Article Covers the following Topics

Exemption widened on Service provided by transport of export goods by road from the place of removal to a land customs station (LCS) vide Notification No. 4/2015-ST dated 1-03-2015 (Effective From 1-04-2015)

→  Service Tax Rules, 1994 amended vide Notification No. 5/2015-ST dated 01-03-2015

Changes in Mega Exemption Notification No. 25/2012-ST dated 20-06-2012 vide Notification No. 6/2015-ST dated 01-03-2015

 → Changes in Reverse Charge Mechanism vide Notification No. 7/2015-ST dated 01-03-2015 amending Notification No. 30/2012-ST dated 20-06-2012

 → Changes In Abatement Notification No. 26/2012-ST dated 20-06-2012 vide Notification No. 8/2015-ST dated 01-03-2015

EFFECTIVE FROM APRIL 1, 2015

Exemption widened on Service provided by transport of export goods by road from the place of removal to a land customs station (LCS) vide Notification No. 4/2015-ST dated 1-03-2015 (Effective From 1-04-2015): Goods transport agency service provided for transport of export goods by road from the place of removal to an inland container depot, a container freight station, a port or airport is exempt from Service Tax vide notification No. 31/2012-ST dated 20-6-2012. Scope of this exemption is being widened to exempt such services when provided for transport of export goods by road from the place of removal to a land customs station (LCS).
Service Tax Rules, 1994 amended vide Notification No. 5/2015-ST dated 01-03-2015  Under Rule 2: New Entries under Full Reverse Charge·         Mutual Fund/ Asset Management Company needs to pay Service tax under Reverse Charge on services received from mutual fund agent/ distributor – 2(1)(d)(i)(EEA) inserted;·         Lottery Distributor or Selling Agent needs to pay Service tax under Reverse Charge on services received from selling or marketing agents of lottery tickets – Rule 2(1)(d)(i)(EEB) inserted
Changes in Mega Exemption Notification No. 25/2012-ST dated 20-06-2012 vide Notification No. 6/2015-ST dated 01-03-2015  Exemptions Withdrawn: Entry 12: Services provided to the Government, a Local authority or a Governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of-·         a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession;·         a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment;·         a residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation 1 to clause 44 of section 65B of the said Act.

Entry 14: Services by way of construction, erection, commissioning, or installation of original works pertaining to an airport or port.

Entry 29: Services by following persons in respective capacities:

·         Mutual fund agent to a mutual fund or asset management company;

·         Distributor to a mutual fund or asset management company;

·         Selling or marketing agent of lottery tickets to a distributer or a selling agent.

Service tax on the above stated services shall be levied under Reverse Charge Mechanism on Mutual fund or Asset Management Company/ Lottery Distributor or Selling Agent w.e.f 01-04-2015

Entry 32: Services by way of making telephone calls from:

·         Departmentally run public telephone;

·         Guaranteed public telephone operating only local calls;

·         Free telephone at airport and hospital where no bill is issued

Exemptions Amended:

Entry 16: Exemption to services provided by a performing artist in folk or classical art form of (i) music, or (ii) dance, or (iii) theatre, has been restricted only to such cases where amount charged is not exceeding Rs. 1,00,000/- for a performance (except brand ambassador)

Entry 20: Exemption under Entry 20(i) substituted, transportation of food stuffs by rail or vessels from one place in India to another will be limited to milk, salt and food grains including flours, pulses and rice. [Earlier Entry 20(i): foodstuff including flours, tea, coffee, jaggery, sugar, milk products, salt and edible oil, excluding alcoholic beverages].

Entry 21: Exemption under Entry 21(d) substituted, for Services provided by a goods transport agency, by way of transport in a goods carriage of, milk, salt and food grain including flours, pulses and rice. [Earlier Entry 21(d): foodstuff including flours, tea, coffee, jaggery, sugar, milk products, salt and edible oil, excluding alcoholic beverages]

New Exemptions:

Entry 2: All ambulance services provided to patients are exempted. Hitherto, any service provided by way of transportation of a patient to and from a clinical establishment by a clinical establishment was exempt from Service tax.

Entry 26A: Life insurance service provided by way of Varishtha Pension Bima Yojna.

Entry 43: Services by operator of Common Effluent Treatment Plant by way of treatment of effluent.

Entry 44: Services by way of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labelling of fruits and vegetables which do not change or alter the essential characteristics of the said fruits or vegetables.

Entry 45: Services by way of admission to a museum, national park, wildlife sanctuary, tiger reserve or zoo.

Entry 46: Services provided by way of exhibition of movie by an exhibitor to the distributor or an association of persons consisting of the exhibitor as one of its members.

Certain new definitions also provided for following terms– ‘National park’, ‘Tiger reserve’, ‘Trade union’, Wildlife sanctuary’, ‘Zoo’.

