TMI BlogEXPLANATORY NOTES - SERVICE TAX-BUDGET 2007X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices, namely:- (i) telecommunication services; (ii) mining services; (iii) services provided in relation to renting of immovable property, other than residential properties and vacant land, for use in the course or furtherance of business or commerce; (iv) services component of a works contract, other than works contract in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams; (v) development and supply of content service for use in telecommunication services, advertising agency services and on-line information and database access or retrieval services; (vi) asset management including portfolio management and all forms of fund management service provided by any person, except a banking company o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and antecedents of the candidate, and authenticity of documents submitted by the candidates; (g) Banking and other financial services, to replace the words "any other person" with "commercial concern" in the definition of taxable service of banking and other financial services [section 65(105)(zm)] and definition of banking and other financial services [section 65(12)], to delete reference to the exclusion of cash management, and to clarify that a transaction shall be treated as a financial lease, if the following conditions are fulfilled:- (i) a contract for leasing of a specific asset is entered into between two parties, (ii) the contract is for use and occupation of the specific asset, (iii) the lease payments are ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll the above mentioned amendments in section 65 will come into effect from a date to be notified after the enactment of the Finance Bill, 2007. (III) Exemptions from service tax: (1) The threshold level of service tax exemption for small service providers has been increased from the present level of Rs.4 lakh to Rs.8 lakh with effect from 01.04.2007, provided that the aggregate value of taxable services rendered by such provider of taxable service from one or more premises, does not exceed Rs. 8 lakh in the preceding financial year. [ refer notification No. 4/2007-Service Tax dated 01.03.2007 ] Consequent upon increase in threshold limit of exemption from Rs. 4 lakh to Rs. 8 lakh, notification No.26/2005-Service Tax dated 07. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 10/2007-Service Tax dated 01.03.2007 ] These exemptions will come into effect from 1st April, 2007. (4) Exemption from service tax is being provided to technical testing and analysis services provided in relation to testing of newly developed drugs including vaccines and herbal remedies on human participants by a clinical research organisation approved to conduct clinical trials by the Drugs Controller General of India. [refer notification No. 11/2007-Service Tax dated 01.03.2007 ] (5) Exemption from service tax is being provided to services provided in relation to delivery of content of cinema in digital form after encryption, electronically. [refer notification No. 12/2007-Service Tax dated 01.03.2007 ] The above exemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals); (4) Section 94 is being amended to empower the Central Government to make rules for specifying late fee for furnishing delayed return; and (5) Section 95 is being amended to empower the Central Government to issue orders for removal of difficulty in respect of implementing, classifying or assessing the value of any taxable service incorporated by the Finance Act, 2007 upto one year from the date of enactment of the Finance Bill, 2007. (6) Section 96A is being amended to insert an Explanation in clause (b) of section 96A relating to definition of 'applicant' so as to clarify that in the 'joint venture in India' at least one of the participants or partners or equity holders shall be a non-resident. The changes mentioned a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Rule 9 is being amended to insert sub-rule (11) to allow an assessee to rectify mistakes and file revised return within 60 days from the due date for filing of original return. This change will come into effect from 1st March, 2007. [refer notification No.10/2007-Service Tax dated 01.03.2007 ]. (VII) Changes in the Export of Services Rules, 2005: (1) Rule 3 is being amended to- (i) substitute the words 'delivered outside India and used outside India' with the words 'provided from India and used outside India' in sub-rule (2); and (ii) to clarify that that both rule 3(1) and 3(2) are to be satisfied for provision of service to be treated as export of services. [refer notification No. 2/2007-Service Tax dated 01.03.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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