SERVICE
TAX RULES
Service
Tax Rules, 1994
Notification
No. 2/94-Service Tax, dated 28-6-1994 -(amended upto date)-In
exercise of the powers conferred by sub-section (1), read with
sub-section (2) of section 94 of the Finance Act, 1994 (32 of
1994), the Central Government hereby makes the following rules
for the purpose of the assessment and collection of service tax,
namely :—
1.
Short title and commencement.
1.
(1) These rules may be called the Service Tax Rules, 1994.
(2)
They shall come into force on the 1st day of July, 1994.
2.
Definitions.
2.(1)
In these rules, unless the context otherwise requires,—
(a)
“Act” means the Finance Act, 1994
(32 of 1994) ;
(b)
“assessment” includes self-assessment
of service tax by the assessee, reassessment, provisional assessment,
best judgment assessment and any order of assessment in which
the tax assessed is nil; determination
of the interest on the tax assessed or reassessed;]
(c)
“Form” means a form appended to these
rules ;
(cc)
“half-year” means the period between
1st April to 30th September or 1st October to 31st March of
a financial year;]
(ccc)
“input service distributor” has the
meaning assigned to it in clause (m) of rule 2 of the CENVAT Credit
Rules, 2004;]
(d)
“person liable for paying the service tax”
means,—
(i)
in relation to a telephone connection or pager or a communication
through telegraph or telex or a facsimile
communication or a leased circuit,—
(a)
the Director General of Posts and Telegraphs, referred to in clause
(6) of section 3 of the Indian Telegraph
Act, 1885 (13 of 1885); or
(b)
the Chairman-cum-Managing Director, Mahanagar Telephone
Nigam Limited, Delhi, a company registered under
the Companies Act, 1956 (1 of 1956); or
(c)
any other person who has been granted a licence by the Central
Government under the first proviso to sub-section
(1) of section 4 of the Indian Telegraph Act, 1885 (13 of 1885);
(ii) in relation to general insurance business —
(a) the Chairman of the General Insurance Corporation of India,
Mumbai; or
(b)
the Chairman-cum-Managing Director of the National Insurance Company
Limited, Calcutta; or
(c)
the Chairman-cum-Managing Director of the New India Assurance
Company Limited, Mumbai; or
(d)
the Chairman-cum-Managing Director of the Oriental Insurance Company
Limited, Delhi; or
(e)
the Chairman-cum-Managing Director of the United India Insurance
Company Limited, Chennai; or
(f)
any other person carrying on general insurance business and who
has obtained a certificate of registration
under section 3 of the Insurance Act, 1938 (4 of 1938); and
(iii) in relation to insurance auxiliary service by an insurance
agent, any person carrying on the general insurance
business 7[or the life insurance business, as the case may be,]
in India;]
(iv) in relation to any taxable service provided by a person who
is a non-resident or is from outside India, does
not have any office in India, the person receiving taxable service
in India
(v) in relation to taxable service provided by a goods transport
agency, where the consignor or consignee of goods
is,—
(a) any factory registered under or governed by the Factories
Act, 1948 (63 of 1948);
(b)
any company established by or under the Companies Act, 1956 (1
of 1956);
(c)
any corporation established by or under any law;
(d)
any society registered under the Societies Registration Act, 1860
(21 of 1860) or under any law corresponding
to that Act in force in any part of India;
(e)
any co-operative society established by or under any law;
(f)
any dealer of excisable goods, who is registered under the Central
Excise Act, 1944 (1 of 1944) or the rules
made thereunder; or
(g)
any body corporate established, or a partnership firm registered,
by or under any law, any
person who pays or is liable to
pay freight either himself or through his agent for the transportation
of such goods by road in a goods
carriage;]
(vi) in relation to business auxiliary service of distribution
of mutual fund by a mutual fund distributor or an agent,
as the case may be, the mutual fund or asset management company,
as the case may be, receiving
such service;]
(e)
“quarter” means the period between
1st January to 31st March or 1st April to 30th June or 1st July
to 30th September or 1st October
to 31st December of a financial year.]
(2)
All words and expressions used but not defined in these rules
but defined in the Central Excise Act, 1944 (1
of 1944), 9[and the rules made thereunder shall have the meanings
assigned to them in that Act and rules].
3.
Appointment of officers.
The
Central Board of Excise and Customs may appoint such Central Excise
Officers as it thinks fit for exercising the powers under Chapter
V of the Act within such local limits as it may assign to them
as also specify the taxable service in relation to which any such
Central Excise Officer shall exercise his powers.
4.
Registration.
