Budget Highlights Part 2

Budget Updates - Service Tax

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Changes in Rate of Service Tax

 

 Change in rate of Service Tax for all Services

[effective from the date of enactment of Finance Bill, 2015]

Rate of Service Tax on the value of all services is proposed to increase from existing 12.36% (including Education Cess and SHE Cess) to flat rate of 14% (wherein Education cess and SHE Cess are abolished).

 

Levy of “Swachh Bharat Cess”

[effective from the date of enactment of Finance Bill, 2015]

An enabling provision is being incorporated in the Finance Bill, 2014 (Chapter VI/clause 117) to empower the Central Government to impose a Swachh Bharat Cess on all or any of the taxable services at a rate of 2% on the value of such taxable services. This cess shall be levied from such date as may be notified by the Central Government after the enactment of the Finance Bill, 2015. The details of coverage of this Cess would be notified in due course.

 

Change in alternate rate of Service Tax for certain specified services

[effective from a date to be Notified]

Rule 6 of Service Tax Rules, 1994 provides an option to certain service providers where it is difficult to segregate the value of their service in the total amount received from service recipient.  Such rates have been amended in correspondence to the change in flat rate from 12.36% to 14%. 

 

Changes in Negative List:

 

All Services of Government to Business entity made taxable

[effective from date to be Notified]

Earlier only support services (other than renting) when provided by Government to a business Entity, were liable for payment of Service Tax.  Support services were earlier defined as “support services” means infrastructural, operational, administrative, logistic, marketing or any other support of any kind comprising functions that entities carry out in ordinary course of operations themselves but may obtain as services by outsourcing from others for any reason whatsoever and shall include advertisement and promotion, construction or works contract, renting of immovable property, security, testing and analysis.

 

Since the definition was wide yet, could be interpreted to confine to a certain set of activities, it was causing a lot of confusion amongst the tax payers.  It has thus, been proposed by Finance Bill, 2015, that all services other than services specified in Section 66D(i) to (ii) when provided by Government, or a local authority to a business entity be charged to Service Tax.  Accordingly, all services provided by government to a Business Entity shall hence forth be taxable.  It is pertinent to mention that Business entity means any person ordinarily carrying out any activity relating to industry, commerce or any other business or profession.

 

It is further pertinent to note that Government has also been defined now in the Finance Act, 1994.  Government has been define to mean the Departments of the Central Government, a State Government and its Departments and a Union territory and its Departments, but shall not include any entity, whether created by a statute or otherwise, the accounts of which are not required to be kept in accordance with article 150 of the Constitution or the rules made thereunder.  Thus, with the definition in place, the confusion about government entities is tried to be done away with.  It is make amply clear that any entity when constituted under any statute or otherwise would not fall within the ambit of being Government.

 

Processing of Alcoholic Liquor made taxable

[effective from date to be Notified]

Earlier, Clause (f) of Section 66D of Finance Act, 1994 excluded all services any process amounting to manufacture or production of goods from the purview of Service Tax by way of its inclusion in Negative List.  However, Finance Bill, 2015 proposes to take away such benefit from processes involved in manufacture or production of alcoholic liquor for human consumption.  The clause has been amended to exclude services by way of carrying out any process amounting to manufacture or production of alcoholic liquor for human consumption.

 

Activities of activities relating to Lottery explained to be taxable

[effective from date to be Notified]

Explanation 2 to the definition of Services as provided in Section 65B(44) of Finance Act, 1994 has been amended to include any activity carried out, for a consideration, in relation to, or for facilitation of, a transaction in money or actionable claim, including the activity carried out by a lottery distributor or selling agent in relation to promotion, marketing, organizing, selling of lottery or facilitating in organizing lottery of any kind, in any other manner.  “Lottery distributor or selling agent” has been defined as a person appointed or authorized by a State for the purposes of promoting, marketing, selling or facilitating in organizing lottery of any kind, in any manner, organized by such State in accordance with the provisions of the Lotteries (Regulation) Act, 1998’.

Parallely, an Explanation has been inserted in clause (i) of section 66D dealing with betting, gambling or lottery in Negative List.  By way of this explanation, it is provided that the expression “betting, gambling or lottery” shall not include the activity specified in Explanation 2 to clause (44) of section 65B.  Thus, the entry relating to betting, gambling or lottery in Negative List shall not cover any activity in relation to promotion, marketing, organizing, selling of lottery or facilitating in organizing lottery of any kind. 

