We are a travel agency providing services of a rail travel agent and an air travel agent. We are registered with the service tax authorities and are depositing service tax and filing returns on a timely basis. With respect to our service tax return for the half-year ended September 30, 2007, submitted on October 22, 2007, it has recently come to our notice that there were certain clerical errors in the return due to an oversight. We would like to revise the said return and submit a rectified return. Can we file a revised return?
Yes, a revised return can be submitted by a service tax assessee. Rule 7B of the service tax rules introduced with effect from May 12, 2007, states that an assessee might submit a revised return, in Form ST-3, in triplicate, to correct a mistake or omission. Further, the time limit prescribed in this respect is 60 days from the date of submission of the original return. In the present case, since you would like to rectify certain clerical errors in the service tax return, you can submit a revised return within 60 days from October 22, 2007?by December 21, 2007.
We are engaged in the manufacture of industrial adhesives. Certain employees have been provided mobile phones for business purposes. Mobile connections have been obtained in the respective employees? names while the bills are completely borne by us. We currently do not avail any Cenvat credit in respect of the service tax element included in the said mobile bills as we understand that the same is not allowed under service tax laws. Is the above position taken by us appropriate?
Prior to September 10, 2004, under the erstwhile service tax credit rules, 2002, there was a restriction imposed on availing credit of service tax paid on mobile phone bills. However, under the cenvat credit rules, 2004, effective from September 10, 2004, the restriction in respect of availment of Cenvat credit on mobile bills has been omitted. The recent Central Board of Excise and Customs (CBEC) circular has specifically clarified that Cenvat credit in respect of the service tax paid on mobile bills would be available provided the usage of the said mobile phone can be linked directly or indirectly to the manufacture of finished goods or in providing any taxable service. It would be important that the mobile bills are in the name of the company?if the connections are in the name of employees, there is a possibility of credit being denied.
We are a Kolkata-based construction company and registered under the service tax authorities under categories of commercial and industrial construction service, and construction of residential complex service. We have been awarded a contract in Dhaka, Bangladesh for construction of a commercial complex. The payment for the above service would be partly received in convertible foreign exchange and partly in Indian currency. We understand that the above service might qualify as an export of service and hence, would be exempt from service tax. Please clarify.
Under rule 3(2) of the Export of Services Rules, 2005, one of the conditions laid down for qualifying any service as an export, is that the payment for such service should be received in convertible foreign exchange. In the present case, since the payment that you receive is partly in convertible foreign exchange and partly in Indian currency, the service may not qualify as an export and service tax may be levied on the Indian currency payment. Separately, you could also consider a position that as the entire service is performed outside India, there should not be any service tax applicable?this position could however be litigative.
We are a software company in Bangalore. We are in the process of expanding our operations in India and are opening branches in metros. We have appointed an interior decorator for designing the office spaces and the open spaces as well as the gardens. The interior decorator is charging us service tax. We believe that designing or decorating open spaces and gardens is not interior decoration and hence service tax should only be charged on the indoor interior decoration. Please clarify if the position taken by us is correct.
As per the Finance Act 1994, an interior decorator is any person engaged in providing advice, consultancy, technical assistance or in any other manner, service relating to planning, design or beautification of spaces whether man made or otherwise and this includes landscape designer. It appears from the definition that landscape designing is also under the ambit of the interior decorator?s service. Hence your interior decorator is correctly charging service tax on the services rendered in relation to designing open spaces and gardens.
?Respondents are senior professionals at Ernst & Young. The replies do not constitute professional advice, but are based on interpretation of facts available in readers? queries to the professionals. Neither Ernst & Young nor this publication are liable for any action taken on the basis of this information