- Bangalore Branch of SIRC of ICAI

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SERVICE TAX
MAJOR EXEMPTIONS
ABATEMENTS
SETTLEMENT COMMISSION
ADVANCE RULING
APPEALS
K.VAITHEESWARAN
ADVOCATE & TAX CONSULTANT
Mobile: 98400-96876
E-mail : [email protected], [email protected]
Flat No.3, First Floor,
No.9, Thanikachalam Road,
T. Nagar,
Chennai - 600 017, India
Tel.: 044 + 2433 1029 / 4048
402, Front Wing,
House of Lords,
15/16, St. Marks Road,
Bangalore – 560 001, India
Tel : 080 22244854/ 41120804


Services provided to the United Nations or a specified international
organization .
Health care services by a clinical establishment, an authorised medical
practitioner or a para-medics
(i) Authorised medical practitioner means a medical practitioner registered
with any of the councils of the recognised system of medicines
established or recognized by law in India and includes a medical
professional having the requisite qualification to practice in
any recognised system of medicines in India as per any law for the time
being in force;
(ii) Clinical establishment means a hospital, nursing home, clinic,
sanatorium or any other institution by, whatever name called, that offers
services or facilities requiring diagnosis or treatment or care for illness,
injury, deformity, abnormality or pregnancy in any recognised system of
medicines in India, or a place established as an independent entity
or a part of an establishment to carry out diagnostic or investigative
services of diseases;
(iii) Health care services means any service by way of diagnosis or treatment or
care for illness, injury, deformity, abnormality or pregnancy in any
recognised system of medicines in India and includes services by way of
transportation of the patient to and from a clinical establishment, but does
not include hair transplant or cosmetic or plastic surgery, except when
undertaken to restore or to reconstruct anatomy or functions of body
affected due to congenital defects, developmental abnormalities, injury or
trauma;
 Services by a veterinary clinic in relation to health care of animals or birds.
 Services by an entity registered under section 12AA of the Income tax Act,
1961by way of charitable activities;
Charitable activities means activities relating to (i) public health by way of (a) care or counseling of (i) terminally ill persons or persons with severe
physical or mental disability, (ii) persons afflicted with HIV or AIDS, or
(iii) persons addicted to a dependence-forming substance such as
narcotics drugs or alcohol; or
(b) public awareness of preventive health, family planning or prevention
of HIV infection;
(ii) advancement of religion or spirituality;
(iii) advancement of educational programmes or skill development relating to,(a) abandoned, orphaned or homeless children;
(b) physically or mentally abused and traumatized persons;
(c) prisoners; or
(d) persons over the age of 65 years residing in a rural area;
(iv) preservation of environment including watershed, forests and wildlife; or
(v) advancement of any other object of general public utility up to a value of,(a) Rs. 18.75 lakhs for the year 2012-13 subject to the condition that total
value of such activities had not exceeded Rs. 25 lakhs during 2011-12;
(b) Rs. 25 lakhs in any other financial year subject to the condition that
total value of such activities had not exceeded Rs. 25 lakhs during the
preceding financial year;


Services by a person by way of renting of precincts of a
religious place meant for general public;
(i) Religious place means a place which is primarily meant
for conduct of prayers or worship pertaining to a religion,
meditation, or spirituality;
(ii) General public means the body of people at large
sufficiently defined by some common quality of public or
impersonal nature;
Services by way of conduct of any religious ceremony;

Services provided by an Arbitral Tribunal to
(i) any person other than a business entity; or
(ii) a business entity with a turnover up to rupees ten lakh
in the preceding financial year;


Services provided by an individual as an advocate or a
partnership firm of advocates by way of legal services to,(i) an advocate or partnership firm of advocates providing
legal services
(ii) any person other than a business entity; or
(iii) a business entity with a turnover up to rupees ten lakh in
the preceding financial year; or
Legal service means any service provided in relation to
advice, consultancy or assistance in any branch of law, in any
manner and includes representational services before any
court, tribunal or authority.



Services provided by a person represented on an arbitral
tribunal to an Arbitral Tribunal.
Services by way of technical testing or analysis of newly
developed drugs, including vaccines and herbal remedies, on
human participants by a clinical research organization
approved to conduct clinical trials by the Drug Controller
General of India.
Services by way of training or coaching in recreational
activities relating to arts, culture or sports.