It is however, doubtful as to whether the amendment could bring to life the levy of Service Tax on margins earned by agents and distributors of Lottery.  In the case of Future Gaming Solutions Pvt Ltd. v UOI[2015 (37) S.T.R. 65 (Sikkim)], it was held that the transaction between State and Distributors / distributors and agents is one of sale and purchase and the margin constituted their trading margin.  Advertisement and promotion by distributors was only to popularize the State lottery, for their own sale at their own expense without recovering it from State Government.  Distributor acted as a wholesaler on payment of total sale price, and he was not an agent and thus, with this understanding, it can be said that such distributors do not provide any services of promotion, marketing, organizing, selling of lottery or facilitating in organizing lottery of any kind and thus, remain outside the ambit of Service Tax.  We shall see the fate of this entry in times to come and once settled by Apex Court.

 

Services of admission to amusement parks and events omitted

[effective from the date to be notified]

Services by way of admission to entertainment events or access to amusement facilities were outside the ambit of Service Tax vide clause (j) of Section 66D (Negative List) of Finance Act, 1994.  However, the entry is now proposed to be deleted and thus, all such admissions would now be taxable under Service Tax. 

 

It is however pertinent to mention that Entry 62 of State List in Seventh Schedule to Constitution of India relating to Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling empowers state government only to make laws in relation to such events. Accordingly, entertainment tax is levied on such tickets by State government.  By way of an artificial bifurcation that the price of ticket constitutes price for admission to the event and is not a tax on even itself may be challenged by the taxpayers in Court.  It is also difficult to divide the value of ticket between price for admission and price for event.  It can be argued that what a person pays is not for admission but for the event itself and thus, levy of Service Tax on the limb of admission is artificial and liable to be struck down.  However, the same is for Courts to decide and till such time it shall be open to the tax payers to pay Service Tax on such values to avoid litigations.

 

Suitable exemption to certain admissions has been provided by amending Notification No. 25/2015-Service Tax.

 

Clarification in relation to classification of Services 

[effective from the date of enactment of Finance Bill, 2015]

It has been clarified by way of an illustration that services of an entity shall not provide the same colour to its input services.  Clause (i) of Section 66F is very clear in providing that reference to a service (herein referred to as main service) shall not include reference to a service which is used for providing main service.

 

As an illustration to this clause, it has been provided that the services by the Reserve Bank of India, being the main service within the meaning of clause (b) of section 66D, does not include any agency service provided or agreed to be provided by any bank to the Reserve Bank of India. Such agency service, being input service, used by the Reserve Bank of India for providing the main service, for which the consideration by way of fee or commission or any other amount is received by the agent bank, does not get excluded from the levy of service tax by virtue of inclusion of the main service in clause (b) of the negative list in section 66D and hence, such service is leviable to service tax.’.

The clarification has been brought in light of the decision of Tribunal in Canara Bank [2012 (28) S.T.R. 369 (Tribunal)] held that since the appellant was an agent of R.B.I. it was entitled to same immunity to taxation as granted to R.B.I. and relied in the case of State Bank of Patiala [2015 (37) S.T.R. 284 (Tri. - Del.)].

Changes in Valuation Rules

 

 Change in the definition of term ‘Consideration’

[effective from date of enactment of Finance Bill, 2015]

Definition of term consideration has been amended as provided in Section 67 of Finance Act, 1994.  The new definition is as follows:

(a) “consideration” includes–

(i)           any amount that is payable for the taxable services provided or to be provided;

ii)           any reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service, except in such circumstances, and subject to such conditions, as may be prescribed;

(iii)         any amount retained by the lottery distributor or selling agent from gross sale amount of lottery ticket in addition to the fee or commission, if any, or, as the case may be, the discount received, that is to say, the difference in the face value of lottery ticket and the price at which the distributor or selling agent gets such ticket.’.

