TMI BlogSERVICE TAX - AMENDMENTS PROPOSED IN CHAPTER V OF THE FINANCE ACT, 1994 - BUDGET 2013-14X X X X Extracts X X X X X X X X Extracts X X X X ..... SERVICE TAX - AMENDMENTS PROPOSED IN CHAPTER V OF THE FINANCE ACT, 1994 - BUDGET 2013-14 - By: - CS Swati Dodhi - Service Tax - Dated:- 28-2-2013 - - SERVICE TAX - AMENDMENTS PROPOSED IN CHAPTER V OF THE FINANCE ACT, 1994 I. Amendments: 1. Definition of 'approved vocational education course' provided in section 65B (11) (i) a course run by an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training offering courses in designated trades notified under the Apprentices Act, 1961 or State Council of Vocational Training' (SCVT) (ii) a Modular Employable Skill Course, approved by the National Council of Vocational Training, run ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a person registered with the Directorate General of Employment and Training, Union Ministry of Labour and Employment; or (iii) a course run by an institute affiliated to the National Skill Development Corporation set up by the Government of India (Omitted) After the proposed amendment takes effect, courses in 'designated trades' offered by Industrial Training Institute or Industrial Training Center affiliated to State Council of Vocational Training will also be covered by the negative list. 2. Definition of "process amounting to manufacture or production of goods", in section 65B(40) means a process on which duties of excise are leviable under section 3 of the Central Excise Act, 1944 (1 of 1944.) or any process amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to manufacture of alcoholic liquors for human consumption, opium, Indian hemp and other narcotic drugs and narcotics on which duties of excise are leviable under any State Act for the time being in force or a processes on which duties of excise are leviable under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955(16 of 1955). 3. New Section 66BA introduced - Explanation contained in Removal of Difficulty Order 2/2012 is being introduced as a separate section. By the authority of this section, references to section 66 (charging section under the positive list approach) in Chapter V of the Finance Act, 1994 or any other act, will be construed as reference to section 66B (charging section under the negative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... list approach), with effect from the 1st day of July, 2012. Reference to section 66 appearing in the Finance (No.2) Act, 2004 and the Finance Act, 2007, in the context of education cesses will be read as 66B, in accordance with this new section. 4. Section 66D - The negative list shall comprise of the following services, namely: (i) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or seed (Omitted) testing . As a result, testing activities directly related to production of any agricultural produce like soil testing, animal feed testing, testing of samples from plants or animals, for pests and disease causing microbes will be cov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by the negative list. 5. In section 73 - Recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded a new sub-section (2A), similar to sub-section (9) of section 11A of Central Excise Act, 1944 is being inserted so that if a show cause notice issued under proviso to sub-section (1) of section 73, is not found sustainable by an appellate authority or tribunal or court, the same will be deemed to be a notice issued for a period of eighteen months . 6. Section 77 - Penalty for contravention of rules and provisions of Act for which no penalty is specified elsewhere Penalty for contravention of rules and provisions of Act for which no penalty is specified elsewhere. (1) Any perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, (a) who is liable to pay service tax, or required to take registration, fails to take registration in accordance with the provisions of section 69 or rules made under this Chapter shall be liable to pay a penalty which may extend to ten thousand rupees or two hundred rupees for every day during which such failure with maximum penalty imposable will be ten thousand rupees only. 7 . New Section 78A is being introduced, to make provision for imposition of penalty on director, manager, secretary or other officer of the company, who is in any manner knowingly concerned with specified contraventions. 8. As said in section 86(5) The Appellate Tribunal may admit an appeal or permit the filing of a memorandum o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f cross-objections after the expiry of the relevant period referred to in sub-section (1) or sub-section (3) or sub-section (4) if it is satisfied that there was sufficient cause for not presenting it within that period. Therefore, in case of assessee appeal also, appellate tribunal can admit an appeal or permit the filing of memorandum of cross objections after the expiry of the relevant period. 