Changes in Reverse Charge Mechanism vide Notification No. 7/2015-ST dated 01-03-2015 amending Notification No. 30/2012-ST dated 20-06-2012 New Entries under Full Reverse Chargea)      Mutual Fund/ Asset Management Company needs to pay Service tax under Reverse Charge on services received from mutual fund agent/ distributor;b)      Lottery Distributor or Selling Agentneeds to pay Service tax under Reverse Charge on services received from selling or marketing agents of lottery tickets;

From Partial Reverse Charge to Full Reverse Charge

a)      Manpower Supply and Security services provided by an individual, HUF, partnership firm or association of persons to a business entity registered as body corporate have been brought under Full Reverse Charge as against Partial Reverse Charge mechanism applicable at present.

Changes In Abatement Notification No. 26/2012-ST dated 20-06-2012 vide Notification No. 8/2015-ST dated 01-03-2015   ·         Uniform Abatement for transport by rail, road and vessel: A uniform abatement of 70% has been prescribed for transport by rail, road and vessel to bring parity in these sectors. Service tax shall be payable on 30% of the value of such service subject to a uniform condition of non-availment of Cenvat credit on Inputs, Capital goods and Input services.Presently, Service tax is payable on 30% (in case of rail transport)/ 25% (in case of road transport)/ 40% (in case of transport by vessels). Further, there is no condition for availment of Cenvat credit on Inputs, Capital goods and Input services in case of transport by rail, which is now withdrawn.·         Reduction in abatement for classes other than economy class: The abatement for classes other than economy class (i.e. business/ first class) has been reduced from 60% to 40%. Accordingly, Service tax would be payable on 60% of the value of such higher classes.

At present, Service tax is payable on 40% of the value of transport of passenger by air for economy as well as higher classes (i.e. business/ first class).

·         Abatement in relation to Chit fund withdrawn: Abatement for the services provided in relation to Chit fund stands withdrawn. Consequently, Service tax shall be paid by on full consideration received by the foremen of Chit fund.

(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)

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0 responses to “Service Tax Changes Effective from April 1, 2015”

  1. SITARAM says:

    HOSPITAL USING LAUNDRY SERVICES INDIVIDUAL FIRM AND BILL IS ISSUING. WHETHER SERVICE TAX IS APPLICABLE TO WHOM AND IT IS APPLICABLE REVERSE CHARGE MECHANISM OR NOT.

  2. bhim sain raja says:

    please tell us classification regarding sno. 1 agricultural produce ans sno. 5 chemical fertilisers, organic manure & oil cake. Railway Board Classification mentioned in cir.no.TCR/1078/2011/2 on 31.03.2015 are not same for Goods Transport Agency.

  3. Mohan Karia says:

    Sir, kindly advice On export frt. recovered by Forwarders Service tax payable. Forwarders has paid on behalf of exporter Rs.700-00 and he charge to exporter (i.e.his client) Rs.720-00 – Is service tax payable on 20-00 ?

  4. Amaya parida says:

    sir i want to ask that one projet of residental flat there are four wings three has been completed but one is in wip three wing has got the oc can u tell me sir if any sale in three project service tax is applicable or not.

  5. CA Ramesh Dasari says:

    Hi,
    The rate of service tax will be applicable as per POT Rules, 2011 as per the said Rules the point of taxation will be, earlier of, Provision of Service or Amount received. and Again a service provider needs to raise invoice within 14 days from the date of completion of service, it means, if provision of service is to be treated as follows:
    1) if the service provider raise an invoice within 14 days from the date of provision of service, the date should be invoice date or
    2) if not raised within 14 days the date is Actual completion of service.

    by considering these issues one should understand what is point of taxation the rate will be applicable as on date of Point of taxation.
    And the new service tax rate i.e. 14% + 2% towards Swachh Bharath Cess date not yet notified hence the until the rate is notified the existing rate i.e. 12.36% is applicable (Subject to Point of Taxation Rules)

  6. Nandeeswar says:

    Sir
    Please let me know when will the service tax be effected?. I heart that it will be on 01/04/2015.is it true?

  7. Nandeeswar says:

    Sir

    Please let me know when will the service tax be effected?. I heart that it will be on 01/04/2015.is it true?

  8. Meenakshisundaram says:

    Now the Annual Maintenance Contract the service tax 12.36%. After this budget proposal service tax 14%. Let me know Education cess % . from what date it will be applicable. so that i can financial sanction should be obtained.

  9. Sunil Jain says:

    The provision of enhancement of Service Tax Rate from 12% to 14% and abolishing Educational and Higher Educational Cess in finance bill 2015 to be effective from publication of Notification which supposed on 01/04/2015. A Insurance Policy having premium due on 29/03/2015 inclusive of Service Tax @ 12.36%, payable with a terms of payment of 15 days grace period. If person pay the premium on 05/04/2015 or a later date (within grace period) whether he is liable, to pay premium with enhanced rate of Service Tax i.e. 14% or rate applicable on 29/03/2015 i.e. 12.36%.

  10. Karthik says:

    Hi, Kindly let us know new service tax rates (14% and 14%+2% cess) fro what date it will applicable.

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