Notification No. 26/2009-Service Tax, dated 19-8-2009
In exercise of the powers conferred by clauses (A) and (B) of section 113 of the Finance Act, 2009 (33 of 2009), the Central Government hereby appoints the 1st day of September, 2009, as the date on which the provisions of the said Act shall come into force.
OUR ANALYSIS OF OF ABOVE CIRCULAR
The President of India has given assent to the Finance Bill and the CBEC vide notification No. 26/2009-ST dated 19-8-09 has notified that the provisions of Finance Act will be effective from 1st September 2009. In view of this the following amendments in the existing services and four new services will be effective from 1-9-2009.
Amendments in existing services:
|1||Business Auxiliary Services Section 65(19)|
|Amendment in Brief||The earlier definition of Business Auxiliary services excluded all activities amount to manufacturing from the levy of service tax. The amendments are been proposed to restrict the exclusion from service tax to activity of manufacture of excisable goods which are specified in central excise Tariff.|
|Implication||Activities of liquor bottling plants, manufacture of state excise products under loan license, etc will now attract service tax. As the said goods are not excisable goods the cenvat credit will not be available to the service recipient.|
|2||Stock Broker Services 65(101).|
|Amendment in Brief||Definition of stock broker to exclude sub-broker.|
|Implication:||The services of sub-broker will be exempt from payment of service tax. As per clarification given, separate notification will be issued to exempt the said services from levy of service tax under the category of Business Auxiliary services.|
|3||Information Technology Software service. Section 65(105) (zzzze)|
|Amendment in Brief||The Finance bill proposes retrospective amendment to the definition of information technology services to amend the following:
The above changes are retrospective w.e.f 16th May 2008
Any amount paid by the acquirer’s of right to use information technology software is refundable and demand made to such persons is not sustainable.
(a) Transportation of goods by Rail
(b) Transportation of coastal goods through inland and national waterways
(c) Cosmetic and Plastic Surgery Service.
(d) Legal consultancy services:
For details about amendment in service tax refer our following earlier post on the same:-