Conditions to Claim Abatement from 1 April 2016 Onwards

Transcription

1 Conditions to Claim Abatement from 1 April 2016 Onwards Since Service tax is charged at lower rate, Government has imposed a condition that Cenvat or Input will not be available Conditions for Different Services Name of Service Abatement Rate Taxable Rate Effective Rate of Service Tax INPUTS CAPITAL GOODS INPUT SERVICE Goods Transport Agency (Road) Normal Cases 70.00% 30% 4.50% NO NO NO For Supply of Old Household Items 60.00% 40% 6.00% NO NO NO Goods Transport by Railways by Private Railways 60.00% 40% 6.00% NO NO NO Yes by Indian Railways 70.00% 30% 4.50% NO NO NO Yes Passenger Transport by Railways 70.00% 30% 4.50% NO NO NO Yes

2 Goods transport by vessel (Like Ship) 70.00% 30% 4.50% NO NO NO Yes Chit Fund 70.00% 30% 4.50% NO NO NO Construction Services For Residential unit less than 2000 sq feet + Price Charged > 1 cr 70.00% 30% 4.50% NO YES YES Other Cases 70.00% 30% 4.50% NO YES YES Tour Operator Service Booking Accommodation 90.00% 10% 1.50% NO NO NO (For Tour Operato Package Tour Service 70.00% 30% 4.50% NO NO NO (For Tour Operato Other Cases 70.00% 30% 4.50% NO NO NO (For Tour Operato

3 Transport of Passengers Motor Cab 60.00% 40% 6.00% NO NO NO (For Cab Operato Service YES) Radio Taxi 60.00% 40% 6.00% NO NO NO Stage Carriage (AC Bus) 60.00% 40% 6.00% NO NO NO Stage Carriage (Non AC Bus) Exempt 0.00% NO NO NO (For Stage Carria Service YES) Air transport (passenger) Economy Class 60% 40% 6.00% NO NO YES Other than Economy Class 40% 60% 9.00% NO NO YES Financial Leasing Services 90% 10% 1.50% YES YES YES Supply of Food Drinks with 30% 70% 10.50% NO NO YES Rent (like Hotel/Banquet hall/pandal)

4 Renting of Hotel/Guest house/lodge 60% 40% 6.00% Yes (no for food YES items) YES Restaurant Services 60% 40% 6.00% Yes (Except Chapter 1 to Chapter YES 22 of Central Excise Act) YES Change in Conditions for Abatement from 1 April 2016 (Notification 9/2016) Now Cenvat of Input Services can be taken in case of following Services also Transportation of Goods by Rail Transportation of Passengers by Rail Transportation of Goods in a Vessel. Explanation in case of Motor Cab Service Cost of fuel should be included in the consideration charged for providing renting of motor cab services for availing the abatement. (Insertion of Explanation BA in notification No. 26/2012ST)

5 Other Important Points Goods Transport Agency There is reverse charge on Goods Transport Agency (Freight charges) in some cases Hence, the service receiver pays Service Tax However, condition for not claiming cenvat is on Service provider and not on service receiver Service Provider cannot claim cenvat of all 3 (inputs/capital goods/input services) Cab Transport Service Provider cannot claim cenvat of all 3 (inputs/capital goods/input services) However, it may happen that he has availed input service of some other cab operators (hired cabs of some other cab operators) In this case, Cenvat of Input Service is available as follows If such other Cab Operator has charged Full Service Tax-40% Input is available 40% Service tax (i.,e. claimed 60% Abatement)-Full Input Available Tour Operator Service Provider cannot claim cenvat of all 3 (inputs/capital goods/input services) However, it may happen that he has availed service of some other tour operator Input of service of such other tour operator is available Also abatement is only applicable if gross amount charged in Bill and commission not shown separately

6 Type of Service Amount in Bill Bill shall indicate gross amount of whole package Package Tour (Service tax rate is Charged on Whole Package) Bill shall indicate gross amount of total charges Booking Charges (If Hotel charges and Commission shown separately, then Service tax at full rate on Booking Charges) Other Cases Bill shall indicate gross amount charged (Commission not shown separately) Bundled Service Supply of Food/Drinks with Rent (like Hotel/Banquet hall/pandal) No Cenvat of Goods covered in Chapters 1 to 22 of the Central Excise Tariff Act, 1985 (called CETA) (No Input of Food items purchased in restaurant) Construction of Complex, building,structure No Cenvat on Inputs The value of land is included in the amount charged from the service receiver.