 

The above definition has been amended to overcome the following gaps:

• Taxability of reimbursement under Rule 5(1) of Service Tax (Determination of Value) Rules, 2006 was held ultravires the Finance Act, 1994 as Section 67 only provides for levy of Service Tax on value of taxable services only and nothing else.  The same has been upheld in the case of Intercontinental Consultants & Technocrats Pvt Ltd. [2013 (29) S.T.R. 9 (Del.)].  Thus, by including reimbursements specifically in the definition of consideration as provided in Section 67, the said defect is tried to be cured and accordingly, the aim is to bring all reimbursements within the ambit of Service Tax.
• To overcome the decision of Future Gaming Solutions Pvt Ltd. v UOI[2015 (37) S.T.R. 65 (Sikkim)] and to levy Service Tax on margins of Distributors and agents engaged in sale of Lottery tickets, their margins/discounts has been deemed to be consideration towards provision of taxable services of promotion of lottery.

 

Changes in Exemption

Rationalization of Ambulance Services

[effective from April 1, 2015]

Service provided by a Ambulance when belonging to a clinical establishment was already exempt vide clause 2 of Notification No. 25/2012-Service Tax dated 20.06.2012.  However, ambulances when provided by private entities which are not clinical establishments were taxable.  Vide Notification No. 6/2015-Service Tax, dated March 1, 2015, services of private ambulance operators has also been exempted.

 

Rationalization of construction services when provided to Government

 [effective from April 1, 2015]

Service of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of certain specified building of Government, a local authority or a governmental authority were exempt vide Entry 12 of Notification No. 25/2012-Service Tax dated 20.06.2012.  However, same services when provided to similar buildings in Private Sector were taxable.  Accordingly, to equate the provision of such services in relation to same buildings when provided to either government or private sector, the said exemption has been removed when provided in relation to following buildings:

-      a civil structure or  any other original works meant predominantly for  use other than for commerce, industry, or any other business or profession;

-      a structure meant predominantly for use  as (i) an educational, (ii) a clinical, or  (iii) an art or cultural establishment; 

-      a residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation 1 to clause 44 of section 65 B of the said Act.

 

Exemption to construction activities in relation to airport, port withdrawn

[effective from April 1, 2015]

Service by way of construction, erection, commissioning, or installation of original works pertaining to an airport and port has now been made taxable by deleting existing exemption in clause 14 of Notification No. 25/2012-Service Tax dated 20.06.2012.  Such services are now exempt only when provided pertaining to Railways.

 

 Exemption to folk artists restricted

[effective from April 1, 2015]

Service by a performing artist in folk or classical art forms of (i) music, or (ii) dance, or (iii) theatre were earlier exempt vide Clause 16 of Notification No. 25/2012-Service Tax dated 20.06.2012.  The exemption has now been restricted and shall now be available when:

(a)      the consideration charged for such performance is not more than one lakh rupees; and

(b)      such service are not provided by such artist as a brand ambassador

 

Exemption to carriage of foodstuff restricted to few food items:

[effective from April 1, 2015]

Service of transportation of all foodstuff including flours, tea, coffee, jiggery, sugar, milk products, salt and edible oil, excluding alcoholic beverages by rail or a vessel or GTA was earlier exempt vide Clause 20 and 21 of Notification No. 25/2012-Service Tax dated 20.06.2012.  The exemption has now been restricted and shall now be available in relation to milk, salt and food grain including flours, pulses and rice.  Accordingly, transportation of all other foodstuff including tea, coffee, jiggery, sugar, milk products, edible oil etc shall be taxable henceforth.

 

Exemption to Varishtha  Pension Bima Yojana

[effective from April 1, 2015]

Services of insurance provided under Varishtha Pension Bima Yojana has been exempted.

 

Exemption to Mutual fund agents and Lottery agents withdrawn:

   [effective from April 1, 2015]

Service of mutual fund agent to a mutual fund or asset management company, distributor to a mutual fund or asset management company, selling or marketing agent of lottery tickets to a distributer or a selling agent were exempt vide Clause 29 of Notification No. 25/2012-Service Tax dated 20.06.2012.  The exemption has now been withdrawn as their services have now been made taxable.  However, such liability has been fastened on the service provider i.e. mutual fund or asset management company or distributer or a selling agent of lottery as the case may be.

 

Processing of Alcoholic Liquor made taxable        

   [effective from date to be notified]

Service of job workers in relation to processing of alcoholic liquors for human consumption was exempt vide Clause 30 of Notification No. 25/2012-Service Tax dated 20.06.2012.  The exemption has now been withdrawn and their services have now been made taxable.        

