Notification No. 08/2014-Service Tax (N.T.), Dated: July 11, 2014 amends the Notification No.26/2012 ST dated 20.06.2012 which provides abatement in respect to specified services, with the following changes:
a. The condition for availing abatement in case of GTA service is being amended with immediate effect to clarify that the condition for non- availment of credit is required to be satisfied by the service providers only. Service recipient will not be required to establish satisfaction of this condition by the service provider
b. The taxable portion of service of transportation of passenger by air-conditioned contract carriages shall be 40% with the condition that CENVAT credit of inputs or capital goods or input services has not been taken.
c. With effect from 01.10.2014, CENVAT credit of input service of renting of a motor cab is allowed if such services are received from a person engaged in the similar line of business i.e. a sub-contractor providing services of renting of motor cab to the main contractor. The whole of the CENVAT credit has been allowed with respect to input service of renting of any motor cab, received from a person who is paying service tax on 40% of the value of services. The CENVAT credit eligibility will be restricted to 40% of the credit of the input service of renting of any motor cab if service tax is paid or  payable on full value of the services i.e. no abatement is availed.
d. With effect from 01.10.2014, tour operator service providers, availing abatement, are allowed CENVAT credit on the input service of another tour operator, which are used for providing the taxable service.
e. With effect from 01.10.2014, abatement in respect of transport of goods by vessel is increased from 40% to 50%. Effective service tax will decrease from the present 6.18% to 4.944%.

Budget 2014 – Changes In Abatement Notification No. 26/2012,Service Tax Dated- 20.06.2012 Vide Notification No. 8/2014-ST Dated 11-7-2014 (Effective From 11-7-2014 Unless Otherwise Stated).

Notification No. 08/2014 – Service Tax

Dated-11th July, 2014

G.S.R….(E)- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.26/2012-Service Tax, dated the 20th June, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 468 (E), dated the 20th June, 2012, namely:-

1. In the said notification, in the TABLE,-

(i) against serial number 7, in column (4), after the words “has not been taken”, the words “by the service provider” shall be inserted;

(ii) in serial number 8, for the entry in column (4), the following entry shall be substituted, namely:-

“CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.”;

(iii) in serial number 9,-

(a) in column (2), for the words “any motor vehicle designed to carry passengers”, the words “motorcab” shall be substituted with effect from the 1st day of October, 2014;

(b) for the entry in column (4), the following entry shall be substituted with effect from the 1st day of October, 2014, namely:-

“(i) CENVAT credit on inputs and capital goods, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004;

(ii) CENVAT credit on input service of renting of motorcab has been taken under the provisions of the CENVAT Credit Rules, 2004, in the following manner:

(a) Full CENVAT credit of such input service received from a person who is paying service tax on forty percent of the value; or

(b) Up to forty percent CENVAT credit of such input service received from a person who is paying service tax on full value;

(iii) CENVAT credit on input services other than those specified in (ii) above, has not been taken under the provisions of the CENVAT Credit Rules, 2004.”;

(iv) after serial number 9 and the entries relating thereto, the following serial number and entries shall be inserted, namely:-

“9A Transport of passengers, with or without accompanied belongings, by a contract carriage other than motorcab. 40 CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.”;

(v) in the serial number 9A, so inserted, for the entry in the column (2), the following entry shall be substituted with effect from such date as the Central Government may notify for omission of the words “radio taxis” in the section 66D(o)(vi) of the Finance Act 1994, namely:-

“Transport of passengers, with or without accompanied belongings, by-

a. a contract carriage other than motorcab.

b. a radio taxi.”;

(vi) in the serial number 10, for the existing entry in column (3), the entry “40” shall be substituted with effect from the 1st day of October, 2014;

(vii) against serial number 11, in column (4), for the words “input services”, wherever occurring, the words “input services other than the input service of a tour operator” shall be substituted with effect from the 1st day of October, 2014.

2. Save as otherwise provided in this notification, the amendments shall come into force on the 11th day of July, 2014.

[F.No. 334/15/2014 – TRU]

(Akshay Joshi)

Under Secretary to the Government of India

Note.- The principal notification was published in the Gazette of India, Extraordinary, vide notification No. 26/2012 – Service Tax, dated 20th June, 2012, vide number G.S.R. 468 (E), dated the 20th June, 2012 and was last amended by notification No.9/2013- Service Tax, dated the 8th May, 2013 vide G.S.R. 296 (E), dated the 8th May, 2013.

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