I have a property in a commercial complex in Delhi, which I have rented to a foreign company. Currently, I am not charging service tax under the category of ?renting of immovable property service?. This is pursuant to the Delhi High Court judgement, which has struck down the levy of service tax on the rent charged in respect of the immovable property. We understand that as per the recent instructions issued, we would need to deposit service tax on the rentals charged to our tenants. Please confirm.
You are correct that the Delhi High Court has struck down the levy of service tax on renting of immovable property. Pursuant to this judgement, there are few instances where lessors are not charging service tax on the rentals of the immovable property. The department has since filed a special leave petition with the Supreme Court and has sought an interim relief against the order passed by the Delhi High Court.
Recently, the Tax Research Unit has issued instructions to the jurisdictional service tax authorities to take necessary action to safeguard the revenue either by pursuing the tax payer to pay the service tax due or resort to any other means under the law. Therefore, it is likely that the jurisdictional service tax authorities will demand service tax from lessors of commercial property. In such a case, you can opt to deposit service tax with the service tax department ?under protest?.
We are a diagnostic company and are planning to import packaged software (through a physical medium) to facilitate provision of our services. We understand that the consideration representing provision of ?right to use? on import of packaged software is subject to service tax. Accordingly, the same has been exempted from the additional customs duty. Please advice whether we would need to pay custom duty on entire value, including value towards provision of right to use.
You are correct that certain custom authorities have refused to accept the split value in the invoices and sought to charge CVD on the entire invoice value i.e. media value and value for right to use software disclosed separately by certain importers and charged CVD on the entire value. In this regard, a circular has recently been issued by the Central Board of Excise and Customs, which provides clarifications on objections raised by certain custom authorities on availing of CVD exemption by importers of packaged software. The circular provides that the authorities should accept the split value and charge CVD only on the media value unless there are reasons to believe that the split has been effectively done to evade payment of duty. Therefore, if your invoice separately mentions the value towards provision of right to use, no CVD should be levied on the same by the Custom authorities.
We are garment traders in Haryana and have an annual turnover of Rs 8.5 lakh. We are currently covered under the purview of Haryana VAT Act and are duly discharging our VAT liability. We understand that a new Goods and Service tax (GST) will replace various indirect taxes in India by the middle of next year. Please advise whether we would get covered under the ambit of GST or not.
At this stage, it would not be possible to ascertain whether you would get covered under the GST regime because the same could be determined only once the draft GST legislation is released by the government. The discussion paper recommends a threshold of Rs 10 lakh and Rs 1.5 crore for goods at State level GST and Central level GST, respectively.
We are a service provider and have been filing our service tax returns manually. Please advice, if we could also file our service tax returns electronically.
Yes, you can file your service tax returns electronically. The Central Board of Excise and Customs is launching ACES (Automation of Central Excise and Service Tax) for electronic interface between the department and assessees. For availing the ACES facility, the department will allot a login ID and password to each assessee. You can also visit the websites, http://www.aces.gov.in and http://www.servicetaxdelhi.gov.in for more information on ACES.
Respondents are senior professionals at Ernst & Young. The replies do not constitute professional advice. Neither EY nor FE are liable for any action taken on the basis of these replies