Ist Full Year Budget of New Government has been introduced in Parliament on 28th February, 2015. This Article intends to outline key amendments made in Service Tax.

A. Changes effective from enactment of Finance Bill

I. Rate of service tax

Present rate: 12.36% (12% + 3% as Education Cess)

Revised rate: Consolidated 14% (subsuming Education & Secondary Education Cess)

Impact: Cost of all services to get costlier viz. food, flats, insurance, mobile, transport to name a few.  

II. Enabling Provision for Swachh Bharat Cess (Date to be notified)

An enabling provision is being incorporated to empower the Central Government to impose a Swachh Bharat Cess on all or any of the taxable services at 2% on the value of such taxable services.

As per Budget Speech by FM, the same shall be notified, if required.

III. Negative List compressed and consequent change in Exemptions.

1. Admission to Entertainment events etc. in service tax net

Present: Clause ‘admission to entertainment event or access to amusement facility’ is at present exempted under Negative List.

Proposed: The same is being omitted and exemption is being provided under Mega Exemption Notification 25/2012 on certain specific events viz. Theatrical/cinematographic events, recognised sports event and award functions/concerts/musical performance (in case consideration upto Rs. 500 per head).

Impact: Service Tax shall be levied on the service provided by way of access to amusement facility providing fun or recreation by means of rides, gaming devices or bowling alleys in amusement parks, amusement arcades, water parks and theme parks.

2. Manufacture of alcoholic liquor for human consumption under service tax.

Present: Clause ‘any process amounting to manufacture or production of goods’ is covered in negative list

Proposed:

  • The same is being amended to exclude service by way of carrying out any processes for production or manufacture of alcoholic liquor for human consumption.
  • Consequently, Notification 25/2012 is being amended to exclude intermediate production of alcoholic liquor for human consumption from its ambit.

Impact: Service Tax shall be levied on contract manufacturing/job work for production of potable liquor for a consideration.

3. Not only Support Services, but all services by Government taxable

Present: Presently, services provided by Government or a local authority, excluding certain services specified under clause (a) of section 66D, are covered by the Negative List. Service Tax applies on the “support service” provided by the Government or local authority to a business entity.

Proposed: An enabling provision is being made to exclude all services provided by the Government or local authority to a business entity from the Negative List. Consequently, the definition of “support service” is being omitted. Further to address confusion, term ‘Government’ is being defined in Finance Act.

Impact: As and when this amendment comes into effect, All services provided by the Government or local authority to a business entity, except the services that are specifically exempted, or covered by any another entry in the Negative List, shall be liable to service tax.

4. Activities in respect of Chit funds and lotteries taxable

On account of contrary views by Courts, Government has clarified by way of explanation in Definition of Service and Negative List to levy Service Tax on the services provided by:

(a) chit fund foremen by way of conducting a chit.

(b) distributor or selling agents of lottery, as appointed or authorized by the organizing state for promoting, marketing, distributing, selling, or assisting the state in any other way for organizing and conducting a lottery.

IV. Other Amendments in Finance Act, 1994

1) Reimbursable Expenditure includable in value of taxable service

An amendment is being made in Section 67 to include following as part of consideration for value of taxable services:-

i. all reimbursable expenditure or cost incurred and charged by the service provider.

ii. amount retained by the distributor or selling agent of lottery from gross sale amount of lottery ticket, or, as the case may be, the discount received, that is the difference in the face value of lottery ticket and the price at which the distributor or selling agent gets such tickets.

Impact:- This will nullify landmark judgment of Delhi High Court in case of Intercontinental Consultants & Technocrats Pvt. Ltd. wherein HC has quashed Rule 5(1) of Service Tax Rules, 1994 which provide for inclusion of expenditure or costs incurred by the service provider in the taxable value.

2) Section 73 is being amended in the following manner:

(a) a new sub-section (1B) is being inserted to provide that recovery of the Service Tax amount self-assessed and declared in the return but not paid shall be made under section 87, without service of any notice under sub-section (1) of section 73; and

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(b) sub-section (4A) that provides for reduced penalty if true and complete details of transaction were available on specified records, is being omitted.

