Service Tax Rules 1994, (As-Amended)

SERVICE TAX RULES, 1994
(as amended)

Notification No.2/94, dated the 28th June, 1994 as amended.

In exercise of the powers conferred by sub-section (1) read with sub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules for the purpose of the assessment and collection of service tax namely: -

1.  Short title and commencement –

   These rules may be called the Service Tax Rules, 1994. They shall come into force on the 1st day of July, 1994.

2. Definitions

   In these rules, unless the context otherwise requires,- "Act" means the Finance Act, 1994 (32 of 1994);  "assessment" includes self assessment of service tax by the assessee, reassessment, provisional assessment, best judgment assessment and any order of assessment in which the tax assessed is nil; determination of the interest on the tax assessed or reassessed;] "Form" means a Form appended to these rules; (cc) "Half year" means the period between 1st April to 30th September or 1st October to 31st March of a financial year; (ccc) “input service distributor” has the meaning assigned to it in clause (m) of rule (2) of CENVAT Credit Rules, 2004 "Person liable for paying service tax" means,- in relation to a telephone connection or pager [or a communication through telegraph or telex or a facsimile communication or a leased circuit]- the Director General of Posts and Telegraphs, referred to in clause (6) of Section 3 of the Indian Telegraph Act, 1885(13 of 1885); or the Chairman-cum-Managing Director, Mahanagar Telephone Nigam Ltd, Delhi, a company registered under the Companies Act, 1956 (1 of 1956); or any other person who has been granted a licence by the Central Government under the first proviso to sub-section (1) of Section 4 of the Indian Telegraph Act, 1885(13 of 1885); in relation to general insurance business-  the Chairman of the General Insurance Corporation of India, Mumbai; or the Chairman-cum-Managing Director of the National Insurance company Ltd., Calcutta; or the Chairman-cum-Managing Director of the New India Assurance Company Ltd; Mumbai; or the Chairman-cum-Managing Director of the Oriental Insurance Company Ltd., Delhi; or the Chairman-cum-Managing Director of the United India Insurance Company Ltd., Chennai; or any other person carrying on general insurance business and who has obtained a certificate of registration under section 3 of the Insurance Act, 1938 (4 of 1938); and in relation to insurance auxiliary service by an insurance agent, any person carrying on the general insurance business or the life insurance business, as the case may be, in India; in relation to any taxable service provided by a person who is a non-resident or is from outside India, dose not have any office in India, the person receiving taxable service in India; In relation to any taxable service provided by a goods transport agency, where the consignor or the consignee of goods is,- any factory registered under or governed by the factories Act, 1948 ( 63 of 1948); any company established by or under the Companies Act, 1956 (1 of 1956); any corporation established by and under any law; any society registered under the Society Registration Act, 1860 (21 of 1860) or any other law corresponding to that Act in force in any part of India; any co-operative society established by or under any other law; any dealer of excisable goods, who is registered under the Central Excise Act, 1944 ( 1 of 1944) or rules made thereunder; or any body corporate established, or a partnership firm registered, by or under any law; any person who pays or is liable to pay freight himself or through his agent for transportation of such goods by road or road carriage; in relation to business auxiliary service of distribution of mutual fund by a mutual fund distributor or an agent, as the case be, the mutual fund or asset management company, as the case may be, receiving such service; "quarter" means the period between 1st January to 31st March or 1st April to 30th June or 1st July to 30th September or 1st October to 31st December of a financial year;] All words and expressions used but not defined in these rules but defined in the Central Excise Act, 1944 (1 of 1944) [and the rules made thereunder shall have the meanings assigned to them in that Act and rules.]

3. Appointment of officers – The Central Board of Excise and Customs may appoint such Central Excise Officers as it thinks fit for exercising the powers under Chapter V of the Act within such local limits as it may assign to them as also specify the taxable service in relation to which any such Central Excise Officers shall exercise his powers.
4. Registration –

