TMI BlogPost Budget 2007-08 notifications to give effect to the provisions of the Finance Act, 2007 - regarding.X X X X Extracts X X X X X X X X Extracts X X X X ..... 007 to 32/2007-Service Tax, all dated 22 nd May, 2007 have been issued. 3. Seven services which are specifically mentioned in the category of taxable services and amendments made relating to existing taxable services shall come into effect from the 1 st June, 2007. In other words, changes made in the Budget 2007-08 relating to scope and coverage of taxable services will be effective from 01.06.07 [ Notification No.23/2007-Service Tax dated 22.05.07 ]. 4. Section 65 defines taxable services and various terms used in relation to taxable services. Section 66 is the charging section and provides for levy of service tax on taxable services. These two sections have been amended in the Finance Act, 2007 and these amendments shall come into effect from 01.06.07 [ Notification No.23/2007-Service Tax dated 22.05.07 ]. 5. Seven services which are specifically mentioned in the category of taxable services are: (i) Service provided by a telegraph authority in relation to telecommunication service [sub-clause (zzzx) of section 65(105)]; (ii) Service provided in relation to mining of mineral, oil or gas [sub-clause (zzzy) of section 65(105)]; (iii) Service provided i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson" with "commercial concern" in the definition of taxable service of banking and other financial services [section 65(105)(zm)] and also in the definition of banking and other financial services [section 65(12)], b. Inclusion of cash management services within the scope by deleting the specific exclusion [section 65(12)], and c. Insertion of explanation to explain the term "financial leasing" [section 65(12)]; (vii) Renaming of management consultant's service as management or business consultant's service [section 65(105)(r)], and inclusion of business consultancy in the definition itself [section 65(65)]; (viii) Inclusion of exclusion of computer hardware engineering consultancy under consulting engineer service by deleting the specific exclusion [section 65(105)(g)]; (ix) Clarification that "goods" for the purposes of this service includes computer software under management, maintenance or repair service [section 65(64)]. Amendment to Rules: 7. In view of the merger of various telecommunication related taxable services into "telecommunication service", notification no. 36/2004-Service Tax dated 31.12.04 and Rule 2(1)(d)(i) of the Service Tax Rules, 1994 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest, penalty paid to the local authority by the service provider on account of delayed payment of property tax or any other reasons can not be treated as property tax for the purpose of this exemption and hence, deduction of such amount from the gross amount charged shall not be allowed. 8.2 If property tax is paid for a period which is different from the rental period, property tax proportionate to the rental period shall be calculated and the amount so calculated shall be excluded from the rental amount received for the purpose of levy of service tax. 8.3 There may be a situation where property tax is paid after the payment of service tax on the rental. As a result, deduction of property tax paid from rental could not be availed of at the time of payment of service tax. In such cases, Rule 4C of the Service Tax Rules, 1994 provides self-adjustment of excess service tax paid without any limit [ Notification No.24/2007-Service Tax, dated 22.05.07 ]. 8.4 Construction of ports is specifically exempted from levy of service tax under commercial or industrial construction service [section 65(25b)] vide notification No.16/2005-Service Tax, dated 07.06.05 . Construction of po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for the works contract less the value of transfer of property in goods involved in the execution of the said works contract. Thus, wherever the service provider maintains records, the value of services shall be the gross amount charged for the works contract less the value of transfer of property in goods involved in the execution of the works contract. 9.3 Wherever VAT/ sales tax on transfer of property in goods involved in the execution of works contract is paid on actual value, the same value is also taken for the purpose of determining the value of works contract service. In other cases, value of works contract service shall be determined based on the actuals. It has also been explained that value of works contract service shall include: (i) labour charges for execution of the works; (ii) amount paid to a sub-contractor for labour and services; (iii) charges for planning, designing and architect's fees; (iv) charges for obtaining on hire or otherwise, machinery and tools used for the execution of the works contract; (v) cost of consumables such as water, electricity, fuel, used in the execution of the works contract, the property in which is not transferred in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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