Disclaimer This presentation is for the purpose of information and is based on changes implemented through the Act and Notifications It does not constitute a legal opinion or advisory The position can change if there are any modifications or amendments or decisions to the contrary ID: 634240
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Slide1
Service
Tax
Latest
Changes - 2015-16Slide2
Disclaimer
This presentation is for
the purpose of information and is based on changes implemented through the Act and Notifications.
It does not
constitute a legal opinion or advisory.
The position can change if there are any modifications or amendments or decisions to the contrary.
Please refer to the Finance Act, Rules, Notifications available on
www.cbec.gov.in
Slide3
ACKNOWLEDGEMENT
Kakinada
Commissionerate
heartily
thanks
Sri
Fredrick
Cooper
,
Superintendent, Service Tax
who
had taken efforts to prepare this presentation for the benefit of
assessees
.Slide4
A
. CHANGES W.E.F. 01.06.2015
Section
66B – Rate of Service Tax - Increased
The
rate of service tax has been increased from 12% to 14% subsuming
cess
. Slide5
The
applicable rates based on the Point of Taxation Rules, 2011
r/w Sec 67A of FA’94 is
given in the following
table
Sl. No.
Taxable Service Provided
Issue of Invoice
Receipt of Payment
Point of Taxation
Rate Applicable
1
Before 01.06.2015
After 01.06.2015
After 01.06.2015
Date of payment or issue of invoice whichever is earlier
14%
2
Before 01.06.2015
Before 01.06.2015
After 01.06.2015
Date of issue of invoice
12.36%
3
Before 01.06.2015
After 01.06.2015
Before 01.06.2015
Date of payment
12.36%
4
After 01.06.2015
Before 01.06.2015
After 01.06.2015
Date of payment
14%
5
After 01.06.2015
Before 01.06.2015
Before 01.06.2015
Date of payment or Issue of invoice whichever is earlier
12.36%
6
After 01.06.2015
After 01.06.2015
Before 01.06.2015
Date of issue of invoice
14%Slide6
Entertainment
and
Amusement
Section
66D(j)
of Negative List
and which covered “admission to entertainment event or access to amusement facility” has been
omitted
“Admission
to
Entertainment
event or access to amusement facility”
now taxable
to service
tax
Exemptions
in the following manner:
(
i
) Services by way of
right of admission to
exhibition of cinematographic film, circus, dance, or theatrical performance including drama or ballet
; (entry 47 Notification No. 25/2012)
(
ii) Services by way of right of admission to
recognised
sporting event
; (Entry 47, Notification No.25/2012).
Recognised
sporting event means any sporting events organized by
recognised
sports body where the participating team or individual represents any District, State, Zone or Country or a sporting event referred to in Entry 11 of Notification No.25/2012.
(
iii) Services by way of right of
admission to award function, concert, pageant, musical performance or any sporting event
other than a
recognised
sporting event, where the consideration for admission is
not more than Rs. 500 per person.
(Entry 47, Notification No.25/2012). Slide7
Betting, Gambling and Lottery
An
explanation has been introduced to Section 66D(
i
) of the Finance Act, 1994 dealing with betting, gambling and lottery in order to specify that it does not include the activity specified in Explanation 2 to Section 65B(44).
The
TRU Circular dated 19.05.2015 indicates that the amendment is to make it explicitly clear that betting, gambling or lottery shall not include the
activity carried out by a lottery distributor or selling agent in relation to promoting, marketing, organizing, selling of a lottery or facilitating in organizing of lottery
of any kind Slide8
Process amounting to Manufacture or Production of Goods -
Liquor
The
entry in the Negative List that covered service by way of any process amounting to manufacture or production of goods (Section 66D (f)) is being trimmed to exclude any service by way of carrying out
any processes for production or manufacture of alcoholic liquor for human consum
ption.
Amendments
have also been made to Entry 30(c) of Notification No.25/2012 in order
to impose service tax
on contract manufacturing /job work for production of potable liquor for human consumption for a consideration. Slide9
Rule
6 (7) of Service Tax Rules – Air Travel Agent – Rate
modified
The
option provided to an air travel agent to pay service tax on booking tickets at the
rate of 0.6% has been enhanced to 0.7% of the basic fare for domestic bookings
and from
1.2% to 1.4% of the basic fare for international bookings. Slide10
Rule 6(7A) of Service Tax Rules – Life Insurance premium - Rate modified
The
rate of service tax payable on the premium charged by the Insurance Company from the policy holder has been enhanced
from 3% to 3.5%
for the first year and from
1.5% to 1.75%
for the subsequent years. Slide11
Rule 6(7B) of Service Tax Rules – Foreign Currency - Rate modified
The
rate of service tax payable on the purchase and sale of foreign currency had been fixed instead of discharging service tax at the rate of 14%. The previous rates and the new rates are given below:
(a) 0.12% of the gross amount of currency exchanged for an amount
upto
Rs.1,00,000/- subject to minimum of Rs.30 stands increased to 0.14 % and the minimum amount to Rs.35 respectively.
