Transcript Diapositiva 1

WORKSHOP ON
ENABLING SERVICE
TAX PRACTICE
ORGANISED BY.....INDIRECT TAXES
COMMITEEE OF ICAI
HOSTED BY…….HYDERABAD BRANCH OF
SOUTH INDIAN REGIONAL
COUNCIL OF ICAI
1
COVERAGE
SERVICE..DECLARED SERVICE
NEGATIVE LIST
EXEMPTIONS
PRESENTED BY
RAJIV LUTHIA
A CANDLE LOSES NOTHING BY LIGHTING ANOTHER CANDLE
26th October,2012
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NEGATIVE LIST REGIME!!!!!!!! W.e.f. 1st July,12
•
Section 65, 65A, 66 & 66A amended whereby the provisions of those sections would not
apply with effect from 1st July,2012.
•
Section 65B inserted interpreting various terms in view of introduction of comprehensive
approach for taxation of services.
•
Section 66B inserted to levy ST @12% on the value of all services other than those
specified in the negative list provided or agreed to be provided in the taxable territory by
one person to another.
•
Section 66C inserted to grant power to Central Government to make rules for
determination of place of provision of service.
•
Section 66D inserted to provide negative list of services. (17 items) Eg… Service by
RBI, by foreign diplomatic mission, trading of goods, betting lottery etc., Funeral etc.
•
Section 66E inserted providing for declared list of Services (9 items)
•
Section 66F inserted to provide for ..Principles of interpretation of specified description
of services or bundled services
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DEFINITON OF “SERVICE”`
• Section 65B(44)…. Definition of “Service” … means
– Any activity…. Excluding
• Transfer of title in goods or immovable property by
way of sale, gift or in any other manner; or
• Such transfer, delivery or supply of any goods which
is deemed to be a sale within the meaning of clause
(29A) of article 366 of the constitution; or
• A transaction in money or actionable claim;
• Provision of Service by an employee to employer in
course of employment
• Fees taken in court or tribunal established any law
– For consideration
– Carried out by person for another &
– Includes declared Service
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Explanation:1
Service ….not to include
• Functions performed by MP,MLA, corporators receiving
consideration in performing functions of that office as
member
• Duties performed by person holding post as per
constitution
• Duties performed by chairperson/member/ director in
body established by govt. & who is deemed as employee
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Explanation:2
Transaction in money shall not include any
activity relating to the use of money or it’s
conversion by cash or by any other mode,
from one form currency or denomination to
another form, currency or denomination for
which a separate consideration is charged
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Explanation 3
• an unincorporated association or a body of persons, as the
case may be, and a member thereof shall be treated as
distinct persons;
• an establishment of a person in the taxable territory and any
of his other establishment in a non-taxable territory shall be
treated as establishments of distinct persons.
Explanation 4
A person carrying on a business through a branch or agency or
representational office in any territory shall be treated as having an
establishment in that territory.
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ACTIVITY
• Term “Activity” not defined in the Act
• Could be active or passive and would include forbearance to act
• Would include
– an act done,
– a work done,
– a deed done,
– an operation carried out,
– execution of an act,
– provision of a facility etc
– Agreeing to an obligation to refrain from an act or to tolerate an
act or a situation
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CLARIFICATION BY MOF –Pg.8
• There has to be direct and immediate link between activity &
consideration……..e.g.
– Services received from club against membership…Direct Link
– Services received from govt against taxes paid…..No direct link
– Amount received in consideration for lifetime contribution……NOBLE
PRIZE…….No immediate link….NOT ACTIVITY
– Consideration may be paid at later point of time but linkage should be
immediate
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CLARIFICATION BY MOF
•
Activity would not include any activity where there is no reciprocity
– Tourist Information free of charge…..NO CONSIDERATION
– Free TV Channels…..INDIRECT CONSIDERATION FOR ADS
– Pure gifts…. CONSIDERATION WITHOUT ACTIVITY
– Tips & Ex Gratia Payments…CONSIDERATION WITHOUT ACTIVITY
– Pocket Money…CONSIDERATION WITHOUT ACTIVITY
– Donations without conditions…CONSIDERATION WITHOUT ACTIVITY
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CONSIDERATION
•
Monetary payment, non –monetary consideration, deferred consideration as well
as recharges between establishments located in a non taxable territory on one
hand and taxable territory on the other hand
•
It is clarified that the term consideration would include the following:
– Recharges between MNCs
– Adjustments between government undertakings
– Amount paid for longer period of use (Containers retained beyond
permissible period)…RELATED TO PROVISION OF SERVICE
– Subsidies which influence the unit price….TAXABLE
•
The Term consideration would not include the following:
– Amount paid against accidental damages (Eg. Damages to rented property)
– Deficit subsidies given
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TRANSACTION IN MONEY OR ACTIONABLE CLAIM
•
Clarified by Ministry of Finance that following would not be taxable
• LOANS/DEPOSITS/INVESTMENTS
• COMMERCIAL PAPER ISSUED AS PROMISSORY NOTES
•
CG Vide Circular No 163/14/2012- ST ….has clarified the following:
• CG clarified that Service tax will not be leviable on the amount of foreign
currency remitted to India from overseas since the definition service
excludes transaction in money
• Conversion charges levied for sending such remittance are also not liable
to service tax since service deemed to be provided outside India as per
Pop Rules, 2012
• The fees charged by Indian Counterpart Bank is also not leviable to
Service Tax since service deemed to be provided outside India
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SERVICES BY EMPLOYEE TO EMPLOYER
•
Services provided beyond the course of employment is taxable…
Eg…Pvt. Coaching by teacher beyond school hours when under no
obligation under the contract would be taxable
•
Expenses recovered form employees for private use of company’s facilities is
taxable unless otherwise exempt…canteen etc.
•
Directors Fees, Commission, Bonus, Travel Reimbursements etc paid to
directors would also become taxable
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Taxability of Service under comprehensive approach
No
Whether activity covered within a
definition of service
Not taxable
Yes
Yes
Whether covered under negative
list
No
Yes
Whether exempted
No
Provided or agreed to be provided
in Taxable Territory
No
Yes
Taxable under Service Tax
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DECLARED SERVICES…. Section 66E
Following
9 services:
1. Renting of immovable property……


