Service Tax Interview Questions & Answers

Question 1. What Is E-filing Of Service Tax Returns?

Answer :

The e-filing is a facility for electronic filing of Service Tax Returns through the Internet.

Question 2. What Is Export Of Services? Whether Export Of Services Is Exempted From Service Tax?

Answer :

What constitute export of service is defined in the Export of Service Rules, 2005. The export of taxable services is exempted from Service Tax.

Question 3. What Will Be "usual Place Of Residence" Of A Body Corporate?

Answer :

Usual Place of Residence, in relation to a body corporate, means the place where it is incorporated or otherwise legally constituted. (Ref.: Explanation 2 to sub-section 2 of Section 66A of the Finance Act,1994.)

Question 4. When Should A Prospective Assessee Obtain Registration?

Answer :

• When a person commences business of providing a taxable service, he is required to register himself within 30 days of such commencement of business[sub-rule (1) of Rule 4 of Service Tax Rules, 1994].
• In case service tax is extended to a new service, an existing service provider must register himself, unless he is eligible for exemption under any notification, within a period of 30 days from the date of new levy [sub-rule 5A of Rule 4 of the Service Tax Rules, 1994].

Question 5. For What Exactly Can Automation Of Central Excise And Service Tax (aces) Be Used?

Answer :

• Online registration and amendment of registrations details.
• Electronic filing of documents such as returns, claims, letter for permission/ intimation etc.
• Online tracking of status of applications filed for claims, permission/ intimation etc.
• Online facility to view documents like Registration Certificates, Returns, Show Cause Notice, Order-in-Original etc.

Question 6. What Is The Relevance Of Declared Tariff? Is The Tax Required To Be Paid On Declared Tariff Or Actual Amount Charged?

Answer :

includes charges for all amenities provided in the unit of accommodation like furniture, air-conditioner, refrigerators etc., but does not include any discount offered on the published charges for such unit. The relevance of ?declared tariff? is in determining the liability to pay service tax as far as short term accommodation is concerned. However, the actual tax will be liable to be paid on the amount charged i.e declared tariff minus any discount offered.

Question 7. Can Service Tax Show Cause Notice Be Waived?

Answer :

Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person chargeable with the service tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such service tax on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise/Service Tax Officer before service of notice on him and inform the Central Excise/Service Tax Officer of such payment in writing.

Question 8. Is The Value Added Tax Imposed By States Required To Be Included For The Purpose Of Service Tax?

Answer :

For the purpose of service tax, State Value Added Tax (VAT) has to be excluded from the taxable value.

Question 9. What Are The Returns A Service Tax Assessee Has To File?

Answer :

• ST-3 Return : For all the registered assessee, including Input ServiceDistributors, (Ref. Section 70 of Finance Act,1994 and Rule 7 of Service Tax Rules, 1994 read with Notfn.No. 14/2007-ST dated 02.04.2007).
• ST-3A Return:The assessee who is making provisional assessment under rule 6(4) of the Service Tax Rules, 1994.

Question 10. If Export Proceeds Are Received In Indian Currency, Will It Be Denied Export Benefit?

Answer :

If export proceeds are received in Indian currency, no export benefits shall be available.

[Ref. Rule 3(2)(b) of Export of Service Rules, 2005].

Question 11. Can The Department Modify The Value Determined By The Service Provider?

Answer :

• The Central Excise Officer is empowered to verify the accuracy of any information furnished or document presented for valuation.
• If the value adopted by the Service Tax assesses is not acceptable in accordance with the statute, the officer shall issue a show cause notice (SCN) proposing to determine the value as per the law.
• The SCN would be decided after providing reasonable opportunity of being heard to the assesses.

Question 12. Which Banks Provide The Facility Of E-payment Of Service Tax?

Answer :

The following banks provide e-payment facility:

1. Allahabad Bank All Commissionerates
2. Bank of Baroda All Commissionerates
3. Bank of India All Commissionerates
4. Bank of Maharashtra All Commissionerates
5. Canara Bank All Commissionerates
6. Central Bank All Commissionerates

Question 13. What Are The Duties / Taxes That Can Be Availed As Credit In Case Of Service Tax?

Answer :

As mentioned at para 12.1, Duties paid on the inputs and capital goods, and the Service Tax paid on the input‟ services can be taken as credit. Education Cess paid on the Excise duty and Service Tax can also be taken as credit. However, the credit of such Education Cess availed can be utilized only for payment of Education Cess relating to output service.

Question 14. When Paid By Cheque, Which Date Will Be Treated As Date Of Payment For Service Tax Payment?

Answer :

The date of presentation of the cheque to the bank designated by the Central Board of Excise & Customs for this purpose shall be deemed to be the date on which service tax has been paid subject to realization of that cheque.

Question 15. What Is Meant By Service Tax Registration? Who Should Apply For Service Tax Registration?

Answer :

In terms of Section 69 of the Finance Act,1994 (Chapter V) read with rule 4 of the Service Tax Rules,1994:

• Every person who has provided a taxable service of value exceeding Rs. 9 lakhs, in the preceding financial year, is required to register with the Central Excise or Service Tax office having jurisdiction over the premises or office of such service provider.
• In case a recipient is liable to pay service tax, he also has to obtain registration.

Question 16. Are There Any Geographical Restrictions On Banks For Service Tax Payments?

Answer :

No. Customer can effect payment from anywhere for the Commissionerate in which he is registered with, provided that particular bank is designated and authorized to collect revenue for that Commissionerate.

Question 17. Are There Any Statutory Documents Prescribed By The Government Such As Specified Invoice Proforma, Specified Registers Etc. For Use By The Service Providers?

Answer :

There are no specific statutory records which have to be maintained by a Service Tax assessee. The records including computerized data, if any, which are being maintained by an assessee on his own or as required under any other law in force, such as Income Tax, Sales Tax etc. are acceptable for the purpose of Service Tax - (Rule 5(1) of the Service Tax Rules, 1994).

Question 18. Where Can The Service Tax Department Be Contacted?

Answer :

In Ahmedabad, Bangalore, Chennai, Delhi, Kolkata & Mumbai (Mumbai I & II) there are exclusive Service Tax Commissionerates.

Question 19. What Is The Procedure For Registration? Who Should Be Approached For Service Tax Registration?

Answer :

A prospective Service Tax assessee (service provider or service receiver) or "Input Service Distributor" seeking registration should file an application in Form ST-1 (in duplicate) [prescribed vide Notfn.No. 32/2005 dated 20.10.2005 as amended Notfn. No. 11/2008 dated 1.3.2008] before the jurisdictional Central Excise/Service Tax officer. To verify the correctness of declaration in the said form, certain documents such as copy of PAN card, proof of address of business premise(s).

Question 20. Whether Cleaning Of Export Cargo By Fumigation Is Taxable Under "cleaning Services"?

Answer :

No. Fumigation of export cargo including agricultural/horticultural produce, whether loaded into containers or otherwise, does not satisfy the statutory definition of "cleaning activity" under Section 65(24b) of the Finance Act, 1994. Further the cleaning of the containers used for exporting the cargo are also exempted from the scope of cleaning services.