 

Exemption to public telephones withdrawn:

   [effective from April 1,2015]

Services by way of making telephone calls from -

(a)  departmentally run public telephone;

(b)  guaranteed public telephone operating only for local calls; or

(c)  free telephone at airport and hospital where no bills are being issued

 

were earlier exempt vide Clause 32 of Notification No. 25/2012-Service Tax dated 20.06.2012.  Such services are now taxable as the said exemption has been withdrawn.

                 

Exemption to operator of Common Effluent treatment plant    :

   [effective from April 1,2015]

Services by operator of Common Effluent Treatment Plant by way of treatment of effluent has been exempted by introducing Clause 43 in Notification No. 25/2012-Service Tax dated 20.06.2012.  In order to minimize environmental pollution due to the small and medium-scale industries, cleaner production technologies and formation of waste minimization circles are being encouraged in India. Thus, exemption to operator of Common Effluent Treatment Plant by way of treatment of effluent is step in this direction.

 

Exemption to pre market activities in relation to fruits and vegetables

   [effective from April 1,2015]

Services by way of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labelling of fruits and vegetables has been exempted by introducing Clause 44 in Notification No. 25/2012-Service Tax dated 20.06.2012.  As a condition it has been provided that such activities when provided on fruits or vegetables should not change or alter the essential characteristics of the said fruits or vegetables.  Such activities were taken as part of making such fruits or vegetables marketable, however, was not covered by the activities forming part of Clause (d) of Section 66D of Finance Act, 1994 (Negative List) which included processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market. 

 

Exemption to admission to certain places:

[effective from April 1,2015]

Services by way of admission to a museum, national park, wildlife   sanctuary, tiger reserve or zoo has been exempted by introducing Clause 45 in Notification No. 25/2012-Service Tax dated 20.06.2012.

 

Exemption to exhibition of movie to distributors/association of exhibitor:

[effective from April 1,2015]

Service provided by way of exhibition of movie by an exhibitor to the distributor or an association of persons consisting of the exhibitor as one of its members has been exempted by introducing Clause 46 in Notification No. 25/2012-Service Tax dated 20.06.2012. 

 

Exemption to Services by way of right to admission to certain events

[effective from the date to be notified]

Services by way of right to admission to,-

(i)   exhibition of cinematographic film, circus, dance, or theatrical performance including drama or ballet;

(ii)   recognized sporting event;

(iii) award function, concert, pageant, musical performance or any sporting event other than a recognized sporting event, where the consideration for admission is not more than Rs 500 per person.

 

While the first two do not have any limit for price of ticket, the third part of exemption has restricted the exemption to those tickets of the event where tickets are priced for not more than Rs.500. 

 

For the above purpose, “recognized sporting event” means any sporting event,-

(i)   organized by a recognized sports body where the participating team or individual represent any district, state, zone or country;

(ii)  covered under entry 11.’;

 

The exemption was required as the Finance Bill has proposed to remove the services by way of admission to entertainment events or access to amusement facilities from Negative List (Section 66D of Finance Act, 1994).

 

Rationalization of exemption to Commission agents of goods located abroad :

[effective March 1,2015]

Service provided by a commission agent located outside India and engaged under a contract or agreement or any other document by the exporter in India, to act on behalf of the exporter, to cause sale of goods exported by him which were received by an exporter of goods were exempted vide Notification No. 42/2012-Service Tax dated 29th June, 2012.  The Notification has been rescinded vide Notification No.  3/2015-Service Tax dated March 1, 2015 and such services have now been made taxable. 

 

It is pertinent to note that services of such Commission agent is already non taxable as Place of Provision Rules, 2012 were amended to change their place of provision to the location of Service provider with effect from October 1, 2014.  Thus, the present amendment is more of a weeding exercise of removing a not required Notification.

 

GTA Services to exporter to goods till Land Customs station added to existing exemption :

   [effective April 1,2015]

Following services of GTA were exempt when provided to an exporter of goods vide Notification No. 31/2012-Service Tax dated 20.06.2012:

• Service provided to an exporter for transport of the goods by goods transport agency in a goods carriage from any container freight station or inland container depot to the port or airport [or land customs station], as the case may be, from where the goods are exported.
• Service provided to an exporter in relation to transport of the goods by goods transport agency in a goods carriage directly from their place of removal, to an inland container depot, a container freight station, a port, airport [or land customs station], as the case may be, from where the goods are exported

 

In addition such delivery when made to land customs station has now been added vide Notification No. 4/2015-Service Tax dated March 1, 2015 with effect from April 1, 2015.

