Page 111 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Indirect Tax Laws

Notes
The USC on gross income is also payable. The total amount deducted from income in the
year is:
€6,212 (income tax) + €2,118.80 (USC) = €8,334.80
Tax allowances
See the section on tax allowances in How your income tax is calculated for a simple
explanation of how to calculate the value of a tax allowance.
Question:
Analyse the case and Discuss the case facts
Source: http://www.citizensinformation.ie/en/reference/case_studies/
case_study_calculating_your_income_tax_case_studies.html
6.11 Summary

 Service tax is a tax levied on services rendered by a person and the responsibility of
payment of the tax is cast on the service provider.

 It is an indirect tax as it can be recovered from the service receiver by the service provider
in course of his business transactions.
 Service Tax was introduced in India in 1994 by Chapter V of the Finance Act, 1994.

 It was imposed on an initial set of three services in 1994 and the scope of the service tax has
since been expanded continuously by subsequent Finance Acts.
 The Finance Act extends the levy of service tax to the whole of India, except the State of
Jammu & Kashmir.
 The Central Board of Excise & Customs (CBEC) under Department of Revenue in the
Ministry of Finance deals with the task of formulation of policy concerning levy and
collection of Service Tax.
 In exercise of the powers conferred, the Central Government makes Service Tax Rules for
the purpose of the assessment and collection of service tax.
 The Service Tax is being administered by various Central Excise Commissionerates,
working under the Central Board of Excise & Customs.
 The Service Tax collections have shown a steady rise since its inception in 1994.
 The Indian Service Tax law has been ever evolving since its introduction in 1994.
 A tax which started with three services now has more than 100 services under its ambit.

 In addition, the legislation has also undergone changes with respect to Export of Service
Rules and Import of Service Rules, leading to a substantial increase in the legislative
provisions.
6.12 Keywords

Appropriatie: To seize.
CENVAT: Central Value Added Tax.
Finance Act: When a bill is passed with a two third majority in Indian Parliament, it is known as
Finance Act or Annual Budget.

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