RULE 4: REGISTRATION – Three categories of person liable to get themselves registered under service tax namely:-a. Service Provider of taxable services under section 69(1) b. Person responsible for making payment of service tax as specified in Rule 2 (1) (d) read with section 68. They shall also seek registration under section 69(1) of Chapter V of Finance Act, 1994
1.Financial leasing services- 10% taxable -Financial leasing includes hire charges but excludes operating lease – The value of taxable service would be 10% i.e. abatement of 90% has been granted unconditionally. Taxability is defined as follows: -Interest chargeable to the extent of 10% -Principal amount not subject to tax
Service tax payable by builders – Composition scheme of 25% available to builders done away with?: As per Rule 2A of Service Tax (Determination of Value) Rules, as amended on 17-3-2012 composition scheme of payment of tax @ 25% on value of works contract of construction available to builder, where the total amount charged includes value of land. This rule is amended on 6-6-2012, which is to be effective from 1-7-2012, and provision relating to tax @ 25% of gross value has been deleted. It will be a big blow to builders. Service tax payable on flats will go up considerably.
