Changes in Service Tax Rules, 1994 Vide Notification No. 5/2015-ST dated 01-03-2015

Notification No. 5/2015-ST, Dated: March 01, 2015,  Seeks to amend Service Tax Rules, 1994 so as to prescribe,- (i) definition of an ‘aggregator’ and the ‘brand name or trade name’  (ii) the person liable to pay service tax for certain specified services;  (iii) for issuing digitally signed invoices and their authentication by means of digital signatures. (iv) for preserving records in electronic form by bay of authenticating by digital signatures. (v) To revise the alternative rates of service tax at which certain categories of service providers have an option to pay service tax.

CBEC vide Notification No. 5/2015-ST, Dated: March 01, 2015 has amended Service Tax Rules, 1994 as follows:

(i) With effect from 1st March 2015, in respect of any service provided under aggregator model, the aggregator, or any of his representative office located in India or an agent of aggregator, is being made liable to pay Service Tax if the service is so provided using the brand name of the aggregator in any manner.[Rule 2]

(ii) CBEC by way of an order will specify the conditions, safeguards and procedure for registration in service tax. In this regard Order No. 1/15-ST, dated 28.2.2015 has been issued, prescribing documentation, time limits and procedure for registration. Henceforth, registration for single premises shall be granted within two days of filing the application.[Rule 4]

(iii) Provision for issuing digitally signed invoices is being added along with the option of maintaining of records in electronic form and their authentication by means of digital signatures. The conditions and procedure in this regard shall be specified by the CBEC. The changes are applicable with immediate effect.[Rule 4, 4A and 5A]

(iv) Rule 6(6A) dealing with recovery of service tax self-assessed and declared in the return under section 87 is being omitted consequent to the amendment in section 73 enabling such recovery. This change will come into effect from the date of enactment of the Finance Bill, 2015.

(v) In respect of services relating to Air Travel Agent (domestic as well as international bookings), Life Insurance, Money Changer, Lotterydistributor and selling agent, service tax is payable at alternative rates subject to the conditions prescribed. Consequent to the upward revision in Service Tax rate, the said alternative rates would be revised proportionately. These changes will become effective from a date to be notified after Finance Bill receives the assent of the President.[Rule 6 (7), 6(7A), 6(7B) and 6(7C)]

Notification No. 5/2015-ST, Dated: March 01, 2015

G.S.R. 159(E) In exercise of the powers conferred by sub-section (1) read with sub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Service Tax Rules, 1994, namely:-

1. (1) These rules may be called the Service Tax (Amendment) Rules, 2015.

(2) Save as otherwise provided in these rules, they shall come into force on the 1st day of March, 2015.

2. In the Service Tax Rules, 1994,-

(a) in rule 2, in sub-rule (1),-

(i) after clause (a), the following clause shall be inserted, namely:-

‘(aa) “aggregator” means a person, who owns and manages a web based software application, and by means of the application and a communication device, enables a potential customer to connect with persons providing service of a particular kind under the brand name or trade name of the aggregator;’;

(ii) after clause (bc), the following clause shall be inserted, namely:-

‘(bca) “brand name or trade name” means, a brand name or a trade name, whether registered or not, that is to say, a name or a mark, such as an invented word or writing, or a symbol, monogram, logo, label, signature, which is used for the purpose of indicating, or so as to indicate a connection, in the course of trade, between a service and some person using the name or mark with or without any indication of the identity of that person;’;

(iii) in clause (d), in sub-clause (i),-

(I) after item (AA), the following item shall be inserted, namely:-

‘(AAA) in relation to service provided or agreed to be provided by a person involving an aggregator in any manner, the aggregator of the service:

Provided that if the aggregator does not have a physical presence in the taxable territory, any person representing the aggregator for any purpose in the taxable territory shall be liable for paying service tax;

Provided further that if the aggregator does not have a physical presence or does not have a representative for any purpose in the taxable territory, the aggregator shall appoint a person in the taxable territory for the purpose of paying service tax and such person shall be liable for paying service tax.’;