9. Section 89 Offenses and penalties (1) Whoever commits any of the following offences, namely, (a) knowingly evades the payment of service tax under this Chapter; or (b) avails and utilises credit of taxes or duty without actual receipt of taxable service or excisable goods either fully or partially in viol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of the rules made under the provisions of this Chapter; or (c) maintains false books of account or fails to supply any information which he is required to supply under this Chapter or the rules made thereunder or (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true) supplies false information; or (d) collects any amount as service tax but fails to pay the amount so collected to the credit of the Central Government beyond a period of six months from the date on which such payment becomes due, shall be punishable, (i) in the case of an offence specified in clauses (a), (b) and (c ) of sub-section (1) where the amount exceeds fifty lakh rupees, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... punishment shall be for a term which may extend to three years, but shall not, in any case, be less than six months; (ii) in the case of failure to pay service tax collected, to the credit of the Central Government within six months, an offence specified in section 89(1)(d), if such non-payment exceeds fifty lakh rupees, punishment shall be imprisonment for a term which may extend upto seven years but not less than six months; (iii) in the case of any other offence, the punishment shall be imprisonment for a term which may extend to one year 10. New Section 90 is being introduced to specify and differentiate cognizable offences from non-cognizable and bailable offences. 11. New Section 91 is being in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... troduced to provide for power to arrest to Commissioner of Central Excise to authorize any officer of Central Excise not below the rank of Superintendent of Central Excise, to arrest a person for specified offences particularly nonpayment of collected service tax. 12. Section 95 Power to remove difficulties amended to empower the Central Government for removal of difficulty in respect of amendments carried out through the Finance Act, 2013 . II. RETROSPECTIVE EXEMPTION: New Section 99 is being added - Retrospective exemption is being extended to the Indian Railways on the service tax leviable on various taxable services provided by them during the period prior to the 1st day of July 2012, to the extent show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notices have been issued upto the 28th day of February 2013 III. RATIONALIZATION OF ABATEMENT: (to take effect from 1st day of March, 2013): At present taxable portion for service tax purpose is prescribed as 25% uniformly for constructions where value of land is included in the amount charged from the service recipient. This is being rationalized. Accordingly , where the carpet area of residential unit is upto 2000 square feet or the amount charged is less than One Crore Rupees, in the case of 'construction of complex, building or civil structure, or a part thereof, intended for sale to a buyer, wholly or partly except where the entire consideration is received after issuance of completion certificate by the competent a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority', taxable portion for service tax purpose will remain as 25%; in all other cases taxable portion for service tax purpose will be 30%. IV. REVIEW OF EXEMPTIONS (to take effect from 1st day of April, 2013): 1. Rationalization of exemption limit prescribed for charitable organizations, providing service towards any other object of general public utility of 25 Lakh Rupees per annum will be covered by the threshold exemption. 2. Exemption provided to restaurants other than those having (i) air-conditioning and (ii) license to serve liquor (Omitted) i.e. service tax will be leviable on taxable service provided in restaurants with air-conditioning or central air heating in any part of the establishment at any time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the year. 3. Rationalization of exemption to transport of goods by road and rail/vessel. 4. Exemptions withdrawn on Services provided by an educational institution by way of renting of immovable property , 5 . Exemption on Temporary transfer or permitting the use or enjoyment of a copyright relating to cinematographic films will be restricted to exhibition of cinematograph films in a cinema hall or a cinema theatre. 6 . Exemptions withdrawn on Services by way of vehicle parking to general public . 7. Exemptions withdrawn on Services provided to Government , a local authority or a governmental authority, by way of repair or maintenance of aircraft . V. AMNESTY SCHEME FOR NON FILERS AND STOP FILE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RS: (to take effect from the date on which the Finance Bill, 2013 receives the assent of the President. One time amnesty by way of (i) waiver of interest and penalty; and (ii) immunity from prosecution, to the stop filers, non-filers or non-registrants or service providers (who have not disclosed true liability in the returns filed by them during the period from October 2007 to December 2012) who pay the "tax dues VI. ADVANCE RULING: Scope of advance ruling is being extended to cover resident public limited companies , a notification is being issued for this purpose, under section 96A (b) (iii) of the Finance Act, 1994. **Markings in Bold with Underline are the amendments. . - - Scholarly articles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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