Indirect-Tax - Sem VI PDF

Direct and Indirect Taxes Paper II TYBCOM Semester VI 2015-2016
Prepared as per the new syllabus for 75:25 pattern Credit Based Semester
and Grading System which is coming into effect from the academic year
2014-2015
Applied Component Group:

Direct and Indirect Taxes Paper-II
Assessment Year 2015 – 2016
(Suitable for T.Y.B.com. Examination – April, 2016)
Indirect Taxes
Modules at a Glance
Sr. Modules No. of
No. Lectures
1 Service Tax 27
Basic
Services Specifically Excluded
Point of Taxation
2 Maharashtra Value Added Tax (MVAT) 18

Important Definitions
Incidence and levy of tax
Payment and tax recovery
Set off and Refunds
Total 45
Pankaj Pandagale, Assistant Professor of Accountancy, GES’ Dr.T.K.Tope College, Parel, Mumbai -12 1
Sr. No. Modules / Units

1 Service Tax
1.1 Basic Terms
Terms- Service, Activity, Consideration, Person, Declared Services
Applicability of Service Tax
Registration under Service Tax law (Sec 69)
Registration Procedure
Mega Exemption from Service Tax under Notification 25/2012, Threshold
Exemption
Service Tax Returns and Penalty for late filing
Payment of service tax and rate of service tax
Negative List (Sec 66 D Specifies services which are not taxable)
1.2 Services Specifically Excluded
Transfer of title in goods or immovable property
Transfer delivery or supply of any goods which is deemed sale
Transactions on money or actionable claims
Provision of service by employee to employer
Services provided by MP, MLA, etc
Duties preferred by persons who hold posts in pursuance of provision of
constitution e.g. Central Vigilance Committee
Duties performed as a chairperson or member or director in body established by
central, state Govt or local authority
1.3 Point of Taxation
Determination of point of taxation
Point of taxation for services including continuous supply of services from
1.4.2012
Special provision for individual
2 Maharashtra Value Added Tax (MVAT)

2.1 Definitions
Section:
2 (4) Businesses
2 (8) Dealers
2 (12) Goods
2 (13) Importer
2 (15) Manufacturer
2 (20) Purchase Price
2 (22) Resale
2 (24) Sales
2 (25) Sales Price
2 (27) Service
2 (33) Turnover of Sales and Rule 3
2.2 Incidence of Levy of Tax
Sec. 3 Incidence of Tax
Sec. 4 Tax Payable
Sec. 5 Tax Not Leviable on Certain Goods
Sec. 6 Levy of Sales Tax on goods specified in the schedule
Sec. 7 Rate of tax on Packing Material
Sec. 8 Certain Sale and Purchase Not Liable For Tax
2.3 Payment of Tax and Recovery
Section: 42 - Composition of Tax and Notification 1505/CR-105/Taxation -1
2.4 Set Off, Refund etc.
Section 48 and 49 Set Off, Refund etc. along with rules 52, 53, 54, 55
Notes:
1. The Syllabus is restricted to study of particular sections, specifically mentioned rules and
notifications only.
2. All modules / units include Computational problems / Case Study.
3. The Law In force on 1st April immediately preceding the commencement of Academic year will
be applicable for ensuing Examinations.
Pattern
Semester VI end University Examination : 75 Marks
For the Academic Year: 2014-15
Duration : 2½ Hrs.
All Questions are Compulsory Carrying 15 Marks each
Indirect Taxes
Q. No. Particulars Marks marks
Objective Questions
(A) Sub questions to be asked 10 and to be answered any 8 08
1 15
(B) Sub questions to be asked 10 and to be answered any 7 07
( Multiple choice / True or False / Match the columns / fill in the blanks)
2 Full Length Practical Question ( Service Tax ) 15

OR 15
2 Full Length Practical Question (Service Tax ) 15
3 Practical Question (Full Length MVAT ) 15

OR 15
3 Full Length Practical Question ( MVAT) 15
4 (A) Practical Question (Full Length MVAT ) 08

(B) Practical Question ( Full Length Service Tax) 07
OR 15
4 (A)Practical Question (Full Length MVAT ) 08
(B) Practical Question ( Full Length Service Tax) 07
(A) Theory Questions (MVAT) 08

5 (B) Theory Questions ( Service Tax) 07
OR 15
5 Short Notes On MVAT and Service Tax 15
To be asked 05, to be answered 03
Total Marks 75
Note: Full-length question of 15 marks may be divided into two sub questions of 08 and 07 marks.
Service Tax
Indian Economy – An Overview
 Indian economy is the 11th largest economy in the world and the third fastest growing even in today’s
recession, after China and Indonesia (Present growth rate around 5.5%)
 World is presently facing recession-II but Indian economy is still a growth economy
 Inflation –food, lifestyle
 Agriculture, services and industry are the major sectors of Indian economy. Contribution of different
sectors in March, 2012 was :
 Agriculture 19%
 Services 59%
 Industry 22%
(likely to be @ 64% in March, 2013)
Economy / Taxation – A Status

 Indian GDP to grow about 5 percent in 2012-13 and growth expected at 6.1-6.7 percent in 2013-14
 Tax Policy – clarity in tax Laws, stable tax regime, non-adversarial tax administration, fair
mechanism for dispute resolution, independent judiciary
 Need to raise tax – GDP ratio which is presently around 6-7 percent.
 Service Tax contributes 11.50 percent of the gross tax revenue
 Service sector growth @ 9%, much higher than the GDP growth itself.
 Contribution of services sector in GDP at 64% including construction sector.
 No change in Service Tax rates.
 No change in peak rates of customs and excise duties also.
Growth of Service Tax
Total No of Total collection

Year No of new services
services (Rs. in crore)
1994 3 3 407
2001 - 26 2612
2005 13 72 14199
2008 7 103 51301
2010 3 112 58000
2012 0 120 97509
132697 (RE)
2013 - All
131884 (A)
2014 - All 180141 (BE)
Constitutional Framework
 Taxes levied by Central Government and State Government(s)
 Authority to levy a tax is derived from the Constitution of India
 Which allocates power to levy various taxes between the Centre and State
 Article 265 of the Constitution which states that "No tax shall be levied or collected except by
the authority of law”
 Article 246 of the Indian Constitution, distributes legislative powers including taxation, between the
Parliament of India and the State Legislature
 Schedule VII enumerates use of three lists;
 List - I Where the parliament is competent to make laws
 List - II Where only the state legislature can make laws
 List - III Where both the Parliament and the State Legislature can make laws upon
concurrently
Union List State List Concurrent List

• Income Tax • Taxes on lands and • Stamp duties
• Custom Duty buildings other than duties
• Excise Duty • Excise duty on alcoholic or fees collected
• Corporation Tax liquor etc by means of
• Entry tax judicial stamps,
• Service tax
• Central Sales Tax • Sales Tax but not including
• Tolls rates of stamp
• Stamp duty in respect of duty
bills of exchange, cheques, • Luxury Tax
promissory notes, etc • Stamp duty in respect of
documents other than
those specified in the
provisions of List I
Service Tax in India (The Past)

 Introduced in India in 1994 as a simple, modest tax with just three services.
 Service tax – an indirect tax.
 Approach to Service Tax – Selective as against comprehensive one.
 Desirable from revenue, equity and economic view point.
 Governed by Finance Act, 1994 and a dozen of rules.
 Legislative dependence on over 25 other laws.
 Scattered and heterogeneous large mass of service providers as well as wide spectrum of services.
 Jurisdictional application.
Service tax is an Indirect tax levied on certain services provided by certain categories of persons. Service tax
was introduced with effect from 1 July, 1994 with taxation of just three services.
Applicability Section 64
This chapter extends to the whole of India except the state of Jammu and Kashmir.
Service’ is defined for first time w.e.f. 1-7-2012 vide section 65B(44).
What is Service?
‘Service' has been defined in clause (44) of the section 65B and means –
As per the definition, any activity carried out by a person for another for consideration, and includes a
declared service, but shall not include –
a. An activity, which constitutes merely
i. a transfer of title in goods or immovable property, by way of sale, gift or in any other manner;
ii. such transfer, delivery or supply of goods which is deemed to be a sale within the meaning of clause
(29A) of Article 366 of the constitution or
iii. a transfer in money or actionable claim.
b. A provision of service by an employee to the employer in the course of or in relation to his employment.
c. Fees taken in any court or tribunal established under any law for the time being in force.
Explanation I –
For the removal of doubts, it is hereby declared that nothing contained in this clause shall apply to,-
(A) the functions performed by Members of Parliament, Member of state Legislative, Members of
Panchayat, Members of Municipalities and Member of other local authorities who receive any
consideration in performing the functions of that office as such member; or
(B) the duties performed by any person who holds any post in pursuance of the provisions of the
Constitution in that capacity; or
(C) the duties performed by any person as a Chairperson or a Member or a Director in a body established
by the Central Government or State Government or local authority and who is not deemed as an
employee before the commencement of this section.
Explanation 2 –
For the purpose of this clause, transaction in money shall not include any activity relating to use of money or
its conversion by cash or by any other mode, from one form, currency or denomination to other form,
currency or denomination for which a separate consideration is charged.
Explanation 3 –
For the purposes of this chapter –
(a) an unincorporated association or a body of persons, as the case may be, and a member there of shall
treated as distinct persons;
(b) an establishment of a person in the taxable territory and any of his other establishment in a non-
taxable territory shall be treated as establishments of distinct persons.
Explanation 4 –
A person carrying on a business through a branch or agency or representational office in any territory shall be
treated as having an establishment in that territory.
Comments
The following are the ingredients of “Service”
1. Service means any Activity carried out by a person.
2. The activity shall be carried out by one person to another person.
3. Activity must be carries out for a consideration.
4. Definition of service includes Declared service.
A. Activity
The definition of ‘Service’ means any “Activity carried out”,
Activity must be for a consideration (nexus / reciprocity)
 Activity – includes both activity as well as non-activity
 Consideration – includes both monetary and non monetary consideration.
 Two persons are involved –
Service provider
Service receiver
 Only services provided by one person to another are taxable

 Person – natural as well as artificial
 Not defined in the Act
 Departmental guidelines of CBE & C’s, Taxation of Services. An educational gudie published the
Term Activity as follows:
 In common understanding, activity includes –
 An act done
 A work done
 A deed done
 An operation carried out
 Execution of an act
 Provision of a facility etc.
 Activity could be active or passive and forbearance to act
 Agreeing to an obligation to refrain from an act or to tolerate an act or a situation - listed as a declared
service u/s 66E.
B. Consideration
To be taxable an activity should be carried out by a person for a consideration. Acitivity carried out
without any consideration like gift, donation etc. is not subject to service tax.
‘Consideration’ means something in return [The term has been elaborately defined in Indian
Contract]
Consideration need not be in money form.
Means everything received or recoverable in return for a provision of service which includes -
○ Monetary payment
○ Non-monetary payment
○ Deferred consideration
Under Indian Contract Act, 1872, consideration means -
“When, at the desire of the promisor, the promisee or any other person has done or abstained
from doing, or does or abstains from doing, or promises to do or to abstain from doing, something,
such act or abstinence or promise is called a consideration for the promise”.
Monetary Consideration:
Any consideration received in the form of money. ‘Money has been defined in section 65B
and includes not only cash but also cheque, promissory note, bills of exchange, letter of credit, draft,
pay order, traveler’s cheque, money order, postal or electronic remittance or any such similar
instrument.
Non -Monetary Consideration:
1. Supply of goods and services in return for provision of service.
2. Refraining or forbearing to do an act in return for provision of service.
3. Tolerating an act or a situation in return for provision of a service.
4. Doing or agreeing to do an act in return for provision of service.
‘Service’…
Means Includes But shall not include
- Any activity - Includes a declared service any activity that constitutes

Carried out by a person for 1. Right to use immovable merely a transfer in title of goods
another property or immovable property by way of
For consideration 2. Construction of a complex, sale, gift or in any other manner;
building, civil structure or a such transfer, delivery or supply
part thereof; including a of any goods which is deemed to
complex or building be a sale within the meaning of
intended for sale to a buyer, clause (29A) of Article 366 of the
wholly or partly except Constitution;
where consideration is a transaction in money or
received prior completion actionable claim;
3. Temporary transfer or any service provided by an
permitting the use or employee to an employer in the
enjoyment of any course of or in relation to his
intellectual property right employment;
4. Information technology fees taken in any Court or a
software services tribunal established under any
5. Obligation to refrain from law for the time being in force
an act, or to tolerate an act by a Constitutional authority
or a situation, or to do an act under the Indian Constitution or a
6. Service in relation to lease member of an Indian Legislature
or hire of goods and hire or a local self-government in that
purchase transactions capacity
7. Execution of Works
Contracts
8. Service portion in the
serving of foods or other
article of human
consumption
Activities Activities Non-

Without With monetary
consideration consideration Consideration
1 A agrees to construct 3 flats for B on land owned by B;
and in return B agrees to provide one flat to A
2 A agrees to design B’s house; and in return B agrees not
to object to construction of A’s house in his
neighborhood.
3 Award received for contribution over a life time (eg
Nobel prize or Life time Achievement Award for a
veteran Film Actor like Dilip Kumar)
4 Grant of pocket money
5 A voluntary reward
6 Alimony for divorce
7 Advances forfeited for cancellation of an agreement to
provide a service
8 In case research grant is given with counter obligation on
the researcher to provide IPR rights (Patents etc.) arising
out of research undertaken with the help of such grants.
9 Amount received as advances for performance of service
10 An artist performing on a street does an activity , even
though passersby may drop some coins in his bowl in

appreciation or merely out of sympathy
11 Donation to a charitable organisation is obliged to
priovde something in return e.g. display or advertise the
name of the donor in a specified manner or such that it
gives a desired advantage to the donor.
12 A agrees to wash B’s clothes; and in return B agrees to
supply grocery.
13 A agrees not to open laundry in B’s neighborhood; and
in return B agree not to open grocery shop in A’s
neighborhood.
C. Person:
Person has been defined under section 65B (44):
The following shall be considered as persons for service tax:
a. An individual b. A Hindu Undivided family c. A company
d. A Society e. A limited liability f. A firm
partnership
g. An association or body of h. Government i. A local
individuals, whether incorporated or authority
not
j. Every Artificial Juridical person,
not falling within any of the
preceding sub-clauses
What is not ‘service’ [Explanation to section 65B(44)]

¨ Activity of mere transfer of title in goods or immovable property is not ‘service’ [security is
‘goods’. Hence, transfer of security is not ‘service’]
¨ Deemed sale of goods under Article 366(29A) of Constitution of India is not ‘service’.
¨ Mere transaction in money is not service.
¨ Mere Actionable claim – claim of unsecured debt or beneficial interest in movable property,
lottery ticket –is not service.
¨ Service provided by employee to employer – not ‘service’ [However, service provided by
employer to employee can be ‘service’]
¨ Fees paid to Court or Tribunal is not service
¨ Duties performed by MP, MLA, MLC , Members of Panchayats, Members of Municipalities and
Members of other local authorities is not ‘service’ [How true!]
¨ Duties performed by persons holding Constitutional post, Member or a Director in a body
established by the Central Government or State Governments or local authority is not ‘service’
Mere transaction in money is not service
¨ Any legal tender (Indian or foreign currency) is ‘money’.
¨ Transaction may be by cash, cheque, promissory note, DD, LC, money order, electronic transfer.
¨ Dividend, loans, advances, deposits, repos, reverse repos, share of profit are mere transaction in
money [However, service tax is payable if advance is for provision of service]
What is not mere transaction in money
¨ Bank charges, LC charges, Bank Inspection charges, Bank guarantee charges, Loan processing
fees.
¨ Commitment charges by Banks for sanctioned Bank Limit will be subject to service tax.
¨ Cheque collection charges, services of recovery agents, chit funds are not mere transaction in
money. These will be taxable.
¨ Conversion of money from one currency to other is not ‘mere transaction in money’, as
conversion charges are levied.
¨ Credit card charges are subject to service tax..
Transfer of title in goods or immovable property
¨ Simple sale or transfer of goods or immovable property not taxable.
¨ Goods include securities
¨ Sale purchase of securities (shares, derivatives) not taxable

¨ Forward contracts, future contracts not taxable.
Rewrite the following sentences by selecting the correct option under the provision of Service Tax Laws
1. Service tax is
a. A Direct Tax levied by the Central Government
b. An Indirect Tax levied by the state Government
c. An Indirect Tax levied by the Central Government
d. A Direct Tax levied by the State Government
2. Service Tax was introduced in India w.e.f
a. 1st July,1993
b. 1st June, 1995
c. 1st July, 2000
d. 1st July, 1994
3. Service tax is a tax on ___
a. Profession
b. Trade
c. Service
d. All the above
4. Service Tax is levied under ___
a. Entry 79
b. Entry 77
c. Entry 97
d. Entry 90
5. Service tax is applicable to
a.Whole of India
b.Whole of India except Jammu and Kashmir
c.Whole of India , except Jammu and Kashmir and Union Territories of Dadra, Nagar Haveli
d.None of this
6. Service Tax is normally
a. Paid and borne by the person who provides the service
b. Paid and borne by the person who receives the service
c. Paid by the person who provides the services and borne by the person who receives the service.
d. Paid and borne by the person who provides the service, and receives the service equally.
7. Following are taxable services
a. Service provides from Jammu & Kashmir to the clients anywhere in India.
b. Service provides within Jammu & Kashmir
c. Services provided within Jammu & Kashmir to Non-Indians.
d. Service provided to residents of Jammu & Kashmir from anywhere in India.
8. Service tax law is governed by
a. The Income Tax Act
b. The service Tax Act
c. The Excise Act
d. Chapter V of the Finance Act, 1994
9. Total number of services subject to service tax
a.9 b. 119 c. 5 d. cannot be determine
DECLARED SERVICES SECTION 66 E

Declared service means any activity carried out by a person for another person for consideration and
declared as such under section 66E of Finance Act, 1994 – Section 65B(22) of Finance Act, 1994 introduced
w.e.f. 1/07/2012.
 There are 9 categories of services or activities as declared services implying that on all such nine
declared services, Service Tax shall be payable.
 Does not include any such transfer, delivery or supply of any goods which is deemed to be a sale
within the meaning of Article 366(29A) of the Constitution of India.
 They are amply covered by the definition of service but have been declared with a view to remove
any ambiguity for the purpose of uniform application of law all over the country
Following constitute Declared Services (Section 66E)
1. Renting : Renting of immovable property;
2. Construction : Construction of a complex, building, civil structure or a part thereof, including a
complex or building intended for sale to a buyer, wholly or partly, except where the entire
consideration is received after issuance of certificate of completion by a competent authority;
3. IPR : Temporary transfer or permitting the use or enjoyment of any intellectual property right;
4. Software:Development, design, programming, customization, adaptation, up gradation,
enhancement, implementation of information technology software;
5. Obligation: Agreeing to an obligation to refrain from an act, or to tolerate an act or a situation, or to
do an act;
6. Hiring: Transfer of goods by way of hiring, leasing, licensing or any such manner without transfer of
right to use such goods;
7. HP: Activities in relation to delivery of goods on hire purchase or any system of payment by
installments
8. Works Contract : Service portion in execution of a works contract;
9. Food or Drinks : Service portion in an activity wherein goods, being food or any other article of
human consumption or any drink (whether or not intoxicating) is supplied in any manner as part of the
activity.
1. Renting of Immovable Property Section 66E (a)

