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.

Further, Ministry of Law to issue Gazette Notification in a couple of days on newly inserted Sections 65B,66B,66C,66D,66E,66F and the Place of Provision of Service Rules,2012 will made effective when notified by Central Government in official gazette.

Furthermore, Section 65(Definition of Taxable Service), 65A(Classification of Taxable Service), 66(Charging Section of Service Tax )and 66A(Charging Section of Service Tax on Services received from outside India-Import of Services) shall continue to remain in force till rescinded by notification.

Applicable w.e.f. 28th May 2012
Inserted ->Sub clause (H) in new Section 67A->To provide the date of determination of rate of service tax, value of taxable service and rate of exchange.

Amended->Sub clause(I)in Section 68->To insert a proviso in sub-section(2),for the purpose of empowering the Central Government to notify the services and the extent of service tax payable.

Section 72A->To provide for a special audit to be carried out by a chartered accountant or cost accountant nominated by a Commissioner. Where the service tax assessee has failed to declare or determine the value of taxable service or has availed or utilized credit of  duty or tax beyond the normal limit or by means of collusion or willful mis-statement or he is having operations spread out  in multiple locations.

It is further proposed to provide that the chartered accountant or as the case may be the cost accountant shall submit the report to the Commissioner on completion of the audit and such audit may be ordered even though such accounts had been audited under any other law for the time being in force.

Before initiating proceedings on the basis of the report, a reasonable opportunity of being heard shall be given to the service tax assessee so audited.

Amended->Sub-clause(K) Section 73->Provision regarding Recovery of service tax not levied or paid or short levied or short paid or erroneously refunded where one year limit extended to 18 months is made applicable.

Section 73(1A)->To provide that where a notice or notices have been served under sub-section (1),service of a statement or details of service tax not levied, or not paid or short levied or short paid or erroneously refunded on the person chargeable with service tax shall be deemed to be service of notice on such person if the grounds relied upon are the same.

Amended->Sub-clause(L) in Section 80->To provide for the penalty waiver on the service tax payable on service of renting of immovable property  as on the 6th day of March,2012, subject to the condition that the service tax  and interest are paid in full within  a period of six months.

Amended-> Sub-clause(M) in Section 83->To make certain provisions of the Central Excise Act applicable to the service tax->Section 12E, 14, 15, 31, 32, 32A to 32P (both inclusive),33A, 34A, 35EE, 35F substituted.

Amended-> Sub-clause(N) in Section 85->To provide for the period of filing appeal before the Commissioner (Appeals) as two months extendable by one month from the date of receipt of decision or order of the adjudicating authority.

Amended-> Sub-clause(O) in Section 86->To provide for the period of limitation for filing appeal before the Tribunal as four months  from the date of receipt of order by the Committee of Chief Commissioners or Committee of Commissioners.

Section 86(1)->Provisions regarding Appeals to Appellate Tribunal by assessee  where time limit applicable 3 months.

Amended-> Sub-clause(P) in Section 88->To substitute the word ‘duty’ with the word ‘tax’.

Amended-> Sub-clause(Q) in Section 89-> To make evasion of payment of service tax knowingly committed a punishable offence.

Amended-> Sub-clause(R) in Section 93(A)-> To provide for rebate of service tax on taxable services used for export of goods after the stage of manufacture, processing or removal.

Inserted-> Sub-clause(S) in Section 93(B)->To provide that all the rules made U/S 94 and applicable to taxable services shall also be applicable to services other than taxable services in so far as they are relevant to the determination of any tax liability, refund, credit of service tax or duties paid on inputs, and input services or for carrying out of the provisions of Chapter V of the Finance Act,1994.

Amended->Sub-clause(T) of sub-section(2) of Section 94->To omit clause(ee),to amend clause(hhh) and to insert new clause(i) and (j) relation to Power to make rules w.r.t place of provision of taxable service Rules, Compounding of offences and Settlement Commission.

Amended->Sub-clause(U) of Section 95->To empower CG to issue orders for removal of difficulty in case of certain provisions inserted by the proposed legislation  in this chapter.

Amended->Sub-clause(V) of sub-section(2) of Section 96C->To substitute clause (e)  thereof to provide for admissibility of credit of duty or tax in terms of rules made in this regard.

Inserted->Sub-clause(W) in Section 97 and 98->To extend service tax exemption retrospectively in certain cases  relating to management, etc., of roads from 16.06.2005 to 26.07.2009 AND relating to management, etc., of non commercial Government buildings from 16.06.2005 to 26.07.2009.

Hope the information will assist you in your Professional endeavors. In case of any query/information, please do not hesitate to write back to us. 

Bimal Jain

FCA, ACS, LLB, B.Com (Hons)

Mobile: +91 9810604563


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0 responses to “Budget 2012-Amendments in Service Tax – W.E.F. 28/05/2012”

  1. Hari kishin says:

    Dear Bimal Sir,

    Can you pls clarify who is liable to pay service tax in case one ltd company is using express transportation goods by road from one place to another. Who is liable for paying this service tax.

  2. C Patra says:

    Dear Sir, I have heard that there is a change in the Service Tax for construction from the 3.09% (25% of 12.36) to 4.09% (40% of 12.36). This was communicated to me by the builder and that the effective date if July 1, 2012. Please let me know if this is true information as I am not able to find any source for this.

  3. Ashok Jogalekar says:

    What about change of definition of service to exclude Deemed sale transactions as defined under constitution. This will have effect taxation of several transactions like IPR / Roralty, Lease transactions etc.,.

  4. Satyanarayana says:

    Dear Sir

    We are in the business of Dairy Div…. Milk and milk products,,,,
    we paid the service tax on renting of immovable property and Retail Div Advt Space or time and Goods Transport by road….. in this situation can we set off the input tax or not.

  5. CA. Subhash Chandra Podder ,FCA. says:

    Amendments in service Tax as mentioned in the wright up are good and appreciable.
    Thanks for this update.
    CA. Subhash Chandra Podder, FCA

  6. P.N.V.GIRI says:

    With regard to providing the penalty waiver on the service tax payable on service of renting of immovable property as on the 6th day of March,2012, subject to the condition that the service tax and interest are paid in full within a period of six months, I have a doubt as to when the said “six months ” period commences.

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