3) Rationalisation of Penalties – Section 76 & 78

  Section 76 Section 78
When applicable Cases other than fraud, suppression etc. Fraud, Collusion, wilful misrepresentation Suppression,
Maximum 10% of Service Tax 100% of Service Tax
In case ST+ Interest+ Penalty(sec 78) paid within 30 days of Show Cause Notice No Penalty 15% of Service tax
In case ST+ Interest+ Penalty paid within 30 days of Order of CE Officer 25% of penalty imposed 25% of Service tax
In case ST amount subsequently reduced in Appellate Order Benefit of reduced penalty (25%) available if ST+ Interest +Reduced Penalty paid within 30 days of such order.
     

A transition provision by way of Section 78B is being provided in respect of pending cases.

4) Section 80 struck off

The most beneficial Section 80 of Finance Act, 1994 which provides for waiver of penalty in certain bonafide circumstances is being omitted. It is surprising that no reasonable justification has been provided in the Budget where it is being frequently used by Courts to waive penalty in unreasonable demands. This ensures penalty for every non-payment of service tax whatever is the reason.

5) Appeals in respect of issue pertaining to rebate of service tax on input services or inputs used in export of service shall be lied before Central Government as Revision Application as against present before CESTAT.

6) The facility of Advance Ruling is being extended to all resident firms by specifying such firms under section 96A (b)(iii) of the Finance Act, 1994

B. Changes effective from 01.04.2015 unless specified otherwise.

V. Review of Exemptions (Mega Exemption Notf. No. 25/2012)

     Several major exemptions have been withdrawn in this Budget tabulated as under:

Sr. No. Service Exemption withdrawn /limited
12

Construction related service provided to the Government, a local authority or a governmental authority

·   a civil structure or  any other original works meant predominantly for  use other than for commerce, industry, or any other business or profession;

·   a structure meant predominantly for use  as (i) an educational, (ii) a clinical, or  (iii) an art or cultural establishment

· a residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation 1 to clause 44 of section 65 B of the said Act;

14

Construction related services

Construction related works pertaining to an airport or port

16

services provided by a performing artist in folk or classical art form of (i) music, or (ii) dance, or (iii) theatre

Exempt upto Rs 1,00,000 for a performance
20& 21 Transport by Road/Rail/Vessel

Exemption withdrawn on all activities except transportation of food grains including rice and pulses, flour, milk and salt and agriculture produce

29 Sub-Contract Services

(a) a mutual fund agent to a mutual fund or assets management company,

(b) distributor to a mutual fund or AMC,

(c) selling or marketing agent of lottery ticket to a distributor.

32 Telephone related service

(a) Departmentally run public telephone; (b) Guaranteed public telephone operating only local calls; (c) Service by way of making telephone calls from free telephone at airport and hospital where no bill is issued

 New Exemptions introduced as under:

Sr. No. Service
2 Transportation of a patient in an ambulance
26A Life insurance service provided by way of Varishtha Pension Bima Yojna
43 Service provided by a Common Effluent Treatment Plant operator for treatment of effluent
44 Pre-conditioning, pre-cooling, ripening, waxing, retail packing, labeling of fruits and vegetables
45 Admission to a museum, zoo, national park, wild life sanctuary and a tiger reserve
46 Exhibition of movie by the exhibitor (theatre owner) to the distributor or an association of persons consisting of such exhibitor as one of it’s members
* transport of export goods by road from the place of removal to a land customs station (LCS)

*By amendment in Notf. No. 31/2012.

VI. Change in Abatement rates and conditions

Particulars Present taxable rate Proposed taxable rate
Transport by(a) Road (Goods)(b) Rail(Goods + Passenger)(c) Vessel(Goods) 25%30%40% 30%30%30% 

Subject to condition that no Cenvat on inputs, input services and capital goods is allowed.**

Air Transport of Passenger other than in Economy Class 40% 60%
Services provided in relation to chit 70% 100%

      **Earlier in case of transport by rail, there was no restriction on Cenvat credit, now aligned for all modes of transport.

