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CA CA Sumit Grover Sumit Grover

Post enactment of Finance Act’15, trade was waiting for the Finance Ministry to notify the date for enhancement of service tax. Finally, the same has been notified as 1st June’15. Following is the gist of changes applicable w.e.f. the said date:

1) Abolition of EC & SHEC and effective rate of service tax to be enhanced from 12.36% to 14% (date of levy of the swachh bharat cess yet to be notified);

2) Rule 6(3) of CENVAT Credit Rules(i.e. non-maintenance of separate books of accounts) has been triggered with. Now, reversal of CENVAT under the said sub-rule shall be 6% of exempted goods plus 7% of exempted services. Earlier, it was 6% for both(exempted goods as well as exempted services);

3) Changes in rate of tax by insurers, air travel agent, lottery distributor, etc.

4) Exemption of service tax on entry in recognized sporting event, circus, cinematographic film,award function (wherein entry fees is upto Rs. 500/person), etc.

5) Levy of service tax on job work processes for production of alcoholic liquor for human consumption;

It is pertinent to mention that no date has been notified for levying service tax on all services by govt. (as enacted in Finance Act’15). The same shall be notified in due course of time.Presently, only support services by govt. are in the ambit of service tax.

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June 2024