Renting of immovable property to educational body exempt only if
provided to educational body for the purpose of education which is
exempt from service tax
Renting of land or building for entertainment or sports is sought to
be taxed. ( para 6.1.4 of Education Guide)
2. Construction of a complex……..

completion certificate from engineer, architect or licensed surveyor
would be treated as CC for the purpose of service tax only when
there is exemption from obtaining CC in certain areas or certain
types of building ( para 6.2.7 of Education Guide)
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DECLARED SERVICES…. Section 66E
3. Temporary transfer or permitting the use or enjoyment of any IPR
……
 IPR not registered in india will also be liable to tax ( para
6.3.2 of Education Guide)
4. Development, design …….. Of IT software
5. Agreeing to the obligation to refrain from an act, or to
act or situation, or to do an act….
tolerate an
NON COMPETE FEES ( para 6.7.1 of Education Guide)
6. Transfer of goods by way of hiring, leasing, licensing or in any
such manner without transfer of right to use such goods.
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DECLARED SERVICES…. Section 66E
7. Activities in relation to delivery of goods on hire purchase or any
system of payment by installments

Mere delivery of good on hire purchase or any system of payment
by installments not leviable to Service tax ( para 6.5.1 of Education
Guide)
8. Service portion in execution of a works contract
9. Service portion in an activity wherein goods being food or any
other article of human consumption or any drink (whether or not
intoxicating) is supplied in any manner as a part of the activity.
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NEGATIVE LIST
1. Services provided by government/local authority except:
a. Service by departmental post by way of speed post, express parcel
post, Life insurance & other agencies service provided to a person
other than govt.. Postal services such as post card, inland, book
post, registered post, money orders, postal orders provided
exclusively by department of post are not liable…Services of
speed post, express parcel service provided by postal
department is already taxable under “courier service” w.e.f.
1st May,2006..
b. Service in relation to vessel/aircraft, inside or outside
precincts of port/airport
c. Transport of goods or passengers
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NEGATIVE LIST
1. Services provided by government/local authority except:
d.Support Services (Defined in sec 65B(49) other than above 3, provided
to business entities (Defined in sec 65B(17).. Services provided by
Government in terms of their sovereign right to business entities which
are not substitutable in any manner by any private entity, are not
support services for e.g. grant of mining or licensing rights or audit by
CAG…
 Corporations formed under central/state act, government companies or
autonomous institutions set up under special act are not covered in the
definition of government.
 Services provided by police/security agency to corporate entities or
sports events held by a private entity are taxable
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NEGATIVE LIST
2. Services by RBI………Prior to 1st July., 2012 also exempt
Services provided to RBI are not in negative list and would be taxable
unless otherwise exempted
3. Services by foreign diplomatic mission located in India……..Prior to 1st
July,2012 not notified service
Prior to 1st July, 2012, services provided to foreign diplomatic mission
were exempted………..Post 1st July, 2012 also made exempt vide
notification no. 27/2012-ST dt. 20th June, 2012
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NEGATIVE LIST
4. Service relating to agriculture (defined in Section 65B(3)) or agricultural
produce( defined in Section 65B(5)) by way of :
• Agricultural operations directly related to production of agricultural produce
including harvesting, threshing etc.
• Supply of farm labour….. Prior to 1st July,12, taxable under the category of
“manpower supply services”
• Process such as drying, fumigating, grading, cooling etc….. Which do not alter
essential characteristic of agricultural produce but make it marketable for
primary market…….. Services of production or processing of agricultural goods
was exempted under the category of “Business Auxiliary Services” vide
Notification No.14/2004-ST dt. 10/09/2004.
• Renting, leasing of agriculture machine or vacant land with or without structure
thereon ….. Prior to 1st July,12 taxable under the category of “Supply of
Tangible Goods for Use” if renting or leasing is without possession & effective
control..Vacant land used for agriculture is excluded from the definition of
immovable property
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NEGATIVE LIST
•Loading/unloading, packing, storage warehousing of agricultural
produce…Presently exempted under the category of “Cargo
Handling” & “Storage & Warehousing”
•Agricultural Extension Services (defined in section 65B(4)….
Application of scientific research or knowledge through agricultural
practice through farmer education.
•Service by APMC/board or service by commission agent for sale
or purchase of produce….. Services of renting of shops or property
by APMC is liable to service tax
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NEGATIVE LIST
5.
Trading of goods ….



