Page 97 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Indirect Tax Laws

Notes
94. Technical inspection and certification service 1-Jul-2003
95. Technical testing and analysis service 1-Jul-2003
96. Telecommunication service 1-Jun-2007

97. Transport of coastal goods and goods transported through 1-Sept-09
inland water service
98. Tour operator’s service 1-Apr-2000
99. Transport of goods by air service 10-Sep-2004
100. Transport of goods by rail service 1-May-2006

101. Transport of goods by road service 1-Jan-2005
102. Transport of goods, other than water, through pipeline or 16-Jun-2005
other conduit service

103. Transport of passengers embarking in India for 1-May-2006
international journey by air service

104. Transport of persons embarking from port in India by cruise 1-May-2006
ship service
105. Travel agent’s service 10-Sep-2004
106. Underwriter’s service 16-Oct-1998
107. Video production agency’s services 16-Jul-2001
108. Works contract service 1-Jun-2007

The levy of service tax on these services is effective from the date written against them and the
rate of service tax has been enhanced to 10% from 8%. Besides this 2% Education Cess on the
amount of service tax has also been introduced. Thus the effective service tax rate is now 10.2%
including Education Cess.

6.3.2 Administrative Mechanism

Service Tax is administered by the Central Excise Commissionerates working under the Central
Board of Excise & Customs, Department of Revenue, Ministry of Finance, Government of India.
The unique feature of Service Tax is reliance on collection of tax, primarily through voluntary
compliance.
Government has from the very beginning adopted a flexible approach concerning Service Tax
administration so that the assessees and the general public gain faith and trust in the tax measure
so that voluntary tax compliance, one of the avowed objectives of the Citizens Charter, is
achieved. Substantive and procedural liberalization measures, adopted over the years for this
purpose, are clear manifestations of the above approach. Following are some of the measures
adopted in that direction.
Under Section 67 of the Finance Act, 1994, Service Tax is levied on the gross or aggregate amount
charged by the service provider on the receiver. However, in terms of Rule 6 of Service Tax
Rules, 1994, the tax is permitted to be paid on the value received. This has been done to ensure
that providers of professional services are not inconvenienced, as in many cases, the entire
amount charged/billed may not be received by the service provider and calling upon him to
pay the tax on the billed amount in advance would have the effect of asking him to pay from his
own pocket. It would also make the levy a direct tax, which is against the very scheme of Service
Tax.

92 LOVELY PROFESSIONAL UNIVERSITY