Service Tax (Determination of Value) Second Amendment Rules, 2012; Notification No. 24/2012 - Service Tax, dt 6th June, 2012

Service Tax (Determination of Value) Second Amendment Rules, 2012. W.E.F  1^st day of July, 2012.

2. For rule 2A, the following rule shall be substituted, namely:-

“2A. Determination of value of service portion in the execution of a works contract.- 

Subject to the provisions of section 67, the value of service portion in the execution of a works contract U/s 66E (h) of the Act, shall be determined in the following manner

(i)             Value of service portion in the execution of a works contract 

a.     Shall be equivalent to the gross amount charged for the works contract less: the value of property in goods transferred in the execution of the said works contract.

Explanation.

(a)   gross amount charged for the works contract shall not include value added tax or sales tax,(on transfer of property in goods involved in the execution )

(b)  Value of works contract service shall include, -

(i)      Labour charges for execution of the works;

(ii)      amount paid to a sub-contractor for labour and services;

(iii)     Charges for planning, designing and architect’s fees;

(iv)     Charges for obtaining on hire or otherwise, machinery and tools used for the execution of the works contract;

(v)     cost of consumables such as water, electricity, fuel used in the execution of the works contract;

(vi)     cost of establishment of the contractor relatable to supply of labour and services;

(vii)    Other similar expenses relatable to supply of labour and services; and

(viii)   profit earned by the service provider relatable to supply of labour and services;

(b)   Value assessed for value added tax or sales tax shall be taken as the value of property in goods transferred, for determination of the  value of service portion in the execution of works contract under this clause.

(ii) Where the value has not been determined under clause (i), the person liable to pay tax on the  service portion involved in the execution of the works contract shall determine the service tax payable in the following manner, namely:-

Sl No	Particulars	The total amount charged for the works contract;
A	Works contracts entered into for execution of original works,	40%
B	Contract entered into for maintenance or repair or reconditioning or restoration or servicing of any goods	70%
C	Not covered  under A and B above including maintenance, repair, completion and finishing services such as glazing, plastering, floor and wall tiling, installation of electrical  fittings of an immovable property	60%

;

Explanation 1.-  

 (a) “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;

(c)   “total amount” means

the sum total of the gross amount charged for the works contract

and the fair market value of all goods and services supplied (determined in accordance with the generally accepted accounting principles) in or in relation to the execution of the works contract.

after deducting-

(i) the amount charged for such goods or services, if any; and

(ii) the value added tax or sales tax, if any, levied thereon:

           

 Explanation 2.- Provider of taxable service shall not take CENVAT credit of duties or cess paid on any inputs, used in or in relation to the said works contract,

3.  For rule 2B, following are omitted :-

  the words, brackets, letters and figures “referred to in sub-clause (zm) and (zzk) of clause (105) of section 65 of the Act,” shall be omitted.

 4.  Insertion of Rule 2C

“2C. Determination of value of  service portion involved in supply of food or any other article of human consumption or any drink in a restaurant or as outdoor catering.-

 Subject to the provisions of section 67, the value of  service portion,  in an activity wherein goods   being  food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity at a restaurant or as outdoor catering, shall be the specified percentage of the total amount charged for such supply, in terms of the following Table, namely:-

Sl. No.	Description	Percentage of  the total amount
(1)	(2)	(3)
1.	Service portion in an activity wherein goods, being food or any other article of human consumption or any drink(whether or not intoxicating) is supplied in any manner as a part of the activity,  at a restaurant	40
2.	Service portion in outdoor catering wherein goods, being food or any other article of human consumption or any drink(whether or not intoxicating) is supplied in any manner as a part of such outdoor catering	60

Explanation 1.- 

“total amount” means

the sum total of the gross amount charged and the fair market value (determined in accordance with the generally accepted accounting principles) 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), whether  or not  supplied under the same contract or any other contract,

after deducting-

(i) the amount charged for such goods or services,  if any; and

(ii) the value added tax or sales tax, if any, levied thereon:

             

.  

Explanation 2.- 

Provider of taxable service shall not take CENVAT credit of duties or cess paid on any goods classifiable under Chapters 1 to 22 of the Central Excise Tariff Act, 1985 (5 of 1986).”.

