Service tax
Clause 143 of the Bill seeks to amend Chapter V of the Finance Act, 1994, relating to service tax, with a view to replace the existing system of taxation of services based on specified description of services with a new system of taxation of all services other than the services specified in the negative list, in the following manner—
Sub-clause (A) seeks to insert a proviso in section 65 so as to provide that the provisions of that section shall not apply with effect from such date as the Central Government may, by notification, appoint.
Sub-clause (B) seeks to insert a new sub-section (3) in section 65A so as to provide that the provisions of that section shall not apply with effect from such date as the Central Government may, by notification, appoint.
Sub-clause (C) seeks to insert a new section 65B with effect from such date as the Central Government may, by notification, appoint so as to define the following expressions—
actionable claim, advertisement, agriculture, agricultural extension, agricultural produce, Agricultural Produce Marketing Committee or Board, aircraft, airport, amusement facility, Appellate Tribunal, approved vocational education course, assessee, associated enterprise, authorised dealer of foreign exchange, betting or gambling, Board, business entity, Central Electricity Authority, Central Transmission Utility, courier agency, customs station, declared service, electricity transmission or distribution utility, entertainment event, goods, goods transport agency, India, information technology software, inland waterway, interest, local authority, metered cab, money, negative list, non-taxable territory, notification, person, port, prescribed, process amounting to manufacture or production of goods, renting, Reserve Bank of India, securities, service, Special Economic Zone, stage carriage, State Electricity Board, State Transmission Utility, support services, tax, taxable service, taxable territory, vessel, works contract.
This amendment shall have effect from such date as the Central Government may, by notification in the Official Gazette, appoint.
Sub-clause (D) seeks to insert a proviso in section 66 so as to provide that the provisions of that section shall not apply with effect from such date as the Central Government may, by notification, appoint.
Sub-clause (E) seeks to insert a new sub-section (3) in section 66A so as to provide that the provisions of that section shall not apply with effect from such date as the Central Government may, by notification, appoint.
Sub-clause (F) seeks to insert new sections 66B, 66C, 66D, 66E and 66F with effect from such date as the Central Government may, by notification, appoint.
Proposed section 66B seeks to levy service tax at the rate of twelve per cent. on the value of services, other than services specified in the negative list, provided or agreed to be provided in the taxable territory by a person to another.
Proposed section 66C seeks to empower the Central Government to make rules to determine the place of provision of service having regard to the nature and description of various services.
Proposed section 66D seeks to specify the following list of services as the negative list:—
(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, 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, to business entities;
(b) services by the Reserve Bank of India;
(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) processes carried out at an agricultural farm including 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 essential characteristics of agricultural produce but make it only marketable for the primary market;
(iv) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use;
(v) loading, unloading, packing, storage or warehousing of agricultural produce;
(vi) agricultural extension services;
(vii) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce;
(e) trading of goods;
(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) betting, gambling or lottery;
(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) 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 law;
(iii) education as a part of an approved vocational education course;
(m) services by way of renting of residential dwelling for use as residence;
(n) services by way of:—
(i) extending deposits, loans or advances in so far as 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 to deal in foreign exchange or foreign securities or amongst banks and such dealers;
(o) service of transportation of passengers, with or without accompanied belongings, by—
This amendment will take effect from the date on which this Bill receives the assent of the President.
Sub-clause (I) seeks to amend section 68 with a view to insert a proviso in sub-section (2), for the purpose of empowering the Central Government to notify the services and the extent of service tax payable.
This amendment will take effect from the date on which this Bill receives the assent of the President.
Sub-clause (J) seeks to insert new section 72A with a view to provide for a special audit to be carried out by a chartered accountant or cost accountant nominated by the Commissioner.
The special audit shall be ordered where the service tax assesse has failed to declare or determine the value of taxable service or has availed and utilised credit of duty or tax beyond the normal limit or by means of, collusion or wilful mis-statement or he is having operations spread out in multiple locations. It is further proposed to provide that the chartered accountant or as the case may be, the cost accountant shall submit a report to the Commissioner on completion of the audit and such audit may be ordered even though such accounts had been audited under any other law for the time being in force. Before initiating proceedings on the basis of the report, a reasonable opportunity of being heard shall be given to the service tax assessee so audited.
This amendment will take effect from the date on which this Bill receives the assent of the President.
Sub-clause (K) seeks to amend section 73, with a view to increase the period of issue of notice from one year to eighteen months. It is further proposed to insert sub-section (1A) with a view to provide that where a notice or notices have been served under sub-section (1), service of a statement of details of service tax not levied, or not paid or short levied or short paid or erroneously refunded, on the person chargeable with service tax, shall be deemed to be service of notice on such person if the grounds relied upon are the same.