(1) Every person liable for paying the service tax shall make
an application to the concerned Superintendent of Central Excise
in Form ST-1 for registration within a period of thirty days from
the date on which the service tax under section 66 of the Finance
Act, 1994 (32 of 1994) is levied :
Provided
that where a person commences the business of providing a taxable
service after such service has been levied, he shall make an application
for registration within a period of thirty days from the date
of such commencement :
Provided
further that a person liable for paying the service tax in the
case of taxable services referred to in sub-section (4) or sub-section
(5) of section 66 of the Finance Act, 1994 (32 of 1994) may make
an application for registration on or before the 31st day of December,
1998:]
Provided
also that a person liable for paying the service tax in the case
of taxable services referred to in sub-clause (zzp) of clause
(105) of section 65 of the Act may make an application for registration
on or before the 31st day of March, 2005.
(2)
Where an assessee is providing a taxable service from more than
one premises or offices and has centralized billing systems or
centralized accounting systems in respect of such service, and
such centralized billing or centralized accounting systems are
located in one or more offices or premises, he may, at his option,
register such premises or offices from where such centralized
billing or centralized accounting systems are located.
(3)
The registration under sub-rule (2), shall be granted,—
(a) by the Commissioner of Central Excise or the Chief Commissioner
of Central Excise, as the case may be, in whose jurisdiction all
the premises or offices providing taxable service and the premise
or office from where centralised billing or centralised accounting
is done, are located; and
(b) in cases other than (a) above, by such authority, as may be
specified by the Board :
Provided
that nothing contained in this sub-rule shall have any effect
on the registrations granted to the premises or offices having
such centralized billing or centralized accounting systems, prior
to 1st day of April, 2005.
(3A)
Where an assessee is providing a taxable service from more than
one premises or offices, and does not have any centralized billing
systems or centralized accounting systems, as the case may be,
he shall make separate applications for registration in respect
of each of such premises or offices to the jurisdictional Superintendent
of Central Excise.
(4)
Where an assessee is providing more than one taxable service,
he may make a single application, mentioning therein all the taxable
services provided by him, to the concerned Superintendent of Central
Excise.
(5)
The Superintendent of Central Excise shall after due verification
of the application form, grant a certificate of registration in
Form ST-2 within seven days from the date of receipt of the application.
If the registration certificate is not granted within the said
period, the registration applied for shall be deemed to have been
granted.
(6)
Where a registered assessee transfers his business to another
person, the transferee shall obtain a fresh certificate of registration.
(7)
Every registered assessee, who ceases to provide the taxable service
for which he is registered, shall surrender his registration certificate
immediately.
4a.
Taxable service to be provided or credit to be distributed on
invoice, bill or challan.
4A.
(1) Every person providing taxable service shall, not later than
fourteen days from the date of completion of such taxable service
or receipt of any payment towards the value of such taxable service,
whichever is earlier, issue an invoice, a bill or, as the case
may be, a challan signed by such person or a person authorized
by him in respect of such taxable service provided or to be provided
and such invoice, bill or, as the case may be, challan shall be
serially numbered and shall contain the following, namely:—
(i) the name, address and the registration number of such person;
(ii)
the name and address of the person receiving taxable service;
(iii)
description, classification and value of taxable service provided
or to be provided; and
(iv)
the service tax payable thereon :
Provided that in case the provider of taxable service is a banking
company or a financial institution including a non-banking financial
company, or any other body corporate or commercial concern, providing
service to a customer, in relation to banking and other financial
services, an invoice, a bill or, as the case may be, challan shall
include any document, by whatever name called, whether or not
serially numbered, and whether or not containing address of the
person receiving taxable service but containing other information
in such documents as required under this sub-rule :
Provided
further that in case the provider of taxable service is a goods
transport agency, providing service to a customer, in relation
to transport of goods by road in a goods carriage, an invoice,
a bill or, as the case may be, a challan shall include any document,
by whatever name called, which shall contain the details of the
consignment note number and date, gross weight of the consignment
and also contain other information as required under this sub-rule.
(2)
Every input service distributor distributing credit of taxable
services shall, in respect of credit distributed, issue an invoice,
a bill or, as the case may be, a challan signed by such person
or a person authorized by him, for each of the recipient of the
credit distributed, and such invoice, bill or, as the case may
be, challan shall be serially numbered and shall contain the following,
namely:—
(i) the name, address and registration number of the person providing
input services and the serial number and
date of invoice, bill, or as the case may be, challan issued under
sub-rule (1);
(ii)
the name and address of the said input service distributor;
(iii)
the name and address of the recipient of the credit distributed;
(iv)
the amount of the credit distributed :
Provided
that in case the input service distributor is an office of a banking
company or a financial institution including a non-banking financial
company, or any other body corporate or commercial concern, providing
service to a customer, in relation to banking and other financial
services, an invoice, a bill or, as the case may be, challan shall
include any document, by whatever name called, whether or not
serially numbered but containing other information in such documents
as required under this sub-rule.]