5. Amendment in rule 3,

for the words “where the consideration received is not wholly or partly consisting of money”, the words “where such value is not ascertainable” shall be substituted.

6. Amendment in  rule 5,

 In the said rules, in rule 5, in sub-rule(1), in the Explanation, for the words, brackets, letters and figures  “services specified in sub-clause (zzzx) of clause (105) of section 65 of the Finance Act, 1994,

 the value of taxable service shall be the gross amount paid by the person to whom telecom service is provided by the telegraph authority”, the words

“the value of the telecommunication service shall be the gross amount paid by the person to whom telecommunication service is actually provided.” shall be substituted.

7. Amendment in Rule 6,

(a)  in sub-rule (1),-

 (i) in clause (viii), for the words “in any manner; and” the words “in any manner;” shall be substituted;

(ii) in clause (ix), for the words “insurance agent”, the words “insurance agent; and” shall be substituted;

(iii) after clause (ix), the following clause shall be inserted, namely:-

 “(x) the amount realised as demurrage or by any other name whatever called for the provision of a service beyond the period originally contracted or in any other manner relatable to the provision of service.”;

(b)   in sub-rule (2),-

 (i) for clause (iv), the following clause shall be substituted, namely:-

“(iv)   interest on  delayed payment of any consideration for the provision of services or sale of  property, whether moveable or immoveable;”

 (ii)    after clause (v), the following clause shall be inserted, namely:-

“(vi)   accidental damages due to unforeseen actions not relatable to the provision of service; and

(vii) subsidies and grants disbursed by the Government, not directly affecting the value of service.”.

8. Rule 7  omitted.

Notification No. 17/2012 - Service Tax dt 29th May 2012 on Service Tax (Compounding of Offences) Rules, 2012.

                                     Service Tax (Compounding of Offences) Rules, 2012.

1. Important  Definitions.-

 (a) “applicant” means any assessee or any other person, but shall not include officers of Central Excise appointed for exercising the powers under the Act under rule 3 of the Service Tax Rules, 1994;

(b)  “compounding authority” means the Chief Commissioner of Central Excise, having jurisdiction over the place where the offence under the Act, have been or alleged to have been committed;

 (c) “reporting authority” means, the Commissioner of Central Excise or Commissioner of Service Tax, having jurisdiction over the place where the offences under the Act have been or are alleged to have been committed or any other officer as may be authorised in this regard by the Chief Commissioner of Central Excise having jurisdiction over the place where such offences under the Act, have been or are alleged to have been committed;

2. Form and manner of application.-

(a) An applicant may, either before or after the institution of prosecution, make an application under sub-section (2) of section 9A of  Excise Act, (made applicable to service tax vide section 83 of the Act), in the prescribed.

(b) Where an offence under the Act has been committed at more than one place of jurisdiction then the Chief Commissioner of Central Excise having jurisdiction over such place where the amount of service tax evaded is more than the others, shall be the competent authority.

3. Procedure on receipt of application

(1) On receipt of an application,

(a) the compounding authority shall call for a report from the reporting authority with reference to the particulars furnished in the application,

(b) or any other information, which may be considered relevant for examination of such application.

(2) Such report shall be furnished by the reporting authority within a period of one month or within such extended period, from the date of receipt of communication from the compounding authority.

(3) The compounding authority, after taking into account the contents of the said application,

(a) may, by order, either allow the application indicating the compounding amount and grant him immunity from prosecution or reject such application:

(b) no rejection unless an opportunity has been given to the applicant of being heard and the grounds of such rejection are mentioned in such order:

(c) However the application shall not be allowed unless the service tax, penalty and interest liable to be paid have been paid for the case for which application has been made.

(4) A copy of every order) shall be sent to the applicant.

(5) The applicant shall, within a period of thirty days from the date of receipt of order allowing the compounding of offences,

(a) pay the compounding amount, as ordered to be paid by the compounding authority and shall furnish the proof of such payment to the compounding authority.

(6) The compounding amount once paid shall not be refunded except in cases where the court rejects grant of immunity from prosecution.

(7) The applicant shall not claim, as of right, that his offence be compounded.