VII. Changes in Reverse Charge Mechanism

1. Manpower supply and security services in full reverse charge

Present: Partial Reverse Charge is applicable in case of Manpower Supply and Security Service i.e. 25% payable by Service provider and balance 75% by Service Receiver when provided by an individual, HUF, or partnership firm to a body corporate

Proposed: The same is being brought to full reverse charge i.e. entire service tax payable by Service Receiver.

Impact: This will reduce unnecessary compliance burden on small contractors and agencies.

2. Following Services have been brought under full reverse charge consequent to withdrawal of the exemption on such services –

(i) Service provided by mutual fund agents, mutual fund distributors; and

(ii) Service provided by agents of lottery distributor.

3. Aggregator or Representative made liable to pay service tax

In case of service provided or agreed to be provided by a person involving an aggregator in any manner, the aggregator or representative office located in India is being made liable to pay service tax if the service is so provided using the brand name of the aggregator in any manner under reverse charge scheme. If an aggregator does not have any presence, including that by way of a representative, in such a case any agent appointed by the aggregator shall pay the tax on behalf of the aggregator.

The term “aggregator” has been defined to means a ‘person, who owns and manages a web based software application, and by means of the application and a communication device, enables a potential customer to connect with persons providing service of a particular kind under the brand name or trade name of the aggregator’.

VIII. Amendments in Rules (w.e.f. 01.03.2015):

A. Service Tax Rules, 1994

(1) To move towards ease of doing business, it has been prescribed to grant registration for single premises within 2 days of filing of application. The modalities of the same have been issued by Order No. 1/15-ST, dated 28.2.2015 w.e.f. 01.03.2015.

(2) A provision for issuing digitally signed invoices is being added along with the option of maintaining of records in electronic form and their authentication by means of digital signatures.

 (3) To align with revised general service tax rate, alternative rates of service tax under optional scheme for following services have been revised as under (effective on enactment of Finance Bill):

Service Present Revised
Air Travel Agent Domestic- 0.6%International- 1.2% Domestic- 0.7%International- 1.4%
Life Insurance Service Ist Year- 3%Subsequent Years-1.5% Ist Year- 3.5%Subsequent Years-1.75%
Money Changers’ Services Upto Rs. 1 Lac- 0.12% subject to max. Of Rs. 301 Lac-10 Lac: 0.06%Above 10 Lac: 0.012% Upto Rs. 1 Lac- 0.14% subject to max. Of Rs. 351 Lac-10 Lac: 0.07%Above 10 Lac: 0.014%
Service of organizing Lottery Guaranteed payout>80%:Rs. 7000Guaranteed Payout<80%: Rs. 11000 Guaranteed payout>80%:Rs. 8200Guaranteed Payout<80%: Rs. 12800

B. Cenvat Credit, 2004

1. Cenvat Credit allowed on service tax payment in partial reverse charge

Present: In cases where partial reverse charge is applicable, Service Recipient can avail the credit only after payment of the value of input service and service tax (unlike Full reverse charge where credit is allowed on payment of service tax).

Proposed: The provision has been aligned to allow Cenvat Credit in such cases on payment of service tax.

2. Time period for availment of credit extended to one year

Present: The time period for availment of Cenvat credit is 6 months from the date of invoice (introduced in Budget 2014.

Proposed: Now it has been extended from 6 months to 1 year.

Impact: It is a major relief for all manufacturers and service providers.

3.  Certain other changes are being made in the provisions of the Cenvat Credit Rules, 2004, which, inter-alia, include allowing Cenvat Credit on input and capital goods received directly by job workers, defining “export goods” for the purposes of rule 5, defining “exempt goods” for the purposes of rule 6, making applicable the provision of rule 9(4) to importer dealers, authorizing imposition of restrictions on registered dealers under rule 12AAA, and provisions relating to recovery of credit wrongly taken and imposition of penalty.