Section 65B (41) defines “renting” as allowing, permitting or granting access, entry, occupation, use or any
such facility, wholly or partly, in an immovable property, with or without the transfer of possession or control
of the said immovable property and includes letting, leasing, licensing or other similar arrangements in respect
of immovable property’.
Would the following activities be chargeable to service tax?
No. Activities Yes/No
1. Permitting use of immoveable property for placing vending/dispensing machines
2. Allowing erection of a communication tower on a building for consideration
3. Renting of land or building for entertainment or sports.
4. Renting of theatres by owners to film distributors (including under a profit sharing
arrangement)
2. CONSTRUCTION OF A COMPLEX OR BUILDING

Section 66E (B)
Construction Service is ‘declared service’ – section 66E(B)
Closely linked with works contract service and that service should be studied first Construction of a complex,
building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly
or partly. Except where the entire consideration is received after issuance of completion-certificate by the
competent authority.
“Construction” includes additions, alterations, replacements or re-modelling of any existing civil structure – -
Explanation (II) to section 66E(b) of Finance Act, 1994 w.e.f. 1-7-2012 (Thus, repairs of existing buildings is
not covered under this head. It will be taxable as general taxable service).
Deemed construction service – Taxable if even part consideration received before completion of construction
(completion certificate)
Redevelopment of existing building taxable

Residential Complex
“Residential complex” means any complex comprising of a building or buildings, having more than one single
residential unit. “single residential unit” means a self-contained residential unit which is designed for use,
wholly or principally, for residential purposes for one family
Single residential unit which is Part of Residential Complex is taxable
Construction of single residential unit also taxable if it is part of residential complex
If individual plots are allotted in a complex and then if individual plot owner gets his unit separately
constructed in that complex, it will be subject to service tax.
3. INTELLECTUAL PROPERTY RIGHT section 66E (c)

 Temporary transfer or permitting the use or enjoyment of any intellectual property right (IPR) is a
declared service.
 Intellectual property right includes Copyrights, Patents, and Trademarks, Designs or any other similar
right to an intangible property.
 The transfer of IPR must be temporary. The transfer of even unregistered IPR is taxable. The transfer
on an IPR registered outside India is also taxable.
 Permanent transfer may be subject to State Vat. A permanent transfer will be taxed as a sale and
not as service.
 Copyright services of literary, dramatic, musical, artistic works or cinematograph films exempted.
Service tax is payable on copyright of sound recording is subject to service tax.
 Technology agreement without Patent is not an IPR service.
If R&D cess is paid, service tax payable is reduced to that extent – see Notification No. 14/2012-ST
dated 16-3-2012
4. INFORMATION TECHNOLOGY SOFTWARE Section
66E (d)
 Any representation of instructions, data, sound or image, including source code and object code,
recorded in a machine readable form, and capable of being manipulated or providing interactivity to a
user, by means of a computer or an automatic data processing machine or any other device or
equipment.
 Development, design, programming, customisation, adaptation, up gradation, enhancement,
implementation of information technology software is a declare service.
 On site, development of software is covered under the category of development of information
technology software.
 A licence to use software which does not involve the transfer of right to use would neither be a
transfer of title in goods nor a deemed sale of goods. Such an activity would fall in the ambit of
definition of service.
 Delivery of content online would also not amount to a transaction in goods, as the content has not
been put on media before sale. Delivery of content online for consideration would, therefore, amount
of provision of service.
 Pre-packaged or canned software which is put on a media (CD) etc. is in the nature of goods. Sale
of pre-packaged or canned software is, therefore, in the nature of sale of goods and is not covered in
this entry. If the software is put on the media like computer disks (e.g. Tally) or even emedded on a
computer before sale (e.g.Window 8) the same would be treated as goods.
 If the software is put on the media like computer disks or even embedded on a computer before the
sale of same would be treated as goods.
Software services
• Development, design, programming, customisation, adaptation, upgradation, enhancement,
implementation of information technology software is a ‘declared service’ under proposed
section 66E(d) of Finance Act, 1994
• Software is really ‘goods’ and Vat payable
• Packaged software with MRP- Excise duty if manufactured in India, CVD (if imported) and
Vat/CST (if sold in India) – No service tax
• Packaged software without MRP – Excise duty on cost of media if manufactured in India,
CVD on cost of media if imported, service tax on transfer of right to use software and
Vat/CST on sale.
• Tailor made software and paper license, PUK Cards – Service tax and Vat
• Downloaded software – Service tax by service receiver (if downloaded from outside India as it
is import of service), If downloaded from service provider in India, the service provider is
liable to service tax. No Vat as there is no physical media.
5. OBLIGATION TO REFRAIN FROM / TOLERATE / DO AN

ACT Section 66 E (e)
1. Refrain :
A non-compete agreement will be considered a provision of service. By virtue of a non-
compete
agreement one party agrees, for consideration, not to compete with the other in any specified
products, services, geographical location or in any other manner. Such action on the part of one
person is also an activity for consideration and will be covered by the declared services.
2. Tolerate :
Obligation to tolerate an act includes acceptance of
(i) Penalty for early termination of rental agreement.
(ii) Prepayment charges for early settlement of housing loan.
(iii) Demurrage charges paid to post etc.
6. HIRING OF GOODS WITHOUT TRANSFER OF RIGHT TO

USE Section 66 E (f)
Transfer of goods by way of hiring etc. without transfer of right to use, is a declared service. For a transfer to
involve transfer of right to use goods:
1. There must be goods available for delivery;
2. There must be a consensus as to the identity of the goods.
3. The transferee should have legal right to use the goods to the exclusion to the transferor.
4. Having transferred, the owner cannot again transfer the same right to others.
For Example 1 :A car is given in hire by a person to a company along with a driver on payment of charges
on per month/mileage basis: Right to use is not transferred as the car owner retains the permissions and
licenses relating to the cub. Therefore possession and effective control remains with the owners. The service
is, therefore covered in the declared list entry.
For Example 2: Hiring of audio visual equipment where risk is of the owner: There is no transfer of right to
use goods as effective control and possession is not transferred. Since the right to use is not transferred, this
transaction is covered as declared service.
For Example 3: Hiring of bank lockers: The transaction does not involve the right to use goods as
possession of the lockers is not transferred to the hirer even though the content of the locker would be in the
possession of the hire. Since the right to use is not transferred, this transaction is covered as a declared
Pankaj
service. Pandagale, Assistant Professor of Accountancy, GES’ Dr.T.K.Tope College, Parel, Mumbai -12 14
For Example 4 :Hiring of vehicles where it is the responsibility of the owner to abide by all the laws relating
to motor vehicles: There is no transfer of right to use goods as effective control and possession is not
transferred. Since the right to use is not transferred, this transaction is convered as a declared service.
For Example 5 :Supply of equipment like excavators, wheel loaders, dump trucks, cranes etc. for use in a
particular project where the person to whom such equipment is supplied is subject to such terms and
conditions in the contract relating to the manner of use of such equipment, return of such equipment after a
specified time, maintenance and upkeep of such equipment- The transaction will not involve transfer of right
to use such equipment as in terms of the agreement the possession and effective control over such equipment
has not been transferred even though the custody may have been transferred along with permission to use
such equipment. The receiver is not free to use such equipment in any manner as he likes and conditions have
been imposed on use and control of such equipment. Since the right to use is not transferred, this transaction
is convered as a declared service.
7. SEVICES IN RELATION TO HIRE PURCHASE OR

INSTALMENTS Section 66 E (F)
The delivery of goods on hire purchase or any system of payment on instalment is not chargeable to service
tax because as per Article 366(29A) of the Constitution of India such delivery of goods is deemed to be a sale
of goods. However, activities or services provided in relation to such delivery of goods are covered in this
declared list entry.
In equipment, leasing/hire-purchase agreements there are two different and distinct transactions, the financing
transaction and equipment leasing/hire-purchase transaction. The financial transaction, consideration for
which is by way of interest or other charges as lease management fee, processing fees, documentation
charges and administration fees, is chargeable to service tax. Therefore, such financial services that
accompany a hire-purchase agreement are covered by this entry of declared services.
8. SEVICE PORTION IN EXECUTION A WORKS CONTRACT

Section 66E (h)
Works Contract has been defined in section 65B(54) of Finance Act, 1994, for purpose of service tax, as
follows -
“Works contract” means a contract wherein transfer of property in goods involved in the execution of such
contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction,
erection, commissioning, installation, completion, fitting out, repair, renovation, alteration of any movable or
immovable property or for carrying out any other similar activity or a part thereof in relation to such property
Definition of works contract different from definition under CST Act or State Vat Laws – but broadly
coverage is same
The contract should be leviable to tax as sale of goods [Thus, actual levy or payment of tax not required]
Both movable and immovable property covered
Coverage under works contract
• Construction of building and civil structure
• Laying of pipelines
• Contracts of Erection,Commissioning or installation of plant, machinery, equipment or structure,
whether prefabricated or otherwise, would be treated as works contract if-
1. Transfer of property in goods is involved in such a contract
2. The machinery, equipment or structures are attached or embedded to earth after erection
commissioning or installation.
• Composite Annual Maintenance Contracts (AMC) covering both supply of spares and provision of
services
• Job work where some material used by job worker
• Painting of car, dyeing of fabric
• Printing on paper supplied by customer (Here Vat is payable on ink but no service tax as printing job
work has been exempted from service tax).
9. SERVICE PORTION IN SUPPLY OF FOOD OR DRINKS

Section E (i)
 Supply of food or drinks in a restaurant;
 Supply of food and drinks by an outdoor caterer.
1. Declared services are specified in
a. Section 66B b. Section 65B c. Section 66E d. Section 66D
2. Declared services are
a. Taxable b. Exempt from tax c. excluded from charge of tax d. taxed at a lower rate
3. Number of declared services
a. 5 b. 17 c. 9 d. inifinite
4. Declared services includes service by builders where payment is received
a. before the agreement of sale b. after the payment of stamp duty
c. after the issuance of completion certificate d. before the issuance of completion certificate
5. Permanent transfer of patent is treated as
a. a sale b. a declared service c. an exempt service d. a service covered in the negative list
Write a short note on :

(i) Define service
(ii) Explain – Service means any activity carried out for consideration.
(iii) Explain – person under the service tax law.
(iv) Activity without consideration.
(v) Declared services
(vi) Renting as declared services
(vii) Construction of complex as a declared service
Services in Negative List

• Defined in new section 66B
• The services specified in the negative list are not taxable.
• Section 66D specifies seventeen 17 broad categories of services.
• Effective from 1-7-2012
• If an activity meets the characteristics of ‘ service ‘, it is taxable unless specified in Negative
List.
• Based on socio-economic–tax criterion drawn from seven sectors, viz. financial sector,
transportation , construction & real estate, education, health care, Government services
Negative List of Services

2. Services by Government or local authority, except support service (In case of support services, usually
service receiver is liable to pay service tax).
3. Services by the Reserve Bank of India.
4. Services by a foreign diplomatic mission located in India.
5. Services relating to Agriculture and agricultural produce related services.
6. Trading of goods is not taxable service (goods include securities).
7. Any Process that results in ‘manufacture’ of goods is not ‘service’ (since then excise law provisions
become applicable).
8. Selling of space or time slots for Advertisement other than advertisement and sale of time slot on TV
and radio (Services of advertisement agents and services of advertisement design will be subject to
service tax. Advertisements on TV and radio will be subject to service tax).
9. Service by way of access to a road or a bridge on payment of Toll charges (but service for collection of
toll is taxable).
10. Betting , gambling or lottery.
11. Admission to Entertainment events , amusement factilities.
12. Transmission and Distribution of Electricity by authorised bodies (however, no service tax even on
private basis as tax on consumption and sale of electricity is State subject i.e. List II)
13. Educational services (recognised), training in arts, culture, sports – no tax on midday meals and bus
services to students and staff (Commercial coaching and training will be subject to service tax)
a. Pre-education and education upto higher secondary school or equivalent.
b. Education as part of a curriculum for obtaining a qualification recongised by law.
c. Education as a part of an approved vocational education course.
14. Renting for residential purposes.

15. Interest or discount on deposits, loans, advances (need not be by Bank or FI)
Inter se sale or purchase of foreign currency among Banks and authorised dealers (However,
commission on sale and purchase by authorised dealers and Banks to others will be subject to service
tax)
16. Passenger transport in stage carriage, metro, inland waterways, metered taxis, auto-rickshaws is in
negative list. However, transport in tourist vehicles and tour operators and transport for tourism,
conducted tour charter or hire in contract carriages will be subject to service tax.
Railways in a class other than first class or an air conditioned coach, metro, monorail or tramway.
Passenger transport in inland waterways
Public transport in vessel between places in India except for tourism purposes
17. Transport of goods by road is in negative list (except Goods Transport Agency (GTA) and Courier).
Transport of goods air or vessel (from outside India upto customs station of clearance in India)
No tax on transport in inland waterway.
18. Funeral, burial, crematorium or mortuary related services and also transportation of deceased
(Ambulance Service).
1. GOVERNMENT OR LOCAL AUTHORITY

The negative list Entry covers services by Government or a local authority excluding the following services to
the extent they are not covered elsewhere:
(i) Services by the Department of Post by way of speed post, express parcel post, life insurance, and
agency
Services provided to a person other than Governement.
(ii) Services in relation to an aircraft or a vessel, inside or outside the precinct of a port or an airport.
(iii) Transport of goods or passengers or
(iv) Support services other than services covered under clauses (i) to (ii) above, provided to business
entities.
Governement : include various departments and offices of the Central or State Government or the Union
Territories Administrations which carry out their functions in the name and by order of the President of India
or the Government of a state.
Local Authority : means a Panchayat, Municipality, Municipal Committee and a District Borad, Cantonment
Board, Regional council or a District council or Development Board.
“Support services" means

 infrastructural,
 operational,
 administrative,
 logistic,
 marketing or
 any other support of any kind comprising functions that entities carry out in ordinary course
of operations themselves but may obtain as services by outsourcing from others for any
reason whatsoever
 shall include advertisement and promotion, construction or works contract, renting of
immovable property, security, testing and analysis;
 Services provided by Government security agencies are covered under support service - under
reverse charge, service receiver is liable to tax.
Business Entity : Any person ordinarily carrying out activities relating to business / commerce/ profession
/industry.
Non-Taxable Taxable
Sovereign Services: Support services provided by the Government or a
Services which are provided by government in local authority to the business entities.
terms of their sovereign right to business entities
1
and which are not substitutable in any manner by
any private entity are not support services e.g.
grant of mining or licensing rights.
Comptroller and Auditor General’s performed by Aircraft, Vessel Services :
2 the business entity themselves (CAG Audit) Services in relation to an aircraft or vessel , inside or
outside the precincts of a port or an airport provided
by Government or local authority

Postal Dept. Non-taxable Services: Postal Dept. taxable Services:
Basic mail services known as postal services such Speed post, Express parcel post, Life Insurance and
as post card, inland letter, book post, registered Agency services (distribution of mutual funds,
post provided exclusively by the Department of bonds, passport applications, collection of telephone
Post to meet the universal postal obligations and and electricity bill) which are provided by the
3
Transfer of money through money orders, Department of posts to non-government entities are
operation of savings accounts, issue of postal liable to service tax as these are excluded from
orders, pension payments and other such services. negative list entry relating to services provided by
Government or a local authority.
VEC : Security Services:

CBEC has clarified that service tax is not leviable Services provided by police or security agencies to
4 on vocational education courses (VEC)/ training/ PSUs or corporate entities or sports events held by
skill development course offered by the institution private entities are taxable
of the government.
Government Quarters:
If a government department allots houses to its
employees and charges a license fees, such service
5
would be converted in the negative list entry
relating to services provided by government and
hence not taxable.
2. RESERVE BANK OF INDIA

• All services provided by RBI are in Negative List
• Service Provided to RBI is taxable unless covered in negative list.
• Service provided by banks to RBI taxable unless covered in Negative List or exempted services
3. SERVICES BY A FOREIGN DIPLOMATIC MISSION LOCATED IN

INDIA
• Services by diplomatic mission of any country located in India
• Does not cover services provided by any office or establishment of an International organization
(Section 3 of United Nation Privileges & Immunities Act ,1947)
• Example- UNESCO, UNICEF, IMF, IBRD etc.
• Notification No. 27/2012-ST dated 20.6.2012 conditionally exempts service provided by any person
 for the official use of a provision of a foreign diplomatic mission or consular post in India
 for personal use or use of the family member of diplomatic agents or career consular officers
posted in India
4. SERIVCE RELATING TO AGRICULTURE OR AGRICULTUREAL

PRODUCE
Services relating to agriculture by way of—
(a) agricultural operations directly related to production of any agricultural produce including cultivation,
harvesting, threshing, plant protection or seed testing;
(b) supply of farm labour;
(c) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying,
cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and
such like operations which do not alter the essential characteristics of agricultural produce but make it
only marketable for the primary market;
(d) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use;
(e) loading, unloading, packing, storage or warehousing of agricultural produce;
(f) agricultural extension services;
(g) services by any Agricultural Produce Marketing Committee or Board or services provided by a
commission agent for sale or purchase of agricultural produce;
Agriculture -Section 65 B(3)
Agriculture means Cultivation of plants and rearing of all life-forms of animals except the rearing of
horses, for food, fiber, fuel, raw material or other similar products
Breeding of fish (pisciculture), rearing of silk worms (sericulture), cultivation of ornamental flowers
(floriculture) and horticulture, forestry are included in the definition of agriculture.
Agriculture Produce -Section 65B(5)
Agricultural produce means any produce of agriculture on which either no further processing is done
or such processing is done as is usually done by a cultivator or producer which does not alter its essential
characteristics but makes it marketable for primary market (E.g. Plantation crops like rubber, tea or coffee but
does not include potato chips or tomato ketchup)
Scope of testing to include all types of testing, not just seeds (W.e.f 10.5.2013 )
Non Taxable Taxable
1 Primary Market Processes: Retail Market process:
The processes carried out at an agricultural farm Processes of grinding, sterilizing, extraction,
including tending, pruning, cutting, harvesting, drying, packaging in retail packs of agricultural
cleaning, trimming, sun drying, fumigating, curing, products, which make the agricultural products
sorting, grading, cooling or bulk packaging and such marketable in retail market, are not converted in
like operations which do not alter the essential the negative list. Only such processes are
characteristic of agricultural produce but make it only covered in the negative list, which makes
marketable for the primary market are not taxable. agricultural produce marketable in the primary
market.
2 Cleaning of wheat Paddy Shelling at Mill:
Cleaning of wheat would be covered in the negative Shelling of paddy would not be convered in the
list entry even if the same is done outside the farm. negative list entry relating to agriculture if this
process is done in a rice Sheller (mill) normally
located away from the farm.
3 Farm Labour: Rearing of Horses :
The service provider who is providing the desired Rearing of horses (feeding, housing, training,
farm labour to the service receiver is not liable to pay racing, breeding etc.) is taxable being
service tax on the said services. specifically excluded in the negative list.
4. Agro Machinery:
Renting of agro machines such as tractors, pumps,
pesticide spraying machines, crop cutting machines
etc.
5 Vacant Farm:
Suppose Mr. A gives his vacant farmland to Mr. B on
rent for cultivation. B cultivates the land, harvests the
produce and sells it. A is paid either a Lumpsum
amount or a percentage of the agricultural produce.
The consideration paid to A by B is not taxable; being
covered by this negative list entry.
6 Shed or Green house :
If vacant agriculture land has a structure like storage
shed or a green house built on it which is incidental to
its use for agriculture then its lease would be covered
under the negative list entry.
7 Animal Farm :
Since ‘agriculture’ includes rising of animals, land
given on rent for, say, poultry will be covered under
the negative list entry.
8 APMC :
Services like shed, water, light, electricity, grading by
Agricultural Produce Marketing Committee (APMC)
are covered in this negative list entry.
For Example :
‘Krish Farmer Association’ is engaged in providing services relating to agriculture. It furnishes the following
details with respect to the activities undertaken by them in the month of May, 2015.
Particulars Rs.
1 Cultivation of ornamental flowers 42,000
2 Packing of tomato ketchup 54,000
3 Warehousing of potato chips 1,65,000
4 Commission on sale of tea 68,000
5 Packaging of pulses in retail packs 1,63,500
6 Training of farmers on use of scientific tools and agro machinery 10,000
7 Leasing of vacant land to a stud farm 1,63,000
8 Grading of wheat according to its quality 42,000
9 Testing of samples from plants for pest detection 2,75,000
10 Rearing of silk worms 83,500
Compute the service tax liability of ‘Krish Farmer Association’ of the month of May, 2015. Assume that the
point of taxation in respect of all the activities mentioned above falls in the month of May, 2015 itself.
5. TRADING OF GOODS
 Trading of goods is not a taxable service, it being a sale and not a service.
 If a transaction is a sale, it is not a service and vice versa
 Transfer of title in goods is crucial
 Activities of a commission agent / clearing and forwarding agent who sells goods on behalf of
another for a commission are not trading of goods (Title of goods does not pass)
 Forward contracts are in the nature of trading of goods.
 Future contracts are not in the nature of trading of goods
Goods - Section 65B(25)
“goods" means
• every kind of movable property
• other than actionable claim, and
• money
• includes securities, growing crops, grass, and things attached to or forming part of the land
which are agreed to be severed before sale or under the contract of sale.
6. PROCESS AMOUNTING TO MANUFACTURE OR PRODUCTION OF GOODS

