Followings new clause or change has made in form-3CD

CBDT has vide notification no. 33/2014 dated 25.07.2014 revised the format of  Tax Audit Report to be furnished under section 44AB of the Income tax Act with effect from 25.07.2014. We have compiled below the key amendments made to  the old Form 3CD:-

1. Particulars of registration under excise duty, service tax, sales tax, and customs duty etc – Revised Form 3CD requires Auditors to report registration number or any other identification in respect of all other types of tax liabilities which Assessee is liable to pay. Although Tax Auditor have to report only the Registration details of taxes payable under other statues but he has to check under what other statues Assessee is liable to pay taxes and has to report accordingly. Auditor may also obtain such list from his client. (Clause 4)

2. Relevant clause of section 44AB under which the tax audit has been conducted – Now Auditor has to report under which clause of Tax Audit the Audit is been conducted. Now Auditor has to report if the Audit is of Business or Profession or under Presumptive taxation scheme. (Clause 8)

3. Location(s) (address(s)) of keeping books of accounts to be given - Revised Audit Report prescribes the requirement to report address of place where books of accounts Audited by the Tax Auditor are kept by the Assessee. If the books of accounts are not kept at one location, Auditor has to furnish the addresses of all such locations along with details of books of accounts maintained at each location. (Clause 11(b))

4. Particulars of sale of Land/Building less than Stamp value to be given – Now Auditor has to report where any land or building or both is transferred during the previous year for a consideration less than value adopted or assessed or assessable by any authority of a State Government referred to in section 43CA or 50C. (Clause 17)

5. Detailed information to be given on amount debited to P & L a/c of Capital Expenses, Personal Expenses, and Advertisement. (Clause 21(a))

6. Amounts inadmissible under section 40(a) – Revised report restricted the reporting only to sub-clause (i) and (ia). Sub-Clause (i) deals with allowability of payment made to non-resident of such sums on which TDS is deductible, while sub-clause (ia) deals with payment to resident dedcutees. It further requires Auditor to report the name and address of the payee in respect of whom default has been committed. (Clause 21(b))

7. Additional Reporting of disallowance U/s. 40A(3A) - Earlier Auditor had to report only the cash payment for expenses incurred during the year in excess of prescribed limit but now the CBDT has casted additional responsibility on auditor to report the cash payment made during the year in respect of expenses incurred in earlier years exceeding the prescribed limit U/s. 40A(3A). Now auditor has to verify all the cash payments in excess of prescribed limits to report under section 40A(3) and 40A(3A). In addition to this auditor also needs to report Cash payment under section 269T if the same relates to any loan or deposit exceeding the limit prescribed under section 269T. (Clause 21(d)).

Clause has further removed the reporting requirement of certificate if any been obtained by the Auditor from the Assessee U/s. 40A(3).

8. Word Modvat been replaced by the word Cenvat. (Clause 27(a)).

9. Reporting of shares acquired without consideration or inadequate consideration- Now Tax Auditor has to report Whether during the previous year the assessee has received any property, being share of a company not being a company in which the public are substantially interested, without consideration or for inadequate consideration as referred to in section 56(2)(viia). It is not clear how a Tax Auditor can determine the Value of shares of a company of which he is not the auditor. This clause applies only to Firms and Companies in which Public are not substantially interested. (Clause 28)

10.Reporting of Issue of share at Premium- Whether during the previous year the assessee received any consideration for issue of shares which exceeds the fair market value of the shares as referred to in section 56(2)(viib), if yes, please furnish the details of the same. Clause applies to Companies in which Public are not substantially interested. (Clause 29).

11. Non reporting of Certificate Under section 269SS and 269T – Now Auditor not required to report whether or not he has obtained any certificate from Assessee Under section 269SS and 269T of the Income Tax Act,1961.

12. Additional Reporting of Losses in speculation business (Section 73) and of carry forward and set-off of losses by specified business (Section 73(A) – Auditor has to furnish the following details.

(1) details of speculation loss referred to in section 73 during the previous year

(2) details of loss referred to in section 73A in respect of any specified business

(3) Auditor has to state whether the company is deemed to be carrying on a speculation business as referred in explanation to section 73 and details of speculation loss from such business.

(Clause 36(c’), 32(d) and 32(e)

13. Section wise details of TDS/TCS deducted/collected and paid- In addition to details of TDS/TCS auditor has to disclose amount short deducted, TAN of the Assessee, Amount on which TDS /TCS deducted or collected , amount paid and also details of amount of TDS/TCS not paid by the Assessee . (Clause 34(a)).