Services provided to or by an educational institution in respect of
education exempted from service tax, by way of,(a) auxiliary educational services; or
(b) renting of immovable property;
Auxiliary educational services means any services relating to imparting
any skill, knowledge, education or development of course content or any
other knowledge – enhancement activity, whether for the students or
the faculty, or any other services which educational institutions ordinarily
carry out themselves but may obtain as outsourced services from any
other person, including services relating to admission to such institution,
conduct of examination, catering for the students under any mid-day
meals scheme sponsored by Government, or transportation of students,
faculty or staff of such institution.

Services provided to a recognised sports body by(a) an individual as a player, referee, umpire, coach or team
manager for participation in a sporting event organized
by a recognized sports body;
(b) another recognised sports body;
Recognized sports body means –
(i)
the Indian Olympic Association,
(ii)
Sports Authority of India,
(iii) a national sports federation recognised by the Ministry
of Sports and Youth Affairs of the Central Government,
and its affiliate federations,
(iv) national sports promotion organisations recognised by
the Ministry of Sports and Youth Affairs of the Central
Government,
(v) the International Olympic Association or a
federation recognised by the International Olympic
Association; or
(vi) a federation or a body which regulates a sport at
international level and its affiliated federations or
bodies regulating a sport in India;

Services by way of sponsorship of sporting
events organized,(a) by a national sports federation, or its affiliated federations, where
the participating teams or individuals represent any district, state or
zone;
(b) by Association of Indian Universities, Inter-University Sports Board,
School Games Federation of India, All India Sports Council for the
Deaf, Paralympic Committee of India or Special Olympics Bharat;
(c) by Central Civil Services Cultural and Sports Board;
(d) as part of national games, by Indian Olympic Association; or
(e) under PanchayatYuva Kreeda Aur Khel Abhiyaan (PYKKA) scheme;

Services provided to the Government, a local authority or a
governmental authority by way of construction, erection,
commissioning, installation, completion, fitting out, repair,
maintenance, renovation, or alteration of (a) a civil structure or any other original works meant predominantly
for use other than for commerce, industry, or any other business or
profession;
(b) a historical monument, archaeological site or remains of national
importance, archaeological excavation, or antiquity specified under
the Ancient Monuments and Archaeological Sites and Remains Act,
1958;
(c) a structure meant predominantly for use as
(i)
an educational,
(ii)
a clinical, or
(iii)
an art or cultural establishment;

(d) canal, dam or other irrigation works;
(e) pipeline, conduit or plant for
(i) water supply
(ii) water treatment, or
(iii) sewerage treatment or disposal; or
(f) 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.
Original works means
(i) all new constructions;
(ii) all types of additions and alterations to abandoned or damaged
structures on land that are required to make them workable;
(iii) erection, commissioning or installation of plant, machinery or
equipment or structures, whether pre-fabricated or otherwise;


Residential complex means any complex comprising of a building or
buildings, having more than one single residential unit.
Governmental Authority means a board, or an authority or any other
body established with 90% or more participation by way of equity or
control by Government and set up by an Act of the Parliament or a State
Legislature to carry out any function entrusted to a municipality under
article 243W of the Constitution.

Services provided by way of construction, erection,
commissioning, installation, completion, fitting out, repair,
maintenance, renovation, or alteration of,(a) a road, bridge, tunnel, or terminal for road transportation for use by
general public;
(b) a civil structure or any other original works pertaining to a scheme
under Jawaharlal Nehru National Urban Renewal Mission or
Rajiv AwaasYojana;
(c) a building owned by an entity registered under section 12 AA of the
Income tax Act, 1961 and meant predominantly for religious use by
general public;
(d) a pollution control or effluent treatment plant, except located as a
part of a factory; or
(e) a structure meant for funeral, burial or cremation of deceased;