   Every person liable for paying the service tax shall make an application to the concerned Superintendent of Central Excise in form ST-1 for registration within a period of thirty days from the date on which the service tax under section 66 of the Finance Act, 1994(32 of 1994) is levied: Provided that where a person commences the business of providing a taxable service after such service has been levied, he shall make an application for registration within a period of thirty days from the date of such commencement: Provided further that a person liable for paying the service tax in the case of taxable services referred to in sub-section (4) or sub-section (5) of section 66 of the Finance Act, 1994 (32 of 1994) may make an application for registration on or before the 31st day of December, 1998: Provided also that a person liable for paying the service tax in the case of taxable services referred to in sub-section (zzp) of clause (105) of section 65 of the Act may make an application for registration on or before the 31st day of March, 2005. Where an assessee is providing a taxable service from more than one premises or offices and has a centralized billing systems or centralized accounting systems in respect of such service, and such centralized billing systems or centralized accounting systems are located in one or more premises or offices he may, at his option, register such premises or office where such centralized billing systems or centralized accounting systems are located. The registration under sub-rule (2) shall be granted,-  by the Commissioner of Central Excise or the Chief Commissioner of Central Excise, as the case may be, in whose jurisdiction all the premises or offices providing the taxable service and the premises or office where centralized billing systems or centralized accounting systems is done, are located; and in cases other than (a) above, by such authority, as may be specified by the Board. Provided that nothing contained in this sub-rule shall have any effect on the registrations granted to the premises or offices having such centralized billing systems or centralized accounting systems, prior to the 1st day of April, 2005. (3A) Where an assessee is providing taxable service from more than one premises or offices, and does not have any centralized billing systems or centralized accounting systems, as the case may be, he shall make separate applications for registration in respect of each such premises or offices to the jurisdictional Superintendent of Central Excise. Where an assessee is providing more than one taxable service, he may make a single application, mentioning therein all the taxable services provided by him, to the concerned Superintendent of Central Excise. The Superintendent of Central Excise shall after due verification of the application form, grant a certificate of registration in Form ST-2 within seven days from the date of receipt of the application. If the registration certificate is not granted within the said period, the registration applied for shall be deemed to have been granted. Where a registered assessee transfers his business to another person, the transferee shall obtain a fresh certificate of registration. Every registered assessee, who ceases to provide the taxable service for which he is registered, shall surrender his registration certificate immediately.

4A. Taxable Service to be provided or credit to be distributed on invoice, bill or challan.

4B. Issue of consignment note. – Any goods transport agency which provides service in relation to transport of goods by road in a goods carriage shall provide a consignment note to the customer:

    Provided that where any taxable service in relation to transport of goods by road in a goods carriage is wholly exempted under Section 93 of the Act, the goods transport agency shall not be required to issue the consignment note.

    Explanation.- For the purposes of this rule and the second proviso to Rule 4A, “consignment note” means a document, issued by a goods transport agency against the receipt of goods for the purpose of transport of goods in a goods carriage, which is serially numbered, and contains the name of the consignor and consignee, registration number of the goods carriage in which the goods are transported, details of goods transported, details of the place of origin and destination, person liable for paying service tax whether consignor, consignee or the goods transport agency.

5. Records -

   The records (including computerized data) as maintained by an assessee in accordance with the various laws in force from time to time shall be acceptable. Every assessee shall furnish to the Superintendent of Central Excise at the time of filing his return for the first time a list of all accounts maintained by the assessee in relation to service tax including memoranda received from his branch offices.