“process amounting to manufacture or production of goods" means a process on which duties
of excise are leviable under section 3 of the Central Excise Act, 1944 or the Medicinal and Toilet
Preparations (Excise Duties) Act, 1955 or any process amounting to manufacture of alcoholic liquors
for human consumption, opium, Indian hemp and other narcotic drugs and narcotics on which duties
of excise are leviable under any State Act for the time being in force.
 Covers manufacturing activity carried out on contract or job work basis where
a. Transfer of title of goods is not involved
b. Duties of excise are leviable on such process under the respective Acts
 W.e.f 10.5.2013, manufacture of perfumery, cosmetics etc will also be covered
What is Excisable Goods?
 “excisable goods” means goods specified in the First Schedule and the Second Schedule to the
Central Excise Tariff Act, 1985 as being subject to a duty of excise and includes salt
 Mobility and marketability are essential conditions
 Goods includes any article, material or substance which is capable of being bought and sold for a
consideration and such goods shall be deemed to be marketable.
Exemption to Service - Clause 30 (N. No. 25/2012-ST)
Carrying out an intermediate production process as job work in relation to -
(a) agriculture, printing or textile processing;
(b) cut and polished diamonds and gemstones; or plain and studded jewellery of gold and other
precious metals, falling under Chapter 71 of the Central Excise Tariff Act ,1985
(c) any goods on which appropriate duty is payable by the principal manufacturer or
(d) processes of electroplating, zinc plating, anodizing, heat treatment, powder coating, painting
including spray painting or auto black, during the course of manufacture of parts of cycles or sewing
machines upto an aggregate value of taxable service of the specified processes of one hundred and
fifty lakh rupees in a financial year subject to the condition that such aggregate value had not
exceeded one hundred and fifty lakh rupees during the preceding financial year
7. SELLING OF SPACE OR TIME SLOTS FOR ADVERTISEMENTS

Selling of space or time slots for advertisements other than advertisements broadcast by radio
or television
This entry in negative list should qualify the following tests –
• involves selling of space (in case of print media)
• involves selling of time slots ( in case of electronic media)
• purpose of selling time slots / space to be for advertisements (publicity / sales promotion,
awareness etc.)
• excludes broadcast by radio or television ( i.e. broadcast will be taxable)
• Webcast is not a broadcast
Taxable Non-taxable
Sale of space or time for advertisement to Sale of space for advertisement in

be broadcast on radio or television print media
Sale of time slot by a broadcasting Sale of space for advertisement in bill

organization boards, public places (including
stadia), buildings, conveyances, cell
phones, automated teller machines, internet
Canvassing advertising for publishing on Sky : Aerial advertising

a commission basis by persons/agencies.
Services provided by advertisement Presentation made in person
agencies relating to making or
preparation of advertising.
Not covered in Negative List Covered In Negative List

 Printing & Publishing of yellow  Spaces allotted in buses and public
pages, business directory and trade transport system public transport
catalogues etc. system to run display of
advertisement
 Advertisement services to  Private circulation of magazines /
Government departments journals
 Purchase of time slots from  Telephone directories
broadcaster and sold to advertising
agency
 Preparing advertisement for display  Clubs, associations, professional

during a movie in theatre bodies etc. member's list / directories
 Services provided by advertisement  Internal directories / business
agencies in relation to preparation of information
advertisement
 Commission received by
advertisement agencies from
broadcasting or publishing companies
Advertisement means
• any form of presentation for promotion of,
• or bringing awareness about,
• any event,
• idea,
• immovable property,
• person, service,
• goods or actionable claim through
• newspaper, television, radio or any other means
• but does not include any presentation made in person;
• Services provided by advertisement agencies relating to preparation / designing etc of
advertisements are taxable.
• Print media includes newspaper and books.
8. SERVICE WAY OF ACCESS TO A ROAD OR A BRIDGE ON

PAYMENT OF TOLL CHAREGES
 Only covers toll charges for access to road and bridge
 Includes National highways or state highways
 Toll on other roads with in negative list
 Collection charges or service charges paid to any toll collection agency are not covered under
negative list (are business auxiliary services)
 Does not include services used for providing such service
9. BETTING, GAMBLING OR LOTTERY

Betting or Gambling means
• putting on stake something of value,
• particularly money,
• with consciousness of risk and hope of gain on the outcome of a game or a contest,
• whose result may be determined by chance or accident, or on the likelihood of
anything occurring or not occurring
• Betting is a form of wagering contract in which money or money’s worth is made payable by
the parties on the result of an uncertain event, usually a game or sport
• Gambling means playing game of chance for money or risky action undertaken with the hope
of success
• Lottery is a game of chance (e.g. lottery, bingo, lotto etc.) which may include online games
10. ADMISSION TO ENTERTAINMENT EVENTS AND ACCESS TO

AMUSEMENT
‘Entertainment event’ if it is intended (may not necessarily provide) to provide any one or
more of the following to the recipients / viewers / audience
• recreation
• pastime
• fun , or enjoyment
This could be by way of –
• exhibition of cinematographic film
• circus
• concerts
• sporting events
• pageants
• award functions
• dance performance
• musical performance
• theatrical performances – drama, ballets or any such event / programme.
Amusement facility means
• a facility where fun
• recreation is provided by means of rides
• gaming devices
• bowling alleys in amusement parks
• amusement arcades
• water parks
• theme parks
• such other places
• but does not include a place within such facility where other services are provided
 Amusement means entertainment, diversion, pastime, sport etc.
 Theatrical performances need not be performed in theatre
 Standalone amusement ride in a mall – fun or recreation by means of ride – covered
under amusement – excluded
 Membership of club which provides amusement facilities - excluded
 Event manager for organizing an entertainment event or entertainment is not covered
in this category
For Example :
Compute value and service tax from following sums received by M/s A Ltd. (exclusive of service tax) (ignore
small service provider’s exemption).
1. Holding a dance programme, entry tickets whereof were sold for Rs.5,00,000.
2. Collection from a standalone ride set up in a mall Rs.23,00,000.
3. Running a video-parlour showing cinematographic films Rs.8,00,000.
4. Acting as an event manager for organisation of an entertainment event Rs.9,00,000.
5. Receipts from running a circus Rs.12,00,000.
6. Direct to home services on which it has paid entertainment tax under state laws Rs.15,00,000.
11.Transmission or distribution of Electricity by an electricity transmission or

distribution utility
 Provided by Electricity Transmission or Distribution utility
 Covers both –
a. Transmission
b. Distribution
 Installation of gensets or similar equipment by private contractor for distribution - taxable
 Charges collected by developer or a housing society for distribution of electricity within a residential
complex - taxable but excluded if it acts as a licensed authority
12. Specified services relating to education

Service by way of -
i. Pre-school education and education up to higher secondary school or equivalent
ii. Education as a part of a prescribed curriculum for obtaining a qualification

recognized by law
iii. Education as a part of an approved vocational education course
Conduct of degree courses by colleges, universities or institutions which lead to grant of
qualifications recognized by law.
Approved vocational education course
 a course run by an industrial training institute or an industrial training centre affiliated to the
National / State Council for Vocational Training, offering courses in designated trades as
notified under the Apprentices Act, 1961 , or
 a Modular Employable Skill Course, approved by the National Council of Vocational
Training, run by a person registered with the Directorate General of Employment and
Training, Ministry of Labour and Employment, Government of India, or
 a course run by an institute affiliated to the National Skill Development Corporation set up by
the Government of India ( w.e.f. 10.5.2013)
• Education upto higher secondary school or equivalent are in negative list.
• Services provided to or by ( w.e.f. 1.04.2013) an educational institution for Auxiliary educational
services and renting of immovable property – exempted under mega notification
Negative list will not include –
• Private tuitions
• Education as a part of prescribed curriculum for obtaining qualification recognized by law of
a foreign country
• Services provided to educational institutions
• Placement services
Not Taxable Taxable
1 Pre-school Education: Private Tuitions:
Education in Nursery, Kinder garden(KG), Play school
2 HSC: Private Coaching Institutes:
Education upto Higher Secondary School (HSC) i.e. Training given by private coaching institutes
upto 12th standard
3 International Certification: Foreign Degree :
Services provided by international school giving Services provided by way of education as a part
international certifications like IB as these are services of prescribed curriculum of obtaining a
by way of education upto higher secondary school or qualification recongised by a law of a foreign
equivalent. country.
4 Degree Courses: Campus Recruitment:
Education as a part of curriculum for obtaining a Educational institutes such as IITs, IIMs
qualification reconginsed by law would cover conduct charges a fee from prospective employers like
of degree courses by colleges, universities or corporate houses/MNCs, who come to the
institutions, which lead to grant of qualifications institutes for recruiting candidates through
reconginsed by law. campus interviews.
5 Admission Tests: Placement services:

Services of conducting admission tests for admission to Placement services provided to educational
colleges are exempt institutions for securing job placement for the
students.
6 VEC:
CBEC has clarified that service taxis not leviable on
vocational education course (VEC), training or skill
development courses offered by an institution of the
government (Central Government or State
Government) or a local authority.
7 Boarding School:
Boarding school provides service of education coupled
with other services like providing dwelling units for
residence and food. Since both services, education and
providing residential dwelling
13. RENTING FOR RESIDENCE

Services by way of renting of residential dwelling for use as residence
Renting Covers all types of arrangements in relation to immovable property with or without its
transfer of possession or control and whether wholly or partly. It would cover / include –
• allowing
• permitting
• granting access / entry / occupation
• use of facility
• letting
• leasing
• licensing, or
• other similar arrangements
(such as right to use, sub-lease, space sharing etc.)
Renting of certain kinds of property already covered in the negative list
• renting of vacant land, with or without a structure incidental to its use, relating to agriculture.
• renting of residential dwelling for use as residence
• renting out of any property by Reserve Bank of India
• renting out of any property by a Government or a local authority to non-business entity
 Residential dwelling not defined but includes residential accommodation
• Does not include hotel, motel, inn, guest house, camp site, lodge, house boat or other place meant for
temporary stay (Taxable)
• Residential dwelling used partly as a residence and partly for non residential purpose- treated as
bundled service
• Residential unit – independent residential unit with specific facilities for living, cooking and
sanitation.
14. BANK AND FINANCIAL SERVICES

Services by way of—
(i) extending deposits, loans or advances in so far as the consideration is represented by way of interest or
discount;
(ii) inter se sale or purchase of foreign currency amongst banks or authorised dealers of foreign exchange or
amongst banks and such dealers;
Transactions in money outside the ambit of ‘service’
• Any activity related to a transaction in money by way of its use or conversion by cash or by any other
mode, from one form , currency or denomination to another form, currency or denomination would
not be treated as a transaction in money if a separate consideration is charged for such an activity
• Service tax to be levied on service charges for transactions in money including of charges for making
of drafts, letter of credits issuance charges, service charges relating to issuance of CDs/ CPs etc
• Interest rate swaps and foreign exchange swaps are excluded being securities (hence goods)
• Only interest and discount are in negative list
• Interest could be on
• Money borrowed
• Debt incurred
• Deposit
• Claim / obligation/ similar right
• Service charge / fee/ commission not covered in negative list (e.g. pre payment fee, late fee,
cheque bounce charges)
• interest on credit facility not utilized (commitment charges ) not covered in negative list
• Bill discounting – only discount covered
• Interest on Credit Card EMI is taxable.
• Any charges over and above interest/ discount taxable
• Purchase/ sale of foreign currency between banks and authorized dealers under negative list
Examples of services in negative list-

• Fixed deposits or saving deposits or any other such deposits in a bank for which return is
received by way of interest
• Providing a loan or over draft facility for in consideration for payment of interest
• Mortgages or loans with a collateral security to the extent that the consideration for advancing
such loans or advances are represented by way of interest
• Corporate deposits to the extent that the consideration for advancing such loans or advances
are represented by way of interest or discount.
15.Services relating to transportation of passengers

Services by-
• a stage carriage;
• railways in a class other than
(i) first class; or
(ii) an Air Conditioned coach; ( exempt upto 30.9.2012)
• metro, monorail or tramway;
• inland waterways;
• public transport, other than predominantly for tourism purpose, in a vessel, between places
located in India; and
• metered cabs, radio taxis or auto rickshaws.
Covered under negative list Not Covered under negative list
1. Stage Carriage : 1.Motor vehicles to state transport undertaking (upto

Motor vehicles on hire to state transport 12 passengers)
undertaking (more taken 6 passengers)
2. Exemption to Transport of passengers by a 2.No exemption for Tourism, conducted tours,

contract carriage chartered or hire
16.Service relating to transportation of Goods

Services provided in relation to transportation of goods is specified in the negative list
• by road except the services of
(i) a goods transportation agency or
(ii) a courier agency
• by aircraft or vessel from a place outside India up to the customs station of clearance in India;
or
• by inland waterways (but agents covered)
17.Funeral, Burial, Crematorium or Mortuary Services including
Transportation of the deceased
Covered within the negative list. This following is not taxable
a. Funeral
b. Burial
c. Crematorium
d. Mortuary services
M/s Transporters Ltd. carried out the following activities during the F.Y. 2014-2015.
Services Rendered Rs.
1 Radio taxis for customers in Delhi 10,00,000
2 It operates a fleet of air plants (both domestic and international) 99,00,000
Domestic Transport Tickets
3 Vehicles let out on hire to B Ltd. for carrying its employees 2,00,000
4 Transport of passengers from Chennai to Bangalore , with 3 or 15,00,000
4 stops in between
5 Charges for accompanied bags charged from the above 1,00,000
passengers
6 Vessels between the Chennai Port and Port Blair for 15,00,000
transportation of passengers
7 Operation of cruise ships 30,00,000
8 International Transport from India to other countries 75,00,000
9 Domestic Transport of Passengers from Assam to Chennai by 5,00,000
road
Calculate the value of the taxable service.
The following taxable services have been exempted from the whole of the service tax taxable thereon
under section 66 B of the said Act vide mega exemption notification no.25/2012 – ST dated 20/06/2012
Exempted Services...
MEGA EXEMPTION NOTIFAICATION NO. 25/2012

1. Services by United Nations and International organisations
2. Health care services by a clinical establishment, an authorised medical practitioner or Para medics
3. Services by a veterinary services in relation to health care of animals or birds.
4. Services by Charitable Organisations in respect of specified charitable activities only and
construction of building for religious purposes for Charitable Organisation registered under section
12AA of Income Tax Act. Services imported by Charitable Organisations are also exempt from
service.
5. Religious ceremony and renting of religious places
6. Advocate or Advocate firm to non-business entity or business entity with turnover upto ` 10 lakhs
7. Person on Arbitral Tribunal
8. omitted
9. Services by way of training or coaching in Recreation activities relating to arts, culture, sports
10. Services to or by recognised educational institution for auxiliary educational services and renting
of Immovable Property (but not placement services)
11. Auxiliary educational Services – Outsourced activities, Midday meals, admission and examination
related services, mid-day meals, transport of students, staff, faculty
12. ¨ Services to recognised sports body (but brand ambassadors not exempt)
13. ¨ Sports sponsorship to recognised bodies (not IPL)
14. ¨ Services provided to Government or local authority or governmental authority for erection,
construction, maintenance, repairs of non-commercial or non-industrial use, educational purpose,
sewage, residential colony etc.
15. ¨ Infrastructure related civil construction services (discussed under construction services)
16. ¨ Temporary transfer or permitting use of Copyright (except sound recording)
17. ¨ Services of performing artists
18. ¨ Services of journalists
19. ¨ Hotels, guest houses with less than ` 1,000 per day tariff
20. ¨ Restaurants without AC/central heating and without bar
21. ¨ Goods transport upto ` 750 per consignee and ` 1,500 per vehicle and specified agricultural
commodities
22. ¨ Renting of motor vehicle to state transport or GTA
23. ¨ Transport of passengers (in specified cases only).
24. ¨ Parking for public exempt but not leasing for parking space
25. ¨ Specified general insurance schemes exempt.
26. ¨ Services by incubatee upto ` 50 lakhs
27. ¨ Services by Trade Union.
28. ¨ Housing Society or RWA to its members upto ` 5,000 p.m. – contribution to medical camps
29. ¨ Sub-brokers on stock exchange

30. ¨ Services of mutual fund agents or distributors of mutual fund, marketing agents of lottery
31. ¨ Selling Agents or distributor of SIM card
32. Sub-contractor under works contract providing service to main contractor (who is also under works
contract), when service of main contractor is exempt
33. ¨ Job work of agriculture, textile processing, diamonds and gemstones, parts of cycles and sewing
machine
34. ¨ Job work exempt where principal manufacturer is paying excise duty – when material sent under
rule 4(5)(a) of Cenvat Credit Rules
35. ¨ Business Exhibition held outside India (Really not taxable at all)
36. ¨ Public telephones
37. ¨ Services of slaughtering of animals.
38. ¨ Services from outside India to Government or Charitable Organisations
39. ¨ Public Libraries
40. ¨ Services by ESIC
41. ¨ Slump sale, sale of business, demergers
42. ¨ Public conveniences like toilets, bathrooms etc.
43. ¨ Services by Governmental authority.
Questions
Problem 1 : Mr. Raja is owning certain properties which he is given as follows. The said sum
includes rent from
1.A building was let out to Try sure coaching classes for providing coaching of T.Y.B.com.
Rs.4,00,000.
2.Allowed to use space of building for placing vending machines Rs. 5,00,000.
3. A Ganesh temple hall was letout for religious purpose for general public Rs.6,00,000.
4. Houses are let out to individuals for residential purpose Rs.7,00,000.
5.Vacant land used for animal husbandary Rs.8,00,000.
6. A building was let out to Vidya Prasarak School Rs.9,00,000.
7. A building was let out to be used as corporate office Rs.10,00,000.
8. A buiding was let out to RBI Rs.11,00,000.
9. Land used for exhibition Rs.12,00,000.
Compute the amount of service tax payable, by Mr. Raja assuming the rent is exclusive of service tax
in each case. Ignore small service providers’ exemption. Make suitable assumption.
Problem 2 : Mr. Ravi owns hotel, immovable properties and is engaged in letting of the same.
1.Delux Hotel rooms are let out at declared tariff of Rs.1,200 per room day. Number of days for
which it is let out = 200 days. Total rooms are 10.
2. Normal Rooms let out at declared tariff of Rs.900 per room day and actual room charged is Rs.700
per room day. Total Amount Rs.5,00,500.
3. A building located at Jammu was let out for office purpose at Rs. 20,000 p.m.
4. A vacant land was letout for Horticulture Rs.10,00,000.
5. A building let out private hospital at Rs.15,00,000.
Compute the amount of service tax payable if all charges are exclusive of service tax. Ignore small
service providers’ exemption.
Problem 3: TJSB a bank, furnishes you the following transaction during the year ending
31/03/2016.
1. Interest earned on loan Rs.5 crore.
2. Penal interest charged for delay in repayment of loans by customers Rs.2 lakhs.
3. Debit card related charges Rs.35 Lakhs.
4. Interest earned on reverse repo transactions Rs.40 Lakhs.
5. Commission from government towards collection of taxes Rs.15 Lakhs.
6. Commission charged of Rs.20 lakhs for preparation of demand draft.

