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: list of goods taxed at 4% :: articles on VAT and GST in India :: cpt :: VAT RATES :: due date for vat payment :: VAT Audit :: Central Excise rule to resale the machines to a new company :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS :: ACCOUNTING STANDARD :: empanelment :: TDS :: form 3cd
 
 
Service Tax »
 GST to rate taxpayers, businesses on payment record, make ratings public
 7 major benefits of Goods and Services Tax
 100 Opening GST Profiles- Indirect Taxation- ALL Industries
 New Opening Sr. Manager-Indirect Tax For A Leading Power Company
 Tax Collected At Source Under GST Regime
 India's GST challenge makes Donald Trump's tax overhaul look easy
 What does GST hold for Indian youth?
 GST will help India move towards becoming a commercial union
 Friendly advance ruling mechanism to smoothen ride under GST regime
 GST impact: Small businesses could under-report income initially
 The art of doing business under GST

Companies will have to pay service tax on services availed from government from next fiscal year
March, 09th 2016

Indian companies will have to pay service tax on any service they avail from the government or local authority from the next fiscal year, broadening the scope of the levy to include not just spectrum but all auctions, right of way, licence fees and development rights. These will all attract service tax, now applied at 15%, inclusive of two cesses. The government has notified a provision of the last Budget that will kick in on April 1. Companies will have to pay service tax on services availed from government from next fiscal year

This will bring almost every service provided by it to companies under the tax net. "This is in line with (proposed) goods and services tax ( GST) wherein everything is taxed," a senior government official said, putting the move in context. "Some business support services provided by the government were already under the tax net and this now completes the whole package. Globally, similar regimes are followed as it enables seamless flow of credit."

According to the Budget "all services provided by the government or local authority to a business entity, except the services that are specifically exempted, or covered by any other entry in the negative list, shall be liable to service tax".

Services provided by the government or local authorities, excluding certain specified ones, are currently in the negative list, implying that no service tax can be levied on them.

Under the negative list system, all services are taxed unless specifically mentioned in the list.

The Finance Act, 2015, has made an enabling provision to exclude all services provided by the government or local authorities to a business entity from the negative list. The provision, however, does not cover government services provided to individuals.

"Thus, all services provided by the government or local authority to a business entity, except the services that are specifically exempted, or covered by any other entry in the negative list, shall be liable to service tax," said the Budget.

That means if a telecom company wants to lay cables, it will need permission from the local authority and there will be a service tax levied on this right of way. Mine auctions and development rights for land in the nature of government providing a service by allowing exploitation of a resource becomes taxable.

A large number of government obligations and functions are regarded as services provided by it, pointed out EY partner Bipin Sapra, calling for greater explanation.

"There is an urgent need for clarification as the government and local authority provide a number of services/obligations on which reverse charge will get potentially attracted," he said.

"Since a number of these recipients are not current service taxpayers, this has a potential for huge litigation."

The tax payable will be eligible for input tax credit if the service so availed goes into producing other goods and services. The business will be able to set off this tax against its excise or service tax liability.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Content Management System development CMS development Content Management Solutions CMS Solutions Content Management Services CMS Services CMS Software

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