Services by way of construction, erection, commissioning, or
installation of original works pertaining to,(a) an airport, port or railways, including monorail or metro;
(b) a single residential unit otherwise than as a part of a residential complex;
(c) low- cost houses up to a carpet area of 60 square metres per house in a
housing project approved by competent authority empowered under the
‘Scheme of Affordable Housing in Partnership’ framed by the Ministry of
Housing and Urban Poverty Alleviation, Government of India;
(d) post- harvest storage infrastructure for agricultural produce including a cold
storages for such purposes; or
(e) mechanised food grain handling system, machinery or equipment for
units processing agricultural produce as food stuff excluding alcoholic
beverages;
Single residential unit means a self-contained residential unit which is
designed for use, wholly or principally, for residential purposes for one
family.
Residential complex” means any complex comprising of a building or
buildings, having more than one single residential unit.
Temporary transfer or permitting the use or enjoyment of a
copyright covered under clauses (a) or (b) of sub-section (1) of
section 13 of the Indian Copyright Act, 1957, relating to original
literary, dramatic, musical, artistic works or cinematograph
films.
 Services by a performing artist in folk or classical art forms of (i)
music, or (ii) dance, or (iii) theatre; (services provided by such
artist as a brand ambassador are excluded from this exemption
notification)
 Services by way of collecting or providing news by an
independent journalist, Press Trust of India or United News of
India.


Services by way of renting of a hotel, inn, guest house, club,
campsite or other commercial places meant for residential or
lodging purposes, having declared tariff of a unit of
accommodation below Rs.1000 per day or equivalent.

‘Declared tariff’ includes charges for all amenities provided in the unit of
accommodation (given on rent for stay) like furniture, air-conditioner,
refrigerators or any other amenities, but without excluding any discount
offered on the published charges for such unit.

Services provided in relation to serving of food or beverages
by a restaurant, eating joint or a mess, other than those
having
(i) the facility of air-conditioning or central air-heating in any part of
the establishment, at any time during the year, and
(ii) a licence to serve alcoholic beverages;

Services by way of transportation by rail or a vessel from one
place in India to another of the following goods (a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
petroleum and petroleum products falling under Chapter heading 2710
and 2711 of the First Schedule to the Central Excise Tariff Act, 1985;
relief materials meant for victims of natural or man-made disasters,
calamities, accidents or mishap;
defence or military equipments;
postal mail or mail bags;
household effects;
newspaper or magazines registered with the Registrar of Newspapers;
railway equipments or materials;
agricultural produce;
foodstuff including flours, tea, coffee, jaggery, sugar, milk products,
salt and edible oil, excluding alcoholic beverages; or
chemical fertilizer and oilcakes;

Services provided by a goods transport agency by way of
transportation of (a) fruits, vegetables, eggs, milk, food grains or pulses in a goods
carriage;
(b) goods where gross amount charged for the transportation of goods
on a consignment transported in a single goods carriage does not
exceed Rs.1500; or
(c) goods, where gross amount charged for transportation of all such
goods for a single consignee in the goods carriage does not exceed
Rs.750;

Services by way of giving on hire (a) to a state transport undertaking, a motor vehicle meant to carry
more than twelve passengers; or
(b) to a goods transport agency, a means of transportation of goods;

Transport of passengers, with or without accompanied belongings, by (a) air, embarking from or terminating in an airport located in the state of
Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim,
or Tripura or at Bagdogra located in West Bengal;
(b) a contract carriage for the transportation of passengers, (tourism, conducted
tour, charter or hire are excluded); or
(c) ropeway, cable car or aerial tramway;
Services by way of vehicle parking to general public (leasing of space to
an entity for providing such parking facility is excluded).
 Services provided to Government, a local authority or a governmental
authority by way of 
(a) carrying out any activity in relation to any function ordinarily entrusted to a
municipality in relation to water supply, public health, sanitation conservancy,
solid waste management or slum improvement and upgradation; or
(b) repair or maintenance of a vessel or an aircraft;

Services of general insurance business provided under specified schemes.

Service by an unincorporated body or a non- profit entity
registered under any law for the time being in force, to its
own members by way of reimbursement of charges or share
of contribution (a) as a trade union;
(b) for the provision of carrying out any activity which is exempt from
the levy of service tax; or
(c) up to an amount of Rs.5000 per month per member for sourcing of
goods or services from a third person for the common use of its
members in a housing society or a residential complex;

Services by the following persons in respective capacities (a)
(b)
(c)
(d)
(e)
sub-broker or an authorised person to a stock broker;
authorised person to a member of a commodity exchange;
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;
(f) selling agent or a distributer of SIM cards or recharge coupon vouchers;
(g) business facilitator or a business correspondent to a banking company or an
insurance company, in a rural area; or
(h) sub-contractor providing services by way of works contract to another
contractor providing works contract services which are exempt;
 “Rural area” means the area comprised in a village as defined in land revenue
records, excluding(i) the area under any municipal committee, municipal corporation, town area
committee, cantonment board or notified area committee; or
(ii) any area that may be notified as an urban area by the Central Government
or a State Government;