7. Charges for late payment of dues on credit card outstanding Rs.2 lakhs.
8. Sale and purchase of forward contract of Rs. 10 Lakhs.
9. Loan processing fee charged Rs. 50 Lakhs.
Compute the value of taxable service tax payable thereon if all charges are exclusive of service tax.
Problem 4: Decide whether following receipts attract service tax.

1. Receipts of Saraswati school providing education upto higher secondary Rs.10 lakhs
2. Euro kid’s School providing education upto primary level Rs. 12 lakhs.
3. Receipts of ‘Commerce Concept’ a commercial coaching institute providing coaching Rs.7
lakhs ( a certificate was awarded to each trainee after completion of the training).
4. Receipts of Edu care a commercial coaching institute providing commercial coaching Rs.6
lakhs (No certificate was issued on completion of the training).
5. Receipts of Each one Teach one an industrial training institute (ITI) affiliated to the National
Council for Vocational Training (NCVT) Rs.5 Lakhs.
Problem 5 : RSU Trainers Ltd. A commercial training or coaching centre, provides the various
services as follows:
1. Training in recreational activities centre in relation to culture Rs. 2 lakhs.
2. Receipts from running centre in relation (hobby classes) Rs.2 lakhs.
3. Receipts from sale of prospectus/ application forms to trainee Rs.3 lakhs.
4. Postal coaching receipts Rs.4 lakhs.
5. A building which was let out to school providing pre-school education Rs.5 Lakhs.
6. Training and coaching in different Games Rs.6 Lakhs.
7. Placement services Rs.7 Lakhs.
8. Coaching to students for IIM exams Rs.8 Lakhs.
Problem 6 : Mr Sagar provides you with the following information to compute the value of taxable
services and service tax thereon if all charges are exclusive of service tax. Ignore small service
providers’ exemption:
1. Receipts from permanent transfer of rights of film to Sony Music Limited Rs.50 Lakhs.
2. Royalty from authorship of books Rs. 1 lakh.
3. Royalty for providing use of technical know how Rs.3 lakhs.
4. Royalty received for permanent transfer of trademark Rs.5 lakhs.
5. Royalty received by Mr Sagar from various persons from use of the song Rs.10.5 lakhs.
Problem 7 : Compute value of taxable service under “intellectual Property service” using the details
given below:
Particulars Rs.
1. Royalty for providing Designs and Patents @1% 10,00,000
2. Lumsum Royalty for permanent Transfer of trademark 20,00,000
3. Royalty under Brand Licensing arrangement for use of Brand Name 30,00,000
Problem 8 : Saraswat Bank Ltd. Furnishes the following information relating to services provided
and the gross amount received.
Particulars Rs.
1. Merchant Banking services 15,00,000
2. Asset Management (Including Portfolio Management) 16,00,000

3. Service charges for services to the Government of India 3,00,000
4. Interest on overdraft and Cash credits 20,00,000
5. Banker to the issue 5,00,000
6. Locker Rent 6,00,000
Problem 9 : Compute the value of taxable service and service tax payable on Information
Technology Software if all charges are exclusive of service tax. Ignore small service providers’
exemption.
Particulars Rs.
1. Development and Design of software 1,00,000
2. Sale of pre packaged software which is put on electronic storage media 2,00,000
3. License to use software given to different clients 3,00,000
4. Up-gradation of software 4,00,000
5. Enhancement and implementation of software 5,00,000
6. Programming of software 6,00,000
7. Tailor Made Modification to the software and delivered on electronic storage 7,00,000
media
8. Advice and consultancy on matters relating to software 8,00,000
9. On –site development of software 9,00,000
Problem 10 : Robinson Bank Ltd. furnished the following information relating to services provided
and the gross amount received during the month of December, 2015. Compute the value of taxable
service and service tax payable.
1 Amount of commission received for debt collection service 10,00,000
2 Discount earned on bills discounted 4,50,000
3 Dealing in sale and purchase of forward contract 5,70,000
4 Charges received on credit card and debit card facilities extended 3,80,000
5 Penal interest recovered from the customers for the delay in repayment of loan 2,60,000
6 Commission received for service rendered to Government for tax collection 6,00,000
7 Interest earned on reverse repo transaction 25,00,000
Problem 11 : X Bank Ltd. furnishes the following information relating to services provided and the
gross amount received.
1 Merchant Banking services 8,00,000
2 Asset Management (including Portfolio management) 3,00,000
3 Service charges for services to the Government of India 1,50,000
4 Interest on overdraft and cash credits 2,00,000
5 Banker to the issue 8,00,000
6 Locker rent 2,00,000
Compute the value of taxable service under the Finance Act, 1994 and the service tax liability of X
Bank Ltd., considering the rate of service tax at 12.36%.
Problem 12 : State whether the following are taxable or not:

1. Interest on Term loans from Bank
2. Credit card processing fees
3. Charges for use of bank Debit card while making payment.
4. Charges for sending e-Account statements

5. Commission charges by HDFC bank for money changing services to State Bank of India.
6. Commission charges by Western Union Money Transfer Ltd. bank for money changing
services to Manappuram Gold Loan Ltd. (assume that both are authorised dealers).
Problem 13 : Florus Advertising agency provided the following services during the quarter ending
31.03.2016.
1 Sales of space for advertisement in newspaper 45,000
2 Services related to preparation of advertisement 85,000
3 Sale of time for advertisement to be broadcast on FM Radio 65,000
4 Advertisement via banner at public places 50,000
5 Sale of time for advertisement to be broadcast on TV channel 1,00,000
6 Aerial Bill boards 90,000
7 Canvassing advertisement for publishing on a commission basis 35,000
Compute the service tax liability of florus Advertising Agency for the quarter ending 31/03/2016.
Problem 14 : Parel Post Office provided the following services to persons other than Government
during the quarter ending 31-03-2016 all charges are exclusive of service tax:
Basic mail services 1,00,000
Transfer of money through money orders 5,00,000
Operation of saving accounts 1,50,000
Rural postal life insurance services 2,00,000
Distribution of mutual funds, bonds and passport applications 5,00,000
Issuance of postal order 3,00,000
Collection of telephone and electricity bills 1,00,000
Pension payment services 50,000
Speed post services 5,00,000
Express parcel post services 2,00,000
Compute the service tax liability of Parel post office for the quarter ending 31-03-2016.
Problem No.15. Compute taxable value and tax thereon (assume that all sums received are exclusive
of service tax, if any (Ignore small service provider’s exemption and abatements).
Sr.No. Particulars Rs.
1 Renting of bus to state transport undertaking 25,00,000
2 Renting of truck to a goods transport agency 30,00,000
3 Renting of cars designed to carry passengers to a goods transport agency 16,00,000
4 Renting of cranes 25,00,000
5 Hiring of audio visual equipments 2,00,000
6 Hiring of pandal or shaminana for organizing functions / events 20,00,000
7 Hiring of a specialized machinery with transfer of right to use 60,00,000
8 Hiring of agro machinery for use in agriculture 15,00,000
Problem No.16. From the following information for February, 2015 supplied by Mr. Amir compute
his value of taxable service and the service tax payable for the month of February, 2015 ( Ignore
threshold limit and all amount given are excluding service tax)
1 Supply of farm labour 40,000
2 Loading and unloading of Grapes 60,000
3 Cleaning and Packing of Grapes 20,000

4 Sale of Grapes 4,00,000
5 Consultation service for manufacturing wine 3,50,000
6 Rent from Agricultural Land situated at Jammu and Kashmir 40,000
7 Renting of Agricultural Machinery 80,000
8 Rent from Agricultural Land used for Agriculture 60,000
9 Rent from Agricultural Land given to Agricultural college for Research 70,000
10 Rent from Agricultural Land given to Mela (Fun – Fair) 4,00,000
11 Rent of Agricultural Land from Cinema Production House 6,00,000
12 Rent from Agricultural Land given to Food and Agriculture Organisation of 1,00,000
United Nations
(April, 2014)
Problem No.17. From the following information for March, 2015 supplied by Mr. Shriram compute
his value of taxable service and the service tax payable for the month of March, 2015 (Ignore
threshold limit and all amount given are excluding service tax)
1 Security Charges Received from Candidate contesting for Lok Sabha Election 50,000
2 Rent from Lodge (Declared Tariff Rs.800 per day per room) 60,000
3 Royalty from Temporary Transfer of Trade Mark 2,50,000
4 Sale of Software 1,00,000
5 Rent from Mobile Tower Erected at Residence 3,00,000
6 Rent from Ground given for Local Sports 3,50,000
7 Consultancy given in relation to cultivation of Mango 1,00,000
8 Consultancy given in relation to production of Mango Jam 2,00,000
9 Private Tuition Fees from school students 1,00,000
10 Rent from Hiring of Tractor to Farmers 30,000
11 Salary Received form Employer 2,00,000
12 Health care services rendered 60,000
(April, 2014 )
1.The Negative List Entry covers
a. Services to any by the Reserve Bank of India
b. Services to the Reserve Bank of India
c. Services at the Reserve Bank of India
d. Services by the Reserve Bank of India
a. Services to and by a foreign diplomatic mission located in India
b. Services to a foreign diplomatic mission located in India
c. Services at a foreign diplomatic mission located in India
d. Services by a foreign diplomatic mission located in India
a. Selling of space for advertisements
b. Selling of time slots for advertisements
c. Selling of space or time slots for advertisement
d. Selling of space or time slots for advertisement other than advertisement broadcast by radio
a. renting
b. renting of dwelling
c. renting of residential dwelling
d. renting of residential dwelling for use as a residence
5. The Negative List Entry covers
a. transportation of passengers
b. transportation of passengers with accompanied belongings
c. transportation of passengers without accompanied belongings
d. transportation of passengers with or without accompanied belongings
6.The Negative List Entry covers transportation of passengers
a. by railways
b. by railways in a class other than first class
c. by railways in a class other than first class or an air conditioned coach
d. by railways in a first class or an air conditioned coach
7.The Negative List Entry covers transportation of goods
a. by an aircraft or vessel
b. by an aircraft or vessel between places located in India
c. by an aircraft or vessel from a place outside India up to the customs station of clearance in India
d. by an aircraft or vessel from the customs station of clearance in India upto a place outside India
8.Grant of mining or licensing rights by Government
a. not taxable – excluded from definition of services u/s 65B(44)
b. taxable - as declared service
c. taxable - not covered in negative list u/s 66D
d. not taxable - covered in negative list u/s 66D
22. Audits of government entities required to be audited by CAG
23. Basic mail services by Postal Dept.
24. Transfer of money through money orders etc. by Postal Dept.
25. Vocational education/training/skill development courses offered by Government institute
26. If a government department allots houses to its employees and charges a license fee such service
27. Services by the Department of Posts by way of speed post
a. taxable – not covered in negative list u/s 66D
b. excluded from definition of service u/s 65B(44)
c. taxable as declared service
d. not taxable - Government services covered in negative list u/s 66D
28. Services by the Department of Posts by way of express parcel post
b. not taxable - excluded from definition of service u/s 65B(44)
c. taxable - as declared service u/s 66E
29. Services by the Department of Posts by way of life insurance
30. Services by the Department of Posts by way of agency services provided to a person other than Government
31. Govt. services in relation to an aircraft inside the precincts of an airport
32. Govt. services in relation to a vessel inside the precincts of a port
33. Govt. services in relation to a vessel outside the precincts of a port
34. Govt. services in relation to Transport of goods
35. Govt. services in relation to Transport of passengers
36. Govt. support services to business entities
37. Services provided by Police or Govt.security agencies to PSUs or corporate entities
38. Services provided by Police or Govt.security agencies to sports events held by private entities
39. Support service to business entities by the Department of posts by way of express parcel post
40. Services by the Reserve Bank of India
a. not taxable - excluded from definition of service u/s 65B(44)
c. taxable – not covered in negative list u/s 66D
41. Services provided to the Reserve Bank of India
d. not taxable - RBI services covered in negative list u/s 66D
42. Services provided by bank to Reserve Bank of India
43. Services by a foreign diplomatic mission located in India
44. Cleaning of wheat done outside the farm
45. Service provider providing the desired farm labour to the service receiver
46. Processes carried out at an agricultural farm to make agricultural produce only marketable for the primary market
47. Lease of vacant agriculture land with a storage shed or a green house
48. Loading or unloading of agricultural produce
49. Packing of agriculture produce
50. Storage or warehousing of agricultural produce
51. Services by any Agricultural Produce Marketing Committee or Borad
52. Processing of potatoes to produce Potato chips
53. Processing of tomatoes to produce tomato ketchup
54. Packaging of agricultural products in retail packs
55. Manufacture or production of goods

56. Sale of space for advertisement in bill boards
57. Sale of space for advertisement in stadium
58. Sale of space for advertisement in conveyances
59. Sale of space for advertisement in cell phones
68. Sale of space for advertisement in automated teller machines
60. Sale of space for advertisement in internet
61. Aerial advertising
62. Selling of space or time slots for advertisement broadcast on radio.
d. not taxable - advertisements covered in negative list u/s 66D
3. Service tax is
e. A Direct Tax levied by the Central Government
f. An Indirect Tax levied by the state Government
g. An Indirect Tax levied by the Central Government
h. A Direct Tax levied by the State Government
4. Service Tax was introduced in India w.e.f
e. 1st July,1993
f. 1st June, 1995
g. 1st July, 2000
h. 1st July, 1994
5. Service tax is a tax on ___
e. Profession
f. Trade
g. Service
h. All the above
6. Service Tax is levied under ___
a. Entry 79
b. Entry 77
c. Entry 97
d. Entry 90
7. Service tax is applicable to
19. Whole of India
20. Whole of India except Jammu and Kashmir
21. Whole of India , except Jammu and Kashmir and Union Territories of Dadra, Nagar Haveli
22. None of this
8. Service Tax is normally
e. Paid and borne by the person who provides the service
f. Paid and borne by the person who receives the service
g. Paid by the person who provides the services and borne by the person who receives the service.
h. Paid and borne by the person who provides the service, and receives the service equally.
9. Following are taxable services
e. Service provides from Jammu & Kashmir to the clients anywhere in India.
f. Service provides within Jammu & Kashmir
g. Services provided within Jammu & Kashmir to Non-Indians.
h. Service provided to residents of Jammu & Kashmir from anywhere in India.
10. Service tax law is governed by
e. The Income Tax Act
f. The service Tax Act
g. The Excise Act
h. Chapter V of the Finance Act, 1994
11. Total number of services subject to service tax
a.9 b. 119 c. 5 d. cannot be determine
12. Vide section 66B, Service tax shall be levied
a. On all services
b. On all services other than those specified in the negative list
c. On all services other than those specified in the mega exemption notification
d. On all declared services
13. Vide section 66B, Service tax shall be levied on all services other than those specified in the negative list
a. Provided in the taxable territory
b. Provided or agreed to be provided in the taxable territory
c. Provided or agreed to be provided
d. Provided in India
14. The value of a taxable service is Rs.10,000. Service tax payable on it is
a.Rs.1,236 b. Rs.1,200 c. Rs.1,030 d. Rs.1,020
15. Vide section 66B, Service tax shall be levied at the basic rate of
a.10% b. 10.3% c. 12% d. 12.36%
16. The section 66B (44) service means
a. Any activity
b. Any activity carried out by a person
c. Any activity carried out by a person for another
d. Any activity carried out by a person for another for consideration
17. Vide Section 66 (44) , service
a. Means declared service
b. Includes declared service
c. Excludes declared service
d. Means any service other than a service specified in the negative list
e. Services to any by the Reserve Bank of India
f. Services to the Reserve Bank of India
g. Services at the Reserve Bank of India
h. Services by the Reserve Bank of India
a. Services to and by a foreign diplomatic mission located in India
b. Services to a foreign diplomatic mission located in India
c. Services at a foreign diplomatic mission located in India
d. Services by a foreign diplomatic mission located in India
a. Selling of space for advertisements
b. Selling of time slots for advertisements
c. Selling of space or time slots for advertisement
d. Selling of space or time slots for advertisement other than advertisement broadcast by radio
a. renting
b. renting of dwelling
c. renting of residential dwelling
d. renting of residential dwelling for use as a residence
a. transportation of passengers
b. transportation of passengers with accompanied belongings
c. transportation of passengers without accompanied belongings
d. transportation of passengers with or without accompanied belongings
19. The Negative List Entry covers transportation of passengers
a. by railways
b. by railways in a class other than first class
c. by railways in a class other than first class or an air conditioned coach
d. by railways in a first class or an air conditioned coach
20. The Negative List Entry covers transportation of passengers
a. by an aircraft or vessel
b. by an aircraft or vessel between places located in India
c. by an aircraft or vessel from a place outside India up to the customs station of clearance in India
d. by an aircraft or vessel from the customs station of clearance in India upto a place outside India
21. Grant of mining or licensing rights by Government
22. Audits of government entities required to be audited by CAG
23. Basic mail services by Postal Dept.
24. Transfer of money through money orders etc. by Postal Dept.
25. Vocational education/training/skill development courses offered by Government institute
26. If a government department allots houses to its employees and charges a license fee such service
27. Services by the Department of Posts by way of speed post
b. excluded from definition of service u/s 65B(44)
c. taxable as declared service
28. Services by the Department of Posts by way of express parcel post
29. Services by the Department of Posts by way of life insurance
30. Services by the Department of Posts by way of agency services provided to a person other than Government
31. Govt. services in relation to an aircraft inside the precincts of an airport
32. Govt. services in relation to a vessel inside the precincts of a port
33. Govt. services in relation to a vessel outside the precincts of a port
34. Govt. services in relation to Transport of goods
35. Govt. services in relation to Transport of passengers
36. Govt. support services to business entities
37. Services provided by Police or Govt.security agencies to PSUs or corporate entities
38. Services provided by Police or Govt.security agencies to sports events held by private entities
39. Support service to business entities by the Department of posts by way of express parcel post
40. Services by the Reserve Bank of India
41. Services provided to the Reserve Bank of India
42. Services provided by bank to Reserve Bank of India
43. Services by a foreign diplomatic mission located in India
44. Cleaning of wheat done outside the farm
45. Service provider providing the desired farm labour to the service receiver
46. Processes carried out at an agricultural farm to make agricultural produce only marketable for the primary market
47. Lease of vacant agriculture land with a storage shed or a green house
48. Loading or unloading of agricultural produce
49. Packing of agriculture produce
50. Storage or warehousing of agricultural produce
51. Services by any Agricultural Produce Marketing Committee or Borad
52. Processing of potatoes to produce Potato chips
53. Processing of tomatoes to produce tomato ketchup
54. Packaging of agricultural products in retail packs
55. Shelling of paddy done in rice Sheller (mill) located away from the farm
56. Rearing of horse
57. Futures contracts for goods
58. Commodity futures
59. Auxiliary services relating to future contracts provided by commodity exchanges clearing houses
d. not taxable - trading in goods covered in negative list u/s 66D
60. Auxiliary services relating to future contracts provided by agents
61. Auxiliary services relating to commodity futures provided by commodity exchanges clearing houses
62. Auxiliary services relating to commodity futures provided by agents
63. Manufacture or production of goods
64. Sale of space for advertisement in bill boards
65. Sale of space for advertisement in stadium
66. Sale of space for advertisement in conveyances
67. Sale of space for advertisement in cell phones
68. Sale of space for advertisement in automated teller machines
69. Sale of space for advertisement in internet
70. Aerial advertising
71. Sale of space for advertisement in print media
72. Selling of space or time slots for advertisement broadcast on radio.
73. Sale of time for advertisement to be broadcast on television
74. Sale of time slot by a brodcasing organsisation
75. Making or preparation of advertisement by advertisement agencies
Payment , Registration and Returns

