Service Tax

Service Tax is an indirect tax levied on certain services provided by certain categories of persons/firms/agencies. Service Sector represents nearly 35-45% GDP. At present, service providers of 71 services are liable to pay service tax. No specific records have been prescribed presently. Records maintained in accordance with other laws in force(income tax, sales tax etc) are acceptable as on date. If an assessee is providing a taxable service from more than one premises or offices and has a centralized billing / accounting system in respect of such service rendered to clients from such premises or offices, he may opt for registering only the premises or office from where such centralized billing / accounting is done. Madurai Central Excise Commissionerate has a service tax cell that renders help in service tax matters.

Madurai Central Excise Commissionerate has collected an annual revenue of Rs.103.42 Crores for the year 2007-2008 and Rs.4.12 Cr. has been collected for April 2008.

'Services' constitutes a very heterogeneous spectrum of economic activities. Today services cover wide range of activities such as management, banking, insurance, hospitality, administration, communication, entertainment, wholesale distribution, retailing including Research & Development activities world over. Service sector is now occupying the center stage of the economy. In the contemporary world, development of service sector has become synonymous with the advancement of the economy.

Services constitute 46 per cent of our GDP. Although 46 per cent seems to be a high ratio, it is still relatively low by international standards. Economics hold the view that there is no distinction between the consumption of goods and consumption of services as both satisfy the human needs.

Government of India initiated an exercise in the late seventies to explore alternative sources of revenue due to resource constraints. The Government's primary sources of revenue are direct and indirect taxes, Central Excise Duty on the goods manufactured / produced in India and Customs Duties on imported goods constitute the two major sources of indirect taxes in India. But revenue receipts from Customs & Excise are on the decline due to WTO commitments and rationalization of commodity duties.

Dr. Manmohan Singh, the then Union Finance Minsiter, in his Budget speech for the year 1994-95 introduced the new concept of Service Tax and stated that " There is no sound reason for exempting sevices from taxation, therefore, propose to make a modest effort in this direction by imposing a tax on services of telephones, non-life insurance and stock brokers."

Bringing services under taxation is not simple as the services are provided by large groups of organized as well as unorganiszed service providers including retailers who are scattered across the country. Many of them are in the unorganized sector. Further, there are several services, which are of intermediate nature. The low level of education of service providers will pose difficulties to both-tax administration and assessees.

Again, during 1996, three more services were brought into the net. During 1997 and 1998, 12 services were brought into the service tax net. Some of the services like services rendered by Pandal/Shamiana contractors, out door caterers, Goods transport Operators and Mechanised Slaughter Houses have been removed from the net. From 16.07.2001 onwards, sixteen more services are brought into service tax net. 7 New Services are also brought into the Service Tax Net w.e.f. 1st July, 2003.

At present there are 104 Services under the tax net and 12.36% Service Tax is leviable to all services. They are listed below:

SNO	Service Category Code	Service Category Name	Account Head Code	Date With Effect From	Date Withdrawn
1	ADV	ADVERTISING AGENCY	00440013	01-11-1996
2	ADS	ADVERTISING SPACE OR TIME	00440354	01-05-2006
3	ATS	AIR TRANSPORT OF PASSENGER	00440362	01-05-2006
4	AIR	AIR TRAVEL AGENCY	00440032	01-07-1997
5	APS	AIRPORT SERVICES	00440258	10-09-2004
6	ARC	ARCHITECTS SERVICES	00440072	16-10-1998
7	AMN	ASSET MANAGEMENT SERVICES	00440418	01-06-2007
8	ATM	ATM OPERATIONS	00440346	01-05-2006
9	AUS	AUCTIONEERS SERVICES	00440370	01-05-2006
10	BFN	BANKING AND FINANCIAL	00440173	16-07-2001
11	BTY	BEAUTY PARLOURS	00440209	01-08-2002
12	BRD	BROADCASTING SERVICE	00440165	16-07-2001
13	BES	BUSINESS AND EXHIBITION SERVICES	00440254	10-09-2004
14	BAS	BUSINESS AUXILIARY SERVICES	00440225	01-07-2003
15	BSS	BUSINESS SUPPORT SERVICES	00440366	01-05-2006
16	CAB	CAB OPERATORS	00440048	16-07-1997
17	CBL	CABLE OPERATORS	00440217	01-08-2002
18	CHS	CARGO HANDLING SERVICES	00440189	16-08-2002
19	CAC	CHARTERED ACCOUNTANTS	00440092	16-10-1998
20	CLG	CLEANING SERVICES	00440318	16-06-2005
21	CFA	CLEARING AND FORWARDING AGENCY	00440045	16-07-1997
22	CTC	COMMERCIAL TRAINING & COACHING	00440229	01-07-2003
23	COS	COMPANY SECRETARIES	00440100	16-10-1998
24	CON	CONSTRUCTION OF RES. COMPLEX	00440334	16-06-2005
25	CCS	CONSTRUCTION SERVICES IN RESPECT OF COMMERCIAL OR INDUSTRIAL BUILDINGS AND CIVIL STRUCTURES	00440290	10-09-2004
26	CER	CONSULTING ENGINEER	00440057	07-07-1997
27	COR	CONTAINERS BY RAIL	00440390	01-05-2006
28	CVN	CONVENTION SERVICE	00440133	16-07-2001
29	COA	COST ACCOUNTANTS	00440096	16-10-1998
30	COU	COURIER AGENCY	00440014	01-11-1996
31	CRD	CREDIT CARD RELATED SERVICES	00440394	01-05-2006
32	CRA	CREDIT RATING AGENCIES	00440088	16-10-1998
33	CHA	CUSTOM HOUSE AGENT	00440026	15-06-1997
34	DSN	DESIGN SERVICES	00440422	01-06-2007
35	DSC	DEVELOPMENT AND SUPPLY OF CONTENT SERVICES	00440414	01-06-2007
36	DRS	DREDGING SERVICES	00440310	16-06-2005
37	DCS	DRY CLEANING SERVICES	00440221	01-08-2002
38	CAI	ERECTION,COMMISSIONING AND INSTALLATION	00440233	01-07-2003
39	EVS	EVENT MANAGEMENT SERVICE	00440197	01-08-2002
40	FCS	FACSIMILE SERVICES	00440149	16-07-2001	01-06-2007
41	FDS	FASHION DESIGNER SERVICES	00440213	01-08-2002
42	FDC	FORWARD CONTRACT SERVICES	00440282	10-09-2004
43	FRA	FRANCHISE SERVICES	00440237	01-07-2003
44	GIB	GENERAL INSURANCE BUSINESS	00440005	01-07-1994
45	GTO	GOODS TRANSPORT OPERATORS	00440067	01-09-1997	02-06-1998
46	HFC	HEALTH CLUB AND FITNESS CENTER	00440205	01-08-2002
47	ISD	INPUT SERVICE DISTRIBUTOR		16-06-2005
48	IAX	INSURANCE AUXILIARY	00440169	16-07-2001
49	IPR	INTELLECTUAL PROPERTY SERVICES OTHER THAN COPYRIGHT	00440278	10-09-2004
50	IDS	INTERIOR DECORATORS	00440076	16-10-1998
51	INC	INTERNET CAFE	00440241	01-07-2003