Carrying out an intermediate production process as job work in relation
to (a) agriculture, printing or textile processing;
(b) cut and polished diamonds and gemstones; or plain and studded jewellery of gold and
other precious metals, falling under Chapter 71 of the Central Excise Tariff Act ,1985;
(c) any goods on which appropriate duty is payable by the principal manufacturer; or
(d) processes of electroplating, zinc plating, anodizing, heat treatment, powder coating,
painting including spray painting or auto black, during the course of manufacture
of parts of cycles or sewing machines upto an aggregate value of taxable service of the
specified processes of Rs. 150 lakhs in a financial year subject to the condition that
such aggregate value had not exceeded Rs. 150 lakhs during the preceding financial
year;


“Appropriate duty” means duty payable on manufacture or production under a
Central Act or a State Act, but shall not include ‘Nil’ rate of duty or duty wholly
exempt;
“Principal manufacturer” means any person who gets goods manufactured or
processed on his account from another person;


Services by an organizer to any person in respect of a
business exhibition held outside India.
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;


Services by way of slaughtering of bovine animals.
Services received from a provider of service located in a nontaxable territory by (a) Government, a local authority, a governmental authority or an individual
in relation to any purpose other than commerce, industry or any other
business or profession;
(b) an entity registered under section 12AA of the Income tax Act, 1961 for
the purposes of providing charitable activities; or
(c) a person located in a non-taxable territory;