5.  Fixation of the compounding amount.

S.No.	Offence	Compounding amount
(1)	(2)	(3)
1.	Offence specified under section 89 (1)(a) of the Act	Up to fifty per cent. of the amount of service tax evasion, subject to minimum of ten per cent. of amount of tax evaded
2.	Offence specified under section 89 (1)(b) of the Act	Upto fifty per cent. of the amount of CENVAT Credit wrongly taken or utilised, subject to minimum of ten per cent. of said amount.
3.	Offence specified under section 89 (1)(c) of the Act	Rupees fifty thousand for the first offence and to be increased by hundred per cent. of this amount for each subsequent offence
4.	Offence specified under section 89 (1)(d) of the Act	Upto twenty five per cent. of the amount of service tax not deposited subject to a minimum of two per cent. for each month for which the amount has not been so deposited.

(a) if a person has committed offences falling under more than one category specified above and where the amount of service tax evasion or amount of CENVAT Credit wrongly taken or utilised is the same for all such offences, the compounding amount, in such cases, shall be the amount as determined for the offence for which a higher compounding amount has been prescribed.

6.  Power of compounding authority to grant immunity from prosecution. –

(a)The compounding authority, if he is satisfied that the applicant has co-operated in the proceedings before him and has made full and true disclosure of facts relating to the case,

(b) grant such person, subject to such conditions as he may think fit to impose, immunity from prosecution for any offence under the Act, with respect to the case covered by the compounding of offence.

7. Withdrawal of immunity from prosecution in certain conditions. –

 (1) An immunity granted to a person shall stand withdrawn if such person fails to pay any sum specified in the order of compounding passed by the compounding authority,

(2) An immunity granted to a person may, at any time, be withdrawn by the compounding authority, if he is satisfied that such person had, in the course of the compounding proceedings, concealed any material particulars, or had given false evidence, and

----------------------------------------------------------------------------------

FORM

(See rule 3)

Application for Compounding of Offence

1. Full Name and permanent address of the applicant:

2. Address for communication:

3. (i) Permanent Account Number (PAN):

    (ii) Service Tax Registration No:

4. Commissioner of Central Excise/Service Tax having jurisdiction over the applicant:

5. Specific provision(s) of  Chapter V of the Finance Act, 1994, against whose violation, prosecution is instituted or contemplated for which application of compounding is being filed:

6. Details of Adjudication Order in relation to the case for compounding:

7. Brief facts of the case and particulars of the offence (s) charged:

8. Whether Show Cause Notice issued:

9. If yes, details of service tax demanded:

10. Whether Show Cause Notice has been adjudicated:

11. If yes, adjudication details:

(a) Amount of service tax confirmed:

(b) Amount of CENVAT credit to be recovered/denied:

 

(c) Penalty imposed:

12. Whether this is the first offence under Chapter V of the Finance Act, 1994, if not, details of previous cases:

13. Whether any proceedings for the same offence contemplated under any other law, if so, the details thereof:

Name and Signature of the applicant.

---------------------------------------------------------------------------------------------------------------------------------------

DECLARATION

1. I shall pay the compounding amount, as may be fixed by the compounding authority under sub-rule (3) of rule 4 of the Service Tax (Compounding of Offences) Rules, 2012.

2. I understand that I shall not claim, as of right that the offence committed by me under the Act be compounded.

Name and Signature of the applicant.

VERIFICATION

I,  _______  son/daughter/wife of ____________  residing at __________do solemnly declare that I am making this application in my capacity as ______ and I am competent to verify it.

That the contents of this application are true to the best of my knowledge and belief and no information relevant to the facts of the case has been suppressed. The documents accompanying the application are true copies of the originals and the tables showing financial transactions are correct and are duly attested by me.

Verified today the _____________ day of (month) __________ (year) at_________.

Name and Signature of the applicant.

Place:   

Date: 

Service Tax (Settlement of Cases) Rules, 2012; Notification No. 16/2012- Service Tax dt 29th May, 2012

                              Service Tax (Settlement of Cases) Rules, 2012. 

   

(1) Form and manner of Application. –

An application under sub-section (1) of section 32E  of Excise Act, made applicable to service tax vide section 83 of the Act, shall be made in the Form SC(ST)-1.

