(Note:- see,
1. ST-1
2. ST-2
3. ST-3
4. ST-3A
5. TR-6
6. Service Tax Rules, 1994)

Trade Notice No. 7/97-ST, Dt. 4.7.97
1. Attention of the Trade/Public and all concerned, is invited to Section 88 of the Finance Act, 1997 which provides, interalia, for charging of service tax on the services rendered by Consulting Engineers and Manpower Recruitment Agency, Levy of Service Tax on these services will come into force from 7.7.97 vide Notification No. 23/97-Service Tax dt. 2.7.97 Notification No. 24/97-Service Tax dt. 2.7.97 has been issued to define the person responsible for collecting the Service Tax in relation to the services provided by the Consulting Engineers and Manpower Recruitment Agency.

2. A cell has been created in the Headquarters of the Commissionerate of Central Excise, Mumbai-1 headed by the Assistant Commissioner of Central Excise to deal with the service tax matters. the address of the said Assistant Commissioner is as under :
" Assistant Commissioner, Central Excise
6th Floor, (Service Tax Cell), 115,
M.K. Road, Central Excise Bldg.,
Churchgate, Mumbai-400020."
All the assessees are requested to approach the above Assistant Commissioner for any assistance in the matter of service tax.

3. A general scheme for the purpose of implementation, covering aspects of registration, maintenance of records, assessment, quarterly return and appellate mechanism has been provided by Service Tax Rules, 1994. A special provision has been made in Rule 6 for provisional assessment of the service tax.

4. As per Finance Act, 1997 the taxable services rendered by Consulting Engineer & Manpower Recruitment Agency to any person is chargeable to service tax 5% of the value of the taxable service. The salient features of the scheme related to the above two services are as follows :

I) Registration

a) Every person in the jurisdiction of Mumbai-I Central Excise Commissionerate who is responsible for collecting the Service Tax shall make an application to the Assistant Commissioner, Service Tax Cell, 6th Floor, 115, M.K. Road, Churchgate, Mumbai-400020 in Form ST-1 for registration.

b) An acknowledgement will be provided on the duplicate copy of the ST-1 form by the Superintendent of Central Excise, Service Tax, 115, M.K. Road, Churchgate, Mumbai-I. The registration certificate will be granted in Form ST-2 appended to the Rules, within 7 days from the date of receipt of application of registration. If the registration certificate is not granted within the said period, the registration applied for shall be deemed to have been granted.

c) As per section 69 of the Finance Act, 1994 read with rules 3 & 4 of the Service Tax Rules, 1994, every person responsible for collection of the service tax is required to be registered with the concerned Central Excise Officer appointed under Rule 3. Notification No. 24/97-Service Tax, dated 2.7.97 amends Rule 2 of the said rules so as to prescribe that the person responsible for collecting the service tax in relation to the services provided by a manpower recruitment agency shall be the agency which raises the bill for services rendered to a client and the person responsible for collecting the service tax in relation to the services provided by a consulting engineer shall be the consulting engineer who raises the bill for services rendered to a client.

d) When a registered assessee transfers his business to another person, the transferee shall obtain a fresh certifcate of registration.

e) When a registered assessee ceases to carry on the activity for which he is registered, he shall surrender his registration certificate immediately to the Central Excise authorities.

II) Payment of Service Tax

a) Rule 6 of the Service Tax Rules, 1994, deals with the payment of Service Tax. The existing banks authorised to collect Central Excise duties in each of the Commissionerate collect Central Excise duties in each of the Commissionerate will also undertake the collection work of service tax for the present.

b) As per Sub-Section 2 of Section 68 of the Finance Act, 1994, the Service Tax collected during any calendar month shall be paid to the credit of the Central Governemnt by 15th of the following month in form TR-6 challan (yellow colour) e.g., for the month of July 1997, it should be credited latest by 15th of August 1997. as envisaged sub-section 3 of Section 68 of Chapter V of the Finance Act, 1994 as amended, a person responsible for collecting the service tax who fails to collect such tax shall be liable to pay such tax to the Govt. within 75 days from the close of the month in which the service was rendered. for payment of Service Tax, the TR-6 challan in yellow colour may be used. The head of account for payment of the above 2 services will be intimated shortly.

