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SERVICE TAX - Changes effective from 14th May 2016

Service Tax - By: - Monarch Bhatt - Dated:- 19-5-2016 - Finance Bill, 2016 has received the presidential assent on 14th Day of May, 2016 and became Finance Act, 2016. It is to be noted that numerous changes was proposed in the Finance Bill 2016, and it will come into effect from 14th May, 2016. The highlights of major amendments made under service tax and effective from 14th day of May, 2016 are as follows. Change in the rate of interest - Section 75 Service tax collected but not deposited with .....

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t is to be noted that this scheme will not apply in certain specified type of cases. Annual Return Service tax assesse providing the services above a certain threshold limit will be required to file an annual return from 01st April, 2016. The Annual return is to be filed in addition to the ST3 returns (six monthly) filed by the assesse. The details to be submitted in the annual return, threshold limit for filing of annual return, etc. has not been announced by the board. Soon, I am expecting tha .....

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Government - liable for the payment of service tax The definition of service has been amended by amending an explanation 2 of section 65B (44). Therefore, the activity carried out by a lottery distributor or selling agents of the State Government under the provisions of the Lotteries (Regulation) Act, 1998 (17 of 1998), is leviable to service tax. Right to use the radio-frequency spectrum and subsequent transfers - liable for the payment of service tax Assignment by the Government of the right t .....

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d or short- levied or short paid or erroneously refunded, for cases not involving fraud, collusion, suppression etc. by one year. Therefore, instead of 18 months it can be demanded within a period of 30 months. Retrospective effect to allow refund of service tax on services used beyond the factory Notification No. 41/2012 - ST, dated 29th June, 2012 was amended vide notification No. 1/2016-ST dated 3rd February, 2016 so as to, inter alia, allow refund of service tax on services used beyond the f .....

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ax exemption to canal, dam or other irrigation works Definition of Governmental authority was amended with effect from 30.01.2014 so as to exempt services provided by way of construction, erection, maintenance, or alteration etc. of canal, dam or other irrigation works provided to entities set up by Government but not necessarily by an Act of Parliament or a State Legislature. However, services provided prior to 30.01.2014 to such bodies remained taxable. The benefit of exemption is proposed to .....

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ption provided under the notification number 25/2012 - ST was withdrawn with effect from 01.04.2015. (a) Exemption from Service Tax on services provided to the Government, a local authority or a governmental authority by way of construction, erection, etc. of - (i) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; (ii) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or .....

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fied services. Generally, any government body including municipality or local authority awards such contract for a period of five years and at the time of awarding the contract successful bidder has not taken into consideration the cost of taxes, as during the relevant time of filing of tender it was exempted from payment of service tax. Now, suddenly withdrawal of such exemption has resulted into payment of service tax by the successful bidder which he has not taken into consideration. To overc .....

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15 to 29/02/2016, provision has been made under the Finance Act, 2016 to grant the refund of service tax paid by the assessee. Refund Application shall be filed within a period of six months from the date of enactment. i.e. upto 13/11/2016. Restoration of exemptions - Services provided to an airport / port by way of original works New entry number 14A has been inserted to provide exemption from payment of service tax to the services provided by way of construction or erection or commissioning or .....

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vice tax. Now, suddenly withdrawal of such exemption has resulted into payment of service tax by the successful bidder which he has not taken into consideration. To overcome such situations the said exemption benefit has been restored retrospectively with a condition that the contract or agreement has been entered between the parties prior to 1st day of March, 2015 and appropriate stamp duty has been paid on it, if stamp duty is payable on it. Further, service provider availing such exemption mu .....

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