(II) in item (E), from such date as the Central Government may, by a notification in the Official Gazette, appoint, the word “support” shall be omitted;

(III) after item (EE), the following items shall be inserted with effect from the 1st day of April 2015, namely:-

“(EEA) in relation to service provided or agreed to be provided by a mutual fund agent or distributor to a mutual fund or asset management company, the recipient of the service;

(EEB) in relation to service provided or agreed to be provided by a selling or marketing agent of lottery tickets to a lottery distributor or selling agent, the recipient of the service;”;

(b) in rule 4,-

(i) sub-rule (1A) shall be omitted.

(ii) after sub-rule (8), the following sub-rule shall be inserted, namely:-

“(9) The registration granted under this rule shall be subject to such conditions, safeguards and procedure as may be specified by an order issued by the Board.”;

(c) after rule 4B, the following rule shall be inserted, namely:-

“4C. Authentication by digital signature-

(1) Any invoice, bill or challan issued under rule 4A or consignment note issued under rule 4B may be authenticated by means of a digital signature.

(2) The Board may, by notification, specify the conditions, safeguards and procedure to be followed by any person issuing digitally signed invoices.”;

(d) in rule 5, after sub-rule (3), the following sub-rules shall be inserted, namely,-

“(4) Records under this rule may be preserved in electronic form and every page of the record so preserved shall be authenticated by means of a digital signature.

(5) The Board may, by notification, specify the conditions, safeguards and procedure to be followed by an assessee preserving digitally signed records. Explanation – For the purposes of rule 4C and sub-rule (4) and (5) of this rule,-

(i) The expression “authenticate” shall have the same meaning as assigned in the Information Technology Act, 2000 (21 of 2000).

(ii) The expression “digital signature” shall have the meaning as defined in the Information Technology Act, 2000 (21 of 2000) and the expression “digitally signed” shall be construed accordingly.”

(e) in rule 6,

(i) sub-rule (6A) shall be omitted, with effect from the date on which the Finance Bill, 2015, receives the assent of the President;

(ii) from such dates as the Central Government may, by a notification in the Official Gazette, appoint,-

(a) in sub-rule (7), for the figures “0.6%” and “1.2 %”, the figures and words “0.7 per cent.” and “1.4 per cent.” shall respectively be substituted;

(b) in sub-rule (7A), in clause (ii), for the figures and words “3 per cent.” and “1.5 per cent.”, the figures and words “3.5 per cent.” and “1.75 per cent.” shall respectively be substituted;”;

(c) in sub-rule (7B),-

(i) in item (a), for the figures and words “0.12 per cent” and “rupees 30”, the figures and words “0.14 per cent” and “rupees 35” shall respectively be substituted;

(ii) in item (b), for the figures and words “120 and 0.06 per cent”, the figures and words “140 and 0.07 per cent.” shall be substituted;

(iii) in item (c), for the figures and words “660 and 0.012 per cent” and “rupees 6,000”, the figures and words “770 and 0.014 per cent” and “rupees 7,000” shall respectively be substituted;

(d) in sub-rule (7C),-

(A) in the Table, in column (2),-

(i) against Sl. No. 1, for the figures “7000”, the figures “8200” shall be substituted;

(ii) against Sl. No. 2, for the figures “11000”, the figures “12800” shall be substituted;

(B) in the Explanation, item (i) shall be omitted, with effect from the date on which the Finance Bill, 2015, receives the assent of the President.

[F. No. 334 /5/2015- TRU]

(Akshay Joshi)
Under Secretary to the Government of India

Note:- The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) by notification No. 2/94-Service Tax, dated the 28th June, 1994 vide number G.S.R. 546 (E), dated the 28th June, 1994 and last amended vide notification No.23/2014-Service Tax, dated the 5th December, 2014 vide number G.S.R. 872(E)., dated the 5th December, 2014.