider of service.
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