6. Payment of service tax –

   (1) The service tax on the value of taxable services received during any calendar month shall be paid to the credit of the Central Government by the 5th of the month immediately following the the calendar month in which payments are received, towards value of taxable services: Provided that where the assessee is an individual or proprietary firm or partnership firm, the service tax shall be paid to the credit of the Central Government by the 5th of the month immediately following the quarter in which the payments are received, towards the value of taxable services; Provided further that, notwithstanding the time of receipt of payment towards value of services, no service tax shall be payable for the part or whole of the value of services, which is attributable services provided during the period when such services were not taxable: Provided also the service tax on the value of taxable services received during the month of March, or the quarter ending in March, as the case may be, shall be paid to the credit of the Central Government by the 31st day of March of the calendar year. The assessee shall deposit the service tax liable to be paid by him with the bank designated by the Central Board of Excise and Customs for this purpose in Form TR-6 or in any other manner prescribed by the Central Board of Excise and Customs. (2A) for the purpose of this rule, if the assessee deposits the service tax by cheque, the date of presentation of cheque to the bank designated by the Central Board of Excise and Customs for this purpose shall be deemed to be the date on which service tax has been paid subject to realization of that cheque. Where an assessee has paid to the credit of Central Government service tax in respect of a taxable service, which is not so provided by him either wholly or partially for any reason, the assessee may adjust the excess service tax so paid by him (calculated on a pro rata basis) against his service tax liability for the subsequent period, if the assessee has refunded the value of taxable service and the service tax thereon to the person from whom it was received. Where an assessee is, for any reason, unable to correctly estimate, on the date of deposit, the actual amount payable for any particular month or quarter, as the case may be, he may make a request in writing to the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, giving reasons for payment of service tax on provisional basis and the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, on receipt of such request, may allow payment of service tax on provisional basis on such value of taxable service as may be specified by him and the provisions of the Central Excise (No.2) Rules, 2001, relating to provisional assessment, except so far as they relate to execution of bond, shall, so far as may be, apply to such assessment. Where an assessee under sub-rule (4) requests for a provisional assessment he shall file a statement giving details of the difference between the service tax deposited and the service tax liable to be paid for each month in a memorandum in Form ST-3A accompanying the quarterly or half yearly return, as the case may be. Where the assessee submits a memorandum, in Form ST-3A under sub-rule (5), it shall be lawful of the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be to complete the assessment, wherever he deems it necessary, after calling such further documents or records as he may consider necessary and proper in the circumstances of the case. Explanation. – For the purposes of this rule and rule 7, "Form TR-6" means a memorandum or challan referred to in rule 92 of the Treasury Rules of the Central Government. The person liable for paying the service tax in relation to the services provided by an air travel agent, shall have the option, to pay an amount calculated at the rate of 0.25% of the basic fare in the case of domestic bookings, and at the rate of 0.5% of the basic fare in the case of international bookings, of passage for travel by air, during any calendar month or quarter, as the case may be, towards the discharge of his service tax liability instead of paying service tax at the rate of five per cent of the value of taxable service rendered by him and the option, once exercised, shall apply uniformly in respect of all the bookings of passage for travel by air made by him and shall not be changed during a financial year under any circumstances. Explanation - For the purposes of this sub-rule, the expression "basic fare" means that part of the air fare on which commission is normally paid to the air travel agent by the airline. (7A) An insurer carrying on life insurance business liable for paying the service tax in relation to the risk cover in life insurance business provided to a policy holder shall have the option to pay amount calculated at the rate of 1 per cent of the gross amount of premium charged by such insurer towards the discharge of service tax liability instead of paying service tax at the rate specified in section 66 of Chapter V of the Act: Provided that such option shall not be available in cases where- the entire premium paid by the policy holder is only towards risk cover in life insurance; or the part of the premium payable towards risk cover in life insurance is shown separately in any of the documents issued by the insurer to the policy holder; The value of the taxable service in relation to the services provided by a clearing and forwarding agent to a client for rendering services of clearing and forwarding operations in any manner shall be deemed to be the gross amount of remuneration or commission (by whatever name called) paid to such agent by the client engaging such agent. The value of taxable service in relation to insurance auxiliary services provided by an insurance agent shall be deemed to be the gross amount of commission, fee or any other sum (by whatever name called) paid to such agent by the insurer appointing such agent.

7. Returns –

   Every assessee shall submit a half yearly return in From ‘ST-3’ or ‘ST-3A’, as the case may be, along with a copy of the Form TR-6, in triplicate for the months covered in the half-yearly return. Every assessee shall submit the half yearly return by the 25th of the month following the particular half-year.

   [(3) & (4) * * *]

7.  Returns in case of taxable service provided by goods transport operators and clearing and forwarding agents –

   Notwithstanding anything contained in rule 7, an assessee, in case of service provided by-

   goods transport operator for the period commencing on and from the 16th day of November, 1997 to the 2nd day of June, 1998; and clearing and forwarding agents for the period commencing on and from the 16th day of July, 1997 to the 16th day of October, 1998

   shall firnish a return within a period of six months from the 13th day of may 2003, in form “ST-3B” along with a copy of the form TR-6 in triplicate, failing which the interest and penal consequences as provided in the Act shall follow.

8. . Form of Appeals to Commissioner of Central Excise (Appeals).

   An appeal under Section 85 of the Act to the Commissioner of Central Excise (Appeals) shall be in Form ST-4. The appeal shall be filed in duplicate and shall be accompanied by a copy of order appealed against.

9. Form of appeals to Appellate Tribunal. -

   (1)	An appeal under sub-section (1) of section 86 of the Act to the Appellate Tribunal shall be made in Form ST-5 in quadruplicate and shall be accompanied by a copy of the Order appealed against (one of which shall be a certified copy).
   (2)	An appeal under sub-section (2) of section 86 of the Act to the Appellate Tribunal shall be made in Form ST-7 in quadruplicate and shall be accompanied by a copy of the order of the Commissioner of Central Excise (one of which shall be a certified copy) and a copy of the order passed by the Central Board of Excise and Customs directing the Commissioner of Central Excise to apply to the Appellate Tribunal.
   (2A)	An appeal under sub-section (2A) of Section 86 of the Act to the Appellate Tribunal shall be made in from ST-7 in quadruplicate and shall be accompanied by a copy of the order of the Commissioner of Central Excise (Appeals) (one of which shall be a certified copy) and a copy of the order passed by the Commissioner of Central Excise directing the Assistant Commissioner of Central Excise or as the case may be, the Deputy Commissioner of Central Excise to apply to the Appellate Tribunal; and
   (3)	A memorandum of cross-objections under sub-section (4) of section 86 of the Act, shall be made in form ST-6 in quadruplicate.