(Author-CA Nikhil M. Jhanwar, Delhi-NCR, nmjhanwar@gmail.com, +8860876960)

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0 responses to “Budget 2015- All About Service Tax Proposals”

  1. Pardeep says:

    My question is that reimburseable expenses by the service provider also to pay service tax. Reimburseable service like Train fare/Air fares/Hotel bills/Taxi bills are all coming with already service tax added from the service provider. Then what is the justification of repeat service tax claiming-over the total invoice again- Is this not double taxation please Clarify.

  2. Harbinder Singh says:

    Are we liable for service tax for Govt Proj for self use, non commerce & Industry & if yes than at what % the service tax has to pay, pl guide us & also for Private proj n at what rate.

    Regards.
    Harbinder Singh

  3. mukesh khandelwal says:

    sir please confirm if service tax is applicable on railway and pwd road contract after01 06 2015

    • T K Tripathi says:

      I would like to know is there any provision of service tax on rented building used for school education in kolkata.

  4. Vishnupriya Panigrahi says:

    Dear Sir/Madam,

    Can you give me details of WCT bill of Tax Deatils.
    means which type of services tax charge by provider and receiver in Tax Invoice Bill

  5. Shiv Kedia says:

    Dear Sir

    I am PWD contractor. Earlier civil works for non commercial buildings construction were exempted under service tax. Now i am not cleared whether service tax will be applicable on non commercial building construction. And as road construction is not under service tax so if we subcontract road work to sub contract will service tax applicable on subcontractor and me.

    Kindly help me with this.

    Thanks & Regards

  6. naresh says:

    dear sir
    here my question is that if service tax paid on taxable income in last f,y year 2013-14, but in f,y,2014-15 income reverse so what is the exact treatment of this situation , and legal case ref no-, how to show in ST return st-3
    thanks
    naresh

  7. Raman says:

    Dear Nikhil Ji,
    Informative article and precise answers, thanks for that.
    My question is I am running a sole proprietorship, provide AMC or annual maintenance contract services to PSUs eg : Powergrid.
    What is service tax applicable?
    please help.
    Thanks
    Raman

  8. Vivek Dhawalikar says:

    If Manpower/ Security Service is provided by an Individual, HUF or Partnership Firm to Individual, HUF or Partnership Firm then what is the status? Whether Provider will pay Tax or Receiver pay Tax ? I am unable to get the same. Please guide in this regard.

  9. harish says:

    dear sir,

    service tax rate 14% from 01.06.2015, can i submit 12.36% in may-15 service tax bill.
    pls suggest.

    thanks

  10. Rajesh Thakur says:

    What is due date to issue Invoice for Service Tax (POT) it is 14 Days to increased up to 30 Days ?

    Please give me guide me
    Thanks
    Rajesh Thakur

  11. sandip shinde says:

    please provide me information of service tax abatement rate on WCT for the F.Y.2015-16

  12. shiv shah says:

    we are working with Construction firm i.e redevelopment ..my Qs is we have got a bill from Sec Service Provider he have charged ST @12.36% Bill Date-30/05/2015 bt as per finance budget 100% RCM is Leveied so do we have to ask to change bill n remove ST..

  13. bsekhar says:

    My question is that reimburseable expenses by the service provider also to pay service tax.
    Reimburseable service like Train fare/Air fares/Hotel bills/Taxi bills are all coming with already service tax added from the service provider.
    Then what is the justification of repeat service tax claiming-over the total invoice again- Is this not double taxation please Clarify.

  14. aditya says:

    Dear Sir,
    Our company is a Private Limited firm and engaged in Man Power Supply business my query is in our case Service receiver is liable to deposit service tax or 100% by our company. Second if we deposit service tax 100% than what is the rate from 1st April,2015.
    Thanks & Regard
    – See more at: https://taxguru.in/service-tax/budget-201516-service-tax-proposals.html#sthash.0YbWswog.dpuf

  15. Swapnil Patil says:

    Dear Sir,

    I want to know , weather the service tax is applicable to construction of sports complex, funded by state government.