14. Auditor has to give details of Late filing of TDS/TCS return. (Clause 34(b))

15. Auditor has to give details of Interest Payable u/s 201(1A) and 206C(7). (Clause 34(c))

16. Separate reporting of tax on distributed profits under section 115-O(1A)(i) and 115-O(1A)(ii). (Clause 36)

17. Audit under Service tax to be reported – Report on Audit conducted under section 72A – Auditor has to report Whether any audit was conducted under section 72A of the Finance Act andf has to give details, if any, of disqualification or disagreement on any matter/item/value/quantity as may be reported/identified by the auditor. (Clause 39)

18. Details of Demand and Refund- Auditor has to furnish the details of demand raised or refund issued during the previous year under any tax laws other than Income Tax Act, 1961 and Wealth tax Act, 1957 alongwith details of relevant proceedings. (Clause 41)

Clause                                                                   Particular

4.    Whether the assessee is liable to pay indirect tax like excise duty, service tax, sales tax, customs duty, etc. if yes, please furnish the registration number or any other identification number allotted for the same. …. Particulars of registration under excise, vat, iec, serhvice tax etc to be given

8. Indicate the relevant clause of section 44AB under which the audit has been conducted.

17.  Where any land or building or both is transferred during the previous year for a consideration less than value adopted or assessed or assessable by any authority of a State Government referred to in section 43CA or 50C, please furnish:

Details of property	Consideration received or accrued	Value adopted or assessed or assessable

21(b).   Details required to be inserted whether tds paid after due date specified in section 200.

28.    Whether during the previous year the assessee has received any property, being share of a company not being a company in which the public are substantially interested, without consideration or for inadequate consideration as referred to in section 56(2)(viia), if yes, please furnish the details of the same.

29.    Whether during the previous year the assessee received any consideration for issue of shares which exceeds the fair market value of the shares as referred to in section 56(2)(viib), if yes, please furnish the details of the same.

32(c ). Whether the assessee has incurred any speculation loss referred to in section 73 during the previous year, If yes, please furnish the details of the same.

32(d). whether the assessee has incurred any loss referred to in section 73A in respect of any specified business during the previous year, if yes, please furnish details of the same.

32(e).  In case of a company, please state that whether the company is deemed to be carrying on a speculation business as referred in explanation to section 73, if yes, please furnish the details of speculation loss if any incurred during the previous year.

34    Details of TDS deducted to be filled in full and also interest as per section 201(1a) and 206C(7).  Also details of TDS returns to be given if filed late

39.    Whether any audit was conducted under section 72A of the Finance Act,1994 in relation to valuation of taxable services, Finance Act,1994 in relation to valuation of taxable services, if yes, give the details, if any, of disqualification or disagreement on any matter/item/value/quantity as may be reported/identified by the auditor.

41.    Please furnish the details of demand raised or refund issued during the previous year under any tax laws other than Income Tax Act, 1961 and Wealth tax Act, 1957 along with details of relevant proceedings.

Other Major changes in new 3CD
1. 2. Location(s) (address(s)) of keeping books of accounts to be given
3. Particulars of sale of Land/Building less than Stamp value to be given
4. Comparison of amount debited vis a vis amount admissible on account of various deductions to be given
5. Detailed information to be given on amount debited to P & L a/c of Capital Exp, Personal Exp. ADVERTISEMENT
6. Details on TDS deducted not deposited or not deducted u/s 40(a) Non resident
7. Name of payee whose TDS not deposited, deducted to be given u/s 40(a)(ia)
8. Amount to be profit u/s 40A(3A) to be given
9. Modavt=Cenvat
10. (28) Whether receive shares below fair value u/s 56(2)(viia)- How it is possible for CA
11. Whether assessee receive security premium taxable u/s 56(2)(viib)
12. Detailed info on TDS/TCS deducted section wise to be given 
13. Late filing of TDS/TCS return 
14. Interest Payable u/s 201(1A) and 206C(7)
15. Audit under Service tax to be reported 
16. Demand/Refund raised under any other law during the PY to be reported

Applicability of service tax as per Finance Act, 1994

As per section 65B (44), service means any activity carried out by a person for another person for consideration. Including declared services.

