Service Tax Act Rules

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India's Service Tax Act has been added to and altered since its creation in 1994.

The Service Tax Act is a part of India’s Finance Act of 1994. This act deals with determining the amount of tax a person may be charged with in return for a service being provided by a qualified professional. Along with this are the penalties involved if the service tax isn’t paid within the requisite amount of time.

  1. Classification & Valuation

    • In its broadest terms, a taxable service is any service that either has been or will be provided by one party for another. The act is very detailed in listing what constitutes a service “provider.” Professions and institutions such as stockbrokers, travel agents, accountants, photographers and production agencies (along with many other connected professions) are what the Indian government has deemed a service provider. The amount of service tax that’s applicable is determined based on the value of the service and what was necessary to complete the contracted service. The method of compensation (money or another non-monetary form of payment) doesn’t factor into the service tax’s value.

    Provisional Attachment of Property

    • If a tax hasn’t been paid within one year of the service being completed, the Central Excise Officer requires that person to show why the payment hasn’t been made. To ensure that a provider’s revenue doesn’t suffer during the ensuing hearings, the Central Excise Officer is permitted to attach any immovable property equal to the value of the tax to the notice. Any provisional attachments can remain a part of the notice anywhere between 6 months to 2 years. Following the first 6 months’ attachment, the Chief Commissioner of Central Excise must give a reason why the attachment should continue. While the provision is in place, the owner of the property isn’t allowed to mortgage, lease or transfer the property unless he has the express permission of the Commissioner of Central Excise.

    Publication of Names

    • The Commissioner of Central Excise may decide that it’s in the public’s best interest to find out the names of those involved in court cases pertaining to the failure to pay service taxes. Once the Commissioner has deemed it necessary to reveal the names, he then passes notice onto the Chief Commissioner. The Chief Commissioner then has 15 days to decide whether or not the Central Government is justified in releasing the names to the public. If he agrees with the Commissioner, the proposal is presented before the Central Government who has the final say. While the names may be published, any incurred penalties cannot be made public until the appeal process has been completed.

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