    Pl. guide me,

    Regards,
    Swapnil Patil

  16. Jayaraj Menon says:

    We are a Central Govt. department receiving services on Manpower Supply from a partnership company. Now the company says they have no service tax liability by virtue of Notification No. 7/2015 which has amended the Notification No. 30/2012. My question is since we are a Central Govt. department under the Finance Ministry, do we have to get ourselves registered and start paying Service Tax for Manpower supply received? Is there any Notifications/orders exempting Central Govt. offices from payment of Service Tax?

    • Mridul Chakraborty says:

      We are a Central Govt. department receiving services on Manpower Supply from a private company. Now the company says they have no service tax liability by virtue of Notification No. 7/2015 which has amended the Notification No. 30/2012. My question is since we are a Central Govt. department under the labour Ministry and also enjoying exemption from service tax, do we have to get ourselves registered and start paying Service Tax for Manpower supply received? Is there any Notifications/orders exempting Central Govt. offices from payment of Service Tax?

  17. Kamal Vijayvargiya says:

    We are constructing museum building in Rajasthan by central government financial add could you please let us know do we have to pay service tax on museum building construction .

  18. riken j patel says:

    Dear sir,
    I am propritor & i am provide man poewr in other compeny.As per new notification service tax 100% paid by service recipient my question is can i add service tax in invoice.

  19. yuvraj Falke says:

    Dear sir,
    I am a (proprietorship) service provider for RMC & construction machinary. so I want to know that, which category s service tax will be applicable for me.

  20. Amit says:

    Dear sir,

    I am working in security manpower company.As per new notification service tax 100% paid by service recipient my question is can i add service tax in invoice.

  21. vandna says:

    dear sir ,

    please update the new sales tax rate for water puriefir , in delhi.

  22. Sunil Kumar Chauhan says:

    Dear Sir,
    Our company is a Private Limited firm and engaged in Man Power Supply business my query is in our case Service receiver is liable to deposit service tax or 100% by our company. Second if we deposit service tax 100% than what is the rate from 1st April,2015.

    Thanks & Regard

    Sunil Kumar Chauhan

  23. jamsheer.k says:

    Sir

    Which tax will be applicable to Amusement park? whether sale tax or Service tax?and rate of tax?

  24. Nikhil says:

    Dear Anand Sharma Ji, Abhishek Ji, Hemant Ji

    There is no announcement on applicability of Swacch Bharat Cess at present. New rate of service tax will be 14% only w.e.f. the date to be notified by Government.

    As regards, Cess of 2% whenever it becomes applicable it will be flat additional rate i.e. in addition to 14%.

    At present still the rate of Service tax is 12.36%

  25. Nikhil says:

    Dear Ram Chandram

    W.e.f 01.04.2015, entire service tax liability for Manpower & Security Agency if Service provided by Proprietorship or partnership firm to corporates will be on service receiver. hence, you need not charge service tax on your invoice.

  26. Nikhil says:

    Dear Mr. US Vagh

    At present rate of ST after abatement of 60% is 4.944%. Once new rate gets applicable, the same shall be increased to 5.6%

  27. Nikhil says:

    Dear Gautam,

    No service tax is applicable on registration cost.

    You must have already paid service tax to builder on your flat payment.

  28. Nikhil says:

    Dear Daksh

    For Maintenance work, service tax is payable on 70% of taxable value. At present You have to pay ST @ 8.652% (70% of 12.36%). Once 14% rate gets applied, you have to pay 9.1% of tax

  29. Hemant Kumar says:

    Dear Sir,

    What is the service tax rate applicable in India w.e.f. 01.04.2015?

  30. Anand sharma says:

    Dear sir,

    please clear what date implement of new rate for service Tax (after budget-2015).
    and also clear 2% Swachh Bharat Cess (14+2=16% OR 2%on 14% =14.28%) .

    Anand sharma
    Indore

  31. Abhishek says:

    On or after the date to be notified after enactment of Finance Bill, 2015 rate of service tax will get increased from 12.36% to 16%. For any queries mail to : abhishek94oct@gmail.com

  32. Ramachandram says:

    in manpower service rcm is receiver should pay 100%, when a partnership firm of manpower service provider what is the necessacity to take service tax registration

  33. Gangwal Manish says:

    Dear Sir,

    We are the owners of partnerslhip firm, providing manpower supply to different corporates for which we are charging consultation fees i.e. one time basis. Kindly update us about applicable service tax charges effective 01.04.15.

