No Service-Tax on Individual Advocates, GTA etc w.e.f. 1.7.2012
The Finance Act, 2012 seeks to insert provisos in sections 65, 65A, 66 and 66A of the Finance Act, 1994 from a date to be notified by the Central Government. Notification No. 18/2012 ST dated 01 .06.2012 has notified June 1, 2012 as the date when the provisos would be inserted in the sections mentioned above. The provisos lay down that the provisions of the said sections will cease to apply with effect from a date to be notified by the Central Government.
Subsequently, Notifications 20–23/2012 ST dated 05.06.2012 have been issued to notify July 1, 2012 as the date when the provisions of sections 65 (definitions), 65A (classification of services), 66 (charging section) and 66A (import of services) will cease to apply.
Simultaneously, Notification No. 19/2012 ST dated 05.06.2012 has also been issued to specify that following would be effective from July 1, 2012:
|Clause of the FA, 2012||Sections of the Finance Act, 1994 covered in the Clause of the FA, 2012||Description|
|Charge of service tax on and after Finance Act, 2012 Determination of place of provision of service Negative list of services Declared services Principles of interpretation of specified descriptions of services or bundled services|
Further, the following amendments will also be effective from July 1, 2012:
(i) Omission of definition of money from the explanation to section 67;
(ii) Amendment in section 68 seeking to put onus of payment of service tax under the reverse charge basis partly on service provider and partly on service receiver.
Vide Notification No.15/2012-Service Tax dated 17.03.2012, the Ministry of Finance had specified that in respect of services provided by an individual advocate, Goods Transport Agency, Insurance Agent, services provided or agreed to be provided by way of sponsorship to any business entity, in respect of services provided or agreed to be provided by an arbitral tribunal etc, the service-tax payable shall be Nil and that the person receiving the service shall pay 100% of the tax. This Notification is to come into force from the date on which section 66B of the Finance Act, 1994 comes into effect. S. 66B of the Finance Act, 1994 has been inserted by clause 143 (F) of the Finance Bill 2012. Vide Notification No. 19/2012 dated 5.6.2012, 1.7.2012 has been appointed as the date on which s. 143(F) of the Finance Act 2012 shall come into force. The result is that Notification No. No.15/2012-Service Tax dated 17.3.2012 shall come into effect on 1.7.2012.
Negative List of Services Applicable from 01.07.2012
Central Government has appointed July 1, 2012 (vide Notification No. 19/2012-ST dated 5.6.2012) as the effective date from which Negative List based service tax will come into operation. Now no need to classify the services under any particular category for taxing purpose. Any activity carried out by one person for another for a consideration, unless covered by the Negative List or by some exemption Notification, will be liable to service tax. Many transactions/activities which were hitherto out of the scope of service tax may now be liable to service tax. We expect corresponding changes in Cenvat Credit Rules, 2004, Place of Provision of Services Rules, 2012, Point of Taxation Rules, 2011 and Service Tax Rules, 1994 to align these with the Negative List based service tax regime in next few days. Now more activities will be covered by Service Tax Law, so it become Important to analyse existing and future transactions afresh to ascertain the applicability of service tax or otherwise.
Notified Date for Insertion of New Sections 65B, 66B, 66C, 66D, 66E, 66F & Amendment In Section 67/68
Following new sections have been inserted for governing the Service Tax Legislature:
1. Section 65B – Definitions
2. Section 66B – Charge of Service Tax
3. Section 66C – Determination of Place of Provision of Service
4. Section 66D-Negative list of Services
5. Section 66E – Declared services
FINANCE ACT, 2012 – NOTIFIED DATE FOR INSERTION OF NEW SECTIONS 65B, 66B TO 66F AND AMENDMENT IN SECTION 67/68
NOTIFICATION NO. 19/2012-SERVICE TAX, DATED 5-6-2012
In exercise of the powers conferred by clauses (C), (F), (G) and (I) of section 143 of the Finance Act, 2012 (23 of 2012), the Central Government hereby appoints the 1st day of July, 2012 as the date from which the provisions of clauses (C), (F), (G) and (I) of the said section of the said Act shall come into force.
[F. No. 334 /1 /2012-TRU]
Under Secretary to the Government of India
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