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


Services of public libraries by way of lending of books,
publications or any other knowledge enhancing content or
material.
Services by Employees’ State Insurance Corporation to
persons governed under the Employees’ Insurance Act, 1948.
Services by way of transfer of a going concern, as a whole or
an independent part thereof.
Services by way of public conveniences such as provision of
facilities of bathroom, washrooms, lavatories, urinal or
toilets.
Services by a governmental authority by way of any activity
in relation to any function entrusted to a municipality under
article 243W of the Constitution.
Sl.
No.
(1)
1
Description of
taxable service
(2)
Services in relation
to financial leasing
including hire
purchase
%
Conditi
ons
(3)
(4)
10
Nil.
Explanation
(i)The amount charged shall be an amount,
forming or representing as interest, i.e. the
difference between the installments paid
towards repayment of the lease amount and
the principal amount contained in such
installments;
(ii) the exemption shall not apply to an
amount, other than an amount forming or
representing as interest, charged by the
service provider such as lease management
fee, processing fee, documentation charges
and administrative fee, which shall be
added to the amount calculated in terms of
(i) above.
Sl.
No.
Description of taxable
service
%
Conditions
(1)
(2)
(3)
(4)
2
3
Transport of goods by rail
Transport of passengers, with
or without accompanied
belongings by rail
Bundled service by way of
supply of food or any other
article of human consumption
or any drink, in a premises
(including hotel, convention
center, club, pandal, shamiana
or any other place, specially
arranged for organizing a
function) together with renting
of such premises
30
30
Nil.
Nil.
70
(i) CENVAT
credit on any
goods
classifiable
under Chapters
1 to 22 of the
Central Excise
Tariff Act, 1985
(5 of 1986) used
for providing the
taxable service,
has not been
taken under the
provisions of the
CENVAT Credit
Rules, 2004.
4
Explanation
The amount charged shall be the sum total of
the gross amount charged and the fair market
value of all goods and services supplied in or in
relation to the supply of food or any other article
of human consumption or any drink (whether or
not intoxicating) and whether or not supplied
under the same contract or any other contract,
after deducting(i) the amount charged for such goods or
services supplied to the service provider, if any;
and
(ii) the value added tax or sales tax, if any,
levied thereon :
Provided that the fair market value of goods
and services so supplied may be determined in
accordance with the generally accepted
Sl.
No.
Description of taxable
service
%
Conditions
(1)
(2)
(3)
(4)
5
Transport of passengers by
air, with or without
accompanied belongings
6
Renting of hotels, inns, guest
houses, clubs, campsites or
other commercial places
meant for residential or
lodging purposes.
Services of goods transport
agency in relation to
transportation of goods.
7
40
CENVAT credit on inputs and
capital goods, used for providing
the taxable service, has not been
taken under the provisions of the
CENVAT Credit Rules, 2004.
60
Same as above.
25
CENVAT credit on inputs, capital
goods and input services, used for
providing the taxable service, has
not been taken under the provisions
of the CENVAT Credit Rules,
2004.
Explanation
Sl.
No.
Description of taxable
service
%
Conditions
(1)
(2)
(3)
(4)
70
Same as above.
8
Services provided in relation
to chit
Explanation
Chit means a transaction
whether called chit, chit fund,
chitty, kuri, or by whatever
name by or under which a
person enters into an
agreement with a specified
number of persons that every
one of them shall subscribe a
certain sum of money (or a
certain quantity of grain
instead) by way of periodical
installments over a definite
period and that each
subscriber shall, in his turn, as
determined by lot or by
auction or by tender or in such
other manner as may be
specified in the chit
agreement, be entitled to a
prize amount,
Sl.
No.
Description of taxable
service
%
Conditions
(1)
(2)
(3)
(4)
9
Renting of any motor vehicle
designed to carry passengers
Transport of goods in a vessel
40
Same as above.
50
Same as above.
Services by a tour operator in
relation to,(i) a package tour
25
(i) CENVAT credit on inputs,
capital goods and input services,
used for providing the taxable
service, has not been taken under
the provisions of the CENVAT
Credit Rules, 2004.
(ii) The bill issued for this purpose
indicates that it is inclusive of
charges for such a tour.
10
11
Explanation
Package tour means a
tour wherein
transportation,
accommodation for stay,
food, tourist guide, entry
to monuments and other
similar services in
relation to tour are
provided by the tour
operator as part of the
package tour to the
person undertaking the
tour,
Sl.
No.
Description of taxable
service
%
Conditions
(1)
(2)
(3)
(4)
(ii) a tour, if the tour operator
is providing services solely of
arranging or booking
accommodation for any
person in relation to a tour
10
(i)CENVAT credit on inputs, capital goods
and input services, used for providing the
taxable service, has not been taken under
the provisions of the CENVAT Credit
Rules, 2004.
(ii) The invoice, bill or challan issued
indicates that it is towards the charges for
such accommodation.
(iii) This exemption shall not apply in such
cases where the invoice, bill or challan
issued by the tour operator, in relation to a
tour, only includes the service charges for
arranging or booking accommodation for
any person and does not include the cost of
such accommodation.
Explanation
Sl.
No.
Description of taxable
service
%
Conditions
(1)
(2)
(3)
(4)
10
(i) CENVAT credit on inputs, capital goods and input
services, used for providing the taxable service, has
not been taken under the provisions of the CENVAT
Credit Rules, 2004.
(ii) a tour, if the tour operator is
providing services solely of
arranging or booking
accommodation for any person in
relation to a tour
(iii) any services other than
specified at (i) and (ii) above.
(ii) The invoice, bill or challan issued indicates that it
is towards the charges for such accommodation.
40
(iii) This exemption shall not apply in such cases
where the invoice, bill or challan issued by the tour
operator, in relation to a tour, only includes the
service charges for arranging or booking
accommodation for any person and does not include
the cost of such accommodation.
(i) CENVAT credit on inputs, capital goods and
input services, used for providing the taxable service,
has not been taken under the provisions of the
CENVAT Credit Rules, 2004.
(ii) The bill issued indicates that the amount
charged in the bill is the gross amount charged for
such a tour.
Explanation
Sl.
No.
Description of taxable
service
%
Conditions
(1)
(2)
(3)
(4)
12.
Construction of a complex,
building, civil structure or a
part thereof, intended for a
sale to a buyer, wholly or
partly except where entire
consideration is received after
issuance of completion
certificate by the competent
authority.
25
(i) CENVAT credit
on inputs used for
providing the taxable
service has not been
taken under the
provisions of the
CENVAT Credit
Rules, 2004.
(ii) The value of
land is included in the
amount charged from
the service receiver.
Explanation
The amount charged shall be the sum
total of the amount charged for the
service including the fair market value
of all goods and services supplied by
the recipient(s) in or in relation to the
service, whether or not supplied under
the same contract or any other
contract, after deducting(i) the amount charged for such
goods or services supplied to the
service provider, if any; and
(ii) the value added tax or sales tax,
if any, levied thereon :
Provided that the fair market value of
goods and services so supplied may be
determined in accordance with the
generally accepted accounting
principles.