 

Changes in Abatements

 

Rationalization of abatement in rail transport:

[effective April 1,2015]

At present, service tax is payable on 30% of the value of rail transport for goods and passengers, 25% of the value of goods transport by road by a goods transport agency and 40% for goods transport by vessels. The conditions prescribed also vary. A uniform abatement is now being prescribed for transport by rail, road and vessel and Service Tax shall be payable on 30% of the value of such service subject to a uniform condition of non-availment of Cenvat Credit on inputs, capital goods and input services

 

Reduction of abatement in higher class of air transport:

   [effective April 1,2015]

At present, service tax is payable on 40% of the value of Service Tax is payable on 40% of the value of air transport of passenger for economy as well as higher classes, e.g. business class. The abatement for classes other than economy is being reduced and Service Tax would be payable on 60% of the value of such higher classes.

 

Withdrawal of abatement in Chit funds:

[effective April 1,2015]

Abatement is being withdrawn from services provided in relation to chit. Consequently, Service Tax shall be paid by the chit fund foremen on the full consideration received by way of fee, commission or any such amount. They would be entitled to take Cenvat Credit

 

Reduction of abatement in GTA:

[effective April 1,2015]

Abatement is being reduced from 75% to 70% in case of GTA services and thus, increasing the payout for recipient as well.  Thus, abatement on all modes of transportation of goods (rail, vessel, GTA) now stands streamlines at 70%.

 

Increase of abatement in transportation by vessel:

[effective April 1,2015]

Abatement is being increased from 60% to 70% in case of transportation of goods by vessel services.

 

Changes in Reverse Charge Mechanism

             [effective April 1,2015]

Scope of reverse charge liability on certain categories of recipient has been introduced vide Notification No. 7/2015-Service Tax dated March 1, 2015.read with Notification No. 5/2015-Service Tax dated March 1, 2015.

 

An  Aggregator of Services: 

An Aggregator shall be liable to pay Service Tax under reverse charge when such services are provided to such Aggregator by any person including another Aggregator. 

 

It has also been provided that if the aggregator does not have a physical presence in the taxable territory, any person representing the aggregator for any purpose in the taxable territory shall be liable for paying service tax.  Also, if the aggregator does not have a physical presence or does not have a representative for any purpose in the taxable territory, the aggregator shall appoint a person in the taxable territory for the purpose of paying service tax and such person shall be liable for paying service tax.

 

An “aggregator” means a person, who owns and manages a web based software application, and by means of the application and a communication device, enables a potential customer to connect with persons providing service of a particular kind under the brand name or trade name of the aggregator.

 

In this regard, “brand name or trade name” means, a brand name or a trade name, whether registered or not, that is to say, a name or a mark, such as an invented word or writing, or a symbol, monogram, logo, label, signature, which is used for the purpose of indicating, or so as to indicate a connection, in the course of trade, between a service and some person using the name or mark with or without any indication of the identity of that person.

 

Thus, whenever a person who is Aggregator and received services from any person, such Aggregator shall discharge liability of Service Tax on services of such person.  Usually, provision of services to such Aggregator is by individuals and thus, in order to relieve such small services providers from the liability of payment but to ensure collection on all such values, the present entry has been introduced.  The essential features of the present entry for a person to be called an aggregator is as follows:

• Aggregator considered here only deliver services online i.e. who owns and manages a web based software application
• The services are provided by means of the application and a communication device
• It connects the provider and receiver of services.
• The services are provided under the brand name or trade name of the aggregator

 

The entry aims to bring within the ambit of operators like Uber who are operating from outside India and running a network of cabs which cannot be taxed as individual service providers may benefit from SSI exemption and Uber as such do not have any establishment in India and thus, such services are not made taxable in either hands.

