In the definition of ‘service’ contained in clause (44) of section 65B of the Act it has been stated that service includes a declared service. The phrase ‘declared service’ is also defined in the said section as an activity carried out by a person for another for consideration and specified in section 66E of the Act. The following nine activities have been specified in section 66E:

Normally, service tax is payable by the person who is providing the taxable service. However, the Central Government is empowered under Section 68(2) to notify the specified persons who are liable to pay service tax in respect of notified taxable services. In this budget a proviso has been inserted wherein the Central Government can notify the specified services and the extent of service tax which shall be payable such person and the remaining part of the service tax shall be paid by the service provider. In other words, by insertion this proviso both the service recipient and the service provider together is required to pay the service tax.

A ‘Negative List’ approach for taxation of services is being introduced in the current fiscal. Under the new approach, all services except those in the ‘Negative List’ or otherwise exempted, would come into the tax net. The new system will come into effect from 1st July, 2012.

Please note that Hon’ble President has given her assent to the Finance Bill, 2012 and got enacted as Finance Act(No 23 of 2012) on May 28,2012. We have summarized various statutory provisions have been made applicable w.e.f. 28-05-2012.

Explanation 6.—For the removal of doubts, it is hereby clarified that the expression ‘process’ includes and shall be deemed to have always included transmission by satellite (including up-linking, amplification, conversion for down-linking of any signal), cable, optic fibre or by any other similar technology, whether or not such process is secret;’.

Honourable President of India has Given its Assent to Finance Bill 2012 or Budget 2012-13 on 28.05.2012. The Finance Bill 2012 already received the assent of Lok Sabha & Rajya Sabha. You can also download Finance Bill 2012, We have provided link for the same at the bottom of the post.

Rates for deduction of income-tax at source from certain incomes during the financial year 2011-12. Rates for computation of advance tax, deduction of income-tax at source from Salaries and charging of income-tax in certain cases during the financial year 2011-12.Tax benefits for New Pension System (NPS) . Deduction for investment in long-term infrastructure bonds

In the Finance Bill 2012 section 44AD has been amended retrospectively w.e.f A.Y. 2011-12 to the effect that presumptive scheme under the said section is not applicable to persons carrying on profession as referred to in section 44AA(1) or persons earning income in the nature of commission or brokerage income or persons carrying on any agency business.

• Benefit of reduced tax rate of 10 percent on long term capital gain arising from sale of unlisted securities has been extended to all non-residents in parity with Foreign Institutional Investors. • Benefit of capital gains tax exemption has been extended to sale of unlisted securities in an initial public offering. However, a securities transaction tax at the rate of 0.2 percent will be payable on such a transaction.

Customs -• The rigour of the prosecution provisions originally proposed to be introduced under the Customs Act has been diluted in the following manner: – Only serious offences under the customs law involving prohibited goods or duty evasion exceeding INR 5 million has been retained as ‘cognizable offences’ as opposed to a broader criterion proposed (viz., any offence punishable for a term of imprisonment of three years or more) under the original Finance Bill;