RECOVERY AGENT
Date of Introduction: 01.05.2006 vide Notification No.15/2006 dated 25.04.2006
Definitions:
“taxable service” means any service provided or to be provided to a banking
company or a financial institution including a non-banking financial company or
any other body corporate or a firm, by any person, in relation to recovery of
any sums due to such banking company or financial institution, including a
non-banking financial company, or any other body corporate or a firm, in any
manner; (section 65(105)(zzzl))
Value of Taxable Service:
The value of taxable service shall be the gross amount charged by the service provider for providing such service and the money value of any other consideration ( if any) received for providing such service. The value of taxable service shall be determined as per the provisions made under section 67 of the Finance Act, read with Service Tax (Determination of Value ) Rules, 2006
Who is responsible to pay Service Tax:
The service provider is responsible to pay service tax. However, in cases, where the provider of taxable service is located outside India and the recipient of service is located in India, the recipient of service is responsible for payment of service tax. The responsibility to pay service tax under such situations is determined by the provisions made under section 66A of the Finance Act, 1994, read with Taxation of Services (Provided from outside India and received in India) Rules, 2006
Scope of Service:
Services provided for recovery of any sums due to a commercial or business entity are covered under this category. Under Securities and Reconstruction of Financial Assets and Enforcement of Security Act,2002 and the relevant rules made there under, banks and other financial institutions appoint recovery agents.
(Ref: Joint Secretary (TRU)’s letter D.O.F.No. 334/4/2006-TRU dated 28.02.2006)
General Exemptions:
|
Sr.No. |
Notification No. |
Nature of exemption |
|
1 |
16/2002 |
Services provided to United nations or any International Organisation |
|
2 |
12/2003 |
Exemption to value of goods and material sold during the course of providing taxable service, subject to conditions laid down in the notification. |
|
3 |
4/2004 |
Service provided to a developer of Special Economic Zone or Unit located in SEZ |
|
4 |
6/2005 |
Exemption from service tax for taxable services upto gross value of Rs. 4 lakhs, in case of service providers whose gross turnover for the preceding financial year was less than Rs. 4 lakhs ( w.e.f 01.04.2005) |
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