Service to be taxed inthe Jurisdiction of Consumption. (For the purpose place of provision of service Rules 2012)

LOGSTICS & FREIGHT FORWARDING INDUSTRIES & service TAX

FREIGHT FOWARDING INDUSTRIES

Freight forwarding industries are those industries which provide freight forwarding services to their National and international clients. Freight forwarding is a service used by companies that deal in international or multi-national import and export. While the freight forwarder doesn't actually move the freight itself, it acts as an intermediary between the client and various transportation & Logistics services. Sending products from one international destination to another can involve a multitude of carriers, requirements and legalities. A freight forwarding service handles the considerable logistics of this task for the client, relieving what would otherwise be a formidable burden.

Freight forwarding services guarantee that products will get to the proper destination by an agreed upon date, and in good condition. The freight forwarding service utilizes established relationships with carriers of all kinds, from air freighters and trucking companies, to rail freighters and ocean liners. Freight forwarding services negotiate the best possible price to move the product along the most economical route by working out various bids and choosing the one that best balances speed, cost and reliability.

A freight forwarding service generally provides one or more estimates to the client along with advisement, when necessary. Considerations that effect price will range from origin and destination to special requirements, such as refrigeration or, for example, transport of potentially hazardous materials. Assuming the client accepts the forwarder's bid, the freight is readied for shipping. The freight forwarding service then undertakes the responsibility of arranging the transport from point of origin to destination.

SERVICES OF FREIGHT FORWARDING INDUSTRIES

In Freight Forwarding, There are three distinct activities

1.       Freight Forwarding service

2.       Custom House Agent (CHA)

3.       Goods transportation service (GTA)

As required by Finance Act, 1994 as per Section 66F (3) of bundled service, the taxability of a bundled service shall be determined in the following manner, namely:-

If various elements of such service are naturally bundled in the ordinary course of business, it shall be treated as provision of the single service WHICH GIVES SUCH BUNDLE ITS ESSENTIAL CHARACTER;

Examples:

1.       Meals and air/rail travel:

2.       Breakfast and hotel accommodation

3.       Boarding school and education

Explanation: - “BUNDLED SERVICE” MEANS a bundle of provisions of various services wherein an element of provision of one service is combined in an element or elements of provision of any other service or services.

So it is clarified that service of Freight Forwarding service, Custom House Agent (CHA) , Goods transportation service (GTA) is classified as Freight Forwarding service and all provision of freight forwarding applies.

OVERVIEW OF PLACE OF PROVISION ON LOGISTICS INDUSTRY:

Generally, an “intermediary” is a person who arranges or facilitates a supply of goods, or a provision of service, or both, between two persons, without material alteration or further processing. Thus, an intermediary is involved with two supplies at any one time:

i) The supply between the principal and the third party; and

ii) The supply of his own service (agency service) to his principal, for which a fee or commission is usually charged.

For the purpose of this rule, an intermediary in respect of goods (such as a commission agent i.e. a buying or selling agent or a stockbroker) is excluded by definition. Also excluded from this sub-rule is a person who arranges or facilitates a provision of a service (referred to in the rules as “the main service”), but provides the main service on his own account.

In order to determine whether a person is acting as an intermediary or not, the following factors need to be considered:-

§  Nature and value: An intermediary cannot alter the nature or value of the service, the supply of which he facilitates on behalf of his principal, although the principal may authorize the intermediary to negotiate a different price. Also, the principal must know the exact value at which the service is supplied (or obtained) on his behalf, and any discounts that the intermediary obtains must be passed back to the principal.

§  Separation of value: The value of an intermediary’s service is invariably identifiable from the main supply of service that he is arranging. It can be based on an agreed percentage of the sale or purchase price. Generally, the amount charged by an agent from his principal is referred to as “commission”.

§  Identity and title: The service provided by the intermediary on behalf of the principal is clearly identifiable.

In accordance with the above guiding principles, services provided by the following persons will qualify as ‘intermediary services’:-

i.        Travel Agent (any mode of travel)

ii.      Tour Operator

iii.    Commission agent for a service [an agent for buying or selling of goods is excluded]

iv.     Recovery Agent

Even in other cases, wherever a provider of any service acts as an intermediary for another person, as identified by the guiding principles outlined above, this rule will apply. Normally, it is expected that the intermediary or agent would have documentary evidence authorizing him. To act on behalf of the provider of the ‘main service

ILLUSTRATION

A freight forwarder arranges for export and import shipments. There could be two possible situations here-one when he acts on his own account, and the other, when he acts as an intermediary:

When the freight forwarder acts on his own account (say, for an export shipment) A freight forwarder provides domestic transportation within taxable territory (say, from the Exporter’s factory located in Pune to Mumbai port) as well as international freight service (say, from Mumbai port to the international destination), under a single contract, on his own account (i.e. he buys-in and sells fright transport as a principal), and charges a consolidated amount to the exporter. This is a service of transportation of goods for which the place of supply is the destination of goods. Since the destination of goods is outside taxable territory, this service will not attract service tax due to export of goods. Here, it is presumed that ancillary freight services (i.e. services ancillary to transportation- loading, unloading, handling etc.) are “bundled” with the principal service owing to a single contract or a single price (consideration).On an import shipment with similar conditions, the place of supply will be in the taxable territory, and so the service tax will be attracted.

When the freight forwarder acts as an intermediary:

Where the freight forwarder acts as an intermediary, the place of provision will be his location.servicetax will be payable on the services provided by him. However, when he provides a service to an exporter of goods, the exporter can claim refund of service tax paid under notification for this purpose.

Particular	Prepaid Shipment	Collect Shipment
In CASE of Import	Service performed outside India by foreign agent Service performed in  India by Indian logistic company Non taxable Taxable	Service performed outside India by foreign agent Service performed in  India by Indian logistic company Service given to foreign agent related to collection of revenue Non taxable Taxable Taxable
In CASE of Export	Service performed outside India by foreign agent Service performed in  India by Indian logistic company Non taxable Taxable	Service performed outside India by foreign agent i.e. destination Service performed in  India by Indian logistic company i.e. origin Service provided by foreign agent related to collection of revenue Non taxable Taxable Taxable

·         Service –Clearing and Forwarding

·         Service Provider –Freight Forwarder

·         Place of Provision-Location of service provider (as intermediary)

·         Value of taxable service –As per valuation Rule 6(8) of service tax rules ,1994 read with sec 67 of Finance Act,1994,Gross amount  of remuneration or commission i.e. reimbursements  expenses on actual basis not liable to service tax (As decided CASE of Sangamitraservices Agency June 27,2013, H.C.)

[2014] 43 taxmann.com 363 (Madras)

HIGH COURT OF MADRAS

Commissioner of service Tax, Chennai

v.

Sangamitra services Agency

CHITRA VENKATARAMAN AND K.B.K. VASUKI, JJ.

C.M.A. NO. 985 OF 2008

JUNE 27, 2013 

I. Rule 6 of the service Tax Rules, 1994 read with sections 65(25) and 67, of the Finance Act, 1994 - Valuation of taxable service - Inclusion of Reimbursements - Period from 16-10-1998 to 18-4-2006 - As per rule 6(8), value of Clearing and Forwarding Agent services would gross amount of remuneration or commission (by whatever name called) paid to such agent by client - Phrase 'by whatever name called' must necessarily have some link or reference or nature to receipt of remuneration or commission and, therefore, gross amount referred to in rule 6(8) would apply to receipts of such sum, which would bear character of remuneration or commission - If a receipt is for reimbursing expenditure incurred for purpose of providing services, mere act of reimbursement cannot be regarded as having character of remuneration or commission [Paras 7 to 9] [In favour of assessee]

II. Rule 6 of the service Tax Rules, 1994 read with sections 65(25) and 67, of the Finance Act, 1994 - Valuation of taxable services - Inclusion of Reimbursements - Period from 16-10-1998 to 18-4-2006 - Assessee, a clearing and forwarding agent, reimbursements towards freight, labour, electricity, telephone etc. - Department included said charges in taxable value - Assessee argued that as per rule 6(8) of service Tax Rules, 1994, only gross amount of remuneration or commission constituted value and, therefore, reimbursements were not includible - HELD : In absence of any material to show understanding between principal and client that commission was all inclusive, it is difficult to hold that gross amount of remuneration/commission would nevertheless include expenditure/ incidental charges for running of business - Since revenue's CASE did not rest on a contention that expenditure incurred has character to fall under expression 'remuneration or commission', revenue's contention was liable to be rejected [Paras 7 to 9] [In favour of assessee]

Words and Phrases: 'By whatever name called' as used generally

Case Review

Sri Sasha Agencies (P.) Ltd. v. Asset. CCE [2009] 18 STT 31 (Bang. – Trib.) (para 9) approved.

Sangamitra services Agency v. CCE [2008] 12 STT 103 (Chennai) (para 9) affirmed.

