New Service Tax Rules – Again !
FINANCE ACT, 2012- CHANGES IN SERVICE TAX
TKH FiQDQcH MiQiVtHr Dt tKH timH oI iQtroGXciQJ tKH BXGJHt 2012, oQ 16tK MDrcK, 2012 SroSoVHG cKDQJH in the way services are taxed by introducing the concept oI “1HJDtivH LiVt oI SHrvicHV”. 7KH Central Government has now issued 1otificDtioQ 1o.19/2012-S7 GDtHG 05.06.2012 DSSoiQtiQJ 01.07.2012 as the date from which the above provisions come into force.
SECTION 66C :
SECTION 66D :
SECTION 66E :
The provisions of above clauses in brief, which includes concept of “Negative LiVt’, DrH DV XQGHr DQG wiOO bH HIIHctivH from 01.07.2012.
1. CLAUSE [C] OF SECTION 143 OF THE FINANCE ACT, 2012
7KiV cODXVH KDG SroSoVHG to iQVHrt SHctioQ 65B iQ tKH FiQDQcH Act, 1994, wKicK wiOO Qow comH iQto HIIHct Irom 01.07.2012. This newly inserted section provides for interpretation of various terms for the purpose of taxable services provided.
2. CLAUSE [F] OF SECTION 143 OF THE FINANCE ACT, 2012
7KiV cODXVH KDG SroSoVHG to iQVHrt SHctioQ 66B, 66C, 66D, 66E DQG 66F iQ tKH FiQDQcH Act, 1994, wKicK wiOO now come into effect from 01.07.2012. These newly inserted sections have following provisions:
SECTION 66B :
i. This is new a charging section for levy of service tax and provides for levy of service tax @12% on the value of all services, other than those services VSHcifiHG iQ tKH QHJDtivH OiVt. ii. This section provides for determination oI SODcH oI SroviVioQ oI VHrvicH. For GHtHrmiQDtioQ oI SODcH of provision of service separate set of rules are to be made. iii. This is a very important section giving list of services which would not be subjected to service tDx (1HJDtivH LiVt) DV SHr cKDrJiQJ SHctioQ 66C. AOO VHrvicH HxcHSt tKoVH iQ 1HJDtivH LiVt wiOO Qow bH VXbjHctHG to OHvy of service tax. iv. This section has listed certain activities tKDt KDvH VSHcifiHG DV GHcODrHG VHrvicHV Ior tKH SXrSoVH of word ‘service’ as interpreted under clause (44) of new SHctioQ 65B. MoVt oI tKHVH GHcODrHG VHrvicHV DrH Dt present subjected to tax. v. This section provides for principles of iQtHrSrHtDtioQ oI VSHcifiHG GHVcriStioQ oI VHrvicHV or bundled services.
SECTION 66D: NEGATIVE LIST.
66D. 7KH QHJDtivH services, namely:––
OiVt VKDOO comSriVH tKH IoOOowiQJ (a) Services by Government or a local authority excluding the following services to the extent they are not covered elsewhere— (i) SHrvicHV by tKH DHSDrtmHQt oI PoVtV by wDy oI VSHHG post, express parcel post, life insurance 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 or an 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; (b) SHrvicHV by tKH RHVHrvH BDQN oI ,QGiD; (c) Services by a foreign diplomatic mission located in India; (d) services relating to agriculture by way of— (i) Agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or seed testing; (ii) Supply of farm labour; (iii) ProcHVVHV cDrriHG oXt Dt DQ DJricXOtXrDO IDrm iQcOXGiQJ tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market; (iv) RHQtiQJ or OHDViQJ oI DJro mDcKiQHry or vDcDQt ODQG with or without a structure incidental to its use; (v) LoDGiQJ, XQOoDGiQJ, SDcNiQJ, VtorDJH or wDrHKoXViQJ of agricultural produce; (vi) Agricultural extension services; (vii) SHrvicHV by DQy AJricXOtXrDO ProGXcH MDrNHtiQJ CommittHH or BoDrG or VHrvicHV SroviGHG by D commiVVioQ agent for sale or purchase of agricultural produce; (f) Any process amounting to manufacture or production of goods; (g) Selling of space or time slots for advertisements other than advertisements broadcast by radio or television; (h) Service by way of access to a road or a bridge on payment of toll charges; (i) BHttiQJ, JDmbOiQJ or OottHry; (j) Admission to entertainment events or access to amusement facilities; (k) Transmission or distribution of electricity by an electricity transmission or distribution utility;
(l) Services by way of— (i) PrH-VcKooO HGXcDtioQ DQG HGXcDtioQ XS to KiJKHr VHcoQGDry VcKooO or HqXivDOHQt; (ii) EGXcDtioQ DV D SDrt oI D cXrricXOXm Ior obtDiQiQJ D qXDOificDtioQ rHcoJQiVHG by DQy ODw Ior tKH timH bHiQJ iQ force; (iii) EGXcDtioQ DV D SDrt oI DQ DSSrovHG vocDtioQDO education course; (m) Services by way of renting of residential dwelling for use as residence; (n) Services by way of— (i) ExtHQGiQJ GHSoVitV, OoDQV or DGvDQcHV iQ Vo IDr DV the consideration is represented by way of interest or discount; (ii) Inter se sale or purchase of foreign currency amongst banks or authorised dealers of foreign exchange or amongst banks and such dealers; (o) Service of transportation of passengers, with or without accompanied belongings, (q) FXQHrDO, bXriDO, crHmDtoriXm or mortXDry VHrvicHV including transportation of the deceased. To cut the long story short, the Service Tax will not be applicable, from July 01, 2012, on charges paid for