Budget 2019- Retrospective exemption from service tax on service by way of grant of liquor licence, in certain cases relating to services provided by Indian Institutes of Management to students, and in certain cases relating to long term lease of plots for development of infrastructure for financial business.
Note: (a) ‘Service Tax’ means the service tax levied under section 66B of the Finance Act, 1994
(b) Amendments carried out through the Finance (No. 2) Bill, 2019 come into effect on the date of its enactment, unless otherwise specified.
| S. No. |
Retrospective exemptions | Clause of Finance (No.2) Bill, 2019 |
| 1 | Services provided or agreed to be provided by the State Government by way of grant of liquor licence, against consideration in the form of licence fee or application fee or by whatever name it is called, are proposed to be exempted from service tax for during the period commencing from 1st April, 2016 and ending with the 30th June, 2017. | [116] |
| 2 | Services provided or agreed to be provided by the Indian Institutes of Management, as per the guidelines of the Central Government, to their students, by way of the following educational programmes, except Executive Development Programme, –
(a) two-year full time Post Graduate Programmes in Management for the Post Graduate Diploma in Management, to which admissions are made on the basis of Common Admission Test (CAT), conducted by Indian Institute of Management; (b) fellow programme in Management; (c) five year integrated programme in Management. are proposed to be exempted from service tax for during the period commencing from the 1st day of July, 2003 and ending with the 31st day of March, 2016. |
[117] |
| 3 | Consideration paid in the form of upfront amount (called as premium, salami, cost, price, development charges or by any other name) payable in respect of service, by way of granting of long term lease of thirty years, or more of plots for development of infrastructure for financial business, provided or agreed to be provided by the State Government Industrial Development Corporations or Undertakings or by any other entity having 50% or more ownership of Central Government, State Government, Union Territory to the developers in any industrial or financial business area, is proposed to be exempted from Service Tax for the period commencing from the 1st October, 2013 and ending with the 30th June, 2017. | [118] |
Extract of Clause 116, 117 & 118 of Finance Bill 2019
116. Special provision for retrospective exemption from service tax on service by way of grant of liquor licence.
(1) Notwithstanding anything contained in section 66B of Chapter V of the Finance Act, 1994 as it stood prior to its omission vide section 173 of the Central Goods and Services Tax Act, 2017 with effect from the 1st day of July, 2017(hereinafter referred to as the said Chapter), no service tax shall be levied or collected in respect of taxable service provided or agreed to be provided by the State Government by way of grant of liquor licence, against consideration in the form of licence fee or application fee, by whatever name called, during the period commencing from the 1st day of April,2016 and ending with the 30th day of June, 2017 (both days inclusive).
(2) Refund shall be made of all such service tax which has been collected, but which would not havebeen so collected, had sub-section (1) been in force at all material times:
Provided that an application for the claim of refund of service tax shall be made within a period ofsix months from the date on which the Finance (No.2) Bill, 2019 receives the assent of the President.
(3) Notwithstanding the omission of the said Chapter, the provisions of the said Chapter shall apply for refund under this section retrospectively as if the said Chapter had been in force at all material times.
117. Special provision for retrospective exemption from service tax in certain cases relating to services provided by Indian Institutes of Management to students.
(1) Notwithstanding anything contained in section 66, as it stood prior to the 1st day of July,2012, or in section 66 B, as it stood prior to the 1st day of July, 2017, of Chapter V of the Finance Act,1994, as it stood prior to its omission vide section 173 of the Central Goods and Services Tax Act,2017 (hereinafter referred to as the said Chapter), no service tax shall be levied or collected during the period commencing from the 1st day of July, 2003 and ending with the 31st day of March, 2016 (both days inclusive), in respect of taxable services provided or agreed to be provided by the Indian Institutes of Management to the students as per the guidelines of the Central Government, by way of the following educational programmes, except Executive Development Programme, namely:—
(a) two year full time Post Graduate Programmes in Management for the Post Graduate Diploma in Management, to which admissions are made on the basis of Common Admission Test conducted by the Indian Institute of Management:
(b) fellow programme in Management;
(c) five year integrated programme in Management.
(2) Refund shall be made of all such service tax which has been collected, but which would not have been so collected, had sub-section (1) been in force at all material times:
Provided that an application for the claim of refund of service tax shall be made within a period of 40 six months from the date on which the Finance (No.2) Bill, 2019 receives the assent of the President.
(3) Notwithstanding the omission of the said Chapter, the provisions of the said Chapter shall apply for refund under this section retrospectively as if the said Chapter had been in force at all material times.
118. Special provision for retrospective exemption from service tax in certain cases relating to long term lease of plots for development of infrastructure for financial business.
(1) Notwithstanding anything contained in section 66B of Chapter V of the Finance Act, 1994, as it stood prior to its omission vide section 173 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the said Chapter), no service tax shall be levied or collected on upfront amount, called as premium, salami, cost, price, development charges or by any other name, payable in respect of service by way of granting long term lease of thirty years or more of plots for development of infrastructure for financial business, provided or agreed to be provided by the State Government Industrial Development Corporations or Undertakings or by any other entity having fifty per cent. or more of the ownership of the Central Government or the State Government or the Union territory, either directly or through an entity which is wholly owned by the Central Government or the State Government or the Union territory, to the developers in any industrial or financial business area during the period commencing from the 1st day of October, 2013 and ending with the 30th day of June, 2017 55 (both days inclusive).
(2) Refund shall be made of all such service tax which has been collected, but which would not have been so collected, had sub-section (1) been in force at all material times:
Provided that an application for the claim of refund of service tax shall be made within a period of six months from the date on which the Finance (No.2) Bill, 2019 receives assent of the President.
(3) Notwithstanding the omission of the said Chapter, the provisions of the said Chapter shall apply for refund under this section retrospectively as if the said Chapter had been in force at all material times.
Note on Clause 116, 117 & 118 of Finance Bill 2019
Clause 116 of the Bill seeks to provide retrospective exemption from service tax on service by way of grant of liquor licence by the State Government, during the period from the 1st day of April, 2016 up to 30th day of June, 2017.
Clause 117 of the Bill seeks to provide retrospective exemption from service tax to the long duration degree or diploma programmes except Executive Development Programme provided by the Indian Institutes of Management to the students during the period from the 1st day of July, 2003 up to the 31st day of March, 2016.
Clause 118 of the Bill seeks to provide retrospective exemption from service tax on upfront amount paid for services by way of grant of long term lease of plots for development of infrastructure for financial business by the State Government Industrial Development Corporations or Undertakings or by any other entity having fifty per cent. or more ownership of the Central Government or State Government or Union territory, directly or through an entity which is wholly owned by such Governments, to the developers in the industrial or financial business area, during the period from the 1st day of October, 2013 up to the 30th day of June, 2017.
What is the procedure to claim refund?