CASES REFERRED TO

Sri Sastha Agencies (P.) Ltd. v. Asstt. CCE [2009] 18 STT 31 (Bang. - CESTAT) (para 5).

N. Senthil Kumar for the Appellant.

JUDGMENT

Chitra Venkataraman, J. - The Revenue is on appeal as against the order of the Customs, Excise and service Tax Appellate Tribunal passed in No.902/07 dated 24.07.2007 raising the following substantial question of law :—

"1. Whether the decision of Tribunal that the reimbursable expenses received by the assessee need not be added to the taxable value related to clearing and forwarding agents service is correct, when the Rule 6(8) of service Tax Rules, 1994, stipulates that Gross amount of remuneration or commission should be the taxable value in relation to the services provided by a Clearing and Forwarding Agent?"

2. Inspite of service of notice on the assessee, there is no representation either in person or through counsel. After hearing the learned Standing Counsel for the Revenue and on going through the records, the present order is passed.

3. The Customs, Excise and service Tax Appellate Tribunal, as a matter of fact found in this CASE that various charges, which were alleged by the Revenue, to be includible in the taxable value of Carrying and Forwarding service were reimbursed by the principals on the basis of actuals. Those amounts received by the assessee from the principals as remuneration/commission for service of clearing and forwarding the goods has been rightly assessed as taxable value and tax paid.

4. It is seen from the documents placed before this Court that the show cause notice pointed out that the various charges received by the assessee from the Principal towards freight, labour, electricity, telephone etc were required to be added to the value of the taxable service in relation to the services provided by a Clearing and Forwarding agent of the Principal. The assessee contended that as per Rule 6(8) of service Tax Rules, 1994, only on the gross amount of remuneration or commission would be paid to them by their principals for the service of clearing and forwarding ; since the expenses were incurred by the assessee and reimbursed to them by their principals for the service of clearing and forwarding of excisable goods, the same could not enter into the taxable value under Rule 6(8) of the service Tax Rules, 1994, read with 67 of the Finance Act, 1994. The assessee further contended that the inclusion of such reimbursed expenditure was bad in law.

5. In accepting the CASE of the respondent/assessee, the Customs, Excise and service Tax Appellate Tribunal referred to the decision rendered by the Tribunal in the CASE of Sri Sastha Agencies (P.) Ltd. v. Asstt. CCE [2009] 18 STT 31 (Bang. - CESTAT), holding that no element other than remuneration received by a Clearing & Forwarding agent from their principal was to be included in the taxable value of the service. Thus, the Tribunal allowed the appeal.

6. Aggrieved by this, the present appeal has been preferred by the Revenue. Learned Standing counsel appearing for the Revenue submitted that as per the provisions of Rule 6(8) of service Tax Rules, 1994, the value of taxable service in relation to the services provided by the Clearing and Forwarding Agent to the 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. He further submitted that considering the charges collected towards freight, labor, electricity, telephone etc., in connection with clearing and forwarding services, the same would form part of remuneration / commission.

7. We do not agree with the said contention. In the absence of any material to show the understanding between the Principal and the Client that the Commission payable by the principal was all inclusive, it is difficult to hold that the gross amount of remuneration/commission would nevertheless include expenditure incurred by the assessee providing the services; that all incidental charges for running of the business would also form part of the remuneration or Commission (by whatever name called). The phrase "by whatever name called" must necessarily have some link or reference or nature to the receipt of remuneration or commission. Thus, if a receipt is for reimbursing the expenditure incurred for the purpose, the mere act of reimbursement, per se, would not justify the contention of the Revenue that the same, having the character of the remuneration or commission, deserves to be included in the sum amount of remuneration / Commission.

8. As per Rule 6(8) of service Tax Rules, 1994, the gross amount referred to therein would apply to receipts of such sum, which would bear the character of remuneration or commission, in that, the said sum is brought under the head "receipts".

9. As far as the present CASE is concerned, when the Revenue's CASE does not rest on a contention that the expenditure incurred has the character to fall under the expression "remuneration or commission", we have no hesitation in rejecting the Revenue's contention. Accordingly, the Civil Miscellaneous Appeal is dismissed. No costs.

---

*In favour of assessee.

†Arising out of order of Tribunal inSangamitraservices Agency v. CCE [2008] 12 STT 103 (Chennai - Cestat).

This is beneficial for company not charge service tax on value of service as decided in above CASE to reduce unnecessary burden of tax.