Notification No.30/2012 dated 20.06.2012 w.e.f. 01.07.2012 as amended has been
issued under Section 68(2) specifying the persons liable to pay service tax. The
categories of the service and the amount of tax component payable by the
service provider and service receiver respectively is given in the following table:Nature of Service
Services of Insurance
Agent to person
carrying on insurance
business
Goods Transport
Agency
Status of
Service
Provider
Percentage of Service Tax Payable by
Service Provider
Service Receiver
Any person
Nil
100%
Any person
Nil
100%
The earlier provisions linking
with categories of persons liable
to pay freight such as factory,
company, etc. and the 75%
abatement have been retained.
Nature of Service
Sponsorship Services
Services provided by
an arbitral tribunal
Legal Services
Support services
Status of
Service
Provider
Percentage of Service Tax Payable by
Service Provider
Service Receiver
Nil
100%
Nil
100%
Individual
Advocate or a
Firm of
Advocates
Nil
100%
Government or
local authority
excluding
certain specified
services.
Nil
100%
Any person
Nature of
Service
Status of Service
Provider
Percentage of Service Tax Payable by
Service Provider
Service Receiver
Renting of a
Individual / HUF (i) If service provider
(i) 100%
motor vehicle
/
follows abated value
designed to
system and the service is
Partnership
Firm
carry passengers
not provided to any person
whether
engaged in similar line of
registered or not, business – Nil
including AOP
(ii) 40%
located in the
(ii) If service provider
taxable territory to does not follow abated
a business entity
value system and the
registered as a
service is not provided to
corporate located any person engaged in
in the taxable
similar line of business –
territory.
60%
Nature of
Service
Status of Service Provider
Supply of
Individual / HUF /
manpower for any
Partnership Firm whether
purpose or
registered or not, including
security services
AOP located in the taxable
territory to a business entity
registered as a corporate
located in the taxable territory.
Service portion in Individual / HUF /
execution of
Partnership Firm whether
works contract.
registered or not, including
AOP located in the taxable
territory to a business entity
registered as a corporate
located in the taxable territory.
Percentage of Service Tax Payable by
Service Provider
Service Receiver
25%
75%
50%
50%*
*The service recipient
has the option of
choosing the valuation
method as per choice
independent of the
valuation method
adopted by the
provider.
Nature of Service
Status of Service
Provider
Services of a person
located in a non-taxable
territory and received
by a person located in
the taxable territory.
Services provided or
Individual
agreed to be provided
by a director of the
company to the
company*
Percentage of Service Tax Payable by
Service Provider
Nil
Service Receiver
100%
Nil
100%
Works contract means a contract wherein transfer of property in goods involved
in the execution of such contract is leviable to tax as sale of goods and such
contract is for the purpose of carrying out construction, erection, commissioning,
installation, completion, fitting out, repair, maintenance, renovation, alteration
of any moveable or immovable property or for carrying out any other similar
activity or a part thereof in relation to such property.
 It is to be noted that the tax liability for the service provider and the service
receiver respectively are independent. This is not like a TDS mechanism and
would require discharging of the identified percentage of service tax.

Case must be pending before the adjudicating authority on
the date of making an application before the Settlement
Commission.
 Application Form-SC(ST)-1 along with fee of Rs.1000/-.
 Full and true disclosure of duty liability which has not been
disclosed before the authority.
 Return must have been filed; show cause is issued; additional
amount accepted must be more than Rs.3 lakhs; and
additional amount and interest must have been paid.
 Settlement Commission will not entertain an application
where the case is pending in appeal.

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Within 7 days from receipt of application notice would be
issued to the applicant as to why the application should be
allowed to be proceeded with.
After considering the explanation the Commission will pass
an order allowing or rejecting the application.
If application is allowed to be proceeded with, report is called
for from the Commissioner.
Order of the Commission shall provide for terms of
settlement including any demand of duty, penalty or
interest, manner of payment, etc.
Powers to attach the property are also available.
Immunity from prosecution can be granted.