Current Rate w.e.f. 01.04.2012, Service Tax payable
Service tax is payable @ 12.00 %

Education Cess ( 2% on service tax) 0.24 %
Secondary and Higher Education Cess ( 1% on service tax) 0.12 %
Service tax liability 12.36 %
Who is liable to pay service tax section 68

The following persons are liable to pay service tax
a. Service Provider Section 68(1) :
Every person providing taxable service to any person shall pay service tax at the rate specified in section 66B in
such manner and within such period as may be prescribed. Manner and period are prescribed vide Rule 6 of the
Service Tax Rules , 1994.
b. Service receiver (Reverse charge mechanism) Section 68(2):
In respect of certain taxable services notified by the central government, the service tax thereon shall be paid by
the service receiver and in such manner as may be prescribed and all the provisions of the Act shall apply to
such person as if he is the person liable for paying the service tax in relation to such service.
PERSON LIABLE TO PAY TAX (REVERSE CHARGE)

In relation to Service Service provided to
provided or agreed to be (i.e. Service Receiver) Person liable to Service tax
provided by
To any person carrying on the
1 An Insurance Agent The recipient of the service
insurance business
Where the person liable to pay
freight is-
a. any registered factory;
Any person who pays or is liable to pay
b. any registered society;
freight either himself or through his agent for
c. any co-operative society;
A good transport agency in the transportation of such goods by road in a
d. any registered dealer
2 respect of transportation of goods carriage;
e. anybody corporate
goods by road. Exception: If such person is located in non-
established, by or under
taxable territory, then the service provider
any law or;
shall be liable to pay service tax.
f. any partnership firm whether
registered or not under any law
including association of persons
Anybody corporate or
3 Way of sponsorship partnership firm located in the The recipient of such service.
taxable territory.
(i) an arbitral tribunal , or To any business entity located
4 The recipient of such service.
(ii) an individual advacate in the taxable territory.
Government or local authority
by way of support services-
Except –
(i)renting of immovable To any business entity located in
property, and the taxable territory
(ii) services specified in sub-
clause (i), (ii) and section 66D
of the Finance Act, 1994.
6 A director of a company To the said company The recipient of such service.
Any person which is located in Any person located in the
a non-taxable territory taxable territory
8 Service by a recovery agent To a banking company or a
Recipient of service
financial institution or a NBFC
9 Aggregator (w.e.f. 1-03-2015) Any person located in the

taxable territory
10 Mutual Fund or Distributor Mutual Fund or Asset
(w.e.f. 1-04-2015) Management Company
11 Selling / Marketing Agent of Lottery Distributor or selling
Lottery Tickets Agent Recipient of service
(w.e.f. 1-04-2014)
Aggregator means a person who owns and manages a web-based software application and by means of the application
and a communication device, enable a potential customer to connect with persons providing service of a particular kind
under the brand name or trade name of the aggregator. Examples are cab services like Uber, Ola or meru cabs
c. Service tax to be paid partly by service provider and partly by service receiver (partial reverse
charge mechanism) :
The central Government may notify the service and the extent of service tax which shall be payable by the
Service Receiver and the provision of this chapter shall apply to him to the extent so specified and the remaining
part of the service tax shall be paid by the service provider.
The services notified under this category and the extent of service tax payable thereon by the person who provides the
service and the person who receives the service for the taxable services shall be as specified in the following table.
% of service tax % of service tax
Description of service payable by service payable by service
provider receiver
1 Renting of motor vehicle designed to carry passenger on
Abated Value to any person who is not in the similar line of NIL 100%
business
2 Renting of motor vehicle designed to carry passenger on
Non-abated Value to any person who is not in the similar 60% 40%
line of business.
3 Supply of Manpower of any purpose or security services 25% 75%
4 Services portion in execution of Works Contract 50% 50%
Service Tax is payable in the prescribed manner

Service tax, so levied, is to be paid in the prescribed manner, as laid down in Rule 6 of Service Tax Rule,
1994.
1. Due Dates [Rule 6(1)

Payments through Bank :
Form G.A.R.7 (Previously known as TR6 Challan) should be used to make service tax
payment at the Bank. Payment of service tax may be made at the specified branches of
the designated banks.
As per Point of Taxation Rules were made w.e.f. 1-4-2011 mainly to provide that service tax will be
payable on accrual basis. The exception is that where value of taxable services in previous year were
less than ` 50 lakhs, service tax can be paid on receipt basis (i.e. cash basis) instead of accrual basis.
Quarterly payment by individual or firm – monthly by company, HUF, society etc.
Payment of tax by 5th by end of month/quarter (6th in case of e-payment) (except March) Tax
payable by 31 March in last quarter/month.
Cenvat credit available upto end of month or quarter can be taken though tax is payable by 5th/6th.
Payment of Service Tax

Payment of Service Tax through G.A.R. 7
Other than
Individual/Firm
Individual/Firm
Quarterly Monthly Payment

Payment
I, II & III IV Quarter Ending Months Month of

Quarter on 31st March Apr - Feb March
5th of the 5th of the Up to 31st

Up to 31st
Month Next Month March
March
following
Quarter
18
Electronic Payment through

Internet
Payment of Service Tax through G.A.R. 7
Other than
Individual/Firm
Individual/Firm
Quarterly Monthly Payment

Payment
I, II & III IV Quarter Ending Months Month of

Quarter on 31st March Apr - Feb March
6th of the 6th of the Up to 31st

Up to 31st
Month Next Month March
March
following
Quarter
20
E-Payment [Rule 6(2)]:

E-payment is a payable made through which a Taxpayer can remit his tax dues to the Govt. (CBEC)
using Internet Banking Service. It is an additional facility being offered by the banks besides conventional
procedure. The E-payment is mandatory for the assessee who has paid service tax of Rs.10 lakhs or
above in the proceeding financial year or has already paid service tax of Rs.10 lakhs in the current
financial year.
INTEREST AND PENALTY SECTION 75

1. Section 75 of Finance Act, 1994 prescribes the provisions in respect of interest payable on delayed
payment of service tax. Notification no.12/2014 S.T. dated 11-7-2014 prescribed the following slab
rates of interest which would vary with the extent of delay.
Extent of Delay Simple interest rate per annum
Upto 6 months 18%
More than 6 month and upto 18% for first 6 months and 24% for the period of delay beyond 6 months
1 year
More than 1 year 18% for first 6 months , 24% for the second 6 months and 30% for the period
of delay beyond 1 year.
Further, as specified in the provision to section 75 of Finance Act, 1994, 3% concession on the
applicable rate of interest will continue to be available to small service providers.
2. Penalty : If a person who is liable to pay service tax fails to pay service tax, he shall pay in addition to
such tax and interest in accordance with the provisions of section 75 of the Act, a penalty which shall
not be less than Rs.100 for every day during which such failure continues or @1% of such tax per
month, whichever is higher. However, the penalty amount payable shall not exceed 50% of the
amount of service tax payable.
REGISTRATION and Requirements Section 69 and Rule 4

1. Application :
The following persons should apply for registrations under the Service Tax Act.
(1) Any provider of taxable services whose aggregate value of taxable service in a financial year exceeds
Rs. 9 lakhs Every Person who is liable to pay service tax.
(2) A recipient who is liable to pay service tax.
(3) The ‘Input Service Distributors’
REGISTRATION
Required Not Required
Turnover Input Service Turnover
Brand Name
exceeding Tax less than Dealer/
of another Reverse Charge
Rs. 9 Distributor Rs.9 Manufacture
person
Lakhs (ISD) Lakhs
Provider Providers of Providers of
Recipient of Services
of services services Services
THRESHOLD EXEMPTION
Exemption
Exemption
limit of Exemption
limit of Rs.10 Exemption limit of Rs.10 Lakhs
Rs.10 limit of Rs.10
lakhs not not allowed.
Lakhs Lakhs allowed
allowed
allowed
• Application shall be filed to Superintendent of Central Excise

• Application is to be in form No. ST-1
• Within 30 days
• Registration shall be issued within 7 days in form ST-2 ( Registration certificate)
Example :
1. Discuss whether the following persons are liable to apply for registration under the service tax law and if
yes, by which date.
i. A provider of taxable service, whose aggregate value of taxable services is Rs.8,80,000 upto
31/03/2016.
ii. A provider of taxable service, whose aggregate value of taxable services is Rs.9,01,000 on 01/1/2016.
iii. A provider of taxable service, who has provided services as follows:
Aggregate value of services upto 15/05/2015 (i.e. before the service became taxable) Rs.5,00,000.
Aggregate value of taxable services from 16/05/2015 to 28/02/2016 Rs.8,95,000.
iv. An input service distributor who starts his business w.e.f. 5/06/2015.
v. A provider of taxable service who starts his business w.e.f. 11/08/2015 and whose aggregate value of
taxable servies as on 10/10/2015 becomes Rs.9,02,000.
2.Vishal starts a new business provides taxable services for the following four years. In which year will be
liable to pay service tax.
Year 1 Rs.8,00,000
Year 2 Rs.11,00,000
Year 3 Rs.8,00,000
Year 4 Rs.11,00,000
FILING OF RETURNS SECTION 70
 Return of Service Tax to be filed Half Yearly – ST-3

 For 1st April to 30th September
 Due Date - 25th October
 For 1st October to 31st March
 Due Date - 25th April
 E-filing of ST-3 return

Basic Requirement
 PAN Based Service Tax Code (STC)
 File return on www.servicetaxefiling.nic.in
Condo nation of Delay
 Only for those using e-filing Facility first time
 Assessee has faced technical difficulties
 Delay of 1 month shall be condoned as per Circular No. 71/2004
 Penalty
Period Fine/Penalty
Up to 15 days Rs.500/-
16 to 30 days Rs.1000/-
Rs.1000/- plus Rs.100/- per day from the 30th

Beyond 30 days day till date of furnishing return (max Rs
20,000)
Example: M/s Harpreet Jaggi submitted her servie tax return for the half year ending 30th September, 2015 on
following independent dates for which due date of filing return is 25th Ocober, 2015:
Different Cases Date of Filing of Service Tax Return
Case I 01/11/2015
Case II 22/11/2015
Case III 28/11/2015
Case IV 04/12/2015
Case V 14/12/2015
Case VI 03/05/2016
Case VII 02/06/2016
Case VIII 27/10/2016
Problem No. 1. Mr. Vijay’s taxable services for April, May, June, August and September, 2015 is given
below:
Rs.
April – 2015 20,00,000
May – 2015 35,00,000
June – 2015 40,00,000
July – 2015 10,00,000
August - 2015 0
September - 2015 5,00,000
What is his date of payment of service tax to be paid online and the amount of total service tax payable? What
is penalty in above case if return is filed on 30th October, 2015. ( April, 2015)
Problem No.2. Determine interest and penalty under section 75 and 76 respectively in the following cases:
a. Service tax of Rs.20 lakhs ( e-payment mandatory) for Feb.,2016 was paid on 16/03/2016.
b. Service tax Rs.6,000 for Feb. 2016 on 15th April, 2016. The value of services provided by him during
the preceding financial year was Rs.18 lakhs.
c. Service tax Rs.45,000 for July, 2015 paid on 30th September, 2015. The value of services provided by
him during the preceding financial year was Rs.60 lakhs.
d. An assessee fails to pay service tax of Rs.10 lakhs payable by 6th January, 2016. He pays the amount
on 17th January. What is the penalty payable by M?
e. In respect of the services rendered during the month of December, 2015 the service tax of Rs.40 lakhs
was remitted on Januray, 21 2016. Arrive at the penalty under section 76 of the Finance Act, 1994
which is leviable in this case.
POINT OF TAXATION
According to Section 67A , the rate of service tax or value of a taxable service shall be that in force or as
applicable at the time when the taxable service has been provided or agreed to be provided. This time is
known as the ‘Point of Taxation’(POT).
The Point of Taxation Rules , 2011 as amended and applicable w.e.f. 1/04/2013 are summed up below-
Rule 2 (e), “Point of Taxation” (POT) means the point in time when a service shall be deemed to have been
provided. This , in turn, dertermines
i. Rate of tax applicable and
ii. Due date for payable tax
Rule 3 Determination
a. Issue of Invoice : POT shall be the time when the invoice for the service provided or agreed to be
provided is issued.
b. Provision of service: where the invoice is not issued within the prescribed time period , the point of
taxation shall be the date of completion of provision of the service. As per rule 4A of the Service Tax
Rules, 1994, the time period for issuance of invoice is 30 days ordinarily and 45 days for banks and
financial institutions. (where invoice is in the form of a monthly statement).
c. Date of Payment : In a case, where the person providing the service, receives a payment before the
time specified in (a) above, POT shall be the time , when he receives such payment, to the extent of
such payment.
d. Advance : Wherever any advance by whatever name known, is received by the service provider
towards the provision of taxable service, the POT shall be the date of receipt of each such advance.
However, an option is provided to determine the point of taxation in respect of small advances upto
Rs.1,000 , in excess of the amount indicated in the invoice, on the basis of invoice or completion of
service rather than payment, such provision is expected to address the according problems by service
providers in telecommunication, credit card businesses who regularly receive excess payments from
their customers.
To sum up, POT is earlier of (i) date when invoice is / had to be issued or (ii) date of payment /
advance.
The Maharashtra Value Added Tax Act, 2002
Introduction
• Maharashtra Value Added tax has been introduced
with effect from 1.4.2005. The original bill was
passed in 2002. Due to political reasons its
implementation was postponed. Maharashtra
Government made modification in said Act of 2002
and given its effect from 1-4-2005. Thus its name
Maharashtra Value Added Tax 2002 and not 2005.
• Maharashtra Value Added Tax,2002 is nothing but
VAT that is value added tax.
•
. Vat is adopted in 130 countries in the world. 21 states in India including State of Maharashtra
implemented Vat with effect from 1-4-2005. This is the most important tax reform in India
• Maharashtra Value added tax is a form of Sales Tax collected by Maharashtra Government from
consumers within State of Maharashtra. It is, collected through business transactions involving Sale of
Goods within State. In a chain of distribution goods moved from Manufacturer to Wholesaler, Semi
wholesaler, retailer to consumer. In every stage there is value addition tax is collected on every stage.
That is from manufacturer, wholesaler, semi wholesaler, retailer. It is multi point tax: It is collected on
Value addition made by every person.
Benefits/ Advantages of VAT

1. It is a simple, transparent and progressive system of tax.
2. It is a business friendly system of taxation.
3. Reduction in the number of tax rates to only 2 main rates i.e. 5% & 12.5%.
4. Reduction in effective tax rate for many goods.
5. Elimination of “tax on tax” existing is the sales tax system i.e. Cascade effect.
6. Full set off available for VAT paid on most business purchase.
IS VAT YET ANOTHER TAX?

No; it will replace the following four existing taxes:
1. The Bombay Sales Tax Act, 1959
2. The Maharashtra Sales Tax on the Transfer of Right to use Any goods of Any purpose Act, 1985.
3. The Maharashtra Sales Tax on the Transfer of Property in Goods Involved in the Execution of Works
Contract (re-enacted) Act, 1989.
4. The Bombay Sales of Motor Spirit Taxation Act, 1958.
What types of business are liable for VAT?

