Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: empanelment :: ACCOUNTING STANDARDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: form 3cd :: due date for vat payment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: VAT Audit :: VAT RATES :: cpt :: articles on VAT and GST in India :: ACCOUNTING STANDARD :: Central Excise rule to resale the machines to a new company
 
 
News Headlines »
 GST Council fails to break deadlock over indirect tax regime, next meet on Dec 11 and 12 to hammer out differences
 Invoking Writ Jurisdiction For Income Tax Matters
 How to file income-tax returns online
 How Income Tax Returns Are Scrutinised
 All About New Income Disclosure Scheme to make Demonetisation successful
 Your deposit may draw income tax notice
 Accepting payment under IDS 2016
 New disclosure scheme could see 50% tax and 4-year limit on cash use for unaccounted deposits
 Pay 50% tax on unaccounted deposits, or 85% if caught, says Modi government
 Deadline to pay property tax in old currency extended
 Cabinet clears amendments to Income Tax Act

Customs board seeks to widen service tax net
October, 16th 2006

The Central Board of Excise and Customs (CBEC) is set to widen the service tax net through clarificatory circulars. The drafts of such circulars have been put up on the CBEC website for comments. 
 
The draft circulars deal with services rendered at open cast mines, production of alcoholic beverages and international roaming services to in-bound subscribers. 
 
Mining companies have argued that activities such as excavation, drilling, earthmoving and demolition services are integral part of open cast mining activity although they may amount to preparatory services (i.e. site preparation) in case of deep mining. 
 
The draft circular has merely relied on the definition of taxable service namely, Site formation and clearance, excavation and earthmoving and demolition service and its own clarificatory circular to counter the view of the mining companies, without addressing the distinction that the mining companies have drawn between the nature of activities in deep mining and open cast mining. 
 
The draft circular says that the definition of open cast working itself calls the open cast mining activity as excavation for searching for or obtaining any material, conveniently omitting to take note that the definition amounts to calling excavation as mining activity and not the other way round. 
 
In open cast mining, contractors deploy workers and machinery for extraction, breaking of coal, conversion of coal layers into lumps etc. The draft circular says that these amount to production or processing of goods and should be taxed under the category business auxiliary services. 
 
The draft circular also covers under cargo handling services simple activities like loading, unloading of the layers of mud, boulders etc which are of no market value without involving packing, repacking or filling up containers etc. Even services like transport of coal within the premises of the mines amounts to transport of goods by road and must be taxed, says the circular. 
 
On the issue of collecting service tax from distillers for blending, manufacture, bottling or labelling etc. on a job-work basis, in respect of Indian Made Foreign Liquor on behalf of the brand owner, the CBEC seems to be on a stronger ground. 
 
The law ministry (on the basis of Supreme Court judgment in the matter of Gujarat Ambuja Cements Ltd versus UOI (2005)4 SCC 214, and TN Kalayana Mandapam Association versus UOI (2204) 5SCC 632, wherein service tax levy has been upheld on the service tax aspects of activities which are otherwise a part of the State List) has opined that levy of service tax on distillers is not constitutionally ultra vires but impinges on the legislative competence of the State Legislature to impose excise duties. 
 
The business auxiliary service, inter alia, covers production or processing of goods on behalf of clients provided such activity of production or processing does not amount to manufacture within the meaning of clause (f) of Section 2 of the Central Excise Act, 1944. 
 
The draft circular also says that the domestic telecom operators providing international roaming service to in-bound roamers are liable to pay service tax on the amount received through the home network on account of service provided to such international roaming subscriber, as the essential characteristic of the service is telephone connection, even if the domestic telecom operator does not bill the in-bound roamer. 
 
The service is delivered and consumed in India and therefore not export of services 

T N C Rajagopalan

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Work Flow Workflow Software Software Automation Workflow automation Software Design Workflow Design Business Work Flow Workflow automation tools

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions