CHNAGES IN THE FINANCE ACT 1994 Effective 14/05/2016 Effective from 01/06/2016 CHANGES THROUGH NOTIFICATION Effective from 01/03/2016 Effective from the date of the Notification Effective from 01/04/2016 Effective from 14/05/2016 Effective from 01/06/2016
LIST OF CHANGES With immediate effect (from 01.03.2016) (i) Restoration of exemption on services provided to the Government, a local authority or a governmental authority. (ii) Restoration of exemption on services to an airport, port. (iii) Withdrawal of exemption on services to monorail or metro, in respect of contracts entered into on or before 01.03.2016 (iv) Exemption to services by way of construction etc. in respect of- (a) housing projects under Housing For All (HFA) (Urban) Mission/Pradhan Mantri Awas Yojana (PMAY); (b) low cost houses up to a carpet area of 60 square metres in a housing project under Affordable housing in Partnership component of PMAY, (c) low cost houses up to a carpet area of 60 square metres in a housing project under any housing scheme of the State Government, (v) Exemption to specified services provided by the Indian Institutes of Management (IIM). (vi) Notification to ensure that Information Technology Software is subjected to either central excise duty or service tax. To deal with assessment of media with recorded Information Technology Software, where RSP is affixed or assessment when RSP is not required. (vii) Insertion of Explanations in Rule 5 of Point of Taxation Rules, 2011 (viii) Cenvat credit is being allowed to service providers providing services by way of transportation of goods by a vessel from India to abroad. (ix) Notification No. 27/2012 C.E. (N.T.) is amended to specify relevant date. (x) Service provided by Container Train Operators
B. With effect from 1st day of April, 2016 Exemption on services by senior advocate to other advocate or to a law firm is being withdrawn. Levy under forward charge. A person represented on an arbitral tribunal to an arbitral tribunal; Exemption being withdrawn from the services of transport of passengers, by ropeway, cable car or aerial tramway. Date from which the definition of support services shall stand deleted from the Finance Act, 1994. New exemptions for services by,- Annuity under the National Pension System Securities and Exchange Board of India (SEBI) Employees Provident Fund Organisation (EPFO) Biotechnology incubators approved by Biotechnology Industry Research Assistance Council (BIRAC). National Centre for Cold Chain Development Insurance Regulatory and Development Authority (IRDA) of India. Niramaya Health Insurance scheme implemented by National Trust Threshold exemption to services provided by a performing artist in folk or classical art form is being increased from Rs 1 lakh charged per event to Rs 1.5 lakh charged per event. Deen Dayal Upadhyay Grameen Kaushalya Yojana training partners Assessing bodies empanelled centrally by Directorate General of Training, Ministry of Skill Development & Entrepreneurship. Rationalisation of abatement rates and conditions thereof in respect of services by,- Tour operator services transport of passengers by rail. transport of goods by rail. shifting of used household goods by a GTA foreman to a chit fund. renting of motor-cab services. transport of goods by vessel. Construction of complex, building, civil structure, etc. Service tax Rules,- The benefit of (a) quarterly payment of service tax being extended to OPC and HUF and payment on receipt basis being extended to OPC. Rule 2(1)(d)(i) (D)(II) modified as an individual advocate other than senior advocate. The word support shall stand deleted from rule 2(1)(d)(i) (E) Rule 2(1)(d)(EEA) making mutual fund agents/distributor as person liable for paying service tax will be deleted The service tax composition scheme for single premium annuity policies
Reverse charge mechanism mutual fund agents/distributors to an asset management company under forward charge. service provided by Government or local authorities to business entities shall be on the service recipient. Cenvat Credit Rules, 2004 Invoice issued by Service provider for removal of inputs and capital goods shall be a valid document To give option to banking company, a financial institution including non-banking financial company for Cenvat Credit reversal under sub-rule (1), (2) and (3) of the Rule 6 along with rule 6(3B) of the Cenvat Credit Rules, 2004. Cenvat credit of service tax paid on upfront charges for assignment of spectrum/ mining rights etc. Reversal of Cenvat Credit of inputs/input services which have been commonly used in a taxable output service as well as an activity which is not a service. Sub-rule (2) of rule 14 being omitted.
Changes in the Finance Act, 1994 that get incorporated on enactment of the Finance Bill, 2016 i.e on 14/05/2016 Explanation 2 in section 65B(44) is to be modified. Clause (l) of section 66D would be omitted and clause (11) of section 65B is to be omitted. [educational services] Insertion of right to use the radio-frequency spectrum and subsequent transfers in section 66E as a Declared Service. Section 67A is being amended to obtain rule making powers Section 73 proposed to be amended to increase time limit from 18 months to thirty months. Insertion of proviso to section 75. Insertion of Explanation in section 78A Amendments in sections 89, 90 and 91. In section 93A of the 1994 Act, the words prescribed or by notification in the Official Gazette shall be substituted. Retrospective effect to notification No. 41/2012- ST, dated the 29th June, 2012 as amended by notification No. 01/2016- ST. Retrospective exemption is to be extended to the construction, repair, maintenance etc of canal, dam or other irrigation works provided to entities set up by Govt. provided during the period from the 1st July, 2012 to 29.01.2014. Approved vocational education course is to be incorporated in the general exemption notification and exemption to specified educational services (Notification No. 25/2012-ST). Exemption from Service Tax on services provided to the Government, a local authority or a governmental authority. Exemption from Service Tax on services by way of construction, erection, etc. of original works pertaining to an airport, port. Rationalisation of rate of interest in case where is service tax is collected and not credited in Govt. account and others Dispute resolution scheme, 2016 Returns
With effect from 1st day of June, 2016 after enactment of the Finance Bill, 2016 in respect of each provision Krishi Kalyan Cess Negative List entry that covers service of transportation of passengers, with or without accompanied belongings, by a stage carriage is to be omitted [section 66D (o)(i)] Negative List that covers services by way of transportation of goods by an aircraft or a vessel from a place outside India up to the customs station of clearance is to be omitted [section 66D (p)(ii)] Exemption to transportation of passengers by a stage carriage other than air conditioned stage carriage is to be exempted Services by an aircraft will continue to be outside service tax net by way of exemption through notification
AMENDMENTS IN FINNACE ACT 1994 Section 66D Clause (l) services by way of (i) pre-school 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 in force; (iii) education as a part of an approved vocational education course; (a) clause (l) to be omitted; The following Educational services appearing in the negative list have been deleted from the negative list. Pre School education education upto higher secondary School education as a part of curriculum for obtaining qualification recognised by any law Education as a part of an approved vocational education course However these services have been brought under exemption Notification Clause no.9 of mega exemption notification 9. Services provided.- (effective 11/07/2014) a) By an educational institution to its students, faculty and staff; b) To an educational institution, by way of,- (i) Transportation of students, faculty and staff; (ii) Catering, including any mid- day meals scheme sponsored by the Government; (iii) Security or cleaning or house-keeping services performed in such educational institution; (iv) Services relating to admission to, or conduct of examination by, such institution;] 14/05/2016 14/05/2016 01/06/2016 for both amendments Clause (oa) : educational institution means an institution providing services specified in clause(l) of section 66D of the Finance Act, 1994. 14/05/2016
(oa) educational institution means an institution providing services by way of: (i) pre-school 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 in force; (iii) education as a part of an approved vocational education course; Clause (o) Service of transportation of passengers, with or without accompanied belongings, by (i) a stage carriage; (ii) railways in aclass other than- (A) first class; or (B) an airconditi oned coach (iii) metro, monorail or tramway ; (iv) inland water ways ; (v) public transport, other than predominantly for tourist purpose, in a vessel between places located in India; and (i) Sub-clause (i) to be omitted; (ii) Sub-clause (ii) to be omitted. Sub clause o of section 66D covers service of transportation and passengers by various modes. The sub clause (i) covers service of transportation passengers by stage carriages, whether the stage carriages are air conditioned or not. By omitting sub clause (i) of clause (o) the service of transportation of passengers by stage carriages has been brought under taxing net. However simultaneously mega exemption notification is amended to exempt transport of passengers by stage carriage other than air conditioned stage carriage, by inserting sub clause (bb) in clause 23 of Mega exemption notification no. 25/2012 By combination of the above two amendments transportation of passengers by air conditioned stage carriage has become taxable. 01/06/2016 01/06/2016
(vi) metered cabs or auto rickshaws Clause(p) Services by way of transportation of goods (ii) by an aircraft or a vessel from a place outside India to the first customs station of landing in India; Transportation of goods by an air craft or vessel from a place outside India up to the customs station of clearance in India has been brought under taxing line. Simultaneously by inserting Clause N0. 53 in Mega exemption Notification services of transportation of goods by an aircraft from a place outside India upto the customs station of clearance in India has been exempted Net effect of both the above amendments is that Ocean freight for imports has become taxable. All CHA/clearing and forwarding should have a relook into their arrangement. The D.O letter dated 29.02.2016 states that the domestic shipping lines registered in India will pay service tax under forward charge while the services availed from foreign shipping line by a business entity located in India will get taxed under rcm in the hands of the business entity. Cenvat credit is available to the business entity. Section 66E After clause (i), the following clause shall be inserted, namely: (j) assignment by the Government of the right to use the radio-frequency spectrum and subsequent transfers thereof assignment by the Government of the right to use the radio-frequency spectrum and subsequent transfers thereof has been brought under taxing net by specifically bringing such transactions under declared services. However entry No.61 in mega exemption notification provides following exemptions 14/05/2016 13/04/2016 Services provided by Government or a local authority by way of assignment of right to use any natural resource where
such right to use was assigned by the Government or the local authority before the 1st April, 2016 is brought under exemption list This exemption is available only to service tax payable on one time charge payable, in full upfront or in instalments, for assignment of right to use such natural resource; Section 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 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. The existing section shall be renumbered as subsection (1) thereof, and after subsection (1) as so renumbered, the following sub-section shall be inserted, namely: (2) The time or the point in time with respect to the rate of service tax shall be such as may be prescribed.. The rule is amended to give specific rule making powers in respect of POT 2011. These amendment is to be read along with the amendment in POT rules. 14/05/2016 Notification No.10/2016 dated 01-03-2016 Notification NO.21/2016 dated 30-03-2016 Notification No.24/2016 dated 13-04-2016 Section 73 Section 75 The normal time limit to issue show cause notice has been increased from 18 months to 30 months Section 75 provides for minimum and maximum rate of interest that could be levied for late payment of service tax. The prescribed rates are minimum 10% and maximum 36%. 14/05/2016 14/05/2016 The proviso to that section provides that in respect of service providers whose value of taxable services during any of the financial year covered by the notice or during the last preceding financial year does not exceed 60 lakh of rupees, the rate of interest shall be reduced by 3% per annum. Now a new proviso is added to the affect 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 which such payment is due, the Central
Section 89 Section 101, 102, & 103 Government may, by notification in the official gazette, specify such other rate of interest, as it may deem necessary. Section 89 provides for imprisonment in respect of specified offences, where the service tax amount short to be evaded exceeds 50 lakhs of rupees. This monetary ceiling has been increased to 2 crores. (a) Definition of Governmental authority was amended with effect from 30.01.2014 so as to exempt services provided by way of construction, erection, maintenance, or alteration etc. of canal, dam or other irrigation works provided to entities set up by Government but not necessarily by an Act of Parliament or a State Legislature. However, services provided prior to 30.01.2014 to such bodies remained taxable. The benefit of exemption is proposed to be extended to the said services provided during the period from the 1st July, 2012 to 29.01.2014. 14/05/2016 (b) Refund of Service Tax paid on the said services during the period from the 1st July, 2012 to 29.01.2014 shall also be allowed in accordance with the law including the law of unjust enrichment. Application for refund may be allowed to be filed within a period of six months from the date on which the Finance Bill, 2016 receives the assent of the President. L. Restoration of certain exemptions withdrawn last year for projects, contracts in respect of which were entered into before withdrawal of the exemption. (a) Exemption from Service Tax on services provided to the Government, a local authority or a governmental authority by way of construction, erection, etc. of - (i) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; (ii) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment; (iii) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation 1 to clause 44 of section 65B of the said Act;
The above exemptions were withdrawn with effect from 1.4.2015. The same is being restored for the services provided under a contract which had been entered into prior to 01.03.2015 and on which appropriate stamp duty, where applicable, had been paid prior to that date. The exemption is being restored till 31.03.2020.The services provided during the period from 01.04.2015 to 29.02.2016 under such contracts are also proposed to be exempted from service tax. [New section 102 is being inserted in the Finance Act, 1994] (Clauses 156 of the Bill refers) (b) Exemption from Service Tax on services by way of construction, erection, etc. of original works pertaining to an airport, port was withdrawn with effect from 1.4.2015. The same is being restored for the services provided under a contract which had been entered into prior to 01.03.2015 and on which appropriate stamp duty, where applicable, had been paid prior to that date subject to production of certificate from the Ministry of Civil Aviation or Ministry of Shipping, as the case may be, that the contract had been entered into prior to 01.03.2015. The exemption is being restored till 31.03.2020. [Notification No. 25/2012-ST as amended by notification No. 09/2016-ST dated 1st March, 2016 refers]. The services provided during the period from 01.04.2015 to 29.02.2016 under such contracts are also proposed to be exempted from service tax. Amendments in Mega exemption Notification Notification No.7/2016 dated 18/02/2016 Notification No.9/2016 dated 01/03/2016 Notification No.22/2016 dated 13/04/2016 Notification No.26/2016 dated 20/05/2016
Existing provision Amendment Effect of Amendment Effective from The following Services of senior advocate goes out of exemption notification. 01/04/2016 (i) to an advocate or partnership firm of advocates providing legal services; (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 01/04/2014 a senior advocate by way of legal services to a person other than a person ordinarily carrying out any activity relating to industry, commerce or any other business or profession; ; The following Services of a senior advocate is exempted: The Services of a senior advocate by way of legal services to a person other than a person ordinarily carrying out any activity relating to industry, commerce or any other business or profession (zdd) senior advocate has the
meaning assigned to it in section 16 of the Advocates Act, 1961 (25 of 1961); Insertion of clause 9(b) Insertion of clause 12A Insertion of clause 12A 12A. 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 for commerce, industry, or any other business or profession; (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 Certain specified services of Indian Institute of Management are exempted. Certain Services rendered to Government covered under clause 12 were removed from exemption list w,e,f 01/04/2015 Now the exemption has been restored in respect of contract entered prior to 01/03/2015 and continues to be executed. The exemption is available upto 31/03/2020. 01/03/2016 01/03/2016
Entry 14 Services by way of construction, erection, commissioning, or installation, completion, fitting out, repair, maintenance, renovation, or alteration of, - or the use of their employees or other persons specified in the Explanation 1 to clause (44) of section 65 B of the said Act; 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; ; in entry 14, with effect from 1st March, 2016, A. for item (a), the following shall be substituted, namely:- Construction of Monorail and Metro are brought under taxing net. 01/03/2016 (a) railways, including monorail, or metro; (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, However if the contracts are entered into before 01/03/2016 the same shall continue to be exempt without any sunset clause,
shall remain exempt.. Insertion of clause ca 01/03/2016 after item (c), the following item shall be inserted, namely (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: New exemption construction of house approved by competent authority Carpet area upto 60 sqm. (i) the Affordable Housing in Partnership component of the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana; (ii) any housing schme of a State Government.. Entry 14A is inserted after entry 14, with effect from the 1st March, 2016, the following entry shall be inserted, namely- 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 and on which Exemption given to construction of airport and port was withdrawn w,e,f, 01/04/2015, The exemption is restored in respect of contrcts entered into before 01/03/2015. This exemption is valid upto 31/03/2020 01/03/2016
Entry 16 Services by an artist by way of their performance in folk or classical art forms of (i) music, (ii) dance, or (iii) theatre, If the consideration charged for such performance is not more than one Lakh rupees. Entry 23 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 that the contract had been entered into before the 1st March, 2015: provided further that nothing contained in this entry shall apply on or after the 1st April, 2020; ; Clause modified (viii) in entry 16, for the words one lakh rupees, the words one lakh and fifty thousand rupees shall be substituted; The exemption per performance increased from Rs. 1.00 lakh to 1.50 lakhs, Stage carriers removed from negative list. 01/04/2016 01/06/2016 Exemption given to non air-conditioned stage carriers. Air-conditioned stage carriers brought under taxing net. Transportation of passengers by ropeway, cable car or aerial tramways brought 01/04/2016
Insertion of clause No.48 by notification no.7/2016 dated 18/02/2016 (48) Services provided by Government or a local authority to a business entity with a turnover up to rupees ten lakh in the preceding financial year under taxing net. Provision of threshold limit for service receivers in respect of services provided by the government 01/04/2016 66D. The negative list shall comprise of the following services, namely: (a) services by Government or a local authority excluding the following services to the extent they are not covered elsewhere (i) services by the Department of Posts by way of speed post, express parcel post, lifeinsurance and agency services provided to a person other than Government; (ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port oran airport; (iii) transport of goods or passengers; or (iv) support services, other
than services covered under clauses (i) to (iii) above, provided to business entities; Insertion of Explanation by a Notification no.26/2016 dated 20/05/2016 Explanation.- For the purposes of this entry, it is hereby clarified that the provisions of this entry shall not be applicable to the following services, namely:- (a) services specified in sub-clauses (i),(ii) and (iii) of clause (a) of section 66D of the Finance Act, 1994; (b) services by way of renting of immovable property.. Insertion of clauses 49,50,51 and 52 49. Services provided by Employees Provident Fund Organisation (EPFO) to persons governed under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952); 01/04/2016
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; ; 01/04/2016 01/04/2016 01/04/2016 54.Services provided by Government or a local authority to another Government or local authority: Services provided by government or a local authority to another government or local authority is brought 13-04-2016
Provided that nothing contained in this entry shall apply to services specified in subclauses (i),(ii) and (iii) of clause (a) of section 66D of the Finance Act, 1994; under exemption list However the exemption is not applicable in respect of services specified in sub clauses (i), (ii) and (iii) of clause (a) of section 66D 55. Services provided by Government or a local authority by way of issuance of passport, visa, driving licence, birth certificate or death certificate; The following are brought under exemption list Issuance of a) passport b)visa, c)driving licence, d)birth certificate or e)death certificate 13-04-2016 56. Services provided by Government or a local authority where the gross amount charged for such services does not exceed Rs. 5000/: Provided that nothing contained in this entry shall apply to services specified in subclauses (i), (ii) and (iii) of clause (a) of section 66D of the Finance Act, 1994: Provided further that in case where continuous supply of service, as defined in clause (c) of rule 2 of the Point of Taxation Rules, 2011, is provided by the In respect of services rended by government or local authority the exemption is provided where the gross amount charged does not exceed Rs. 5000 However this exemption is not applicable a) in respect of services specified in sub clauses (i), (ii) and (iii) of clause (a) of section 66D b) In respect of continuos supply of service the ceiling amount of Rs. 5000 is to be reckoned for
Government or a local authority, the exemption shall apply only where the gross amount charged for such service does not exceed Rs. 5000/in a financial year; the whole financial year 57. Services provided by Government or a local authority by way of tolerating non performance of a contract for which Consideration in the form of fines or liquidated damages is payable to the Government or the local authority under such contract; 58. Services provided by Government or a local authority by way of( a) Registration required under any law for the time being in force; (b) testing, calibration, safety check or certification relating to protection or safety of workers, consumers or public at large, required under any law for the time being in force; 59. Services provided by Government or a local authority by way of assignment of right Charges like Fines, late fees, penalties, additional fees, liquidated damages which is charged by the government or local authority is exempted. The following services rendered by the government is exempted: a) Registration charges under any law b) Testing, calibration, safety check or certification relating to protection or safety of workers, consumers or public at large, required under any law for the time being in force; Services provided by Government or a local authority by way of assignment of right to 13-04-2016 13-04-2016 13-04-2016
to use natural resources to an individual farmer for the purposes of agriculture; 60. Services by Government, a local authority or a governmental authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution; 61. Services provided by Government or a local authority by way of assignment of right to use any natural resource where such right to use was assigned by the Government or the local authority before the 1st April, 2016: Provided that the exemption shall apply only to service tax payable on one time charge payable, in full upfront or in Instalments, for assignment of right to use such natural resource; use natural resources to an individual farmer for the purposes of agriculture is being brought under exemption list. Services by Government, a local authority or a governmental authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution is brought under exemption list Services provided by Government or a local authority by way of assignment of right to use any natural resource where such right to use was assigned by the Government or the local authority before the 1st April, 2016 is brought under exemption list This exemption is available only to service tax payable on one time charge payable, in full upfront or in instalments, for assignment of right to use such natural resource; 13-04-2016 13-04-2016 62. Services provided by Government or a local authority by way of allowing a business entity to operate as a telecom service Services provided by Government or a local authority by way of allowing a business entity to operate as a telecom service 13-04-2016
provider or use radiofrequency spectrum during the financial year 201516 on payment of licence fee or spectrum user charges, as the case may be; provider or use radiofrequency spectrum during the financial year 2015-16 on payment of licence fee or spectrum user charges, is brought under exemption list 63. Services provided by Government by way of deputing officers after office hours or on holidays for inspection or container stuffing or Such other duties in relation to import export cargo on payment of Merchant Overtime charges (MOT).". Services provided by Government by way of deputing officers after office hours or on holidays for inspection or container stuffing or such other duties in relation to import export cargo on payment of Merchant Overtime charges (MOT) is brought under exemption list 13-04-2016 POINT OF TAXATION RULES Amendment to Section 67A Notification No.10/2016 dated 01/03/2016 Notification No.21/2016 dated 30/03/2016 Notification No.24/2016 dated 13/04/2016 Section 67A The rate of service tax, value of a taxable service and rate of exchange, if The existing section shall be renumbered as subsection (1) thereof, and after sub-
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. section (1) as so renumbered, the following sub-section shall be inserted, namely: (2) The time or the point in time with respect to the rate of service tax shall be such as may be prescribed.. The rule is amended to give specific rule making powers in respect of POT 2011. 14/05/2016 Amendment to Rule.7 Rule 7 :Notwithstanding anything (contained in rule 3, 4 or 8), the point of taxation in respect of the persons required to pay tax as recipients of service under the rules made in this regard in respect of services notified under sub section (2) of section 68 of the Act, shall be the date on which payment is made: Provided that where the payment is not made within a period of three months of the date of invoice, the point of taxation shall be the date immediately following the said period of three months. As per the exsiting provisions the pot for RCM is the date on which the payment is made. However if the paymnent is not made within 3 months of the date of invoice then the POT and RCM shall be the date immediately following the said period of 3 months. The inserted proviso states that when their is a change in the liability of the person paying tax under RCM, Where service has been provided and invoice has also been issued before the date of such change, but payment has not been made as on the said date the POT shall be issuance of invoice 30-03-2016 Provided further that in case of associated enterprises, where the person providing the after second proviso, the following proviso shall be inserted, namely, Provided also that where there is change
service is located outside India, the point of taxation shall be the date of debit in the books of account of the person receiving the service or date of making the payment whichever is earlier. 2. In the Point of Taxation Rules, 2011, in rule 7, after the third proviso, the following proviso shall be inserted namely:" Provided also that in case of services provided by the Government or local authority to any business entity, the point of taxation shall be the earlier of the dates on which, ( a) any payment, part or full, in respect of such service becomes due, as specified in the invoice, bill, challan or any other document issued by the Government or local authority demanding such payment; or (b) payment for such services is in the liability or extent of liability of a person required to pay tax as recipient of service notified under subsection (2) of section 68 of the Act, in case service has been provided and the invoice issued before the date of such change, but payment has not been made as on such date, the point of taxation shall be the date of issuance of invoice..* In respect of services provided by the government and charged under RCM the POT shall be the earlier of the following two a) When any payment part or full becomes due b) When payment for such services are made 13-04-2016 Position from 01/04/2016 to 12/04/2016?????
made.". [F. No. 334 / 8 /2016 TRU] ( Changes in abatement Notification No.8/2016 dated 01/03/2016 Existing provision Amendment Effect of Amendment Effective from Transport of goods by rail is eligible for abatement of 70% with Cenvat credit on inputs, Capital goods and input services. Transport of goods by rail is divided in to two categories. (a) Transport of goods in containers by rail by any person other than Indian railways (b) Transport of goods by rail other than a above 01/04/2016 For (a) category abatement is only 60% and for (b) category the abatement is retained at 70% Transport of Passengers by rail abatement of 70% was allowed with a condition that CENVAT credit on inputs, Capital goods and input services is not taken Services of GTA in relation to transportation of For both the above categories CENVAT credit on input services are allowed. CENVAT credit on input services are allowed now. These have been divided in to two categories. (a) Services of goods 01/04/2016 01/04/2016
goods- abatement 70% was available, subject to the condition that CENVAT credit on inputs, Capital goods and input services are not taken by the Service providers. Services provided by foreman of a chit fund- no abatement An abatement of 60% was allowed for transportation of passengers by contract carriage other than motor cab, and radio taxi subject to the condition that CENVAT credit on inputs, Capital goods and input services are not allowed. 70% abatement is available in respect of transport of goods in a vessel subject to the condition that CENVAT credit of inputs, Capital goods and input services are not allowed. Tour operators are divided in to three categories. (a) Package tour- 75% abatement is available transport agency in relation to transportation of goods other than used household goods (b) Services of goods transport agency in relation to transportation of used household goods. For category (b) the abatement has been reduced to 60%. Other conditions remain the same. 30% abatement is allowed subject to the condition that CENVAT credit on inputs, Capital goods and input services is not allowed. This abatement extended to transport of passengers by stage carriage. CENVAT credit on inputs and capital goods only denied. CENVAT credit on input services can be availed. For Category (b) the abatement of 90% is retained with the same set of conditions. The other two are merged and an abatement of 70% is 01/04/2016 01/06/2016 01/04/2016 01/04/2016
subject to the condition that CENVAT credit on inputs, Capital goods, and input services ( Other than the input service of a tour operator) is not availed and the bill issued for this purpose indicates that it is inclusive of charges for such tour. (b) If the tour operator is providing services solely of arranging or booking accommodati on- an abatement of 90% was allowed subject to the condition that CENVAT credit on inputs, Capital goods and input services other than the input service of a tour operator is allowed and the invoice, bill or chalan issued indicates that it is towards the charges for such accommodati on and further these given subject to the conditions that CENVAT credit on inputs, Capital goods and input services other than input services of a tour operator is not taken and the bill issued for this purpose indicates that it is inclusive of charges for such tour and the amount charged in the bill is the gross amount charged for such tour. Further the definition of package tour is omitted.
abatement is not applicable in cases where the invoice, bill or chalan issued by the tour operator only includes the service charges for arranging or booking accommodati on and thus not include the cost of such accommodati on (c) Any service other than (a ) and (b) above an abatement of 60% was allowed subject to the condition that CENVAT credit on inputs, Capital goods and input services other than the input service of a tour operator is not availed and the bill issued indicates that the amount charged in the bill is gross amount charged for such tour. The abatement in respect of construction of complex extra was categorised in to two Both the categories are merged and the abatement given is 70% for both the categories. 01/04/2016
(a) Where the carpet area of the unit is less than 2000 sq.feet and the amount charged for the unit is less than 1 crore rupees- for this the abatement was 75% (b) Other than covered by (a) above the abatement was 70% Other conditions are remain the same. Both the above abatements are subject to the condition that CENVAT credit on inputs is not taken and the value of the land is included in the amount charged from the service receiver. Renting of motor cab an abatement of 60% was allowed subject to the condition that CENVAT credit on inputs and capital goods is not taken. In respect of CENVAT credit on input services full CENVAT credit of such input service received from a person who is paying a service tax on 40% of the value and if service tax has been paid on full value than CENVAT credit up to 40% of CENVAT credit of such input service was allowed. It is specified that the amount charged for the purposes of exemption at serial number 9, the amount charged shall be the sum total of the amount charged for the services 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 provided that the fair market value of goods and services so supplied may be determined in accordance with the generally accepted accounting principles. 01/04/2016
CENVAT credit on input services other than the above is not taken. Amendment in Service tax rules Notification no.19/2016 dated 01/03/2016 Notification no.31/2016 dated 26/05/2016 1. The legal services of senior advocate is being brought under direct charge 2. Services of mutual fund agent or distributor mutual fund agent or asset management company is being brought under direct charge 3. The following category of persons are additionally brought under quarterly payment of tax : one person company whose aggregate value of taxable services provided from one or more premises is fifty lakh rupees or less in the previous financial year Hindu undivided family 4. Insertion of sub rule 3A and 3B in rule 7(3)Provide for filing of annual return by 30th of November of the succeeding finical year and Give powers the central government to specific by the notification an assessee or class of assesses who are not required to submit the annual return 5. Presently CBEC has got power to extend the due date of filing of half yearly returns. Now these power is extended to extend the due date of filing of annual returns also 6. Rule 7(B) allows an assessee to submit a revise return. The insertion of sub sec(2) allows an assessee who has filed annual return by due date, to file a revise return, within one month from the date of submission of annual return. If the annual return is filed belatedly the assessee shall pay an amount at the rate of Rs. 100 per day for the period of delay subject to a maximum of Rs. 20000. 7. Sub Rule 7,7(A), 7(B) & 7 (C) of rule 6 provides for payment of service tax at compounding rates in respect of certain specified services like Booking of air ticket by an (a) air travel agent (b) an insurer carrying on life insurance business (c) services in relation to purchase and sale of foreign currency (d) the distributor or selling agent in respect of promotion, marketing, organise lottery.
Sub rule 7(D) provides for calculation of swatch Bharath cess where the above compounding rates are adopted. This clause is amend to refine the mode of calculation of SBC. Similar provision is provided for calculating effective rate of KKC