Service Tax -Reverse Charge Mechanism

What is charging section?

Services are chargeable for service tax as per provision under section 66B but who will pay service tax has been given in section 68 of the Finance Act,1994, sub-section (2) of Section 68 speaks out as to liability to pay by service recipient. 

Sec 68 (2) is worded as follows:-

- “In respect of such taxable services as may be notified by the Central Government in the Official Gazette, the service tax thereon shall be paid by such person and in such manner as may be prescribed at the rate specified in section 66B and all the provisions of this chapter shall apply to such person as if he is the person liable for paying the service tax in relation to such service.

Provided that the Central Government may notify the service and the extent of service tax which shall be payable by such person and the provisions of this chapter shall apply to such person to the extent so specified and the remaining part of the service tax shall be paid by the service provider.”

è

Labour Turnover

            Labour Turnover

            It is the rate of change in the labour force during a specified period measured against a suitable index.  The standard or usual labour turnover in the industry or locally or the labour turnover rate for a past period may be taken as the index or normal against which actual turnover rate is compared.  The methods of calculating labour turnover are given below :

Declaration Forms under CST Act,1956

Central Sales Tax (CST) is a tax on Sale levied by Central Government under the provisions of Central Sales Tax Act, 1957. As per the provisions of this Act, any movement of goods from one State to another on account of :-

(a)  sale/purchase, or

(b)  Transfer of document of Title to goods between two separate parties is considered as Interstate sale/purchase.

All such transactions are liable to CST.

Any movement of goods otherwise than as sale (i.e. stock transfer to Branch, Depot, Consignment Agent or for Job work etc) , sent outside the state , is exempted from levy of CST.

Any movement of goods, sent outside the country , is exempted from levy of CST. Example Exports, or Deemed Exports.

Also some of the Interstate transactions are exempted if goods are supplied to Special Economic Zones or to UN or Diplomatic missions etc.

The basic CST Rate as applicable to inter-state transactions is @2% but this basic rate or exemption from CST would apply if purchasing dealer issue the prescribed statutory forms to the selling dealer.

Some of the points relating to CST rates are as follows:

Input Tax Credit Provisions in brief- Bihar and Kerala

State	BIHAR  {Sec.16 / Rule 12,14,15,}	KERALA  {Sec.11,12,13 / Rule 12-A,12-C,13,14,15,46,47,47-A}
Full VAT Input Tax Credits - Eligibility / admissibility & purposes specified	On VAT-paid purchases upon receipt of Tax invoice; for Sale/resale of taxable goods in/from Bihar; for Capital goods for resale or manufacture of taxable goods; Use in manufacture / packing of taxable goods for sale	On ALL VAT-paid goods purchased, for purposes of Resale in/from Kerala, for use in works contracts, for use as input/capital goods in manufacture / processing of goods; for packing; for inter-State sale.

Input Tax Credit provisions in brief- Andhra Pradesh Assam

State	ANDHRA  PRADESH    {Sec.13,22,38 / Rule 16,20}	ASSAM  {Sec.11,14,15 / Rule 9,11,12}
Full VAT Input Tax Credits - Eligibility / admissibility & purposes specified	On ALL VAT-paid goods at point of purchase on receipt of Tax invoice during Tax period, if such goods are for use in business;                                 E.T. paid eligible for adjustment against output VAT.	On VAT-paid purchases in Tax period following after receipt of Tax invoice; for Sale/resale of taxable goods in/from Assam; for Capital goods for manufacture of taxable goods; Use in manufacture/packing of taxable goods for sale