 

(2) The application and relevant documents accompanying such application shall be signed by:

 

(a)   in the case of an individual,

      1. By the individual himself or

      2.Where the individual is absent from India, by the individual concerned or by some person duly authorised by him in this behalf;

      3.Where the individual is a minor or is mentally incapacitated from attending to his affairs, by his guardian or by any other person competent to act on his behalf;

(b)   in the case of a Hindu undivided family,

      1. By the Karta of such family and,

      2.Where the Karta  is absent from India or is mentally incapacitated from attending to his affairs, by  the senior most adult member of the family available;

(c)   in the case of a company or local authority,

       by the principal officer thereof;

(d)  in the case of a firm,

      by any partner thereof, not being a minor;

(e)  in case of any other association,

       by any member of the association or the principal officer thereof; and

(f)   in the case of any other person,

      by that person or some person competent to act on his behalf.

 

(3) Every application in the Form SC(ST)-1 shall be filed

           

            1. in quintuplicate

           

            2. and shall be accompanied by a fee of one thousand rupees.

 

(4)  The additional amount of service tax

1.accepted by the applicant along with interest due thereon,

2.shall be deposited by him in any of the authorised bank under TR-6 Challan in quintuplicate, or  G.A.R.-7 and shall be disclosed by him in the Form.

 

4.   Disclosure of information in the application for settlement of cases. –

1. The Settlement Commission shall,

a. While calling for a report from the Commissioner of Central Excise having jurisdiction or Commissioner of Service Tax having jurisdiction, under sub-section (3) of section 32F of Excise Act, (made applicable to service tax vide section 83 of the Act),

b. forward a copy of the application referred to in sub-rule (1) of rule 3 along with the annexure to the application and the statements and other documents accompanying such annexure.

 

5.  Manner of provisional attachment of property. –

(1) Where the Settlement Commission orders attachment of property under sub-section (1) of section 32G of Excise Act, (made applicable to service tax vide section 83 of the Act)

(2), it shall send a copy of such order to the Commissioner of Central Excise or Commissioner of Service Tax having jurisdiction over the place in which the applicant owns any movable or immovable property or resides or carries on his business or has his bank account.

           

(3) On receipt of the order referred, the Commissioner may authorise any officer subordinate to him and not below the rank of an Assistant Commissioner of Central Excise or Service Tax to take steps to attach such property of the applicant.

 

(4) The officer authorised) shall prepare an inventory of the property attached and specify in it,

(a) in the case of the immovable property, the description of such property sufficient to identify it and

(b) in case of the movable property, the place where such property is lodged or kept and shall hand over a copy of the same to the applicant or to the person from whose charge the property is attached.

 

(5) The officer authorised shall send a copy of the inventory so prepared each to the Commissioner of Central Excise and the Settlement Commission.

 

6.    Fee for copies of reports. –

(a)Any person who makes an application under section 32J of Excise Act, (made applicable to service tax vide section 83 of the Act), for obtaining copies of reports made by any Central Excise Officer,

 (b)shall pay a fee of five rupees per page of each report or part thereof.

 

Form No. SC(ST)-1

[See rule 3 of the Service Tax (Settlement of Cases) Rules, 2012]

 

Before the Customs and Central Excise Settlement Commission

____________ Bench at  __________

Form of application for settlement of a case under section 32E of Excise Act made applicable to service tax vide section 83 of the Finance Act, 1994 (32 of 1994)

 