4
B. Issue of consignment note.
Any goods transport agency which provides service in relation
to transport of goods by road in a goods carriage shall issue
a consignment note to the customer:
Provided
that where any taxable service in relation to transport of goods
by road in a goods carriage is wholly exempted under section 93
of the Act, the goods transport agency shall not be required to
issue the consignment note.
Explanation—For
the purposes of this rule and the second proviso to rule 4A, “consignment
note” means a document, issued by a goods transport agency
against the receipt of goods for the purpose of transport of goods
by road in a goods carriage, which is serially numbered, and contains
the name of the consignor and consignee, registration number of
the goods carriage in which the goods are transported, details
of the goods transported, details of the place of origin and destination,
person liable for paying service tax whether consignor, consignee
or the goods transport agency.
5.
Records.
(1) The records (including computerised data) as maintained by
an assessee in accordance with the various laws in force from
time to time shall be acceptable.
(2)
Every assessee shall furnish to the Superintendent of Central
Excise, at the time of filing his return for the first time, a
list of all accounts maintained by the assessee in relation to
service tax including memoranda received from his branch offices.
6.
Payment of service tax.
(1)
The service tax shall be paid to the credit of the Central Government
by the 5th of the month immediately following the calendar month
in which the payments are received, towards the value of taxable
services :
Provided
that where the assessee is an individual or proprietary firm or
partnership firm, the service tax shall be paid to the credit
of the Central Government by the 5th of the month immediately
following the quarter in which the payments are received, towards
the value of taxable services :
Provided
further that notwithstanding the time of receipt of payment towards
the value of services, no service tax shall be payable for the
part or whole of the value of services, which is attributable
to services provided during the period when such services were
not taxable :
Provided
also that the service tax on the value of taxable services received
during the month of March, or the quarter ending in March, as
the case may be, shall be paid to the credit of the Central Government
by the 31st day of March of the calendar year.
Explanation.—For
the removal of doubt it is hereby clarified that in case the value
of taxable service is received before providing the said service,
service tax shall be paid on the value of service attributable
to the relevant month, or quarter, as the case may be.
(2)
The assessee shall deposit the service tax liable to be paid by
him with the bank designated by the Central Board of Excise and
Customs for this purpose in Form TR-6 or in any other manner prescribed
by the Central Board of Excise and Customs.
(2A)
For the purpose of this rule, if the assessee deposits the service
tax by cheque, the date of presentation of cheque to the bank
designated by the Central Board of Excise and Customs for this
purpose shall be deemed to be the date on which service tax has
been paid subject to realization of that cheque.]
(3)
Where an assessee has paid to the credit of Central Government
service tax in respect of a taxable service, which is not so provided
by him either wholly or partially for any reason, the assessee
may adjust the excess service tax so paid by him (calculated on
a pro rata basis) against his service tax liability for the subsequent
period, if the assessee has refunded the value of taxable service
and the service tax thereon to the person from whom it was received.
(4)
Where an assessee is, for any reason, unable to correctly estimate,
on the date of deposit, the actual amount payable for any particular
month or quarter, as the case may be, he may make a request in
writing to the Assistant Commissioner of Central Excise or the
Deputy Commissioner of Central Excise, as the case may be, giving
reasons for payment of service tax on provisional basis and the
Assistant Commissioner of Central Excise or the Deputy Commissioner
of Central Excise, as the case may be, on receipt of such request,
may allow payment of service tax on provisional basis on such
value of taxable service as may be specified by him and the provisions
of the Central Excise (No. 2) Rules, 2001, relating to provisional
assessment except so far as they relate to execution of bond,
shall, so far as may be, apply to such assessment.
(5)
Where an assessee under sub-rule (4) requests for a provisional
assessment he shall file a statement giving details of the difference
between the service tax deposited and the service tax liable to
be paid for each month in a memorandum in Form ST-3A accompanying
the quarterly or half-yearly return, as the case may be.
(6)
Where the assessee submits a memorandum in Form ST-3A under sub-rule
(5), it shall be lawful for the Assistant Commissioner of Central
Excise or the Deputy Commissioner of Central Excise, as the case
may be, to complete the assessment, wherever he deems it necessary,
after calling such further documents or records as he may consider
necessary and proper in the circumstances of the case.