NOTIFICATION FOR CUSTOM HOUSING service

As per INSTRUCTION F. NO. B 43/1/97-TRU, DATED 6-6-1997/TRADE NOTICE NO. 5/97-ST, DATED 12-6-1997, MUMBAI COMMISSIONERATE-I, in CASE of import & export of goods, service of custom house agent is taxable on service which is performed by CHA. It is clarified that in relation to Custom House Agent, the service Tax is to be computed only on Gross service charges by whatever head/nomenclature, billed by the Custom House Agent to the client. It is informed that the practice obtaining is to show the charges for services as ‘agency commission’, ‘charges’, ‘agency and attendance charges’ and some similar descriptions. The service tax will be computed only with reference to such charges. In other words payment made by CHA on behalf of client, such as statutory levies (CESS, Custom  Duties, Port Dues, etc.) and various other reimbursable expenses incurred are not to be included for computing the service Tax.

 So as per bundled service provision all provision of freight forwarding apply with notification and circular as notified by central board of excise and custom. 

     Hence, it may be advisable to split up the contract into three

i.        Outside India (as an intermediary)

ii.      Ocean freight (actual basis) and

iii.    Services within India

           If the contract is split up, as given blow than taxable part will be only service performed in taxable territory.

Reno.	Nature of services	Taxability
1.	Commission received from foreign freight forwarder	Taxable
2.	Services provided in India.	Taxable
3.	Ocean freight (actual basis)	Non-Taxable
4.	Outside India (as an intermediary)	Non-Taxable

·         Commission received from foreign freight forwarder-for e.g. Profit share received from foreign agent or amount received any other nomenclature.

·         Services provided in India :

       Destination charge in case imports .e.g. delivery order fee, custom clearance fee, inland haulage charges,Terminal Handling Charges etc.

       Origin charges incaseexport e.g. delivery order fee, custom clearance fee, inland haulage charges, Terminal Handling Charges etc.

·         Ocean freight (actual basis)- This should be only actual amount on which custom duty has been charged by costume authority at the time of valuation of goods as per valuation rule of Costume Act,1962

·         Outside India (as an intermediary)-in CASE import ex-work charges at origin (collect shipment) e.g. Pick up charge at origin, Ex-Work Charges at origin, Custom Clearance charges at origin, Terminal Charges at Origin, Seal fees at origin, Booking fees at origin, Warehouse Charges at Origin

REVERSES CHARGE MECHANISM:

• Governed by Notification No. 30/2012-ST dated 20.06.2012 W.e.f. 1.7.2012

• Liabilities of both the service provider and service receiver are statutory and independent of each other
• Liability cannot be shifted by mutual agreement
• Reverse charge will not apply where the service receiver is located in non-taxable territory
• Reverse charge shall not be applicable if provider of service was liable before 1.7.2012
•  service Tax will not be payable by service receiver under reverse charge, if service was provided prior to 1.7.2012, even if payment is made after 30.06.2012
• Credit of tax paid can be availed by service recipient if it is input servicefor him
• The credit of tax paid by the service recipient under partial reverse charge would be available on the basis on the tax payment challan (but invoice required)
• Service  provider under RCM may claim refund of tax paid under rule 5(b) of CCR, 2004

NOTIFICATION NO 30/2012

Service where partial reverse charge applicable

·         Manpower supply

·         Works contract services

·         Renting of motor vehicles to carry passenger,

Reverse charge shall be applicable only when following two Conditions are satisfied –

i.        service receiver is a business entity registered as a body corporate, and

ii.      service provider is any one of the following entities –

a.       Individual

b.       Hindu undivided family (HUF)

c.       Firm (including limited liability partnerships)

d.       Association of persons

If both the above conditions are not satisfied in respect of these three services, service Tax shall be payable by the service provider in ordinary course of business.

Service where full reverse charge is applicable: -

·         Insurance business services by agents

·         Goods transportation by road

·         Legal services to any business entity located in the taxable territory;

·         Service provided by non-executive director of company  to company

·         Services provided by Government/local authority excluding specified services, i.e., renting of Immovable property &Service specified in Section 66D of Finance Act, 1994: -

i.        Service by the department of post by way of speed post, express parcel post, life insurance and agency service provided to a person other than a government.

ii.      Service in relation to an aircraft or a vessel inside or outside the port

iii.    Transportation of goods or passenger

·         Services provided by persons located in non-taxable territory to persons located in taxable in

Territory (Import of Service)

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