1.	Full name of the applicant:
2.	(i)    Postal address of the applicant (ii)   E- mail address of the applicant, if any
3.	(i)     Address for communication: (ii)    Telephone No.
4.	(i)    Permanent Account No: (ii)   Service Tax registration No: (iii)  Status: (See note 2)
5.	(i) Commissioner of Central Excise/Service Tax having jurisdiction over the applicant: (ii) Postal address of the Commissioner of Central Excise/Service Tax having jurisdiction over the applicant:
6.	Details of Show Cause Notice issued to the applicant (a) Show Cause Notice No and date (b) Period of dispute in the notice (c) Service tax demanded in the notice ( in Rs. ) (d) Dispute in connection with which the application for settlement is made. (e)  Adjudicating authority before whom the notice is pending adjudication.
7.	(i)   Whether service tax returns were filed for the period of dispute: (ii)  Whether the invoices on taxable services are duly entered in the books of accounts.  If so, details thereof.  Note: Self-attested copies of relevant service tax returns and extracts from books of accounts/register to be enclosed.
8.	Brief facts of the case and particulars of the issues to be settled and terms of settlement sought by the applicant:
9.	(a)    Amount of service tax accepted as payable for settlement (in Rs) (b)    Interest on the said admitted service tax (in Rs.): (Detailed calculations of (a) and (b) above to be enclosed as Annexure-I)
10.	Payment details of the service tax accepted, by the applicant, along with interest as at (9) above (TR-6 challan  or G.A.R.-7 number and date)  (Details to be enclosed as Annexure-II)
11.	Whether any application for settlement (other than the present one) has been filed by the applicant before any Bench of Settlement Commission.   If yes, the following information may be provided : (a)  Application No. and date (b) Amount admitted for settlement (c)  Show cause notice No. and date (d)   Status of the application, if decided, then details of the final order of the Commission: (i)  Settlement order No. and date (ii) Details of deposit of settlement amount (iii) Whether settlement amount has been paid in terms of the order (e)  If any application of the applicant was sent back/rejected by the Settlement Commission, the reference number and date of the order (f) Reference number and date of the order, if any, in case the applicant was convicted of any offence under Chapter V of the Act in relation to a case settled earlier by the Settlement Commission
12.	(i) Details of the order, if the applicant was ever debarred from making further application for settlement under section 32-O of Excise Act made applicable to Service Tax vide section 83 of the Act, by any of the Benches of the Settlement Commission (ii)  Details of the order, if any settlement in respect of the applicant has ever been made void under section 32L of Excise Act made applicable to Service Tax vide section 83 of the Act, by any of the Benches of the Settlement Commission

 

 

 

 Signature of the applicant

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Verification

 

I……………..son/daughter/wife of …………………. residing at……………. do solemnly declare that I am making this application in my capacity as………….and I am competent to verify it.

 

That the contents of this application are true and that I have not filed any application for settlement in contravention of the provisions of the Chapter V of Excise Act made applicable to service tax vide section 83 of the Act, before the Settlement Commission and also that no information relevant to the facts of the case has been suppressed.  Annexures of the documents accompanying the application are true copies of the originals and the tables showing financial transaction are correct and are duly attested by me.

 

That no proceeding in respect of the case for which settlement is being sought, is pending before Commissioner (Appeal), Customs, Excise and Service Tax Appellate Tribunal or the courts, as the case may be, or has been remanded back to the adjudicating authority by the said appellate authorities.

 

Verified today the………..day of……….(mention the month and year) at ………(mention the place)

 

Deponent

Note:    

 

1. The application fee should be credited in a branch of the authorised bank or a branch of the State Bank of India or a branch of Reserve Bank of India and the triplicate copy of the challan sent to the Settlement Commission with the application.  The Settlement Commission will not accept cheques, drafts, hundies or other negotiable instruments.

2. Please state whether individual, Hindu undivided family, company, firm, an association of persons, etc.

3.  Details of the additional amount of Service Tax accepted as payable and interest thereon referred to in item 9 of the application shall be furnished in annexure to this application. 

4.  Original copy of the of the TR-6 challan indicating amount of service tax  accepted as payable for settlement and interest thereon referred to in item 9 be retained by the applicant, duplicate be endorsed to the Central Excise Officer having jurisdiction over the applicant, triplicate be endorsed to the jurisdictional Chief Accounts Officer of the Central Excise or Service Tax Commissionerate as the case may be, quadruplicate be retained by the bank and quintuplicate copy be enclosed with this application form. In the case of G.A.R.-7, photocopies of tax payer’s counterfoil, attested by the jurisdictional Central Excise Officer, may be furnished to various authorities.

-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Annexure

 

Statement containing particulars, referred to in item 8 of the application, made under section 32E (1) of Excise Act made applicable to service tax vide section 83 of the Act.

 

1.      Details of information which has not been correctly declared in the periodical return;

2.      Service tax liability accepted out of the total service tax demanded in the show cause notice issued and the manner in which such service tax liability has been derived;

3.      Full and true disclosure of the facts regarding the issues to be settled including the terms of settlement sought for by the applicant.

Signature of the applicant

Place

Date