Who is liable to pay Service Tax in case service is provided by a person

Indian Service Tax

Additional Information

Q. Who is liable to pay Service Tax in case service is provided by a person other than Indian resident or who does not have any establishment in India?

Ans . In this case the services receiver in India is liable to pay service tax.

Q. Would the payment received by the assessees after the notification of the service, but for the services performed before the notification be liable to Service Tax?

Ans. No. The Service Tax is not leviable for the services rendered before the date of Notification of service. Therefore, the payment received for services rendered before the notified date in respect of that service, is not to be taxed.

Q. Can an assessee rectify the mistake on his own, which is apparent from the record?

Ans . No. The assessee cannot rectify the mistakes in any order passed by a Central Excise officer but he should bring it to the notice of the Central Excise officer. The' officer may rectify any mistake within two years of the date on which such order was passed.

Q. Is service tax payable on the reimbursable/out-of-pocket expenses charged to the client on actual basis?

Ans . No, the charges billed to the client on account of out of pocket expenses which are reimbursable on actual basis, such as, travelling, boarding and lodging expenses is concerned, are not subject to service tax. However, the service tax assessee may be required by the jurisdictional officers to provide documentary evidence substantiating his claim for abatement from the gross amount received from the client for services rendered.

Q. Is service tax payable on taxable services rendered in India in respect of overseas project for which payments are received in convertible foreign exchange?

Ans . No, the Services rendered in India in respect of overseas projects for which payment is received in convertible foreign exchange have been exempted from payment of Service tax provided such convertible foreign exchange is not repatriated outside India. This exemption is in respect of all the notified services under the service tax legislation.

Q. Who should be approached for clarification of doubts relating to Service Tax?

Ans. For clarification of doubts, jurisdictional Commissionerates of Central Excise can be approached. However, the problems of general nature concerning services sector and those involving interpretation of law, may be referred to the Directorate of Service Tax, New Central Excise Building, Churchgate, Mumbai and Central Board of Excise and Customs, New Delhi.

Q. Is there any concept of related person in the Service Tax? And what would be service tax liability in case the assessee is providing service to his /her relatives?

Ans . There is no concept of related person in the provision governing the levy of service tax. Therefore, taxable service rendered to any relative by an assessee will attract service tax on the value received by the service provider. However in case the service is provided free of cost no service tax is payable.