This amendment will take effect from the date on which this Bill receives the assent of the President.
Sub-clause (L) seeks to amend section 80 with a view to provide for penalty waiver on the service tax payable on service of renting of immovable property as on the 6th day of March, 2012, subject to the condition that the service tax and interest are paid in full within a period of six months from the date on which the Finance Bill, 2012 receives the assent of the President.
This amendment will take effect from the date on which this Bill receives the assent of the President.
Sub-clause (M) seeks to amend section 83 with a view to make certain provisions of the Central Excise Act applicable to the service tax.
This amendment will take effect from the date on which this Bill receives the assent of the President.
Sub-clause (N) seeks to amend section 85 to provide for the period of limitation for filing appeal before the Commissioner (Appeals) as two months extendable by one month from the date of receipt of decision or order of the adjudicating authority. The period of limitation extended by this sub-clause shall be applicable for all decisions or orders passed by the adjudicating authority on or after the date on which the Finance Bill, 2 012 receives the assent of the President.
This amendment will take effect from the date on which this Bill receives the assent of the President.
Sub-clause (O) seeks to amend section 86 with a view to provide for the period of limitation for filing appeal before the Tribunal as four months from the date of receipt of order by the Committee of Chief Commissioners or Committee of Commissioners. The period of limitation extended by this sub-clause shall be applicable for all decisions or orders passed after the date on which the Finance Bill, 2012 receives the assent of the President.
This amendment will take effect from the date on which this Bill receives the assent of the President.
Sub-clause (P) seeks to amend section 88 to substitute the word ‘duty’ with the word ‘tax’.
This amendment will take effect from the date on which this Bill receives the assent of the President.
Sub-clause (Q) seeks to amend section 89, with a view to make evasion of payment of service tax knowingly committed, a punishable offence.
This amendment will take effect from the date on which this Bill receives the assent of the President.
Sub-clause (R) seeks to amend section 93A, so as to provide for rebate of service tax on taxable services used for export of goods, after the stage of manufacture, processing or removal.
This amendment will take effect from the date on which this Bill receives the assent of the President.
Sub-clause (S) seeks to insert a new section 93B in the Finance Act, 1994 with a view to provide that all the rules made under section 94 and applicable to taxable services shall also be applicable to services other than taxable services in so far as they are relevant to the determination of any tax liability, refund, credit of service tax or duties paid on inputs and input services or for carrying out the provisions of Chapter V of the Finance Act, 1994.
This amendment will take effect from the date on which this Bill receives the assent of the President.
Sub-clause (T) seeks to amend sub-section (2) of section 94, to omit clause (ee), to amend clause (hhh) and to insert new clauses (i) and (j) relating to power to make rules.
These amendments will take effect from the date on which this Bill receives the assent of the President.
Sub-clause (U) seeks to amend section 95 of the said Act, so as to empower the Central Government to issue orders for removal of difficulty in case of certain provisions inserted by the proposed legislation in this Chapter, up to two years from the date of enactment of the Finance Bill, 2012.
This amendment will take effect from the date on which this Bill receives the assent of the President.
Sub-clause (V) seeks to amend sub-section (2) of section 96C so as to substitute clause (e) thereof to provide for admissibility of credit of duty or tax in terms of rules made in this regard.
This amendment will take effect from the date on which this Bill receives the assent of the President.
Sub-clause (W) seeks to insert section 97 and 98, with a view to extend service tax exemption retrospectively for repair of roads and non-commercial Government buildings for the period specified in the respective sections.
These amendments will take effect from the date on which this Bill receives the assent of the President.
Clause 144 of the Bill seeks to give retrospective effect to sub-rule (6A) of rule 6, inserted vide the notification of the Government of India number G.S.R. 134(E), dated the 1st March, 2011, in the CENVAT Credit Rules, 2004, from the 10th day of February, 2006 in the manner specified in the Eighth Schedule.
This amendment will take effect from the date on which this Bill receives the assent of the President.
Clause 145 of the Bill, seeks to give retrospective effect to the notification of the Government of India number G.S.R. 566(E), dated the 25th July, 2011, from the 16th day of June, 2005, so as to allow the service tax exemption to a club or association service provided by a club or association, including cooperative societies, in relation to the project, under the said notification. The notification explains the expression “project” to mean common facility set up for treatment of effluents and solid wastes, with the Central Government’s or State Government’s financial assistance.
This amendment will take effect from the date on which this Bill receives the assent of the President.