    Thanks,

    Manish Gangwal
    09811792281

  34. V.ASHOK says:

    Dear Sir

    I want to know, Service Tax new rates effective date ?

    Thanks
    ASHOK

  35. vikram jasani says:

    weather service tax imlement on works contracts (nagative list cat. ) of previous years agmn. which will complete in current f.y. now excluded from nagative list.

  36. U S WAGH says:

    Respected sir ,
    Please tell me rate of service tax of RENT A CAB SERVICE with abutment for 2015- 16 ,

    regard

  37. Gautam Parekh says:

    Hi,

    I booked one apartment 2 years back. Now the house is ready by may-15. Is there any impact of Service tax on house registration. will the registration cost incrase b’cos of service tax or any other tax.

    Thanks,

    Gautam

  38. daksh singhal says:

    dear sir,
    please insure my to how to calculated the service tax 14 % tax I am maintenance work so please give me answer

    regard
    daksh singhal

  39. M.D.Poojari says:

    sir
    most of your above answer to the above querry you replayed that the new amendment in ST is may be in June. but some consultant says 01-4-15. plz let me know sir. also requesting you to send the new simplified tabulated provisions to my mail
    regards
    MDPoojari

  40. Nikhil says:

    Dear Rupesh Ji

    New rate of service tax will be single rate of 14%. Edcuation cess of 3% will be done away with. Hence you have to simply apply 14% as rate of service tax whenever it becomes applicable.

  41. Nikhil says:

    Dear Devendra Ji,

    Changes in respect of mutual fund distributors are applicable w.e.f. 01/04/2015, hence, business done in March will be out of purview of the Service tax changes.

  42. Devender Goswami says:

    Dear Nikhil ji
    Please let me know that whether service tax on mutual fund distributors will be apllicable on the business done in the month of March for which brokerage is to be paid in month of April. As brokerage is paid on the next month of all the business done in previous month.
    Regards

  43. Nikhil says:

    Dear Sir,

    Service tax registration is compulsory if gross receipts exceeds 9 Lacs and return filing is also mandatory. In any case it may be the case where Manpower supplier or security SP is providing service to firms/individuals.

  44. Rupesh says:

    Dear Sir,

    we are housekeeping service company so we have service tax applicable as per new amendment 14.36%. can you tell me description how we calculate?

  45. john abraham says:

    Sir,

    I am a Manpower supplier and paying service tax 25% at present.I heard that from 01.04.2015 onwards 100% reversal hence shall I retain service tax registration?

    pls reply

    ph 9947300588

  46. Nikhil says:

    Dear Girish Ji

    At present rate is 3.09%. The new rate 3.50% will apply after Finance Bill gets assented by President. it is likely that the new rate may become applicable w.e.f. June 2015.

  47. Nikhil says:

    Dear Patel Ji

    Your query is not clear.

    Kindly drop your mail id here or at nmjhanwar@gmail.com I will send you the simplified tabulated provisions.

    Regards,

  48. Nikhil says:

    Mr. Kamath Ji

    The new rate of 14% and remmoval of education cess will apply from the same date whenever notified by government.

  49. Girish says:

    Pl update service tax% on property

    At present it is 3.05%

    Regards
    Girish

  50. Girish says:

    Hi

    I will be getting possession of my new flat in May 15. I have paid 80% amoun to Builder and balance is to be paid in april or may.
    Pl let me know the service tax % on property purchase.

    Regards
    Girish

  51. Pap says:

    Respected Sir.

    As BUDGET 2015 changes in REVERSE CHARGE MECHANISM i.e. MANPOWER SUPPLY SERVICE & SECURITY SERVICE provider who’s are provided by an individual, HUF, or partnership firm are does not cover under REVERSE CHARGE MECHANISM. Now my question is “WHETHER BOTH ABOVE SERVICE PROVIDER ARE REQUIRED TO CONTINUE THEIR REGISTRATION?” If yes than why?