c) The comcept of provisional assessment has been built into the scheme of th Service Tax Rules. Whenever an assessee is, for any reason, unable to correctly estimate on the date of deposit, the actual amounts collected for any particular month or period, the assessee may make a request in writing to the Assistant Commissioner, Central Excise (Service Tax) to make provisional assessment of the tax on the basis of the amount deposited. The said assistant Commissioner may on receipt of such request, order Provisional Assessment of tax. In this regard, the provisions of the Central Excise Rules, 1944, have been made applicable except for the provisions relating to furnishing the bond.

d) The assessee are required to file quarterly return in Form ST-3 in triplicate under sub-Rule 7 of Service Tax Rules, 1994, to the Superintendent, Central Excise, Service Tax cell. In the case of provisional assessment, the assessee is required to submit a memorandum in Form ST-3A showing details of differences between the service tax deposited and the service tax actually collected for each month. The assessee shall submit quarterly return alongwith the copy each of the Form TR-6 for the month covered in the quarter within 15 days of the end of the preceding quarter.

III) Interest on Delayed Payment of Service Tax

If any assessee fails to pay or credit the Service Tax or any part thereof in time, he shall pay simple interest @1.5% for every month or part of a month by which such payment/crediting of the tax or any part thereof is delayed.

IV) Filing of Quarterly Returns

A quarterly return in Form ST-3 (in triplicate) should be filed within 15 days of the end of the preceding quarter, i.e. latest by 15th July, 15th October, 15th January and 15th April for the quarters ending June, September, December and March respectively.

V) Penalty for failure to collect or pay Service Tax

a) If any person responsible for collecting Service Tax fails to collect such tax, he shall be penalized for a sum equal paying the actual amount of tax and the interest thereon.

b) If any person, fails to pay the Service Tax to the credit of the Central Govt. in time after having collected the service tax, he shall pay a penalty of Rs. 100/- which may extend to Rs. 200/- per day during which such failure continues, besides paying the actual service tax and the interest thereon, However, the penalty in this case shall not exceed the amount of Service Tax that he failed to pay.

Note: The amount of Service Tax collected should be separately shown on the inovice for the service provided.

VI) Penalty for failure to furnish the Quarterly Return

If a person fails to furnish the Quarterly Return (including "Nil" return) in Form ST-3 in time, i.e. by 15th July, 15th October, 15th January and 15th April for the quarters ending June, September, December and March respectively, he shall be panalized for a sum of Rs. 100/- extendable to Rs. 200/- for every day during which the failure continues.

VII) Penalty for suppressing value of taxable service

a) If any person is found concealing or suppressing the value of taxable service or has furnished inaccurate value, etc., such person shall be penalised a sum upto twice the amount of service tax sought to be evaded by reason of suppression, concealment, etc. besides paying the actural service tax and interest, if any.

b) Apart from the above penalties, persons committing offences under Chapter V of the Finance Act, 1994, would be liable to prosecution in certain cases.

VIII) Appellate Mechanism

Appellate mechanism relating to Central Excise have been made applicable for the purpose of Service Tax also with necessary modifications.

5. Certain clarifications regarding collection of service tax from Consulting Engineers & Manpower Recruitment Agencies are enclosed as Annexure-I to this trade notice. The following Annexures are enclosed with this Trade Notice for the information of the tax-payers.

Annexure No.	Particulars
I	Clarification regarding service tax on services rendered by Consulting Engineers & Manpower Recruitment Agencies
II	Form ST-1
III	Form TR-6
IV	Form ST-3

6. For further information, the Assistant Commissioner, (Service Tax Cell), 6th floor, Central Excise Building, 115, M.K. Road, Churchgate, Mumbai-400020, Telephone No. 2051599 may be contacted.

7. The Commissioner of Central Excise having jurisdiction in Central Excise matters will have corresponding jurisdiction for service tax matter.

8. All the Trade Associations are requested to bring the contents of the said matters to the notice of their members in particular and the trade and all other concerned in general.

Sd/-
07.07.97
(N. KRISHNAMURTHY)
COMMISSIONER
CENTRAL EXCISE,
MUMBAI-1

F.No. B43/5/97-TRU dt. 2.7.97

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