Content at Glance. C. Changes in Mega Exemption Notification No. 25/2012-ST videnotification

Transcription

1 Content at Glance A. Changes inrate B. ChangesinFinanceAct,1994 C. Changes in Mega Exemption Notification No. 25/2012-ST videnotification No. 09/2016-ST dated D. Changes in Service Tax Rules,1994 E. Changes in Reverse Charge Mechanism - Notification No. 30/2012-STvide Notification No. 18/2016-ST dated F. Changes in Abatement Notification No. 26/2012-ST vide NotificationNo. 08/2016-ST dated effective from G. ExemptionsinrelationtoInformationTechnologySoftwarevideNotification No. 11/2016 dated H. IndirectTaxDisputeResolutionScheme,2016

2 A. Changes inrate Rate of Service Tax Before Budget After Budget KrishiKalyanCess - 0.5% An enabling provision is being made to levy KrishiKalyanCess on all taxable services witheffectfrom1stjune,2016, This is introduced to finance and promote initiatives to improveagriculture. The amount paid will be CENVATable after the amendment in CENVAT Credit Rules,

3 B. Changes in Finance Act,1994 Sec. Before Budget After Budget Remarks 65B "approved vocational Omitted Since this has been (11) education course" removed from the means, negative list there is no (i) a need of this definition course run by an now. industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training 96b[orState Council for Vocational Training] offering courses in designated trades notified under the Apprentices Act, 1961 (52 of 1961); or (ii) a ModularEmployable Skill Course, approved by the National Council of Vocational Training, run by a person registered with the But now similar entry has been inserted in Mega Exemption Notification, the definition will certainly be inserted there. Directorate General of Employment and Training, Union Ministry of Labour and Employment; 65B Explanation 2. For Explanation 2. For the This has been amended so (44) the purposes of this purposes of this clause, the as to clarify that any clause, the expression "transaction in activity carriedout by a expression money or actionable claim" lottery distributor or "transaction in shall not include selling agent in relation to money or actionable (i) any activity promotion, marketing, claim" shall not relating to use of money or its organizing, selling of include conversion by cash or by any lottery orfacilitating in (i) any other mode, from one form, organizing lottery of any activity relating to currency or denomination, to kind, in any other manner, use of money or its another form, currency or of the State Government as conversion by cash or denomination for which a per the provisions ofthe 3

4 66D (l) by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged; (ii) any activity carried out, for a consideration, in relation to, or for facilitation of, a transaction in money or actionable claim, including the activity carried out (a) by a lottery distributor or selling agent in relation to promotion, marketing, organising, selling of lottery or facilitating in organising lottery of any kind, in any other manner; services by way of (i) preschool education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being inforce; (iii) education as a separate consideration is charged; (ii) any activity carried out, for a consideration,inrelationto,or for facilitation of, atransaction in money or actionable claim, including the activity carried out (a) by a lottery distributor or selling agent on behalf of the State Government, in relation to promotion, marketing, organising, selling of lottery or facilitating in organising lottery of any kind, in any other manner, in accordance with the Lotteries (Regulation) Act, 1998; Omitted Lotteries (Regulation) Act, 1998(17of1998),isleviableto ServiceTax. Has been added under Mega Exemption Notification. 4

5 66D (o) (i) part of an approved vocational education course; service of transportation of passengers, with or without accompanied belongings,by (i) a stage carriage; Omitted 66D services by way of Omitted (p) (ii) transportation of goods (ii) by an aircraft or a vessel from a place outside India up to the customs station of clearance in India; or 66E - (j) assignment by the Government of the right touse the radio-frequency spectrum and subsequent transfers thereof. 67A The rate of service tax, value of a taxable service and rate of exchange, if any, shall be the rate of service tax or value ofataxableserviceor rate of exchange, as the case may be, in force or as applicable at the time when the taxable service has been provided or agreed to be provided. Explanation. For the purposes of this section, "rate of exchange" meansthe 67A. (1) The rate of service tax, value of a taxable service and rate of exchange, if any, shall be the rate of service tax or value of a taxable service or rate of exchange, as the case may be, in force or as applicable at the time when the taxable service has been provided or agreed to be provided. Explanation. For the purposes of this section, "rate of exchange" means the rateof exchange service and referred to in the Explanation to section 14 ofthe Customs Act, (2) The time or the pointin with effect from the 1st day of June, New exemptions vide Notification No 09/2016 ST is being added wherein New Entry No 23(bb) provides for exemption to stage carrier other the air conditioned stagecarriage. with effect from the 1st day of June, An entry has been inserted in Mega Exemption. Entry no 53 which continues the exemption for aircraft but the transportation by vessel is made taxable now. This is not sale of intangible goods and hence will have to regarded as service that is taxable as declared service. Section 67A is being amended to obtain rule making powers in respect of the Point of Taxation Rules,2011,soastoprovide that the point in time when service has been provided or agreed to be provided shall be determined byrules made in this regard. Point of Taxation Rules, 2011 is being amended accordingly. 5

6 73 (1), 73(1A), 73(2A), 73(3) rate of exchange determined in accordance withsuch rules as may be Period of limitation Eighteen Months 73 (4B) (4B) The Central Excise Officer shall determine the amount of service tax due under subsection(2) (a) within six months from the date of notice where it is possible to do so, in respect of cases whose limitation is specified as eighteen months in subsection (1); 75 Provided that in the case of a service provider, whose value of taxable services provided in a financial year does not exceed sixty lakh rupees during any of the financial years covered by the notice or during the last preceding financial year, as the case may be, such rate of interest, shall be reduced by three per cent perannum. time with respect to the rate of service tax shall be such as maybeprescribed. Period of limitation Thirty Months (4B) The Central Excise Officer shall determine the amount of service tax due under subsection (2) (a) within six months from the date of notice where it is possible to do so, in respect of cases falling undersub-section(1); Provided that in the case of a person who collects any amount as service tax but fails to pay the amount so collected to the credit of the Central Government, on or before the date on whichsuch payment is due, the CentralGovernment may, by notification in the Official Gazette, specify such other rate of interest, as it may deemnecessary Provided further thatin the case of a service provider, whose value of taxable services provided in a financial year does not exceed sixtylakh rupees during any of the financial years covered by the notice or during the last preceding financial year, as Time limit has been enhanced and now SCN can be issued within 30 months. Notification 13/2016-ST dated effective from date on which finance bill, 2016 receives assent of president. Situation ROI Collection of any 24% amount as service tax but failing to pay the amount so collected to the credit of the Central Government on or before thedate on which such payment becomesdue. Other than in 15% situations 6

7 the case may be, suchrate of interest, shall be reduced by three per cent. per annum mentioned above Note :-In case of assessee having turnover less than Rs. 60 Lacs in previous year ROI will be 12%. Notification 14/2016-ST dated effective from date on which finance bill, 2016 receives assent of president. Incasewheresection73Bis applicable, ROI will be 15%. 78A - Explanation. For the removal This is with the intention of doubts, it is hereby clarified to provide that penalty that where any service tax has proceedings under Section not been levied or paid or has 78A shall be deemed to be been short-levied or short- closed in those cases paid or erroneously refunded, where the duty demanded and the proceedings with and penalty proceedings respect to a notice issued have been closed under under sub-section (1) of section 76/78 of the section 73 or the provisoto Finance Act1994. sub-section (1) of section 73 is concluded in accordance with the provisions of clause (i) of the first proviso to section 76 or clause (i) of the second proviso to section 78, as the case may be, the proceedings pending against any person under this section shall also be deemed to have been concluded. 89 (1) Monetary Limit of Monetary Limit of Rs. 200 Rs. 50 Lacsfor Lacsfor offence and penalties offence and penalties 90 (2) Notwithstanding Omitted This empowers the arrest anything contained to be done only where the in the Code of person has collected tax Criminal Procedure, and not paid and the 1973 (2 of 1974), all amount exceeds Rs 2 offences, except the Crores. offences specified in sub-section (1), shall 7

8 be non-cognizable andbailable. 91 (1) (1) If the Principal Commissioner of Central Excise or Commissioner of Central Excise has reason to believethat any person has committed anoffence specified in clause(i) or clause (ii) of subsection (1) of section 89, he may, by general or special order, authorise any officer of Central Excise, not below the rank of Superintendent of Central Excise, to arrest such person. 91(3) In the case of a noncognizable and bailable offence, the Assistant Commissioner, or the Deputy Commissioner, as the case may be, shall, for the purpose of releasing an arrested person on bail or otherwise, have the same powers and be subject to the same provisions as an officer in charge of a police station has, and is subject to, under section 436 of the Code of Criminal Procedure,1973(2of 1974). 93A Where any goods or services are exported, If the Commissioner of Central Excise has reason to believe that any person has committed an offence specified in clause (ii) of subsection (1) of section 89, he may, by general or special order, authorise any officer of Central Excise, not belowthe rank of Superintendent of Central Excise, to arrest such person. Omitted Where any goods or services are exported, the Central This amendment with the purpose, to enable power of arrest only when the person has collected tax and notpaid. This amendment with the purpose, to enable power of arrest only when the person has collected tax and not paid. This section is being amended so as to allow 8

9 the Central Government may grant rebate rebate by way of Government may of service tax paid on taxable notification as well as rules. grant rebate of services which are used as service tax paid on input services for the taxable services manufacturing or processing which are used as or removal or export of such input services for the goods or for providing any manufacturing or taxable services and such processing or rebate shall be subject to such removal or export of extent and manner as may be such goods or for prescribed or specified by providing any notification in the Official taxable services and Gazette: such rebate shall be Provided that where any subject to such extent rebate has been allowed on and manner as may any goods or services under be prescribed : this section and the sale Provided that where proceeds in respect of such any rebate has been goods or consideration in allowed on any respect of such services are not goods or services received by or on behalf of the under this section exporter in India within the and the sale proceeds time allowed by the Reserve in respect of such Bank of India under section 8 goods or of the Foreign Exchange consideration in Management Act, 1999 (42 of respect of such 1999), such rebate shall 6[, services are not except under such received by or on circumstances or conditions as behalf of the exporter may be prescribed or in India within the specified by notification in time allowed by the the Official Gazette, be Reserve Bank of deemed never to have been India under section 8 allowed and the Central of the Foreign Government may recover or Exchange adjust the amount of such Management Act, rebate in such manner as may 1999 (42 of 1999), be prescribed or specified by such rebate shall 6[, notification in the Official except under such Gazette. circumstances or conditions as may be prescribed, be deemed never to have been allowed and the Central 9

10 Government may recover or adjust the amount of such rebate in such manner as may be prescribed. 101, (1) Notwithstanding This is a retrospective 102, anything contained in section amendment so as to B, no service tax shall be provide exemption to levied orcollected during the canal, dam or other period commencing from the irrigation works. 1st day of July, 2012 and ending with the 29th day of January, 2014 (both days inclusive) in respect of taxable services provided to an authority or aboard or any other body (i) set up by an Act of Parliament or a State Legislature; or (ii) established by the Government, with ninety per cent. or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution, by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of canal, dam or other irrigation works. (2) Refund shall be made of all such service tax which has been collected but which would not have been so collected had sub-section (1) been in force at allmaterial times. (3) Notwithstanding anything contained in this Chapter, an application for the claimof refund of service tax shall be 10

11 made within a period of six months from the date on which the Finance Bill, 2016 receives the assent of the President (1) Notwithstanding anything contained in section 66B, no service tax shall be levied orcollected during the period commencing from the 1st day of April, 2015 and ending with the 29th dayof February, 2016 (both days inclusive),inrespectoftaxable services provided to the Government,a local authority or a Governmental authority, by way of construction, erection, commissioning,installation, completion, fitting out, repair, maintenance, renovation or alteration of (a) a civil structure or any other original works meant predominantly for use other than forcommerce, industry or any other business or profession; (b) a structure meant predominantly for use as (i) an educational establishment; (ii) a clinical establishment; or (iii) an art or cultural establishment; (c) a residential complex predominantly meant for selfuse or for the use of their employees orother persons specified in Explanation 1 to clause (44) of section 65B of the said Act,under a contract entered into before the 1st day of March, 2015 and on which appropriate stampduty, where This section has been inserted so as to restore certain exemptions which were withdrawn with effect from However a corresponding amendment has also been made in Mega Exemption Notification and a new entry has been inserted which provide the restoration of exemption till

12 applicable, had been paid before that date. (2) Refund shall be made of all such service tax which has been collected but which would not have been so collected had sub-section (1) been in force at all the material times. (3) Notwithstanding anything contained in this Chapter, an application for the claimof refund of service tax shall be made within a period of six months from the date on which the Finance Bill, 2016 receives the assent of the President (1) Notwithstanding anything contained in section 66B, no service tax shall be levied or collected during the period commencing from the 1st day of April, 2015 and ending with the 29th day of February, 2016 (both days inclusive), in respect of services provided by way of construction, erection, This section has been commissioning or installation inserted so as to restore of original works pertaining to certain exemptions on an airport or port, under a Airport or Port which were contract which had been withdrawn with effect entered into before the 1st day from However of March, 2015 and on which a corresponding appropriatestamp duty, where amendment has also been applicable, had been paid made in Mega Exemption before that date, subject to the condition that Ministry of Civil Aviation or, as the case may be, the Ministry of Shipping in the Government of India certifies that the contract had been entered into before the 1st day of March, Notification and a new entry has been inserted which provide the restoration of exemption till

13 (2) Refund shall be made of all such service tax which has been collected but which would not have been so collected had sub-section (1) been in force at all material times. (3) Notwithstanding anything contained in this Chapter, an application for the claim of refund of service tax shall be made within a period of six months from the date on which the Finance Bill, 2016 receives the assent of the President. 13

14 C. Changes in Mega Exemption Notification No. 25/2012-ST vide Notification No. 09/2016-ST dated Entry No. Before Budget After Budget Remarks 6 (b) an (b) a partnership firm of advocates or an individual as individual as an advocate other than a an advocate or senior advocate, by way of legal services toa partnership (i) an advocate or partnership firm of firm of advocatesprovidinglegalservices; advocates by (ii) any person other than a business entity; way of legal or services to, (iii) a business entity with a turnover up to (i) an rupees ten lakh in the preceding financial advocate or year;or partnership firm of (c) a senior advocate by way of legal services to a person other than a person ordinarily advocates carrying out any activity relating to providing legal services ; industry, commerce or any other business or profession; (ii) any person other than a business entity;or (iii) a business entity with a turnover up to rupees ten lakh in the preceding financial year; or (c) a person represented on an arbitral tribunal to an arbitral tribunal; Effective from This means Exemption on services provided by,- (i) a senior advocate to an advocate or partnership firmof advocates providing legal service;and (ii) a person represented on an arbitral tribunal to an arbitral tribunal, is being withdrawn with effect from 1st April, 2016 and Service Tax is being levied under forward charge. 14

15 9B - 9B. Services provided by the Indian Institutes of Management, as per the guidelines of the Central Government, to their students, by way of the following educational programmes, except Executive Development Programme, - (a) two year full time residential Post Graduate Programmes in Management for the Post Graduate Diploma in Management, to which admissions are made on the basis of Common Admission Test (CAT), conducted by Indian Institute of Management; (b) fellow programmeinmanagement; (c) five year integrated programme in Management. ; 9C - 9C. services of assessing bodies empanelled centrally by Directorate General of Training, Ministry of Skill Development and Entrepreneurship by way of assessments under Skill Development Initiative (SDI) Scheme; 9D - 9D. services provided by training providers (Project implementation agencies) under DeenDayalUpadhyayaGrameenKaushalyaYo jana under the Ministry of Rural Development by way of offering skill or vocational training courses certified by National Council For VocationalTraining. Effective Effective Effective from from from 15

16 12A - 12A. Services provided to the Government,a Effective from local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, oralterationof- (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business orprofession; (b) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or(iii) an art or cultural establishment; or (c) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation1toclause(44)ofsection65Bof the saidact; under a contract which had been entered into prior to the 1st March, 2015 and on which appropriate stamp duty, where applicable, had been paid prior to such date: provided that nothing contained in this entry shall apply on or after the 1st April, 2020; ; 13 (ba) - (ba) a civil structure or any other original Effective from & works pertaining to the In-situ Scope 13(bb) rehabilitation of existing slum dwellers expanded. using land as a resource throughprivate participation under the Housing for All (Urban) Mission/PradhanMantriAwasYojana, only for existing slum dwellers. (bb) a civil structure or any other original works pertaining to the Beneficiary-led individual house construction / enhancement under the Housing for All (Urban) Mission/PradhanMantriAwasYojana; ; 16

17 14 Services by way of construction, erection, commissioning, or installation of original works pertainingto, (a) railways, including monorail or metro; Services by way of construction, erection, commissioning, or installation of original works pertaining to, (a) railways, excluding monorail and metro; Explanation.-The services by way of construction, erection, commissioning or installation of original works pertaining to monorail or metro, where contracts were entered into before 1st March, 2016, on which appropriate stamp duty, was paid, shall remain exempt. 14 (ca) (ca) low cost houses up to a carpet area of 60 square metres per house in a housing project approved by the competent authority under: (i) the Affordable Housing in Partnership component of the Housing for All (Urban) Mission/PradhanMantriAwasYojana; (ii) any housing scheme of a State Government. 14A Services by way of construction, erection, commissioning, or installation of original works pertaining to an airport or port provided under a contract which had been entered into prior to 1st March, 2015 andon which appropriate stamp duty, where applicable, had been paid prior to such date: provided that Ministry of Civil Aviation or the Ministry of Shipping in the Government of India, as the case may be, certifies thatthe contracthadbeenenteredintobeforethe1st March,2015: provided further that nothing contained in this entry shall apply on or after the 1st April,2020; ; Effective from Exemption to construction, erection, commissioning or installation of original works pertaining to monorail or metro is being withdrawn. However, the said services, where contracts are already entered into before and appropriate stamp duty is paid, will continue to be exempted. Effective from Effective from 17

18 16 Services by an artist by way of a performance in folk or classical art forms of (i) music, or (ii) dance, or (iii) theatre, if the consideration charged for such performance is not more than one lakh Services by an artist by way of a performance in folk or classical art forms of (i) music, or (ii) dance, or (iii) theatre, if the consideration charged for such performance is not more than one lakh andfiftythousandrupees 23(bb) - (bb) stage carriage other than airconditioned stagecarriage; 23(c) ropeway, cable car or aerial tramway; Effective Monetary increased. Effective Entry. from limits from New Omitted Effective from Hence taxable now. 26 (q) - (q) NiramayaHealth Insurance Scheme implemented by Trust constituted underthe National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of1999). 26C - 26C. Services of life insurance business provided by way of annuity under the National Pension System regulated by Pension Fund Regulatory and Development Authority of India (PFRDA) under the Pension Fund Regulatory And Development Authority Act, 2013 (23 of 2013); Effective Effective from from 18

19 49, 50, 49. Services provided by Employees Effective from 51, Provident Fund Organisation (EPFO) to persons governed under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952); 50. Services provided by Insurance Regulatory and Development Authority of India (IRDA) to insurers under the Insurance Regulatory and Development Authority of India Act, 1999 (41 of 1999); 51. Services provided by Securities and Exchange Board of India (SEBI) set up under the Securities and Exchange Board of India Act, 1992 (15 of 1992) by way of protecting the interests of investors in securities and to promote the development of, and to regulate, the securities market; 52. Services provided by National Centre for Cold Chain Development under Ministry of Agriculture, Cooperation and Farmer s Welfare by way of cold chain knowledge dissemination; ; Services by way of transportation of Effective from goods by an aircraft from a placeoutside India upto the customs station of clearance in India. 19

20 Definitions Before Budget After Budget 2 (ba) - (ba) approved vocational educationcourse means,- (i) a course run by an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training or State Council for Vocational Training offering courses in designated trades notified under the ApprenticesAct,1961(52of1961);or (ii) a Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person registered with the Directorate General of Training, Ministry of Skill Development and Entrepreneurship; ; 2 (oa) (oa) "educational institution" means institution providing services specified an (oa) educational institution means an institution providing services by way of: (i) pre-school education and education up to highersecondaryschoolorequivalent; (ii) education as a part of a curriculum for obtaining a qualification recognised by any lawforthetimebeinginforce; (iii) education as a part of an approved vocationaleducationcourse; in clause (l) of section 66D of the Finance Act,1994 (32 of 1994); 2 (zdd) - (zdd) senior advocate has the meaning assigned to it in section 16 of the Advocates Act, 1961 (25 of 1961); Remarks Effective from date on which finance bill, 2016 receives assent of President Effective from date on which finance bill, 2016 receives assent of President Effective from

21 D. Changes in Service Tax Rules,1994 Rule Before Budget After Budget Remarks 2(1)(d)(i) (D) 2(1)(d)(i)(EE A) in relation to service provided or agreed to be provided by, (I) an arbitral tribunal,or (II) an individual advocate or a firm of advocates by way of legalservices, in relation to service provided or agreed to be provided by a mutual fund agent ordistributor to a mutual fund orasset management company, the recipient of the service; 2(1)(d)(i) (E) in relation to supportservices provided or agreed to be provided by Government or local authority except, (supportword mentioned above was to be deleted as per Notification No. 05/2015-ST) in relation to service provided or agreed to be provided by, (I) an arbitral tribunal,or (II) a firm of advocates or an individual advocate other than a senior advocate by way of legal services Effective from So now senior advocate providing service will be taxed on forward charge. Omitted Effective from Hence these services are not taxable under forwardcharge. in relation to support services provided or agreed to be provided by Government or local authority except, (support wordmentioned above is now deleted as per Notification No. 17/2016-ST dated ) Effective from Date has now been notified and hence with effect from the said date all services, except specified, provided by Government or Local Authority istaxable. 6(1) First Provided that where the Provided that where the Effective from Proviso assessee is an assessee is a one person The option individual or company whose of quarterly payment proprietary firm or aggregate value of and payment of tax on partnership firm, the taxable services provided receipt basis has been service tax shall be paid from one or more extended to one person to the credit of the premises is fifty lakh company. Central Government by rupees or less in the the 6th day of the month previous financial year, if the duty is deposited or is an individual or electronically through proprietary firm or internet banking, or, in any other case, the 5th day of the month, as the partnership firm or Hindu Undivided Family, the service tax shall be paid to the credit 21

22 case may be, of the Central immediately following Government by the 6th the quarter in which the day of the month if the service is deemed to be duty is deposited provided as per the rules electronically through framed in this regard internet banking, or, in any other case, the 5th day of the month, as the case may be, immediately following the quarter in which the service is deemed to be provided as per the rules framed in this regard 6(1) Third Provided also that in Provided also that in case Effective from Proviso case of individuals and of such individuals, One person partnership firms partnership firms and company included. whose aggregate value one person companies of taxable services whose aggregate value of provided from one or taxable services provided more premises is fifty from one or more lakh rupees or less in the premises is fifty lakh previous financial year, rupees or less in the the service provider previous financial year, shall have the option to the service provider shall pay tax on taxable have the option to pay tax services provided or on taxable services agreed to be provided provided or agreed to be by him up to a total of provided by him up to a rupees fifty lakhs in the total of rupees fifty lakhs current financial year, by in the current financial the dates specified in year, by the dates this sub-rule with specified in this sub-rule respect to the month or with respect to the month quarter, as the case may or quarter, as the case be, in which payment is may be, in which received: payment is received: 22

23 6(4) Where an assesseeis,for any reason, unable to correctlyestimate,onthe 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 andthe 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 ofservice tax on provisional basis on such value of taxable service as may be specified by him andthe 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 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 servicetax 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 serviceas may be specified by him and the Central Excise Rules, 2002, relating toprovisional assessment except so far as they relate to execution of bond, shall, so far as may be, apply to such assessment 6 (7A) - (ia) in case of single premium annuity policies other than (i) above, 1.4 per cent.of the single premium charged from the policy holder; ; 7 (3) - (3A) Notwithstanding anything contained in sub-rule (1), every Effective Effective from from Effective from Annual return is to be filed by 23

24 7 (4) The Central Board of Excise and Customs may, by an order extend the period referred to in sub-rule (2) by such period as deemed necessary under circumstances of special nature to be specified in suchorder. assessee shallsubmit an 30 th November of annual return for the succeeding year. financial year to which the return relates, in suchform and manner as may be specified in the notification in the Official Gazette bythe Central Board of Excise and Customs, by the 30th day of November of thesucceeding financial year; (3B) The Central Government may, subject to such conditions or limitations,specify by notification an assessee or class of assesses who may not be required tosubmit the annual return referred to in sub-rule(3a). The Central Board of Effective from Excise and Customs may, by an order extend the period referred to in subrules (2) and (3A)by such period as deemed necessary under circumstances of special nature to be specified in such order. 7B (2) - (2) An assessee who has Effective from filed the annual return Within one referred to in sub-rule month the Annual (3A) ofrule 7 by the due Return filed can be date may submit a revised. revised return within a period of one monthfrom the date of submission of the said annual return. 7C (2) - (2) Where the annual Effective from return referred to in sub Penalty for rule (3A) of rule 7 is filed late filing of annual by the return. assessee after the due 24

25 date, the assessee shall pay to the credit of the Central Government, an amount calculated at the rate of one hundred rupees per day for the period of delay in filing of such return, subject to a maximum of twenty thousand rupees. 25

26 E. Changes in Reverse Charge Mechanism - Notification No. 30/2012-ST vide Notification No. 18/2016-ST dated Changes in Para I I (A) (ib) I (A) (ic) Before Budget After Budget Remarks provided or agreed to be provided by a mutual fund agent or distributor,toa mutual fund or asset management company provided or agreed to be provided by aselling or marketing agent of lottery tickets to a lottery distributor or selling agent I (A)(iv)(B) an individual advocate or a firm of advocates by way of legal services, or Omitted Effective from (ic) provided or agreed to be provided by a selling or marketing agent of lottery tickets in relation to a lottery in any manner to a lottery distributor or selling agent of the State Government under the Lottery (Regulations) Act, 1998 (17 of 1998); a firm of advocates or an individual advocate other than senior advocate, by way of legal services, or Effective from Effective from Changes in Para II Before Budget After Budget Remarks 1B Services provided or Omitted agreed to be provided by a mutual fund agent or distributor, to a mutual fund or asset managementcompany 26

27 1C In respect of service provided or agreed to be provided by a selling or marketing agent of lottery tickets to a lottery distributor or selling agent. 5 in respect of services provided or agreed to be provided by individual advocate or a firm of advocates by way of legal services 6 Services provided by Government or Local Authority Excluding Renting of Immovable Property and Services specified in sub clause (i), (ii) and (iii) of of Section 66D(a) of FinanceAct,1994.(These cover postal, port, airport and transport services) Word Support have been deleted by finance act, 2015 but shall be effective from the datetobenotified in respect of services provided or agreed to be provided by a selling or marketing agent of lottery ticketsin relation to lottery in any manner to a lottery distributor or selling agent of the State Government under the provisions of the Lottery (Regulations) Act,1998 (17 of 1998) in respect of services provided or agreed to be provided by a firm of advocates or an individual advocate other than a senior advocate by way of legal services Services provided by Government or Local Authority Excluding Renting of Immovable Property and Services specified in sub clause (i), (ii) and (iii) of of Section 66D(a) of Finance Act, 1994.(These cover postal, port, airport and transport services) Word Support has been omitted with effect from vide Notification No 18/2016 ST dated

28 F. Changes in Abatement Notification No. 26/2012-ST vide Notification No. 08/2016-ST dated effective from Entry Before Budget After Budget No. Particulars % Conditions Particulars % Conditions 2 Transport of 30 Nil Transport of 30 CENVAT credit on goods byrail goods by rail inputs and capital (other than goods, used for service providing the specified at Sl. taxable service, has No. 2A below) not been taken under the CENVAT Credit Rules, ; 2A Transport of 40 CENVAT credit on goods inputs and capital in goods, used for containers by providing the rail by any taxable service, has person other not been taken than Indian under the Railways CENVAT Credit 3 Transport of passengers, with or without accompanied belongings by rail 7 Services of goodstransport agency in relation to transportation of goods. 30 Nil Transport of passengers, with or without accompanied belongings by rail 25 CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken by the service provider under Services of goods transport agency in relation to transportation of goods other than used household goods Rules, CENVAT credit on inputs and capital goods, used for providing the taxable service, has not been taken under the CENVAT Credit Rules, CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken by the serviceprovider under the CENVAT Credit Rules,

29 the CENVAT Credit Rules, A Services of goods transport agency in relation to transportation of used householdgood s Services provided by a foreman of chit fund in relation to chit 9A Transport of passengers, with or without accompanied belongings, by a. a contract carriage other thanmotorcab. b. a radiotaxi. 10 Transport of goods in a vessel 40 CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the CENVAT Credit Rules, CENVAT credit on inputs, capital goods and input services, used Transport of passengers, with or without accompanied belongings, by a. a contract carriage other thanmotorcab. b. a radiotaxi. (c) a stage carriage (inserted w.e.f ) Transport of goods in a vessel 40 CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken by theservice provider under the CENVAT Credit Rules, CENVAT credit on inputs, capital goods and input services, used for providing the taxable service has not been taken under the CENVAT Credit Rules, ; 40 CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the CENVAT Credit Rules, CENVAT credit on inputs and capital goods, used for providing the taxable service,has 29

30 11 Services by a tour operatorin relationto,- (i) a package tour for providing the taxable service, has not been taken under the CENVAT Credit Rules, (i) CENVAT credit on inputs, capital goods and input services other than the input service of a tour operator, used for providing the taxable service, has not been taken under the CENVAT Credit Rules,2004. (ii) The bill issued for this purpose indicates that it is inclusive of charges for such atour. Services by a tour operator in relation to,- (i) a tour, only for the purpose of arranging or booking accommodatio n forany person not been taken under the CENVAT Credit Rules, (i) CENVAT credit on inputs, capital goods and input services other thaninput services of a tour operator, used for providing the taxable service, has not been taken under the CENVAT Credit Rules, (ii) The invoice, bill or challan issued indicates that it is towards the charges for such accommodation (iii) This exemption shall not apply in such cases where the invoice, bill or challan issued by the tour operator, in relation to atour, includes only theservice charges for arranging or booking accommodation for any person but does not include the cost of such 30

31 11 (ii) a tour, if the tour operator is providing services solely of arranging or booking accommodation for any person in relation to a tour (i) CENVAT credit on inputs, capital goods and 1ag[input services other than the input service of a tour operator], used for providing the taxable service, has not been taken under the CENVAT Credit Rules,2004. (ii) The invoice, bill or challanissue d indicates that it is towards the charges for such accommodation (ii) tours other than (i) above 30 (i) CENVAT credit on inputs, capital goods and input services other than input services of a tour operator, used for providing the taxable service, has not been taken under the CENVAT CreditRules, (ii) The bill issued for this purpose indicates that it is inclusive of charges for such a tour and the amount charged in the bill is the gross amount charged for such a tour. ; (iii) any services other than specified at (i) and (ii) above. (iii) This exemption shall not apply in such cases where the invoice, bill or challan issued by the tour operator, inre lation to a tour, only includes the service charges for arranging or booking accommodation for any person and does not include the cost of such accommodation 31

32 12 Construction of a complex, building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly except where entire consideration is received after issuance of completion certificate by the competent authority, (i) for residential unit having carpet area upto 2000 square feet or where the amount 25 credit on inputs, capital goods and input services other than the input service of a tour operator, used for providing the taxable service, has not been taken under the CENVAT Credit Rules,2004. (ii) The bill issued indicates that the amount charged in the bill is the gross amount charged for such a tour. (i) CENVAT credit on inputs used for providing the taxable service has not been taken under the CENVAT Credit Rules, 2004; (ii) The value of land is included in the amount charged from the service receiver. Construction of a complex, building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly except where entire consideration is received after issuance of completion certificate by the competent authority 30 (i) CENVAT credit on inputs used for providing the taxable service has not been taken under the CENVAT Credit Rules, (ii) The value of land is included in the amount charged from the servicereceiver. 32

33 charged is less than rupees one crore; (ii) for other 30 than the (i) above. Expla- - For the purposes of exemption at Serial nation BA number 9, the amount charged shall be the sum total of the amount charged for the service including the fair market value of all goods (including fuel) and services supplied by the recipient(s) in or in relation to the service, whether or not supplied under the same contract or any other contract: Para 2 Point b "package tour" means a tour wherein transportation, accommodation for stay, food, tourist guide, entry to monuments and other similar services in relation to tour are provided by the tour operator as part of the package tour to the person undertaking the tour, Provided that the fair market value of goods and services so supplied may be determined in accordance with the generally accepted accounting principles. Omitted 33

34 G. Exemptions in relation to Information Technology Software vide Notification No. 11/2016 dated As per this amendment, Information Technology Software Services leviable to Service Tax u/s 66B read with section 66E is now exempted provided the said softwareisrecordedonamediaunderchapter85ofthefirstscheduletothecentral Excise Tariff Act, 1985 on which it is required to declare on package of such media theretailsellprice.conditionsforavailingsuchexemptionsare:- (i) the value of the package of such media domestically produced or imported, for the purposes of levy of the duty of central excise or the additional duty of customs leviable under sub-section (1) of section 3 of the Customs Tariff Act, 1975 (51 of 1975), if imported, as the case may be, has been determined under section 4A of the CentralExciseAct,1944(1of1944)(hereinafterreferredtoassuchvalue);and (ii) (a) the appropriate duties of excise on such value have been paid by the manufacturer, duplicator or the person holding the copyright to such software, as thecasemaybe,inrespectofsuchmediamanufacturedinindia;or (b) the appropriate duties of customs including the additional duty of customs on such value, have been paid by the importer in respect of such media which has been imported intoindia; (iii) a declaration made by the service provider on the invoice relating to such service that no amount in excess of the retail sale price declared on such media has been recovered from the customer. Explanations. - For the purpose of this notification, the expression,- (i) appropriate duties of excise shall mean the duties of excise leviable under section 3 of the Central Excise Act, 1944 (1 of 1944) and a notification, for the time being in force, issued in accordance with the provision of sub-section (1) of section 5A of the said Central Excise Act;and (ii) appropriate duties of customs shall mean the duties of customs leviable under section 12 of the Customs Act, 1962 (52 of 1962) and any of the Customs Tariff Act, 1975 (51 of 1975) and a notification, for the time being in force, issued in accordance with the provision of sub-section (1) of section 25 of the said CustomsAct. 34

35 H. Indirect Tax Dispute Resolution Scheme, 2016 Scheme at Glance:- With the intention to reduce the litigation, the Customs, Central Excise, ServiceTaxDisputeResolutionScheme,2016hasbeenintroduced. Scheme will come into force on and will be applicable to the declarations made till All the cases which are pending with the Commissioner (Appeals) as on under Central Excise Act, 1944 or Customs Act, 1962 or Finance Act,1994areeligibleforapplyingunderthescheme. Application has to be made to the designated authority for which applicant will receive anacknowledgement. Applicant shall pay Tax, Interest, 25% of the penalty imposed in the impugnedorderwithin15daysofthereceiptofacknowledgement. He shall intimate within 7 days about the paymentwith details. The designated authority shall issue order of discharge in the prescribed formatwithin15daysofthereceiptofsuchintimation. In the following cases, Scheme shall not apply:- o Theimpugnedorderisinrespectofsearchandseizureproceeding;or o Prosecution for any offence punishable under the Act has been instituted before the 1st day ofjune, 2016; or o The impugned order is in respect of narcotic drugs or other prohibited goods;or o Impugned order is in respect of any offence punishable under the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act,1985orthePreventionofCorruptionAct,1988;or o Any detention order has been passed under the Conservation of ForeignExchangeandPreventionofSmugglingAct,1974. Disclaimer : The contents of this document are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon. Readers are advised to consult the professional for understanding applicability of this circulation in the respective scenarios. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without our writtenpermission. 35