VAT applies to all types of businesses including Importers, Manufacturers, Distributors, wholesalers,
Retailers, Works Contractors, Lessors.
Definitions Section 2
Business section 2 (4)
Business" includes -
• any service,
• any trade, commerce or manufacture;
• or any adventure or concern in the nature of trade, commerce or manufacture, whether or not the
engagement in such service, trade, commerce, manufacture, adventure of concern is with a motive to
make gain or profit and whether or not any gain or profit accrues from service , trade , commerce,
manufacture, adventure or concern.
Explanation
• For the purpose of this clause,
• (i) The activity of raising of man-made forests or rearing of seedlings or plants shall be deemed to
be business;
• (ii) Any transaction of sale or purchase of capital assets pertaining to such service, trade,
commerce, manufacture, adventure or concern 'shall be deemed to be a transaction comprised in
business;
• (iii) sale or purchase of any goods, the price of which would be credited or, as the case may be,
debited to the profit and loss account of the business under the double entry system of accounting
shall be deemed to be transactions comprised in business;
• (iv) any transaction in connection with the commencement closure of business shall be deemed to
be a transaction comprised in business.
Dealer Section 2 ( 8 )
“Dealer” means any person who, for the purposes of or consequential to his engagement in or, in connection
with or incidental to or in the course of, his business buys or sells, goods in the State whether for commission,
remuneration or otherwise and
Includes
1. a factor, broker, commission agent, del-credere agent or any other mercantile agent, by
whatever name called, who for the purposes of or consequential to his engagement in or in
connection with or incidental to or in the course of the business, buys or sells any goods on behalf
of any principal or principals whether disclosed or not;
2. an auctioneer who sells or auctions goods whether acting as an agent or otherwise or, we
organizes the sale of goods or conducts the auction of goods whether or not he has the authority to
sell the goods belonging to any principal whether disclosed or not and whether the offer of the
intending purchaser is accepted by him or by the principal or a nominee of the principal;
3. a non resident dealer or as the case may be, an agent, residing in the state of a non resident
dealer, who buys or sells goods in the State for the purposes of or consequential to e engagement
in or in connection with or incidental to or in the course of the business;
4. Any society club or other association of persons which buys goods from, or sells goods to its
members.
Explanation:
For the purpose of this clause
Each of the following persons, bodies and entities who sell any goods whether by auction or otherwise,
directly or through an agent for cash, or for deferred payment, or for any other valuable consideration shall,
notwithstanding anything contained in clause (4) or any other provision of this Act, be deemed to be a dealer,
namely
(i) Customs Department of the Government of India administering the Customs Act-1962.
(ii) Departments of Union Government and any Department of any State Government
(iii) Local authorities;
(iv) Port Trusts;

• (a) Public Charitable Trust;
• (v) Railway Administration as defined under the Indian Railways Act, 1989, and Konkan Railway
Corporation Limited;
• (vi).Incorporated or unincorporated societies, clubs or other associations of persons;
• (vii) Insurance and Financial Corporations, institutions or companies and bank included in the second
schedule to the Reserve Bank of India Act, 1934 (ii of l934).
• (viii) Maharashtra State Road Transport Corporation constituted under the Road Transport
Corporation Act, 1950.
• (ix) Shipping and construction companies; Air Transport companies, Airlines and Advertising
Agencies;
• (x) any other corporation, Company, body or authority owned or constituted by, or subject to
administrative control, of the Central Government, any State Government or any local authority:
Exceptions
Exception I: An agriculturist, who sells exclusively agricultural produce grown on land cultivated by him
personally, shall not be deemed to be a dealer within the meaning of this clause.
Exception II: An educational institution carrying on the activity of manufacturing, buying or goods, in
the performance of its functions for achieving its objects, shall not be deemed to a dealer within the meaning
of this clause.
Exception III: A transporter holding permit for transport vehicles (including cranes) granted under the
Motor Vehicles Act, 1988, which are used or adopted to be used for hire or reward shall not be deemed to be a
dealer within the meaning of this clause in respect of sale or purchase .such transport vehicles or parts,
components or accessories thereof.
Goods Section 2 ( 12 )
"Goods" means every kind of moveable property not being newspapers, auctionable claim, money, stocks,
shares, securities or lottery tickets and includes live stocks, growing crop, grass and trees and plants including
the produce thereof including property in such goods attached to or forming part of the land which are agreed
to be severed before sale or under the contract of sale.
State whether the following are ‘goods’ under the MVAT Act, 2002.
1 Mechanical Equipment Y
2 Newspapers N
3 Lottery Tickets N
4 DVD Player Y
5 Actionable claim e.g. a debt (claim) for whose recovery a court case (actionable) can be filed N
6 Chickens Y
7 Vacant Land N
8 Trucks Y
9 Import Licence Y
10 Power Loom Y
11 Loom Hours N
12 SIM card in Mobile Phone Y
13 Shares in Infosys Ltd. N
14 Mango Trees Y
15 Equity Share of Siemens Ltd. N
16 Residential Flat used for business N
17 Malai Kulfi Y
18 Agricultural Plot N
19 One Hundred US Dollars N
20 Malai Paneer Y
21 Jackfruit Trees Y
Importer Section 2(13)

Importer” means a dealer who brings any goods into the states or to whom any goods are dispatched from
any place outside the state.
Manufacture Section 2 ( 15 )
"Manufacture" with all its grammatical variations and cognate expressions includes:
Producing, making, extracting, altering, ornamenting, finishing or otherwise Processing, treating, or adapting
any goods.
Purchase Price Section 2 ( 20 )

"Purchase price" means the amount of valuable .consideration paid or payable by a person for any purchase
made including any sum charged for anything done by the seller in respect of the goods at the time of or
before delivery thereof, other, than the cost of insurance for transit or illustration, when such cost is separately
charged.
Resale Section 2 ( 22 )
"Resale" means a sale of purchased goods:
(i) in the same form in which they were purchased, or
(ii) without doing anything to them which amounts to, or results, in a manufacture; and the word "re-sale"
shall be construed accordingly.
Sales Section 2 ( 24 )
"Sale" means a sale of goods made within the state for cash or deferred payment or other , able consideration,
but does not include a mortgage, hypothecation charge or pledge and the ,word "sell", "buy" and "purchase"
with all their grammatical variation, and cognate expressions, shall be construed accordingly.
Following transaction shall be deemed to be a Sale
1. The transfer of property in goods, otherwise than persuant to a contract for a consideration.
2. The transfer of property in good in the same form or otherwise involved in execution of works contract.
3. a delivery of goods on hire purchase or payment by instalments.
4. the transfer of the right to use any goods or lease.
5. The supply of goods by any association or body of persons incorporated or not, to a member thereof.
6. the supply of food or any other article for human consumption or any drink asservice or otherwise.
Sales Price Section 2 ( 25 )

"Sale price" Means the amt of valuable consideration paid or payable to a dealer for any sale made including
any sum charge for anything done by the seller in respect of the goods act at the time of or before delivery
thereof, other than the cost of insurance for transit or installation. When such cost is separately charge.
Explanation I :- The amt of duties levied or leviable on goods under the central excise act, 1944 or the
custom act, 1962 or the Bombay prohibition act, 1949, shall be deemed to be part of sale price of such goods
whether the duties are pay or payable by or on behalf of the seller or the purchaser or any other person
Explanation II: Sale price shall not include tax paid or payable to seller in respect, of such sale.
Explanation III: Sale price should include the amount received the seller by, Way of deposit, whether
refundable or, not, .which has been received whether by way of, a separate agreement or not, in connection
with or incidental or ancillary to, the said sale. of goods. "
Computing Sale Price

Particulars Rs. Rs.
Consideration XX
Add:
Other Charges XX
Excise Duty XX
Customs Duty XX
Related Deposit XX XX
Less:
Transit insurance (XX)

Installation (XX)
MVAT (XX) (XX)
Total Sales Price XX
State whether the following person is a ‘dealer’ under the MVAT Act, 2002.
Persons Whether a Reasons
dealer
(1) Chartered Accountants No He gives services not deals in goods
(2) Educational Institutions No Specifically excluded
(3) Hospitals (Sale of old machinery) Yes To extent of sale of old machinery
(4) Transporter No Specifically Excluded
(5) Auction on behalf of Custom (confiscated Goods) Yes Sale of Confiscated Goods
(6) Sale of vehicle by State transport corporation Yes Sale of transport vehicle
(7) Carrying of passengers No Sale of Confiscated Goods
(8) Sale of confiscated rickshaw by ICICI Bank Yes Sale of Rickshaw
(9) Ornaments sold by household person No Not a business
(10) Sale of food by MIG Club at concessional rate to its Yes It is a business
State whether the following transaction can be considered as ‘Sale’ under the MVAT Act, 02.
Transaction Sales Or Not Reason
(1) Sales of Computer Yes Sales of goods
(2) Labour charges received No Services and not goods
(3) Sale of goods by barter system No No monitoring consideration
(4) Branch transfer No Sale to one self
(5) Gift donation of TV to charitable organization No No monitoring consideration
(6) Free Samples No No monitoring consideration
(7) Hypothecation of goods No Not a sale
(8) Delivery of goods on hire purchase system Yes Sale
(9) Pledge of goods No Not a Sale
(10) Transfer of goods from Head Office to Branch No Sale to oneself
(11) Sale of Motor Car / Cycle / Byke Yes Sale of asset
(12) Supply of food inside Hotel Yes Sale
(13) Accident claim received in respect of motor car No Not a sale
(14) Supply of steel casting , Yes Sale
(15) Consignment transfer No Not a sale
(16) sale of a building No Sale of immovable property
(17) Sale of Shares No No shares are not goods
(18) Service Charges Received No Not a sale
(19) Sale of Mobile phone Yes Sale of goods
(20) Sale of scrap Yes Sale of goods
(21) Canteen sale of college Yes Transfer of food for price
(22) Transfer of car on installment system Yes Sale of goods
(23) Construction of bridge Yes Transfer of property for price
(24) Computer given a rent Yes Transfer of right to use for price
Problem No.1.M/s Herwadkar & Associates commenced their business on 27th March, 2015. From the following
particulars regarding purchases and sales transactions. Find out which date they will be liable for Registration and to pay
tax as per the provision of MVAT Act, 2002. Give reasons. (Oct, 2009 )
Date Purchases Sales
Taxable Tax free Taxable Tax free
Rs. Rs. Rs. Rs
27/03/2015 6,000 18,000 8,000 24,000
28/03/2015 3,000 25,000 1,000 32,000
29/03/2015 1,500 80,000 500 95,000
02/04/2015 6,000 2,28,000 8,000 3,75,000
04/04/2015 4,000 1,75,000 1,000 1,05,000
07/04/2015 10,000 1,00,000 20,000 1,10,000
08/04/2015 6,000 1,20,000 15,000 1,05,000
10/04/2015 4,000 75,000 10,000 2,10,000
15/04/2015 5,000 1,10,000 5,000 1,28,000
Problem No.2. M/s Thatte & Co. commenced business on 19th March, 2015. From the following particulars regarding
purchases and sales Transactions, Find out from which date they will be liable for Registration and to pay tax as per the
provision of MVAT Act, 2002, Give reasons. (March, 2009)
Month Details of Purchases etc. Details of Sales
Tax free Taxable Out of state Tax free Taxable
(Rs.) (Rs.) Taxable Rs. Rs. Rs.
19/03/2015 16,000 12,000 7,000 7,000 15,000
24/03/2015 12,000 6,000 8,000 10,000 12,000
28/03/2015 10,000 5,000 4,000 18,000 22,000
31/03/2015 18,000 8,000 5,000 12,000 2,000
03/04/2015 20,000 8,000 16,000 9,000 20,000
04/04/2015 12,000 4,000 5,000 500 28,000
10/04/2015 14,000 8,000 4,000 12,500 32,000
12/04/2015 10,000 20,000 5,000 16,000 25,000
15/04/2015 10,000 18,000 10,000 22,000 15,000
Problem No.3. M/s Bansode and Co. is a dealer in chemicals, From the following information find out its Tax liability
for the month of Sept. 2015 as per the provisions of MVAT Act, 2002. ( March, 2009 )
Particulars Rs.
Sales (inclusive of tax)
Schedule ‘C’ Goods @ 5% 4,20,000
Schedule ‘E’ Goods @ 12.5% 2812500
32,32,500
Purchases (inclusive of tax)
Schedule ‘C’ Goods @ 5% 6,30,000
Schedule ‘E’ Goods @ 12.5% 16,87,500
Schedule ‘B’ Goods @ 1% 5,05,000
28,22,500
[ Ans. MVAT Payable Rs.1,10,000 ]
Problem No.4. M/s Sathe Udyog commenced their business on 27th March, 2015. From the following particulars
regarding purchases and sales transactions. Find out which date they will be liable for Registration and to pay tax as per
the provision of MVAT Act, 2002. Give reasons. (April , 2011 )
Purchases Sales
Rs. Rs. Rs. Rs
27/03/2015 7,000 13,000 9,000 60,000
29/03/2015 6,000 12,000 2,000 50,000
30/03/2015 5,000 1,10,000 8,000 1,75,000
31/03/2015 4,000 90,000 12,000 1,10,000
04/04/2015 3,000 1,25,000 6,000 3,00,000
06/04/2015 6,000 60,000 7,000 1,25,000
10/04/201 4,000 1,35,000 12,000 1,00,000
15/04/2015 5,000 2,00,000 6,000 75,000
Problem No. 5. Shri Shyam Pawar started business from 3rd January, 2016. From the following particulars regarding
Purchases and sales transactions, Find out from which date he will be liable for registration and to pay tax as per the
provision for MVAT Act, 2002. Give reasons. (Oct, 2010 )
January 2016 Purchases Sales

Rs. Rs. Rs. Rs
3 16,000 14,500 28,000 12,000
5 40,000 16,000 48,000 40,000
6 52,000 18,000 62,000 68,000
10 48,000 22,000 1,02,000 48,000
12 60,000 72,000 66,000 46,000
15 40,000 28,000 69,000 68,000
20 60,000 46,000 1,01,000 1,05,000
Problem No.6. Guru Impex commenced their business on 30th March, 2015. From the following particulars regarding
purchases and sales transactions, you are required to find out the date from which they will be liable for Registration and
to pay tax as per the provisions of MVAT Act, 2002. Give reasons: (Oct, 2012 )
Date Taxable Purchases Taxable Purchases Taxable sales
within state outside state within state
Rs. Rs. Rs.
04/04/2015 10,000 30,000 40,000
10/04/2015 50,000 12,000 70,000
20/04/2015 30,000 4,000 80,000
25/04/2015 40,000 10,000 20,000
30/04/2015 20,000 30,000 40,000
Problem No.7. M/s Amitabh & Co. commenced business on 19th March, 2015. From the following particulars
regarding purchases and sales Transactions, Find out from which date they will be liable for Registration and to pay tax
as per the provision of MVAT Act, 2002, Give reasons. (March, 2013)
Out of state Within state Exports Local Sales
Taxable Taxable Tax Free Taxable Tax Free
(Rs.) (Rs.) Rs. Rs. Rs.
03/04/2015 16,000 20,000 8,000 5,000 4,000 20,000
04/04/2015 5,000 4,000 12,000 - 500 28,000
10/04/2015 4,000 8,000 14,000 6,000 4,500 16,000
12/04/2015 5,000 20,000 10,000 3,000 7,000 16,000
15/04/2015 10,000 18,000 8,000 10,000 6,000 10,000
Problem No.8. Mr Sameer, a trader, commenced their business on 1st December, 2015. From the following particulars
of their regarding purchases and sales Transactions, you are required to find out date from which they will be liable for
Registration and to pay tax as per the provision of MVAT Act, 2002, Give reasons. (March, 2015)
Date Purchases Sales
Out of state Within state Within state
Taxable Goods (Rs.) Tax free ( Rs.) Taxable Goods (Rs.) Tax free ( Rs.)
01/12/2015 8,000 30,000 5,000 20,000
04/12/2015 4,000 35,000 7,000 33,000
05/12/2015 6,000 40,000 3,000 17,000
11/12/2015 12,000 45,000 6,000 24,000
18/12/2015 20,000 50,000 10,000 30,000
Additional Questions:
Q.1) Ajit is a dealer carrying business at Aurangabad. From the following information find out whether he liable for
registration under MVAT Act
Particulars Taxable Tax free Total
(Rs.) (Rs.) (Rs.)
Within The State 90,000 20,000 1,10,000
Outside The State 6,000 2,000 8,000
Total 96,000 22,000 1,18,000
Sales 1,30,000 30,000 1,60,000
Q.2) The details of sales & purchases of Mr. Prakash is as follows. Find out whether he is liable for registration under
the MVAT Act.
(Rs.) (Rs.) (Rs.)
Within The State 1,00,000 60,000 1,60,000
Outside The State 20,000 10,000 30,000
Total Purchases 1,20,000 70,000 1,90,000
Sales 1,60,000 40,000 2,00,000
Q.3) Mr.Vasant is a manufacturer. Find out from the following information whether he is liable for registration under
the MVAT Act for the year 2015-2016.
(Rs.) (Rs.) (Rs.)
Purchases (within the state) 1,60,000 20,000 1,80,000
Production 8,000 - 8,000
Sales 2,20,000 20,000 2,40,000
Q.4) Details of sales & purchases of Sujata are as follows. Find out whether she is liable for registration.
(Rs.) (Rs.) (Rs.)
Purchases (within the state)
Raw material 80,000 16,000 96,000
Machinery 40,000 - 40,000
Total 1,20,000 16,000 1,36,000
Production 20,000 4,000 24,000
Sales 50,000 6,000 56,000
Q.5) Mrs. Shivani is a manufacturer, during the year 2015-2016 her sales, purchases & goods manufactured by her are
given below. Find out whether she is liable for registration & payment of sales under the MVAT Act.
(Rs.) (Rs.) (Rs.)
Sales 8,000 1,40,000 1,48,000
Purchases 6,000 1,00,000 1,06,000
Value of goods manufactured 16,000 20,000 36,000
Q.6) The details of purchases, sales & value of goods manufactured by Mr.Vicky are as follows. Find out whether he is
liable for payment of sales tax value tax under MVAT Act.
Particulars Purchases Sales Value of goods
(RS.) (Rs.)` manufacture (Rs)
Tax free goods 70,000 80,000 40,000
Taxable Goods 8,000 18,000 20,000
Total 78,000 98,000 60,000
Q.7) Miss sonali carries business in Nagpur. From the following particulars find out whether she is liable for sales tax
registration during the year 2015-2016.
Particulars Purchases Purchases Value of Sales
within state outside state goods (Rs.)
(Rs.) (Rs) manufactured
(Rs.)
Taxable 1,20,000 12,000 4,000 1,60,000
Tax-free 40,000 4,000 4,000 40,000
Total 1,60,000 16,000 8,000 2,00,000
Q.8) Mr. Radhakrishna is a dealer at Pune. From the following information find out whether he is liable for
registration under MVAT Act.
Particulars Sales Purchases
(Rs.) (Rs.)
Taxable 2,00,000 1,00,000
Tax-free 51,000 40,000
Total 2,51,000 1,40,000
Q.9) Mr. Keyuri is a dealer at Pune. following information is available

(Rs.) (Rs.) (Rs.)
Purchases 9000 5,00,000 5,09,000
Sales 9500 9,00,000 9,09,500
Q.10) Following are the particulars of Gift Pvt. Ltd. Having head office at Calcutta & branch an Mumbai. Find out
whether the company is liable for registration under MVAT Act.
Particulars Total Purchases Total Sales

(Rs.) (Rs.)
At Mumbai 2,00,000 2,40,000
At Calcutta 8,00,000 10,60,000
Total 10,00,000 13,00,000
Q.11) Shriram Stores at Dadar has given you following information for the year 2015-2016.
Particulars Sales Purchases
(Rs.) (Rs.)
Tax free goods 40,000 20,000
Taxable goods 20,8000 1,70,000
Total 24,8000 1,90,000
Find out whether Shriram Stores is liable for registration under the MVAT Act.
Q.12) Mr.Ravindra is a dealer and you are asked to find from information from which month will be liable for
registration under the MVAT Tax Act.
Month Purchases Sales
(Rs.) (Rs.) (Rs.)
January 2015 80,000 1,20,000 - -
July 2015 2,000 4,000 - 2,50,000
August 2015 4,000 4,000 1,20,000 10,000
September 2015 20,000 10,000 24,000 16,000
October 2015 10,000 2,000 16,000 4,000
Q.13) Mr. Narenda is a dealer. You are asked to find from which month he will be liable for payment of tax under
MVAT Tax Act from the following information.