Explanation.—
For the purposes of this rule and rule 7, “Form TR-6”
means a memorandum or challan referred to in rule 92 of the Treasury
Rules of the Central Government.
(7)
The person liable for paying the service tax in relation to the
services provided by an air travel agent, shall have the option,
to pay an amount calculated at the rate of [0.5%] of the basic
fare in the case of domestic bookings, and at the rate of [1.0%]
of the basic fare in the case of international bookings, of passage
for travel by air, during any calendar month or quarter, as the
case may be, towards the discharge of his service tax liability
instead of paying service tax at the rate specified in section
66 of Chapter V of the Act and the option, once exercised, shall
apply uniformly in respect of all the bookings of passage for
travel by air made by him and shall not be changed during a financial
year under any circumstances.
Explanation.—For
the purposes of this sub-rule, the expression “basic fare”
means that part of the air fare on which commission is normally
paid to the air travel agent by the airline.
(7A)
An insurer carrying on life insurance business liable for paying
the service tax in relation to the risk cover in life insurance
provided to a policyholder shall have the option to pay an amount
calculated at the rate of one per cent of the gross amount of
premium charged by such insurer towards the discharge of his service
tax liability instead of paying service tax at the rate specified
in section 66 of Chapter V of the Act:
Provided
that such option shall not be available in cases where—
(a) the entire premium paid by the policyholder is only towards
risk cover in life insurance; or
(b)
the part of the premium payable towards risk cover in life insurance
is shown separately in any of the documents
issued by the insurer to the policyholder.
(8)
The value of the taxable service in relation to the services provided
by a clearing and forwarding agent to a client for rendering services
of clearing and forwarding operations in any manner shall be deemed
to be the gross amount of remuneration or commission (by whatever
name called) paid to such agent by the client engaging such agent.]
(9)
The value of taxable service in relation to insurance auxiliary
services provided by an insurance agent shall be deemed to be
the gross amount of commission, fee or any other sum (by whatever
name called) paid to such agent by the insurer appointing such
agent.
7.
[Returns.
(1) Every assessee shall submit a half-yearly return in Form ‘ST-3’
or ‘ST-3A’, as the case may be, along with a copy
of the Form TR-6, in triplicate for the months covered in the
half-yearly return.
(2)
Every assessee shall submit the half-yearly return by the 25th
of the month following the particular half-year.
7A[Returns
in case of taxable service provided by goods transport operators
and clearing and forwarding agents. Notwithstanding
anything contained in rule 7, an assessee, in case of service
provided by—
(a) goods transport operator for the period commencing on and
from the 16th day of November, 1997 to 2nd day
of June, 1998; and
(b)
clearing and forwarding agents for the period commencing on and
from the 16th day of July, 1997 to 16th day
of October, 1998,
shall furnish a return within a period of six months from the
13th day of May, 2003, in Form ST-3B along with copy of Form TR-6
in triplicate, failing which the interest and penal consequences
as provided in the Act shall follow.
8. Form of appeals to Commissioner of Central Excise (Appeals).
(1) An appeal under section 85 of the Act to the Commissioner
of Central Excise (Appeals) shall be in Form
ST-4.
(2)
The appeal shall be filed in duplicate and shall be accompanied
by a copy of order appealed against.
9.
Form of appeals to Appellate Tribunal. An
appeal under sub-section (1) of section 86 of the Act to the Appellate
Tribunal shall be made in Form ST-5 in quadruplicate and shall
be accompanied by a copy of the order appealed against (one of
which shall be a certified copy).
(2)
An appeal under sub-section (2) of section 86 of the Act to the
Appellate Tribunal shall be made in Form ST-7 in quadruplicate
and shall be accompanied by a copy of the order of the Commissioner
of Central Excise (one of which shall be a certified copy) and
a copy of the order passed by the Central Board of Excise and
Customs directing the Commissioner of Central Excise to apply
to the Appellate Tribunal.
(2A)
An appeal under sub-section (2A) of section 86 of the Act to the
Appellate Tribunal shall be made in Form ST-7 in quadruplicate
and shall be accompanied by a copy of the order of the Commissioner
of Central Excise (Appeals) (one of which shall be a certified
copy) and a copy of the order passed by the Commissioner of Central
Excise directing the Assistant Commissioner of Central Excise
or as the case may be, the Deputy Commissioner of Central Excise
to apply to the Appellate Tribunal; and
(3)
A memorandum of cross-objections under sub-section (4) of section
86 of the Act, shall be made in Form ST-6 in quadruplicate.
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