The CBEC has issued following notifications dated August 7, 2012 which are summarised here below for your easy digests:

Notification No. 45/2012-ST dated 7-8-2012 has amended the Notification No. 30/2012-ST dated 20-6-2012 and expanded the scope of reverse charge mechanism. With effect from 7-8-2012, two additional services will be covered under reverse charge mechanism:

S. No. Description of service % of service tax payable by person providing service % of service tax payable by person receiving service
1) Services provided or agreed to be provided by a director of a company to the said company Nil 100%
2) Security services provided or agreed to be provided by an-  Individual, Hindu Undivided Family, Partnership firm, whether registered or not, Association of persons

to a Business entity registered as a body corporate

25% 75%

The definition of Security services has been inserted vide Notification No. 46/2012-ST dated 7-8-2012 as Rule 2(1)(fa) of Service Tax Rules, 1994 which is given below:

“Security services” means services relating to the security of any property, whether movable or immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity.

Partial Reverse Charge for Security Services: – The service provider is liable to charge & pay full Service tax for a period up to and inclusive of 6th August, 2012 and from 7th August, he is liable to pay 25% of service tax and a Body Corporate has to pay 75% service tax.

Resolution with Problem:-

Service by Directors to the Company: As per this amendment, the services provided by a Director to the Company, the entire service tax has to be paid by the Company under Reverse charge but what happen for a period from 1st July 2012 and till 6th August 2012, when there was no reverse charge mechanism for the service by Director to the Company was taxable.

So, for the payment received by the Director for this period, Director has to pay the tax. It means all the directors have to obtain registration for payment of service tax for one month and 6 days, file ST 3, etc.

Notification No. 44/2012-ST:-

The CBEC issued Mega Exemption Notification (Notification No. 25/2012 dated 20-6-2012) exempting 39 services from levy of service tax.  As per entry no. 33 of Notification No. 25/2012, service by way of slaughtering bovine animals was exempt from service tax.

The new Notification No. 44/2012-ST dated August 7, 2012 has omitted the word bovine from the above exemption. It implies that all slaughter is exempted from service tax now.

Bimal Jain
FCA, ACS, LLB, B.Com (Hons)
Mobile: +91 9810604563
E-mail: [email protected]

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  1. spverma says:

    w.e.f.1.7.02012 there was no separate category of security services, but these were covered under man power recruitment services and the individual HUF etc were enjoying the same facility which have been provided to security services by making amendment vide Notification 46/2012 ST. Therefore, I feel, it is incorrect to interpret that the individual or HUF providing security services to corporate clients  were liable to make payment of for full value of services provided.


    Regarding Resolution with problem :

    Yes for the period one month and 6 days (1st July to 6 August) if taxable value of service of directors exceeds Rs. 10.00 lacs he has to take the registration and pay the service tax to comply the provisoins.

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