Taxable Tax free (Rs.) Taxable Tax free
(Rs.) (Rs.)
January 2015 4000 60,000 - -
July 2015 - 1,20,000 - -
August 2015 7000 30,000 - -
September 2015 - 30,000 - -
October 2015 - 10,000 - -
Q.14) Dilip Enterpises is a dealer. Find out from which month he will liable for registration as per the provisions of
MVAT Act, 2002:
Month 2015 Purchases Sales
(Rs.) (Rs.) (Rs.)
April 500 2500 500 1000
May 1000 4500 500 3000
June 2000 6500 1500 10000
July 2500 24000 2000 26000
August 3000 25000 4000 28000
September 3500 52000 1000 65000
October 4500 72000 2500 75000
November 6000 25000 4500 26000
December 4500 80000 6000 92000
Q.15) M/s. Apana Co.Op Stores commences business on 1st July, 2014 . It follows co-operative year as accounting
year. Following information is available.
Particulars Total Purchases Taxable Sales

(Rs.) (Rs.)
01.07.2014 to 31.03.2015 1,60,000 2,40,000
01.04.2015 to 30.6.2015 1,20,000 10,60,000
Total Sales 2,80,000 13,00,000
Find out whether store is liable for registration under Bombay Sales Tax Act.
Q.16) Mr. Vivek is a trade and importer from the following information. Find out on which day he will be liable to pay
tax as per the of the MVAT Act, 2002. Given reason to your answer.

Taxable
goods
Within Outside Within
Maharashtra Maharashtra Maharashtra
Rs. Rs. Rs.
15-05-2013 30,000 - -
20-05-2013 - - 20,000
25-05-2013 - 6,000 -
28-05-2013 40,000 - -
30-05-2013 - - 90,000
05-08-2013 - 4,400 -
Q.17) Shri Santosh is a manufacturer. From the following information. Find out which month he is liable for
registration.

Taxable Tax free Goods Goods
(Rs.) (Rs.) Manufactured sold
Rs. (Taxable)
Rs
May -2015 2000 12,000 - -
June- 2015 - 20,000 - -
July-2015 6000 60,000 4,000 8,000
August-2015 2000 20,000 10,000 -
September 2015 8000 30,000 20,000 40,000
October 2015 2000 12,000 12,000 1,00,000
November 2015 80,000 20,000 20,000 20,000
December 2015 - - 20,000 1,20,000
January 2016 10,000 1,20,000 - -
Q.18) Mr. Godbole is a trader and importer. From the following information find out from which day he will liable to
pay tax as per the provision of the MVAT Act, 2002.
Date Purchases Taxable Sales Taxable

Goods goods
Within Outside Within
Maharashtra Maharashtra Maharashtra
Rs. Rs. Rs.
10-03-2015 - 16,000 -
20-03-2015 8000 - -
28-03-2015 - - 2,40,000
02-04-2015 - 84,000 -
08-04-2015 - - 1,04,000
09-04-2015 - 56,000 50,000
08-05-2015 12,000 - -
15-05-2015 - 26,000 -
18-05-2015 10,000 - -
30-05-2015 - 36,000 80,000
Q.19) Mr.Prabhu is a trader from the following information, find out from which month he is liable
Purchase Taxable Goods Sales Taxable Goods

Month Within Maharashtra (Rs.)
March,2015 1,00,000 1,10,000
April, 2015 1,20,000 1,40,000
May, 2015 30,000 50,000
June, 2015 50,000 80,000
Q.20) From the following information furnished to you by Mr.Dilip regarding his purchases and sales transactions, find
out which month he will be liable to pay tax as per the provisions of the MVAT Act, 2002. Give reason for your answer..
MONTH Details of Purchases etc. Details of Sales

Tax free Taxable RM & Tax free Taxable
Goods Goods Manufacturing goods Goods
(Rs.) (Rs.) Exp. Rs. Rs. Rs.
May -15 to Dec-15 76,000 6,000 5,000 80,000 6,000
January 2016 20,000 - - 30,000 -
February 2016 1,60,000 3,600 - 1,90,000 -
March 2016 6,000 2,400 - 60,000 -
Q.22) From the following information furnished to you by Mr. Care –Free regarding his purchases and sales
transactions, find out from which month he will be liable to pay tax as per the provision of the MVAT Act,2002. Give
explanation for your answer.
Tax free Taxable Manufacturing Tax free Taxable
Goods Goods Exp. Rs. goods Rs. Goods Rs.
(Rs.) (Rs.)
May -15 to Nov.15 40,000 4,000 2,000 50,000 1000
December 2015 60,000 4,000 2,000 70,000 8,000
January 2016 20,000 3,000 7,000 30,000 800
February 2016 40,000 - - 50,000 10,000
March 2016 70,000 20,000 10,000 1,00,000 40,000
Q.23) Mr. Hemant furnished the following information regarding his turnover of purchased and sales transaction, find
out whether as per Tax provision of the MVAT Act, 2002 he is liable for registration (i.e. for payment of sales tax). Give
explanation for your answer.

Tax free Tax free Taxable Total Tax Free Taxable Total
within the outside out of state Goods goods
State the state Rs. Rs.
Rs. Rs.
January 2016 1,00,000 3,000 5,000 1,08,000 80,000 6,000 86,000
February 2016 1,60,000 3,000 2,400 1,65,400 2,00,000 1,600 2,01,600
March 2016 1,80,000 3,000 2,400 1,85,400 1,60,000 1,600 1,61,600
April 2016 1,80,000 3,000 2,400 1,85,400 2,44,000 8,000 2,52,000
Q.24 Rajashree is a manufacturer. From the following details, find out from which month she is liable for registration as
per the provision of the MVAT Act,2002
Date Purchases Taxable Sales Taxable goods

Goods
Within Out of Within Within
Maharashtra Rs. Maharashtra Maharashtra Maharashtra
Rs. Rs. Rs.
Raw Material Machinery
March, 2015 40,000 2,00,000 - -
April,2015 30,000 - - -
May, 2015 36,000 - 20,000 30,000
June, 2015 - - 50,000 40,000
July, 2015 - 60,000 - 18,000
August.2015 80,000 - 22,000 40,000
September, 2015 40,000 - 33,000 60,000
Fill in the blanks.

1. A Tax Invoice is to be issued __________ ( Only by an importer, Only by a manufacturer, only by a registered
dealer, by any dealer whether registered or unregistered )
2. The rate of VAT depends upon ___________
( the buyer, the goods i.e. whether covered by Schedule A or B or C etc., the amount of sales, none of the above )
3.‘Dealer’ as defined under MVAT, 2002 does not include ( insurance companies, shipping company,
an agriculturist who sells agricultural produce grown on land cultivated by him, Airlines )
4. ‘Goods’ as defined under MVAT, 2002 do not include ( Patents, Lottery tickets, livestock, trees )
5. ‘Goods’ as defined under MVAT, 2002 include ( immovable property, newspapers , growing crops,shares.)
6. ‘Sale’ as defined under MVAT, 2002 includes ( Mortgage, Hypothecation, Pledge, transfer of property in
goods involved in the execution of a works contract ).
7. ‘Sale Price’ as defined under MVAT , 2002 includes ( tax payable in respect of such sale, cost of
insurance for transit, deposit in connection with sale of goods , Cost of installation )
8. Tax free goods ( Schedule A, Schedule B, Schedule C, Schedule E )
9. Tax at nil rate ( Schedule A, Schedule B, Schedule C, Schedule E )
10. Tax at 1% ( Schedule A, Schedule B, Schedule C, Exports)
11. Tax at 12.5% ( Service Tax, Schedule B, Schedule C, Schedule E )
12. Tax at 5% ( Central Sales tax, Schedule B, Schedule C, Schedule E )
13. Tax on material used for packing goods specified in Schedule A (1% , Nil , Nil only if charged
separately, 4% )
14. VAT is charged ( by the first dealer only, by the last dealer only, by the consumer only, by all the
dealers)
15. Taxable purchases for the purpose of registration includes (local purchases taxable under MVAT,
Purchases under Schedule A only,Imports from outside the country only, purchases from other states only)
16. Taxable sales for the purpose of registration exclude ( sales under schedule B, Interstate sales, Sale
under Schedule A , Exports )
17. An auctioneer is liable to pay tax when he crosses the turnover limits, even if ( the principal is not a
registered dealer, the principal is not disclosed, both the above, none of the above )
18. An importer is liable to be registered under MVAT Act, 2002 if (the sales turnover exceeds are at least
Rs.10000, taxable sales/purchases are at least Rs.10000, both the above, none of the above)
19. A non-importer is liable to be registered under MVAT Act, 2002 if ( the sales turnover exceeds
Rs.500000, taxable sales/ purchases are at least Rs.10000, both the above, none of the above ).
20. The composition amount in case a dealer of second hand vehicles shall be calculated @ ( 12.5% ,
15% of the sale price of the vechicle, 15% on 12.5% of the sale price of the vehicle, 12.5% on
15% of the sale price of the vehicle)
21. Under a composition schemes under section 42 rate of 15% is applicable to (works contract other than
construction contracts, Construction contracts, Mandap Keeper, None of the above)
22. The composition amount for an eligible restaurant is (5% of the turnover of sales in the case of
registered dealer, 10% of the turnover of sales in the case of unregistered dealer, both of above, non
of above)
23. If the option to join or to opt out of the composition scheme is exercised in any year then it can be
changed (only at the beginning of the next year, only at the end of the next year, any time during
the next year, any time during the current year.)
24. The composition amount for an eligible Baker is ( 4% of the first 30 Lakhs of specified turnover of
sales in the case of a registered dealer , 6% of the first 30 Lakhs of specified turnover of sales in
the case of a unregistered dealer , Both of the above , none of the above )
25. Under a composition schemes under section 42 rate of 1.5% is applicable to (Works contract other than
construction contract, Construction contract, Mandap keeper, none of the above)
26. Under a composition schemes under section 42 rate of 5% is applicable to (Works contract other than
27. Under a composition schemes under section 42 rate of 8% is applicable to (Works contract other than
28. Composition Schemes under section 42 can be availed by (manufacturer, importer, wholesaler, retailer)
29. For the purpose of section 42 , a dealer shall be considered to be engaged in the business of
selling at retail if ____ of his turnover of sales consists of sales made to persons who are not dealer.
(50%, 75%, 90%, 80)
30. Export sales are (sale of tax free goods , exempt sales , sale of goods specified in schedule A, none)
31. VAT does not apply to (Importer, Retailer, works contractor , consumer)
32. For the purpose of section 42, a dealer shall be considered to be engaged in the business of selling
at retail if of his turnover of sales consists of sales made to persons who are not dealers. ( 50%,
75%, 90%, 80%)
33. Under a composition schemes under section 42 rate of 12.5% is applicable to (works contract other
than construction contracts, construction contracts, mandap keepers, none of the above)
34. M/s Darshan & co. Solapur, purchased goods for Rs.15300 (inclusive CST Rs.300) from M/s Siddhesh &
Co. Gandhidham. He sold thses Goods to Shravan & Co. Yavatmal for Rs.22500 (Inclusive of VAT
12.5%) The VAT Payable is (Rs.2200, Rs.2500, 300, None).
35. M/s Deepak Sane & Co. purchase Goods for Rs.90000 and sells them for Rs.120000 (Both excluding
tax) the goods being classified under schedule D the net tax payable will be (Rs.24000, Rs.18000,
Rs.6000)
36. Schedule C Goods include (Gold silver precious metals, All declared goods, Basic goods)
37. A Retailer has opted for composition scheme , his sales are Rs.2500000 and purchases from
unregistered dealers Rs.400000 and purchases from registered dealers are Rs.150000, the composition
Tax payable is (Rs.80000, Rs.48000, Rs.168000)
38. A product is sold @ Rs.150 per unit. The Octroi is Rs,6 per unit and the excise duty Rs.10 per unit
the packing charges were Rs.14 per unit , the sale price liable for MVAT is (Rs.166, Rs.180, Rs.160)
39. The cost of the goods is Rs.75000, the Excise duty Rs.7500, the installation charges Rs.10000, the
transit insurance Rs.5000, octroi Rs.2000, the sale price chargeable to VAT and MVAT Act, 2002 is
(Rs.82500, Rs.99500, Rs.97500)
40. Sales returns that can be deducted from the gross turnover of sales , has to be maximum (within one
month of the sale, within six months of the sale, within three months of the sale)
41. Mr. Jadhav , a dealer purchased goods for Rs.60000 and sells them for Rs.80000 (both excluding tax)
the goods being classified under schedule E, the tax payable will be (Rs.10000, Rs.2500, Rs.7500)
42. Mr. Omkar of Sangli , purchased goods for Rs.36720 (inclusive of CST Rs.720) from Mr.Shah of
Rajkot (Gujarat). He sold these goods to Mr. Pawer of Nasik for Rs.45000 (inclusive of 12.5% of VAT),
the VAT Payable is (Rs.4280, Rs.5000, Rs.720).
43. A Retailer has opted for composition scheme , his sales are Rs.1500000 and purchases from
unregistered dealers Rs.200000 and purchases from registered dealers are Rs.1000000, the composition
Tax payable is (Rs.40000, Rs.24000, Rs.25000)
44. The set-off can be adjusted (against the VAT payable during the period, against CST payable during
that period, against the VAT and CST payable during the period).
45. M/s Kedar Associates purchases Goods for Rs.40000 and sells them for Rs.50000 (Both excluding tax),
the Good being classified under Schedule E, the net tax payable will be (Rs.1250, Rs.6250, Rs.5000).
46. Aditya of Shivadi purchased goods for Rs.12240 (inclusive of CST Rs.240) form Akshada of Satna
(M.P.) He sold these goods to milling of Mumbai for Rs.15750 (inclusive of 12.5% VAT) The VAT
payable is (Rs.1750, Rs.1150, Rs.240).
47. Mr. Vinu , A Registered Dealer of a product covered under Schedule ‘E’ Sells goods for Rs.7,50,000. The purchases
required for the product is procured from Registered Dealers within the state as under:
Material X Covered by schedule ‘C’ Rs.2,00,000.
Material Y Covered by schedule ‘E’ Rs.4,00,000.
Mr. Vinu had an opening balance (credit) in VAT credit receivable account of Rs.15,000.
Mr. Vinu had utilized material Y for manufacture of Exempted Goods.
Calculate the tax payable under MVAT Act, 2002. ( March, 2006 )
[ Ans. Final MVAT Payable Rs.34,750 ]
48. M/s Phutane & Co. Furnishes the following data, you are required to compute the amount payable as Tax under,
MVAT Act, 2002. ( Ocober , 2007 )
Month Sale of Sale of Sale of Purchase
Schedule A Schedule C Schedule E Schedule E
Oct., 2014 1,00,000 4,00,000 3,20,000 4,00,000
Nov., 2014 2,00,000 4,25,000 4,10,000 4,50,000
Dec., 2014 2,50,000 6,00,000 2,20,000 5,50,000
There was an opening Balance of Rs.2,500 in the VAT Credit Receivable Account on 1-10-2014.
[ Ans. Final MVAT Oct. Rs.7,500 , Nov. Rs.16,250 , Final Set-off c/f December Rs. (11,250) ]
49. M/s Raje & Co. a Registered dealer under MVAT Act, 2002, requests you to compute liability under MVAT Act,
2002 for the month of March, 2014 from the following information. ( March, 2008 )
Sales Rs. Sales Returns Rs.
Schedule ‘A’ Goods 100000 Schedule ‘A’ Goods 20000
Schedule ‘B’ Goods 50000 Schedule ‘E’ Goods 20000
Schedule ‘E’ Goods 220000
Sale out of Maharashtra 150000
Labour Charges Received 75000
595000 40000
Purchases Purchases Returns
Schedule ‘A’ Goods 50000 Schedule ‘E’ Goods 30000
400000 30000
There was an Opening Balance (credit) in VAT Credit Receivable Account of Rs.12000. Rates of VAT for schedule A, B
and E Goods are Nil, 1% and 12.5% respectively.
[ Ans. Final MVAT Redund Receivable Rs.26,500 ]
50. Shri Deosthalee a Registered dealer under MVAT Act, 2002, requests you to compute liability under MVAT Act,
2002 for the month of December, 2013 from the following information. ( Ocober , 2008 )
Sales Rs. Sales Returns Rs.
Schedule ‘A’ Goods 180000 Schedule ‘B’ Goods 5000
Schedule ‘B’ Goods 55000 Schedule ‘C’ Goods 8000
Schedule ‘C’ Goods 108000 Schedule ‘E’ Goods 6000
Purchases Purchases Returns
Schedule ‘A’ Goods 120000 Schedule ‘C’ Goods 2000
Schedule ‘C’ Goods 162000 Schedule ‘E’ Goods 4000
Schedule ‘E’ Goods 204000 30000
Shri Deosthalee has an Opening Balance (credit) in VAT Credit Receivable Account of Rs.4500. Rates of VAT
for schedule A, B, C and E Goods are Nil, 1%, 5% and 12.5% respectively.
[ Ans. Final MVAT Due Rs.500 ]
51. From the following details available , calculate the tax payable under the MVAT Act, 2002.
Particulars Rs
Taxable Sales Schedule E 800000
Tax free Sales Schedule A 400000
Purchase Schedule E 500000
Items debited to Profit and Loss A/c
Printing and Stationery Schedule C 40000
Packing Material Schedule E 100000
30% of the purchase Schedule E were used to manufacture tax free sales schedule A.
52. Miss Shaifali , a registered dealer, furnishes you the following information regarding her turnover of purchase and
sales for May, 2013. ( April , 1996 )
1. Local purchases Rs.1000000.
2. Purchases from Gujarat @2% Rs.300000.
3. Purchases from Bihar @2% Rs.100000.
4. Sales of goods Rs.900000.
Calculate tax payable under MVAT ACT, 2002.
[ Ans. Final Set-off c/f May 2013 Rs. (12,500) ]
53. Mr. Harnamsingh, a registered dealer, furnishes you the information regarding his purchase and sales of goods. Find
out the liability of MVAT for the below mentioned months. ( Ocober , 1996 )
Month Within state Within state
Purchases Rs. Sales Rs.
January, 2014 300000 700000
February, 2014 400000 500000
March, 2014 500000 400000
[ Ans. Final VAT Jan. Rs.50,000 , Feb. Rs.12,500 , Final Set-off c/f March Rs. (12,500) ]
54. Mr. Nagesh a registered dealer gives you the information of sales as detailed below: ( April , 1997 )
Period Schedule A Rs. Schedule B Rs. Schedule C Rs.
June, 2013 100000 100000 80000
July, 2013 110000 50000 20000
August, 2013 60000 20000 50000
Septmber, 2013 200000 60000 180000
Details of sale outside Maharashtra are as follows:
Particulars Rs.
June, 2013 100000
July, 2013 80000
August, 2013 10000
Septmber, 2013 200000
Ascertain the sales tax liability of Nagesh under the MVAT Act, 2002.
55. Mr. Raj a registered dealer under MVAT Act, 2002, furnishes you the following details. Calculate the amount of set
off/tax payable.
Particulars Rs.
Raw materials (schedule C) 200000
Machinery (Schedule E) 300000
Other (Schedule D 20%) 30000
56. A dealer requests you to compute his tax liability under MVAT Act, 2002 for March, 2014 from the following
information. ( April , 1998 )
Particulars Rs.
Sales (Tax rate 20% as per Schedule D) 35000
Sales out of Maharashtra including CST 36000
Sales (Schedule C) 72000
Labour charges 110000
Schedule A goods 632000
Total 885000
Sales return within 6 months of Schedule D goods having tax rate 20% 5000
57. M/s Omkar & Co. request you to compute liability under MVAT Act, 2002 for the month of January, 2014 from the
following information. M/s Omkar & Co. is registered dealer under MVAT ACT, 2002. ( Ocober , 1998 )
Particulars Rs.
Sale of Schedule A goods 400000
Sale of Schedule C goods 200000
Sale of Schedule E goods 500000
Labour charges received 400000
Less: Sale return (within 6 months) of
Schedule A goods 20000
Schedule E goods 50000
M/s Omkar & Co. is entitled to Set-off of Rs.36500 b/f from previous month. Sales figures are exclusive of sales tax.
58. M/s Gouri & Co. request you to compute their Tax liability under MVAT Act, 2002 for the month of January, 2014
from the following information :- ( April , 1999 )
Particulars Rs.
Sale (excluding Sales Tax) of Schedule E goods 250000
Labour charges received 120000
Sale of Schedule C goods 40000
Sale of Schedule AParticulars
goods Rs.
35000
Purchase
Total of Schedule A goods 500000
620000
Purchase from Gujarat @ 2% CST 200000
Labour charges paid 100000
Purchase of Schedule C goods used in manufacturing 50000
Set off (b/f) 30000
Q.59. State with reasons whether the following are Dealers as per the provision of the Maharashtra value Added
Tax Act, 2002.
a) Mrs. Khadikar purchasing Chivda for home consumption.
b) M/s Rambhau & Co. auctioning old machines on behalf on M/s Khandekar & Co.
c) Mumbai Municipal Corporation selling unclaimed goods.
d) Cooper Hospital selling old Sonography machines.
e) M/s Rajabhai & Co. company secretaries.
Q.60. State with reasons whether the following are Goods as per the provision of the Maharashtra value Added
Tax Act, 2002.
a) Newspapapers
b) Mango Trees
c) Residential Flat used for business
d) Malai Kulfi
e) Malai Paneer
f) Equity shares of TCS Ltd.
g) Import Licence
h) Lottery tickets
i) Live
j) Patterns
k) Gold Neclace
l) Basmati Rice
Q.61. From the following information provided by Mohan and Co. you are required to compute their tax liability under
the provisions of MVAT Act, 2002 for the month of December, 2013
a. Purchase (excluding tax) Rs.
Schedule C Goods 2,00,000
Schedule E Goods 3,00,000
b. Sales (excluding tax)
Schedule A Goods 5,00,000
c.The dealer, Mohan & co. , utilised Schedule C goods costing Rs.1,50,000 (net of tax) as input for manufacturing
Schedule A goods.
d. The rate tax for Schedule C goods is 5%, Schedule A goods is Nil and Schedule E goods is 12.50%. (Ocober, 2012)
[ Ans. Final MVAT Payable Rs.1,00,500 ]
Q.62. Sony Electronics provides you the following information. You are required to compute their tax liability under the
provisions of MVAT Act, 2002 for the month of January, 2014. (April , 2012)
a. Sales within Maharashtra (excluding VAT) Rs.

