Dr. Sanjiv Agarwal
We are at the beginning of financial year 2015-16 now and it is time to realize and accept that exemption regime of Service Tax has changed with effect from 1st April, 2015 backed by Notification No. 6/2015-ST dated 1.3.2015, amending the mega exemption Notification No. 25/2012-ST dated 20.06.2012. Most of these amendments shall be effective from April 1, 2015 except few which shall be applicable from a notified date after the enactment of Finance Bill, 2015. This may happen sometime in June / July 2015.
The exemptions could be classified into new exemptions, exemptions withdraws and modifications in exemptions. To provide clarity to the scope of exemptions, new definitions of national park, recognized sporting event, tiger reserve, wildlife sanctuary and zoo have been inserted.
The following amendments in exemptions and new amendments w.e.f. dates as indicated are note worthy-
Service Tax exemption effective April, 2015
Exemptions play an important role, at least for assessees, in service taxation. The Budget proposals have made certain amends in the exemptions under Service Tax by way of announcing new exemptions, withdrawal of some existing exemptions and rationalization of certain other exemptions to bring them in line with change in law or to expand the scope of Service Tax. This article discusses the changes in exemptions w.e.f. 1st April, 2015.
(a) New exemptions
- Service provided by a Common Effluent Treatment Plant operator for treatment of effluent has been exempted. (New entry at S.No. 43)
- Services by way of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labeling of fruits and vegetables has been exempted. (New entry at S.No. 44)
- Service provided by way of admission to a museum, zoo, national park, wild life sanctuary and a tiger reserve has been exempted. These services when provided by the Government or local authority are already covered by the Negative List. (New entry at S.No. 45)
- Service provided by way of 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 has been exempted. (New entry at S.No. 46)
(b) Expansion of existing exemptions under Notification No. 25/2012-ST
- Hitherto, any service provided by way of transportation of a patient to and from a clinical establishment by a clinical establishment is exempt from Service Tax. The scope of this exemption has been widened to include all ambulance services. (Entry No. 2)
- Life insurance service provided by way of Varishtha Pension Bima Yojna has been exempted.(Entry No. 26A)
(c) Expansion of exemption under Notification No. 31/2012-ST for GTA services
Goods transport agency service provided for transport of export goods by road from the place of removal to an inland container depot, a container freight station, a port or airport is exempt from Service Tax vide Notification No. 31/12-ST dated 20.6.2012. The scope of this exemption has been widened to exempt such services when provided for transport of export goods by road from the place of removal to a Land Customs Station (LCS).(Vide Notification No. 4/2015-ST dated 1.3.2015).