    PAP PATEL

  52. Raghavendra Kamath says:

    Me also interested to know from when revised rates are applicable. In a reply by you for a comment you said it needs to be taken up in parliament session in June. what about education cess?

  53. Nikhil says:

    Dear Rao Ji

    Service tax is applicable on renting of godowns either under renting of immovable property (if simply let out) or storage and warehousing service (if storage or warehousing is responsibility of Service Provider/Godown owner.

  54. Nikhil says:

    Dear Jasbir & S K Somani Ji

    Reverse Charge Mechanism is applicable on Works contract if Service provider is Individual, HUF, Partnerships, proprietorship firms, AOP and service receiver is business entity registered as body corporate.

  55. Nikhi says:

    Dear GGG and Bhupendra Ji

    Construction activities executed for Railways, roads, bridges, canal, dam is exempted from service tax even after present changes.

  56. Nikhi says:

    Dear Madhu,

    Changes in RCM provisions related to Manpower Supply are applicable w.e.f. 01.04.2015

  57. JASBIRSINGH MAKHIJA says:

    Sir,
    In context to your following reply,please confirm whether Works Contract has been covered under reverse charge mechanism for proprietor ship or partnership firms.
    Dear Sutu
    Reverse Charge Mechanism in case of Manpower Supplies, Security Service, Works COntract Service, Rent-a-cab service is applicable only if service provider is either individual, HUF, Firm or AOP and Service Receiver is Business Entity including Body Corporate, otherwise not applicable

  58. Bhupendra Samdani says:

    Sir,
    Government contractor working in Railway will also be under service tax libility or still exmpted ?

  59. Y P Venkateswara Rao says:

    A fellow has rendered his godowns for storing tobacco (un processed). Hehas obtained a service tax registration under the category of “Renting of Immovable Property”. Whether he is required to pay service tax since there is no exemption from service tax under the category of Renting of Immovable property.

  60. gggg says:

    After the present changes Is service tax applicable to Govt contractors engaged in road and bridge works.for the states and centre?

  61. S K SOMANI says:

    Hi

    Job work done for production or contract manufacturing,
    Service tax rate applicable as per reverse charge rules.

    S K Somani

  62. Madhu says:

    Nice work Mr Nikhil

    but would like to know the date of change in manpower rate

    Regards
    CA Madhu

  63. Nikhil Jhanwar says:

    Dear Sir,

    Law is silent on taxability in cases where both bollywood music(which is fully taxable) and folk/classical music (which is taxable if amount for performance is above Rs. 1 Lac). In such cases of simultaneous activity of taxable and non taxable character, the same has to be inferred based on essential/major character (dominant test) and to classify the activity under taxable or non-taxable charactor accordingly.

  64. V Seetharaman says:

    Please let me know if singers performing Bollywood music as well as western and folk music will be exempted from service tax.
    Presently musicians performing only folk or classical music are being mentioned in the negative list but nowhere is anything mentioned about musicians performing bollywood or western music.
    Kindly clarify this confusion and let me know the present and final situation as far as exemption is concerned for musicians/singers who perform all kinds of music. Thanks.

  65. Nikhil Jhanwar says:

    Dear Pankaj

    As such there is no specific change in respect of Business Auxiliary Service.

    No Penalty is payable if Service tax is paid before SCN alongwith Interest.

  66. Nikhil Jhanwar says:

    Dear Subhash,

    What you are saying will make entire service tax effectively exempt and Government will end up with no revenue on service tax.

    Anyways, nice idea make a pitch to Modi Ji at mogov.in.

    This is certainly unreasonable that all salaried class due to TDS provisions cannot avoid tax and most of business class doesnt pay even a single rupee of tax.

    In India still Tax is treated as Terror instead of facilitation.

  67. Nikhil Jhanwar says:

    Dear Aravind P

    Education fees or College Fees is covered under negative List (Section 66D(l) of Finance Act, 1994 and therefore, exempt from service tax.

