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Finance Bill 2016 enacted Significant changes in Service Tax effective from June 1 2016

Service Tax - By: - Bimal jain - Dated:- 18-5-2016 - Dear Professional Colleague, The Hon ble Finance Minister Shri. Arun Jaitley presented the Union Budget for 2016-17 on February 29, 2016 in the Lok Sabha. On May 5, 2016, the Lok Sabha passed the Finance Bill, 2016 and later on May 11, 2016, the Finance Bill, 2016 was passed by the Rajya Sabha. Now, the Hon ble President has given assent to the Finance Bill, 2016 on Saturday, May 14, 2016. Accordingly, the Finance Bill, 2016 now becomes the Fi .....

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we are summarizing herewith the changes in Service tax that will be effective from the June 1, 2016 for easy digest: A: Krishi Kalyan Cess @ 0.5% on all taxable services Pursuing with an objective to finance and promote initiatives to improve agriculture and farmer welfare, the Government has announced a new cess namely Krishi Kalyan Cess ( KKC ), to be levied at 0.5% on the value of all taxable services w.e.f June 1, 2016. In this regard, a new Chapter VI has been inserted in the Finance Bill, .....

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rms of TRU F. No. 334/8/2016-TRU dated February 29, 2016 [Para 3.1], it is provided that Cenvat credit of KKC paid on input services shall be allowed to be used for payment of the proposed Cess on the service provided by a service provider. However, corresponding changes are yet to be incorporated in Rule 3 of the Cenvat Credit Rules, 2004 to provide requisite legal backing for availment of Cenvat credit. Rate of Service tax would eventually increase to 15% w.e.f. June 1, 2016: After levy of KKC .....

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rio when new levy KKC becomes applicable from June 1, 2016 @ 0.5% on value of all taxable service, please watch video presentation at: https://www.youtube.com/watch?v=NU5_2iAMy3g B: Changes in the Negative List of services Section 66D(o)(i) of the Finance Act: Proposed to be deleted Presently, Section 66D(o)(i) of the Finance Act covers service of transportation of passengers, with or without accompanied belongings, by a stage carriage , which is proposed to be deleted w.e.f June 1, 2016.Corresp .....

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ssengers by contract carriage) without input tax credit, with effect from June 1, 2016 [Read with Notification No. 08/2016-ST dated March 1, 2016 vide which changes have been made in the Abatement Notification] Section 66D(p)(ii) of the Finance Act: Proposed to be deleted w.e.f. 01.06.2016 Presently, Section 66D(p)(ii) of the Finance Act covers services by way of transportation of goods by an aircraft or a vessel from a place outside India up to the customs station of clearance , which is propos .....

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