Case can be sent back to the authority if there is no cooperation.
Chapter V-A of the Finance Act, 1994 provides for advance rulings.
 Advance Rulings means the determination of the Authority of a question
of law or fact specified in the application regarding the liability to pay
service tax in relation to a service proposed to be provided by the
applicant.
 An application for advance ruling can be made in respect of a question
pertaining to
 Classification;
 Valuation of taxable services for charging service tax;
 Principles for determination of value of taxable service;
 Applicability of notification;
 Admissibility of credit;
 Determination of the liability to pay service tax.
 A new form has been specified and the application has to be filed before
the Authority for Advance Rulings (Central Excise, Customs, and Service
Tax), New Delhi.

The benefit is available only to:
(a) A non-resident setting up a joint venture in India in collaboration
with a non-resident or resident.
(b) Resident setting up a joint venture in India in collaboration with a
non-resident making the application.
(c) A wholly owned subsidiary of an Indian Company of which the
holding company is a foreign company.
who or which as the case may be proposes to undertake any business
activity in India.
(d) A joint venture in India.
(e) A resident falling with such class or category of persons as the
Central Government may specify by Notification in the Official
Gazette. Government has notified Public Sector Companies under
this category.


Joint Venture in India means a contractual arrangement whereby two or
more persons undertake an economic activity, which is subject to joint
control and one or more of the participants or partners or equity holders
is a non-resident having substantial interest in such arrangement.
The application should be accompanied by a fee of Rs.2,500/-. The
application can be withdrawn within 30 days from the date of the
application.

The Authority may, after examining the application and the
records called for, by order, either allow or reject the
application. The Authority shall not allow the application
where the question raised in the application is
(a) already pending in the applicant’s case before any
Central Excise Officer, the Appellate Tribunal or any
Court;
(b) the same as in a matter already decided by the Appellate
Tribunal or any Court. However, no application shall be
rejected unless an opportunity has been given to the
applicant of being heard and the reasons for such
rejection shall be given in the order.


The advance ruling pronounced by the Authority shall be
binding only –
(a) on the applicant who had sought it;
(b) in respect of any matter referred to
(c) on the Commissioner of Central Excise, and the Central
Excise authorities subordinate to him, in respect of the
applicant.
The advance ruling referred to shall be binding as aforesaid
unless there is a change in law or facts on the basis of which
the advance ruling has been pronounced.
Where the Authority finds, on a representation made to it by
the Commissioner of Central Excise or otherwise, that an
advance ruling pronounced by it has been obtained by the
applicant by fraud or misrepresentation of facts, it may, by
order, declare such ruling to be void ab initio and thereupon
all the provisions of this Act shall apply (after excluding the
period beginning with the date of such advance ruling and
ending with the date of order under this sub-section) to the
applicant as if such advance ruling had never been made.
 A new form has been specified and the application has to be
filed before the Authority for Advance Rulings (Central
Excise, Customs, and Service Tax), New Delhi.


If the activity is ongoing, Advance Ruling
cannot be issued - Arisaig Partners (India)
Pvt. Ltd.(2008) 12 STR 245.

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Order passed by the Assistant Commissioner
or Deputy Commissioner – Appeal to CCE(A)
within 2 months from the date of receipt of
the order.
Delay
Sufficient cause
CCE(A) can condone delay within a further
period of one month.
Order passed by CCE(A)
Order passed by Commissioner
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Appeal to CESTAT within a period of 3
months from the date of receipt of order.
No specified outer limit for condonation of
delay.
Pre-deposit
Waiver of pre-deposit
Prima facie case / financial position
Circular dated 01.01.2013 and recovery
Writs

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From the CESTAT Order if the issue does not
involve rate of tax or value, appeal lies to
High Court within a period of 180 days from
the date of receipt of order.
From the High Court order appeal lies before
Supreme Court.
If the CESTAT order involves rate of tax or
value, appeal directly lies to the Supreme
Court.
K.VAITHEESWARAN
ADVOCATE & TAX CONSULTANT
Mobile: 98400-96876
E-mails : [email protected]
[email protected]
Flat No.3, First Floor,
No.9, Thanikachalam Road,
T. Nagar,
Chennai - 600 017, India
Tel.: 044 + 2433 1029 / 4048
402, Front Wing,
House of Lords,
15/16, St. Marks Road,
Bangalore – 560 001, India
Tel : 080 + 2224 4854/ 4112 0804
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