CA Sumit Grover

CA Sumit Grover→Notification No. 18/2014 19/2014-Service Tax  dated 25th August’ 2014

→ Effective date of amendment—1st Oct’14


  • Earlier, radio taxis were excluded from the purview of service tax by virtue of section 66D(o)(vi) of Finance Act,1994;
  • However, in the Finance (No.2) Act, 2014, enacted on 6th August, 2014, the said section was amended & the “radio taxis” got deleted, resulting in levy of service tax thereupon. However, effective date wasn’t notified. Now, the same has been notified as 1st October,2014;
  • At the same time, abatement of 40% shall be allowed in such cases, as provided in entry no. 9/9A of N/N 26/2012-ST, amended by N/N 08/2014- ST, subject to the condition that no CENVAT is claimed.
  • Hence, effective rate of service tax shall be 4.944%.


  • As per the erstwhile provisions contained in section 66D(g) of Finance Act, 1994, sale of space for advertisement, other than radio & television, used to remain excluded from the levy of service tax.
  • In the Finance (no. 2) Act, 2014, all advertisements, other than in print media, were made subject to service tax, though effective date of applicability of amended provisions, was not defined.
  • Now, the same has been notified as 1st October, 2014.


  • From 28-May-2012, section 67A was inserted to determine the rate of exchange to be opted for the purpose of determination of value of the taxable service & such rate was construed to be the rates notified by CBEC from time to time, in accordance with section 14 of Customs Act,1962.
  • This had led to various practical difficulties in the industry, since they had to separately maintain a track record as per CBEC rates for the purpose of valuing import or export of service, while in financial statements the rates were taken on a different basis(e.g. RBI rates, Bank TT buying/selling rate, etc.)
  • Now, w.e.f. 1st October, 2014, rule 10 has been inserted in Service Tax Rules, 1994 to consider the rate of exchange as per GAAP on the date when Point of taxation arises in terms of the Point of Taxation Rules, 2011.
  • Post this amendment, an ambiguity may arise as to whether the same rates may also be used for valuing export of services, or department may take the other view?

(Author can be reached at [email protected], +91-9910946323)

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  1. SHAJI says:

    In CPWD construction works contract service receiver is central govt,in such cases whether sevice receiver is exempted to pay service tax for the service provided by the contractor. what is the liability of the contractor to pay service TAX

  2. Vinod Chawla says:

    Dear Sir,

    I am a cable operator and apart from Cable TV Services, I also get the revenue by running scroll ads on channels by having local arrangements. Does this revenue come under the payment of service tax??

  3. Rajendra Prasad sharma says:

    My work is Transportation ( authorised chasis transporter) am i liable for service tax pay for vehicle Temp Registration, state toll taxes and state border taxes,which is all ready govt liability.

    kindly help its urgent.

    Thanks & Regards

  4. Shahid says:

    My work is supply & fixing of Road( Traffic symbol sign boards & road lining )this work awarded by state highways authorities am i liable for service tax

    Thanks & Regards

  5. Rahul says:


    Whether service tax is payable on stamp charges collected from borrower by a NBFC?? If not please give give some circular in this regards

  6. anil bansod says:

    I am small scale service provider in form of AMC with Defense , Govt and public sector My total services billing is less than 8 lacs in financial year. Hence i opted for exumption of Service tax.

    Is the same exemption is still valid after 01.10.2014? Is it necessary to register with Service tax and have service tax no even if it is not applicable? If yes thencan i have service tax no and file nil return?

  7. ss reddy says:


    Kindly let me know we provide online advertisements for that we received amount through dollars is it taxable or exempted. Please advise.

  8. lynette says:


    For service tax on online advertisements, effective date is 1st October,2014.

    Kindly let me know if service is rendered & invoice is also raised before 1st October, but the payment for it comes after 1st October, will service tax have to be paid on such invoices?

    If yes, whose liability is it to pay the tax?

  9. monica says:

    Hi Sumit,

    Thank u for sharing this info. There is one correction. The rate of abatement in case of services by radio taxis is 60%. Although, u have mentioned the effective rate of tax correctly.

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