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: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: due date for vat payment :: Central Excise rule to resale the machines to a new company :: VAT Audit :: TDS :: articles on VAT and GST in India :: ACCOUNTING STANDARD :: cpt :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARDS :: list of goods taxed at 4% :: form 3cd :: VAT RATES
 
 
News Headlines »
 8 benefits you must know about this tax-saving mutual fund
 10 most important income-tax changes which will apply from April 1
 Delhi: 54 CAs, company secretaries on radar in I-T crackdown against black money
 10 Income Tax Rules That Will Change From April. See Details Herea
 Looking for last-minute tax planning with Section 80C investments? Here's help
 Aadhaar mandatory for filing income tax return
 Will Aadhaar linkage solve India's income tax woes?
 GST roll out from July 1 will make goods cheaper: Jaitley
 Aadhaar To Be Mandatory For Filing Income Tax Return, PAN Application
 7 best tax-saving solutions which can help you save money
  No proposal to replace Income Tax with Banking Cash Transaction Tax

Now chit funds to pay service tax
August, 25th 2007
Business chit funds and sub-contractors will now have to pay service tax. In a master circular that supersedes all previous circulars on the scope, valuation and classification of taxable services, the government clarified on Thursday that these two entities are liable to pay service tax.

In Union Budget 2007-08, the government had brought cash management services under the service tax net. However, there were doubts whether it covered the business chit fund service. The Central Bureau of Excise & Customs (CBEC) has now clarified that business chit funds will attract 12% service tax and the education cess, while simple chit funds will not.

This is in line with RBIs view that the business of a chit fund is to mobilise cash from subscribers and to keep it working. Therefore, the activity of chit funds is in the nature of cash management, which is provided for a consideration.

Therefore, it is leviable to service tax under banking and other financial services. In the case of simple chit funds, no consideration is paid or received for the services provided and, therefore, the question of levy of service tax does not arise.

The circular also clarifies that sub-contractors are liable to pay service tax.

In cases where the builder or developer constructs a residential complex of more than 12 residential units by engaging a contractor, the contractor is liable to pay service tax on the gross amount charged for the construction services. If the builder undertakes construction work on his own without engaging the services of any other person, then the question of providing taxable service does not arise, CBEC said.

Thursdays master circular includes all clarifications issued by the government in the last few years. However, the circular will have to be seen with other circulars issued at the time of the budget, said PWC principal consultant Anita Rastogi.

With the issue of this circular, all earlier clarifications issued on technical issues relating to service tax stand withdrawn. This circular is not to be treated as part of law and does not override the legal provisions. The relevant statutory provisions must be referred to and they will prevail, CBEC said.
 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Company Overview

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