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Service Tax Notifications No. 13/2012-ST, DATED 17-3-2012 related to ‘Abatement from Service tax and Conditions for same on specified services’ which is to come into force from the date on which Section 66B comes into effect. Government has vide notification No. 19/2012 specified that Section 66B will come into effect from 01.07.2012.
All services except 17 in the negative list, and those which are exempted vide mega Notification No. 12/2012-ST dated 17.03.2012 will be taxed from July 1, the Finance Ministry has said. Under the ‘negative list’ approach, services specified in the list will remain outside the tax net. The government has widened the definition of ‘Services’ to bring in more activities under the tax net. At present, 119 services that come under ‘positive list’ are levied.
EXEMPTIONS UNDER MEGA NOTIFICATION N. 12/2012 dated 17.03.2012 w.e.f. 01.07.2012 1. Services provided to the United Nations or a specified international organization; 2. Health care services by a clinical establishment, an authorised medical practitioner or para-medics; 3. Services by a veterinary clinic in relation to health care of animals or birds; 4. Services by an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) by way of charitable activities;
Central Govt exempts vide notification No. 14/2012-ST, Dated 17-3-2012 Taxable service involving import of technology, from so much of service tax, as is equivalent to the extent of amount of cess payable on the said transfer of technology under the provisions of section 3 of the Research and Development Cess Act, 1986 w.e.f. 01.07.2012.
In the definition of ‘service’ contained in clause (44) of section 65B of the Act it has been stated that service includes a declared service. The phrase ‘declared service’ is also defined in the said section as an activity carried out by a person for another for consideration and specified in section 66E of the Act. The following nine activities have been specified in section 66E:
Normally, service tax is payable by the person who is providing the taxable service. However, the Central Government is empowered under Section 68(2) to notify the specified persons who are liable to pay service tax in respect of notified taxable services. In this budget a proviso has been inserted wherein the Central Government can notify the specified services and the extent of service tax which shall be payable such person and the remaining part of the service tax shall be paid by the service provider. In other words, by insertion this proviso both the service recipient and the service provider together is required to pay the service tax.
As a result of the aforesaid protests and representations, there has been roll-back or reduction in the rigour, in respect of some of the aforesaid proposed amendments. The same were announced by the Finance Minister in his speech, while introducing the Finance Bill, 2012, for consideration. Besides, in certain respects, some additional reliefs have also been announced by the Finance Minister. The same are briefly discussed as follows:
A ‘Negative List’ approach for taxation of services is being introduced in the current fiscal. Under the new approach, all services except those in the ‘Negative List’ or otherwise exempted, would come into the tax net. The new system will come into effect from 1st July, 2012.
Please note that Hon’ble President has given her assent to the Finance Bill, 2012 and got enacted as Finance Act(No 23 of 2012) on May 28,2012. We have summarized various statutory provisions have been made applicable w.e.f. 28-05-2012.
Explanation 6.—For the removal of doubts, it is hereby clarified that the expression ‘process’ includes and shall be deemed to have always included transmission by satellite (including up-linking, amplification, conversion for down-linking of any signal), cable, optic fibre or by any other similar technology, whether or not such process is secret;’.