52	ITS	INTERNET TELEPHONY SERVICE	00440382	01-05-2006
53	LCR	LEASED CIRCUITS	00440137	16-07-2001	01-06-2007
54	LIS	LIFE INSURANCE SERVICES	00440185	01-08-2002
55	MCM	MAILING LIST COMPILATION	00440330	16-06-2005
56	MRS	MAINTENANCE OR REPAIR SERVICE	00440245	01-07-2003
57	MGC	MANAGEMENT CONSULTANTS	00440116	16-10-1998
58	MAK	MANDAP KEEPER	00440035	01-07-1997
59	MRA	MANPOWER RECRUITMENT AGENCY	00440060	07-07-1997
60	MRK	MARKET RESEARCH AGENCY	00440112	16-10-1998
61	MCA	MEMBERSHIP OF CLUBS	00440322	16-06-2005
62	MNG	MINING SERVICES	00440402	01-06-2007
63	OID	ONLINE INFORMATION AND DATA	00440153	16-07-2001
64	OPS	OPINION POLL SERVICES	00440274	10-09-2004
65	ODC	OUTDOOR CATERING	00440051	01-08-1997
66	PKG	PACKAGING SERVICES	00440326	16-06-2005
67	PGS	PAGER SERVICES	00440015	01-11-1996	01-06-2007
68	PSS	PANDAL OR SHAMIANA SERVICES	00440054	01-08-1997
69	PGH	PHOTOGRAPHY SERVICE	00440129	16-07-2001
70	PRT	PORT SERVICES	00440177	16-07-2001
71	PRS	PUBLIC RELATIONS SERVICE	00440374	01-05-2006
72	RTA	RAIL TRAVEL AGENT	00440201	01-08-2002
73	REA	REAL ESTATE AGENTS	00440104	16-10-1998
74	RCA	RECOVERY AGENT	00440350	01-05-2006
75	RTI	REGISTRAR TO AN ISSUE	00440338	01-05-2006
76	RIS	RENTING OF IMMOVABLE PROPERTY SERVICES	00440406	01-06-2007
77	STC	SCIENTIFIC AND TECHNICAL CONSULTANCY	00440125	16-07-2001
78	SEA	SECURITY AGENCIES	00440108	16-10-1998
79	SMV	SERVICING OF MOTOR VEHICLES	00440181	16-07-2001
80	STR	SHARE TRANSFER AGENT	00440342	01-05-2006
81	SMS	SHIP MANAGEMENT SERVICE	00440378	01-05-2006
82	SPC	SITE PREPARATION AND CLEARANCE	00440306	16-06-2005
83	SRC	SOUND RECORDING SERVICE	00440161	16-07-2001
84	SPN	SPONSORSHIP SERVICE	00440358	01-05-2006
85	STA	STEAMER AGENT	00440029	15-06-1997
86	STB	STOCK BROKER	00440008	01-07-1994
87	SWS	STORAGE AND WAREHOUSE SERVICE	00440193	01-08-2002
88	SEM	SURVEY AND EXPLORATION OF MINERAL	00440270	10-09-2004
89	SUR	SURVEY AND MAP MAKING	00440314	16-06-2005
90	TEL	TELECOMMUNICATION SERVICES	00440398	01-06-2007
91	TGH	TELEGRAPH SERVICE	00440141	16-07-2001	01-06-2007
92	TSU	TELEPHONE SERVICES	00440003	01-07-1994	01-06-2007
93	TLX	TELEX SERVICES	00440145	16-07-2001	01-06-2007
94	TIC	TEST,INSPECTION, CERTIFICATION	00440249	01-07-2003
95	TOU	TOUR OPERATOR	00440063	01-09-1997
96	TCS	TRANSPORT BY CRUISE SHIPS	00440386	01-05-2006
97	TGA	TRANSPORT OF GOODS BY AIR	00440266	10-09-2004
98	TGP	TRANSPORT OF GOODS BY PIPELINE	00440302	16-06-2005
99	GTA	TRANSPORT OF GOODS BY ROAD	00440262	01-01-2005
100	TAO	TRAVEL AGENTS (OTHER THAN AIR/RAIL TRAVEL AGENTS)	00440294	10-09-2004
101	TRP	TV OR RADIO PROGRAMME PRODUCTION	00440286	10-09-2004
102	UWS	UNDER WRITERS	00440084	16-10-1998
103	VTP	VIDEO TAPE PRODUCTION	00440157	16-07-2001
104	WCS	WORKS CONTRACT SERVICES	00440410	01-06-2007

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