b. Purchase within Maharashtra (excluding VAT)
Schedule C Goods – Raw materials 8,00,000
Schedule E Goods - Components 2,00,000
Schedule E Goods - Stationery 50,000
Schedule E Goods - Machinery 2,50,000
c. Balance in VAT Receivable / set off account brought forward from earlier month 50,000
d. Tax rate for schedule C goods is 5% and for Schedule E goods is 12.5%
[ Ans. Final MVAT Payable Rs.2,73,500 ]
Q.63. M/s Ajgaonkar & Co. request you to compute their tax liability under the provisions of MVAT Act, 2002 for the
month of January, 2014 from the following information. (Oct. , 2011 )
Rs.
Sale (excluding VAT) Schedule E goods 3,50,000
Sale of Schedule A goods 45,000
Sale of Schedule C goods 50,000
Sale out of Maharashtra ( Net ) 2,00,000
Labour charges received 1,50,000
Purchase of Schedule A Goods 2,50,000
Labour Charges paid 75,000
Purchase of goods from Rajasthan @ 2% CST 1,00,000
Purchase of goods from Schedule E (Net) 1,00,000
Set off b/f 12,500
[ Ans. Final MVAT Due Rs.21,250 ]
64. From the following information of M/s Jagdale & Co. calculate the set off and tax payable under MVAT Act, 2002,
for the month of March, 2014. ( April , 2011 )
Particulars Rs.
Local Purchases (Schedule E) (Net) 18,00,000
Purchase of Stationary (Schedule E) (Net) 50,000
Purchase from Unregistered Dealers 2,00,000
Sale price of Goods (Schedule E) 25,00,000
Inter state stock Transfer 5,00,000
Ratio of stock Transfer to total sales 20%.
65. From the following details available, calculate tax payable under MVAT Act, 2002. ( Oct. , 2010 )
Particulars Rs.
Taxable Sales (Schedule E) 8,00,000
Tax free Sales (Schedule A) 4,00,000
Purchases (Schedule E ) 5,00,000
Items debited to Profit and Loss A/c
Printing and Stationery (Schedule C) 40,000
Packing Material (Schedule E) 1,00,000
30% of the purchases (Schedule E) were used to manufacture tax free sales (Schedule A)
66. Mr. Pramanik a Job Worker receiving contracts for Repairs of Machinery. Being a Contractor, he has opted for
composition scheme for works contract for Repairs of Machinery. The contract value received is Rs.4,00,000, the
following are the details of purchases and other expenses. ( April , 2010 )
Particulars Rs.
Expenses Related to Job Work
Purchase Value 1,20,000
12.5% VAT 15,000
Purchase Value 22,000
5 % VAT 1,100
Unregistered Dealer Purchases (URD) 5,000
Office equipment purchases 15,000
12.5% VAT 1,875
You are required to calculate the Tax Liability of Mr. Pramanik

64. Calculate Net Tax Payable under MVAT from the following particulars for April, 2013
Particulars Rs.
Price of Goods Purchased 10,00,000
Sales Price 15,00,000
65. Calculate Net Tax Payable under MVAT from the following particulars for April, 2013
Particulars Rs.
Raw material ‘X’ purchase (Schedule E) 10,00,000
Raw material ‘Y’ purchase (Schedule C) 2,50,000
Sales Price of goods 40,00,000
66. Calculate Tax Payable under MVAT from the following particulars for April, 2013
Particulars Rs.
Purchase from Registered Dealer (RD) 10,00,000
Purchase from Unregistered dealer (URD) 2,50,000
Sales Price of goods 15,00,000
67. Calculate Tax Payable under MVAT from the following particulars for June, 2013
Particulars Rs.
Local Purchase 10,00,000
Purchases from Gujarat 3,00,000
Purchase from URD 1,00,000
Sale Price of goods 9,00,000
68. Calculate Tax Payable under MVAT from the following particulars for May, 2013
Particulars Rs.
Purchase Price of Inputs 10,00,000
Sale Price of Goods , Manufactured o & Exported 15,00,000
Gokhale Education Society’s
Dr.T.K.Tope Arts & Commerce Night College, Parel, Mumbai – 4000 12
DEPARTMENT OF ACCOUNTANCY
PRELIMINARY EXAMINATION MARCH, 2012
Class : TYBCOM ( 2011 – 12 ) Time : 7.00 p.m. to 9.00 p.m.
Subject : Direct and Indirect Taxes Marks : 60
Date : 01/03/2012
_____________________________________________________________________________________
Notes 1. All questions are compulsory, subject to internal choice, Each question carries 15 Marks.
2. Use of simple calculator is allowed.
3. Figures to the right indicate full marks assigned to the question.
4. All Working notes, wherever necessary should form part of answer.
Q.1. Mr.Vikas Nikam, proprietor of VN & Co. provides you the following information for the year ended 15
31st March, 2010. Profit & Loss Account for the year ended 31st March, 2011.
Expenses Rs. Income Rs.
To Salaries 150000 By Gross Profit 507000
To Bad Debts written off 10000 By Income Tax refund
(including interest Rs.2000) 18000
To Printing Expenses 11000 By UTI Dividend 40000
To Conveyance 30000 By Gift from a friend 10000
To General Expenses 43000
To Sales Tax Penalty 9000
To Fire Insurance Premium 4000
To Wealth Tax 6000
To Depreciation 20000
To Repairs and Maintenance 8000
To Net Profit 284000
575000 575000
Additional Information:
(1) Depreciation as per Income Tax Rules Rs.22000.
(2) General Expenses include payment of labour charges for business Rs.23000 paid in cash on 16-08-2010.
(3) Salaries include salary to proprietor Rs.48000.
(4) Printing expenses include Rs.8000 for printing of marriage invitation cards for his son.
(5) He paid Tution fees to a school of Rs.15000 for his school going daughter.
(6) He paid interest of Rs.45000 on education loan taken from Bank of India for his son, pursuing post-graduate
degree in medicine from University of Mumbai.
You are required to compute his total taxable income for the Assessment year 2011-12.
OR
Q.1. Mr. Mansukh is a principal of Government College, gets a salary of Rs.17000 per month. He retired from service
on 30th June, 2010. Apart from the salary for June 2010, he received following amounts:-
Encashment of leave salary on retirement Rs.128000
Gratuity Rs.124000.
His monthly pension is determined at Rs.3000 p.m. After retirement Mr. Mansukh has been employed on a part
time basis in a Night College where he gets a salary of Rs.5000 per month from 1st July, 2010.
Mr. Mansukh purchased a plot of land for Rs.124000 in April, 2008 and constructed a small house. Cost of
construction was met out of lumpsum receipts at the time of retirement and by way of borrowing Rs.100000 on
1st April, 2008 at 18% p.a.
Construction was over by October, 2009 and the house was occupied by Mr. Mansukh for his own residence from
1st November, 2009. Municipal taxes on the property are Rs.480 for every half year based on estimated annual
letting value of Rs.7200, Ground rent of Rs.60 and fire insurance premium of Rs.160 were paid for the period
property occupied.
He incurred the expenses of Rs.14000 on medical treatment of his father who became totally blind at the time of
Compute total income of Mr. Mansukh for the assessment year 2011-12.
Q.2. a. From the following information of Mr. Omkar, Find out which month he is liable for registration as per the
provision of MVAT, 2002. Give reasons for your answer. 8
Month 2011 Purchases within state Sales with state

Taxable Goods Tax free Goods Taxable Goods Tax free Goods
(Rs.) (Rs.) (Rs.) (Rs.)
January 2000 80000 Nil Nil
February 2000 60000 Nil Nil
March 4000 50000 1000 250000
April 2000 70000 5000 550000
May 8000 190000 4000 21000
June 1000 30000 4000 50000
July 2000 60000 91000 22000
b. Mr. Baban is classified as a Mandap Keeper and Liable to service Tax. You are required to find out
the amount of service tax which Mr. Ramesh Joglekar should collect and pay to the Government, for the marriage
function of his client. 7
Particulars Rs.
Receipts from Wedding Ceremony 400000
Receipts from conference Hall (for Reception) 250000
Receipts from catering services (including alcohol Rs.100000) 300000
Receipt from Rental furniture 100000
Receipt from Charges for Decoration for stage 100000
VAT and Expenditure Tax on above 50000
OR
Q.2 a. Explain with reasons whether the following are ‘Sales’ as per the provision of MVAT Act. 8
1. Exchange of mobile handset.
2. Hypothecation of goods
3. Sale of scrap by a scrap dealer.
4. Sales of goods by barter system
b. Kalu a work contractor has executed a works contract during March, 2012. The details are given below: 7
Particulars Rs.
Labour charges for execution of the works 750000
Machinery hire charges 250000
Electricity, water etc. 400000
Amount paid to sub-contractor for Labour charges 550000
Value of goods transferred during the execution of works contract 1000000
VAT on the above goods 125000
Compute the Service tax payable, assuming that he has not opted for the composition scheme.
Q.3 .a. M/s A Raja, a registered dealer under MVAT Act, 2002, requests you the to compute liability under MVAT
Act, 2002 for the month of March, 2011 from the following information. 8
Sales Rs. Sales Return Rs.

Schedule A Goods 100000 Schedule A Goods 20000
Schedule B Goods 50000 Schedule E Goods 20000
Schedule E Goods 220000
Labour charges Received 75000
595000 40000
Purchases Purchase Returns

Schedule A Goods 50000 Schedule E Goods 30000
Schedule E Goods 350000
400000 30000
b M/s RDX provide various services to its clients and have received a total amount of Rs.60 lakhs for such
services as under - 8
1. Commission on sale of goods belonging to clients Rs.10 lakhs
2. Commission on after sales service provided to clients Rs.12 lakhs
3. Commission from Reserve Bank of India for sale of property to them Rs. 5 lakhs
4. Commission on sale of Tickets for IPL, organized by BCCI Rs.10 lakhs
5. Commission on purchase and sale of ‘Rice’ Rs. 2 lakhs
6. Commission from M/s Jorka Jhatka Ltd. for the realisation of payment made
on their behalf Rs. 5 lakhs
Compute the service tax payable by them-
OR
Q.3. a. Write a note on composition scheme U/S 42 of MVAT Act, 2002 7
b. Write a short note on Service tax in : General exemption to service providers 8
Q.4. a. Rewrite the following sentences by selecting the correct option- 5

1. Babu a foreign nation but a person of Indian origin visited India during previous year 2010-11 for 181 days.
During 4 preceding previous years he was in India for 366 days. Babu shall be :
* R&OR * NR * RBNOR *None of the above
2. Compensation received on voluntary is exempt under sec. 10 ( 10 C ) to the maximum extent of :
* Rs. 240000 * Rs. 300000 * Rs.500000 * None of the above
3. Chiku has two house properties. Both are self- occupied. The Gross Annual Value of
* Both house shall be nil * One house shall be nil * No house shall be nil * None of the above
4. Which asset is not treated as capital asset for capital gain purchases?
* Motor car for business use * Jewellery * Tenancy rights *Plant & Machinery held as stock in trade
5. Gift received by an individual Rs.70000 from his relatives Rajendra shall be
* Exempt upto Rs.25000 * Fully taxable * Exempt upto Rs.50000 * None of the above
b. Rewrite the following sentences by selecting the correct option- 5
1. M/s Dhobe & Associates chartered Accountants have billed their clients for Rs.60000 plus service tax of
Rs.6180 on 01.09.2010 but receives the payment for the same on 01.12.2010, the service tax payment is due on
* 05.01.2011 * 05.12.2010 05.10.2010 * None of the above
2. If the service provider fails to furnish the ST 3 return within the due date and files it after 45 days, the penalty
will be –
* Rs.500 * Rs .1000 * Rs.1000 plus Rs.100 for every day from 31st day, upto a maximum of Rs.2000 * None
3. Commercial training service became taxable w.e.f.
* 01.07.2003 * 01.06.2007 * 01.07.1997 * None
4. Service tax is not payable if the aggregate value of taxable service does not exceed.
* Rs.800000 * Rs. 1000000 * Rs.600000 * None
5. Service tax is not applicable to –
* Union Territories * Jammu and Kashmir * Kashmir * Goa
c. Choose the correct option and rewrite the statement 5
1. Schedule A Goods include
* Gold, silver * All declared goods * Basic goods such as agricultural Tools * none
2. The rate of VAT depends upon
* The goods * The person * The turnover * none
3. Goods as defined under MVAT Act, 2002, include
* Immovable property * Growing crops * News papers * none
4. A product is sold @ Rs. 250 per unit, the Octroi is Rs.10 per unit and the excise duty is Rs.20 per unit. The
Pakcing charges were Rs. 10 per unit. The sale price liable for VAT is -
* Rs. 290 * Rs. 270 * Rs.280 * None
5. VAT at 1% is under –
* Schedule A *Schedule B *Schedule C * Schedule D

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Direct and Indirect Taxes Paper II TYBCOM Semester VI 2015-2016

Applied Component Group:

2 Maharashtra Value Added Tax (MVAT) 18

Sr. No. Modules / Units

2 Maharashtra Value Added Tax (MVAT)

All Questions are Compulsory Carrying 15 Marks each

2 Full Length Practical Question ( Service Tax ) 15

3 Practical Question (Full Length MVAT ) 15

4 (A) Practical Question (Full Length MVAT ) 08

(A) Theory Questions (MVAT) 08

Economy / Taxation – A Status

Total No of Total collection

2008 7 103 51301

2010 3 112 58000

2012 0 120 97509

2014 - All 180141 (BE)

Union List State List Concurrent List

Service Tax in India (The Past)

 Only services provided by one person to another are taxable

- Any activity - Includes a declared service any activity that constitutes

Activities Activities Non-

though passersby may drop some coins in his bowl in

What is not ‘service’ [Explanation to section 65B(44)]

¨ Sale purchase of securities (shares, derivatives) not taxable

DECLARED SERVICES SECTION 66 E

1. Renting of Immovable Property Section 66E (a)

2. CONSTRUCTION OF A COMPLEX OR BUILDING

Redevelopment of existing building taxable

3. INTELLECTUAL PROPERTY RIGHT section 66E (c)

5. OBLIGATION TO REFRAIN FROM / TOLERATE / DO AN

6. HIRING OF GOODS WITHOUT TRANSFER OF RIGHT TO

7. SEVICES IN RELATION TO HIRE PURCHASE OR

8. SEVICE PORTION IN EXECUTION A WORKS CONTRACT

9. SERVICE PORTION IN SUPPLY OF FOOD OR DRINKS

Write a short note on :

Services in Negative List

Negative List of Services

3. Services by the Reserve Bank of India.

4. Services by a foreign diplomatic mission located in India.

5. Services relating to Agriculture and agricultural produce related services.

6. Trading of goods is not taxable service (goods include securities).

10. Betting , gambling or lottery.

11. Admission to Entertainment events , amusement factilities.

14. Renting for residential purposes.

1. GOVERNMENT OR LOCAL AUTHORITY

“Support services" means

by Government or local authority

VEC : Security Services:

2. RESERVE BANK OF INDIA

3. SERVICES BY A FOREIGN DIPLOMATIC MISSION LOCATED IN

4. SERIVCE RELATING TO AGRICULTURE OR AGRICULTUREAL

are covered in this negative list entry.

6. PROCESS AMOUNTING TO MANUFACTURE OR PRODUCTION OF GOODS

7. SELLING OF SPACE OR TIME SLOTS FOR ADVERTISEMENTS

Sale of space or time for advertisement to Sale of space for advertisement in

Sale of time slot by a broadcasting Sale of space for advertisement in bill

Canvassing advertising for publishing on Sky : Aerial advertising

Not covered in Negative List Covered In Negative List

 Preparing advertisement for display  Clubs, associations, professional

8. SERVICE WAY OF ACCESS TO A ROAD OR A BRIDGE ON

9. BETTING, GAMBLING OR LOTTERY

10. ADMISSION TO ENTERTAINMENT EVENTS AND ACCESS TO

11.Transmission or distribution of Electricity by an electricity transmission or