We are a company registered under the taxable service categories of business auxiliary services, management, maintenance and repair services, and manpower recruitment and supply agency services. We are currently not providing manpower recruitment services and do not propose to provide the same in the future. Should we amend our service-tax registration? Please advice.
The service-tax rules provide that where there is a change, modification in any information or details furnished in the Form ST-1 at the time of obtaining service-tax registration, such change should be intimated to the jurisdictional assistant commissioner or deputy commissioner within 30 days of such change. In your case, the information furnished in relation to the taxable services provided by you would require amendment and therefore, you are required to intimate this change to the service-tax authorities.
This intimation could be done by way of a letter as well as Form ST-1 for amendment of the service-tax registration. It is advisable that both the form and the letter to be submitted by you should clearly mention that you were engaged in the provision of manpower recruitment and supply agency services previously and that the registration certificate should be amended to exclude the service category of manpower recruitment and supply agency service henceforth.
We are an advertising agency and have recently started operations in Mumbai. We have obtained service-tax registration and are currently paying taxes after utilising credit available in the account. We are adjusting the available balance in the credit account on the due-date of payment with the service-tax liability of the particular month and balance if any is paid through TR-6 challan. We have been advised that the method of set-off adopted by us is incorrect. Please let us know the correct position.
The Cenvat Credit Rules, 2004 stipulate that for the purposes of paying service-tax, credit available in the books of the service provider on the last date of the month can be utilised for paying service-tax relating to that particular month. Thus, the balance of credit available only on the last day of an accounting month can be utilised for the payment of service-tax liability of that month. The procedure that is being followed in your case is incorrect as you are adjusting the liability of a particular month with the credit available till the due date of depositing service tax?fifth of the subsequent month excluding the month of March, in the succeeding month.
We are a BPO exporting call-centre services to our clients overseas. We invoice our clients in US dollars and receive payments in foreign currency. As you are aware due to foreign currency fluctuations, typically there is a variance in the amount invoiced and collected. We are registered with the service-tax authorities and would like to understand how we should depict the amount invoiced and received in our returns?
It has been clarified that where payment is in foreign currency the rate of exchange prevailing on the date of payment would be the rate to be used for conversion of foreign currency into Indian rupees. The service-tax law does not specifically mention which rate of exchange should be used, unlike under income tax laws where the SBI rate of exchange has been prescribed. As a service provider, you could use the SBI rate for determining the value invoiced as on the date on invoicing and value received as on the date on receipt of payment. You are correct that there could be variances due to foreign-exchange fluctuations and this would need to be appropriately explained to the authorities should the need arise.
We have deposited service-tax as a recipient of taxable services for the month of May, 2007 on June 5, 2007. In case, we are eligible to take cenvat credit of service-tax paid, we would like to know when could we take credit of the service-tax deposited as a recipient?in the month of May or June 2007.
Service-tax paid by you as a recipient of services from overseas should be eligible as credit if the services received by you qualify as an ?input service? defined in the Cenvat Credit Rules 2004. If the service qualifies as an input service, you would be eligible to claim cenvat credit even on imported services. Credit of service tax paid, as a recipient would be eligible to you only once the service tax is deposited on the service. Therefore, in the instant case, credit of service tax paid as a recipient of services would be eligible in the month of June considering that you have paid the service tax on June 5, 2007.
?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