(b) Rs.120 and 0.06% of the gross amount of currency exchanged for an amount exceeding Rs.1,00,000/- and
upto
Rs.10,00,000/- stands increased to Rs. 140 and 0.07% respectively.
(c) Rs.660 and 0.012% of the gross amount of currency exchanged for an amount exceeding Rs. 10,00,000/- subject to maximum of Rs.6,000 stands increased to Rs.770 and 0.014% and the maximum amount to Rs.7,000 respectively. Slide12
Rule 6(7C) of Service Tax Rules – Lottery
The
service tax payable by the distributor or selling agent of lottery on promotion, marketing and organizing fixed based on the slab amounts has been increased as under:
Sl. No.
Rate
1
.
Rs.7000
stands increased to Rs.8200 on every Rs.10
lakh
(or part of Rs.10 lakh) of aggregate face value of
lottery
tickets printed by the organizing State for a
draw
.
2
.
Rs.11,000
stands increased to Rs.12,800 on every
Rs.10
lakh (or part of Rs.10 lakh) of aggregate face
value
of lottery tickets printed by the organizing
State
for a draw.
. Slide13
Cenvat
Credit
Rule
6 of the
Cenvat
Credit Rules, 2004 is being amended to provide for
payment for 7% of the value of exempted service
as against 6% of the value of exempted services.
This
is to factor the increase in rate of service tax.
The
percentage for value of exempted goods continues at 6%. Slide14
B. CHANGES
w.e.f
. 14.05.2015Slide15
Government
A
definition of ‘Government’ is introduced through Section 65B(26A). Accordingly,
“Government” means the Departments of the Central Government, a State Government and its Departments and a Union territory and its Departments, but shall not include any entity, whether created by a statute or otherwise, the accounts of which are not required to be kept in accordance with Article 150 of the Constitution or the rules made thereunder;
Chit
Fund and Lottery
Amendments
have been made to the definition of ‘service’ in terms of Section 65B(44) in order to bring within the ambit of taxation, the services by a lottery distributor or selling agent in relation to promotion, marketing,
organising
, selling of lottery or facilitating in
organising
lottery of any kind, in any other manner; and services by a foreman of chit fund for conducting or
organising
a chit in any manner.’
New DefinitionsSlide16
Bundled Service
An
illustration has been inserted to Section 66F(1) to explain the concept. The illustration reads as under:-
The services of the Reserve Bank of India being the main service within the meaning of Section 66D(b) does not include any agency service provided or agreed to be provided by any bank to the Reserve Bank of India. Such agency service being input service used by the Reserve Bank of India for providing the main service for which consideration by way of fee or commission or any other amount is received by the agent bank does not get excluded from the levy of service tax by virtue of inclusion of the main service in 66D(b) and hence such service is liable to service tax.
New DefinitionsSlide17
C
onsideration
would include
(
i
) Any
amount that is payable for the taxable services
provided or to be provided; (ii)
Any reimbursable expenditure or cost incurred by the service provider and charged
, in the course of providing or agreeing to provide a taxable service, except is such circumstances, and subject to such conditions, as may be prescribed;
(iii) Any
amount retained by the lottery distributor
or selling agent from gross sale amount of lottery ticket in addition to the fee or commission, if any, or, as the case may be, the discount received, that is to say the difference in the face value of lottery ticket and the price at which the distributor or selling agent gets such ticket;
New Definitions Slide18
Amendments
have been carried out to Section 73 to enable recovery action
in
respect of self-assessed tax reflected in the return.
A
new system of reduced penalties has been introduced through amendments to Section 76 and 78.
The
provision which allowed waiver of penalty in terms of Section 80 is no longer available.
Where
the First Appellate Authority rejects a claim of rebate of service tax on input services or duties on inputs in respect of service exports then appeal to Tribunal is no longer available but revision to Central Government is available akin to excise rebate matters.
Other amendments Slide19
Swachh
Bharat
Cess
on all or any of the taxable services
Rate of CESS –2% or lower on the value of taxable Services
List of Services and Rate to be notified by the Government
Date of operation to be notified
S
wachh
Bharat
CessSlide20
Section 66D(a)(iv) amended. All services provided by the Government or local authority to a business entity excluded from the Negative List
Definition of “Support Service” omitted from date to be notified.
As an when this amendment is given effect to, all services provided by the Government or local authority to a business entity, except the services that are specifically exempted shall be liable to service tax.
Support Services to GovernmentSlide21
Thank You…