 

Services of Mutual Fund Agents and Distributor:

Services provided by a Mutual Fund Agents and Distributors when provided to Mutual fund or Asset Management Company was earlier exempted vide clause (29)(d) of Notification No. 25/2012-Service Tax dated 20.06.2012.  Accordingly, no Service Tax was paid on their services.  Vide this Budget, it is proposed that services of such service providers be made taxable and the said exemption is withdrawn.  However, the entire liability on their services has been burdened on the recipient of their services i.e. Mutual fund or Asset Management Company.  This shall increase the liability under an inverted duty mechanism as such Mutual fund or Asset Management Company cannot avail 100% credit of such Service Tax paid under reverse charge and thus, contribution to the government exchequer shall increase.

 

Services of Lottery Agents:

Similar to the above entry, reverse charge on services provided by a selling or marketing agent of lottery tickets has been introduced and such liability has been fastened on a lottery distributor or selling agent.  Accordingly, exemption available to such agents has also been abolished as provided in clause (29)(e) of Notification No. 25/2012-Service Tax, dated 20.06.2012.

 

Services of Government:

Earlier only support services (other than renting) when received from Government were liable for payment of Service Tax by recipient. Now, all services other than services specified in Section 66D(i) to (ii) have been brought into the ambit of reverse charge mechanism.  Now, Service Tax liability has to be borne by a business entity receiving any taxable services provided or agreed to be provided by Government or local authority excluding,-

(i)           services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Government;

(ii)          services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;

(iii)         transport of goods or passengers; or

It is pertinent to mention that Business entity means any person ordinarily carrying out any activity relating to industry, commerce or any other business or profession.

 

Services of Manpower Supply:

Manpower supply and security services when provided by an individual, HUF, or partnership firm to a body corporate are being brought to full reverse charge. Presently, these are taxed under partial reverse charge mechanism where 75% only is to be paid by service recipient.

 

Changes in Service Tax Rules:

             [effective March 1,2015]

 

Service Tax Registration:

The requirement of CBEC to specify, the documents which are to be submitted by the assesse along with the application is now removed.  However, a new clause has been added to provide that the registration granted under this rule shall be subject to such conditions, safeguards and procedure as may be specified by an order issued by the Board.

 

Accordingly, Order No. 1/2015 has been issued to provide for requisite conditions etc.  The Order provides as follows:

• Applicants seeking registration for a single premises in service tax shall file the application online in the Automation of Central Excise and Service Tax (ACES) website aces.gov.in in Form ST-1
• Applicants, who are not Government Departments shall not be granted registration in the absence of PAN
• Existing registrants, except Government departments not having PAN shall obtain PAN and apply online for conversion of temporary registration to PAN based registration within three months of this order coming into effect
• The applicant shall quote the email address and mobile number in the requisite column of the application form for communication with the department. Existing registrants who have not submitted this information are required to file an amendment application by 30-4-2015.
• Once the completed application form is filed in ACES, registration would be granted online within 2 days, thus initiating trust-based registration
• The applicant is required to submit a self-attested copy of the following documents by registered post/ Speed Post to the concerned Division, within 7 days of filing the Form ST-1 online, for the purposes of verification:
  • Copy of the PAN Card of the proprietor or the legal entity registered
  • Photograph and proof of identity of the person filing the application
  • Document to establish possession of the premises to be registered
  • Details of the main Bank Account
  • Memorandum/Articles of Association/List of Directors
  • Authorization by the Board of Directors/Partners/Proprietor
  • Business transaction numbers obtained from other Government departments or agencies
• The registration certificate may be revoked by the Deputy/Assistant Commissioner in any of the following situations, after giving the assesse an opportunity to represent against the proposed revocation and taking into consideration the reply received, if any:
  • the premises are found to be nonexistent or not in possession of the assessee
  • no documents are received within 15 days of the date of filing the registration application
  • the documents are found to be incomplete or incorrect in any respect

 

Service Tax Invoice           

Every assesse has to issue a signed invoice.  However, in case of invoices issued by a computer system, usually they were either unsigned or were signed using a scanned image of signature of person.  Rule 4C has been introduced vide this budget to provide that any invoice, bill or challan issued under rule 4A or consignment note issued under rule 4B may be authenticated by means of a digital signature.  Thus, either the invoice, bill or challan or consignment note be manually signed or it may be digitally signed.  The provision has been introduced to allow assesses to use digital signature to authenticate their online invoices. CBEC has further been empowered to specify the conditions, safeguards and procedure to be followed by any person issuing digitally signed invoices