    Relevant Extract
    (l) services by way of—

    (i) pre-school education and education up to higher secondary school or equivalent;

    (ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force;

    (iii) education as a part of an approved vocational education course;

  68. Nikhil Jhanwar says:

    Dear Raja Roy, DK Patidar, Shyam Rathi, Ganesh, Nitin

    Service Tax rate is governed by Finance Act, 1994 which can only be amended by Finance Bill. Hence, the new rate of service tax shall be applicable from the date which shall be notified by government after enactment of Finance Bill by way of passing in Parliament and assent of President. Likely by June 2015.

  69. Nikhil Jhanwar says:

    Dear Sutu

    Reverse Charge Mechanism in case of Manpower Supplies, Security Service, Works COntract Service, Rent-a-cab service is applicable only if service provider is either individual, HUF, Firm or AOP and Service Receiver is Business Entity including Body Corporate, otherwise not applicable.

  70. Nikhil Jhanwar says:

    Dear Rao Ji

    Points noted and seperately issued as Corrigendum.

    Thanks

  71. Nikhil Jhanwar says:

    Dear Readers

    Corrigendum

    1. In case of Manpower & Security, at present 25% ST payable by SP and 75% by SR instead of 50%(as written above in article)
    2. Changes relating to aggregator model are effective from 01.03.2015 instead of 01.04.2015.

  72. Nikhil Jhanwar says:

    Dear Readers,

    Corrigendum

    Kindly note following in the above Article

    1. In case of Manpower & Security Service at present 25% payable by SP and 75% by SR instead of 50%(written above).
    2. Changes related to aggregator model are effective from 01.03.2015 instead of 01.04.2015

    Thanks

  73. Nikhil Jhanwar says:

    Dear Rengaraj Ji

    Thanks for the feedback. You are absolutely right. Its typo error.

  74. raja roy says:

    which date for applicable service tax as per budget 2015-16

  75. Dk Patidar says:

    can we making invoice 12.36% as on 31st march and 1st april 14% plz confirm

  76. Aravinda P says:

    For Educational Fees (School Fees, College Fees, etc..) Service TAx applicable or not?

  77. SHYAM RATHI says:

    service tax changes 12.36 to 14 the effect form 1 March 2015 or 1 April 2015.

  78. subhash sachdev says:

    Dear Sirs,
    I like other 3 crores Indians pay income tax while more than 30 crores evade payment of Income tax.
    My submission is that individual tax payers should be allowed to take credit of service tax paid on bills covering electricity,mobile n telephone bills n other services on filing Income Tax returns for respective FY/AY.
    The GOI may please give incentives to honest tax payers.
    This idea may prompt other citizens to pay taxes .

  79. CA Rajesh says:

    Thanks CA Nikhil M. Jhanwar,its very good and useful ….

  80. Ganeshan says:

    what is the date of effect of the new service tax rate.

  81. Ganeshan says:

    When the service tax rate is effective ?

  82. Nitin Pachpande says:

    service tax changes 12.36 to 14 the effect form 1 March 2015 or 1 April 2015.
    Regards,
    Nitin Pachpande
    M:9869394998

  83. PANKAJ says:

    I WANT TO KNOW,IF THERE IS ANY CHANGE IN BUSINESS AUXILARY CATAGORY OF SERVICE RENDERED TO CUSTOMER?

    ALSO I WANT TO KNOW WHETHER I HAVE TO PAY PENALTY , IF SERVICE TAX WITH INTEREST AND PENALTY IS PAID BY DOING SELF ASSESSMENT BEFORE GETTING SCN.

    pl guide me soon
    pankaj

  84. Sutu says:

    Dear Sir,

    What will be the consequences if service provide is Ltd Co. & service recepient is a firm?

    Thanks.

  85. Ch Sreenivasa Rao says:

    Dear sir

    Please up date on payment of service tax on manpower supply

    Thanking You

    C sreenivasa rao
    9059859706

  86. Rengaraj says:

    Dear Sir,

    The present abatement for Manpower supply and security service is not 50% it is 25% by the service provider and 75% by the service recipient. In this budget it is proposed as 100% by service recipient, under reverse charge mechanism.

    Other than this, your article is very good.

    rengaraj r.k
    advocate

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