-
Article 370 of Constitution restricts the Central Government
to make laws for J&K, that is why service tax is not applicable to J&K
-
A person having place of business in J&K providing
services out side J&K shall be charged to service tax. However if such
person is not having any office or establishment outside J&K, collection of
tax shall pose problem. But an opinion prevails that although charging of
service tax in J&K is restricted but not the collection. Still it is a moot
point
-
On the other hand a person in other parts of country
providing service in J&K shall not be liable to service tax
- A letter of
the Director General of Service Tax (F. No . V/DGST/03/GEN/INS/01/2004, dated 17-8-2004)
referring the Central Board of Excise and Customs (CBEC) Circular No. 56/5/2003, dated 25-4-2003
clarifies that, "Service Tax is a destination based consumption
tax and the principle of consumption of services would determine the liability
of Service Tax."
According to the above letter of the DGST, the insurance services
rendered to the clients having assets outside the state of Jammu and Kashmir Jammu Jammu and
Kashmir
A clarification which was long over due..
ReplyDeleteIt is still very confusing. The official web site of J& K commercial taxes clearly says that the rate of Tax applicable on Insurance Service is 10%. Whether this is within prcincts of the clarification given?
ReplyDeleteWhen Service Tax was introduced by Central Govt. J&K is a clear exemption; when has it become applicatble; form which date? I find a Group Janata Personal Accident policy taken by J&K Govt. from M/s. Oriental Insurance company covering all their employees also attracts Tax @ 10%