Forward contract in commodities are covered under trading of goods
Commodities futures are not covered under the definition of service
Auxiliary Services relating to forward contract or future contract not
covered under negative list
6.
Any process amounting to manufacture or production of goods…defined in
Section 65B(40)
7.
Selling of space or timeslot for advertisement other than
advertisements
broadcast by radio or television ……..
 Sale of space for advertisement in billboard, public place, building,
conveyances, cell phones, ATM, aerial advertisement..not taxable

Making & preparation of advertisement & commission received by
advertising agencies from broadcasters/publishing companies
continue to be taxable.
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NEGATIVE LIST
8. Service by way of access of road or a bridge on payment of toll charges
 User access fee for use of road was not taxable as clarified by Circular
No.152/3/2012 dt. 22/02/2012
 Service charges paid to toll collecting agency is liable to service tax
9. Betting, gambling or lottery
 Organizing or promoting gambling or betting events is liable to service
tax
10. Admission to entertainment events (defined in Sec 65B(24)) or access to
amusement facilities (defined in Sec 65B(9))
 Standalone ride set up in mall would be covered under amusement
facility & negative list
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NEGATIVE LIST
11. Transmission or distribution of electricity by an electricity transmission or


distribution utility..(defined in Section 65B(23)..
Electricity charges recovered by developer or housing society not covered
under the negative list
Service provided by way of installation of genset or similar equipment is taxable
12. Services by way of•
•
•
Pre-school education and education up to higher secondary school or
equivalent
Education as a part of curriculum for obtaining a qualification recognized by any
law for time being in force..(Qualification recognised by law of foreign country is
not covered in negative list)
Education as a part of an approved vocational education course
–
–
–
–
Pvt Tutions are taxable (Para 4.12.8 of EG)
Placement Services provided by colleges are taxable..
Will commercial coaching classes be covered under limb 1 ????..
Doesn’t one need to differentiate between coaching & education?
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NEGATIVE LIST
13. Services by way of renting (defined in Section 65B (41) of
residential dwelling for use as residence

Residential dwelling does not include hotel, motel, inn, guest
house, campsite, lodge, house boat or like places for
temporary stay

The rent received from a building which is used as a hotel or
lodge by the lessee will not be covered in negative list

Prior to 1st July, 2012, the same was excluded from the
definition of “immovable property” and hence was not taxable
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NEGATIVE LIST
14. Services by way of• Extending deposits, loans or advances in so far as the
consideration is represented by way of interest or
discount….
 Interest on FD, OD, Term Loan, Corporate deposit etc.
would fall under negative list
 Loan processing charges are not covered under negative
list
 Inter se sale or purchase of foreign currency amongst
banks or authorised dealers of foreign exchange or
amongst banks and such dealers…
 Prior to 1st July, 2012, vide notification no. 19/2009-ST
dated 7th July, 2009 interbank transaction of purchase &
sale of foreign currency between banks were exempt
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NEGATIVE LIST
15. Service of transportation of passenger with or without
accompanied belongings by• A stage carriage… Presently excluded from definition of “Tour
Operator”
• Railways in a class other than– First class; or .
– An air conditioned coach
EXEMPTED FROM 2nd July,12
till 30th September,2012 vide
Notification No 43/2012..ST
• Metro, mono rail or tramway
• Inland waterways
• Public transport other than predominantly for tourism
purpose in a vessel in a vessel, between places located in
india; and
• Metered cabs, radio taxis or auto rickshaws.
CA Rajiv Luthia
NEGATIVE LIST
16. Services by way of transportation of goods• By road except the services of– A goods transportation agency; or … Transportation of goods by road in 3wheeler is made liable to tax
– A courier agency….. Presently Transport of goods by 3-wheeler not liable
• By an aircraft or a vessel from a place outside India upto the
customs station of clearance in India; or…
 Express cargo service is not covered under the negative list…
 Transport of goods by railway, air & by vessel in coastal waters are not
covered under negative list.
• By inland waterways
17.Funeral, burial, crematorium or mortuary services including
transportation of the deceased.
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Lets have break
WHO SPEAKS
SOWS
BUT
WHO LISTENS
REAPS
EXEMPTIONS
 Presently there are more than 100 exemption notificationsgeneral or specific under different category of services
 With the introduction of Negative List
government has introduced……
w.e.f. 1st july,2012,
 1 single mega exemption notification ;
&

Other 9 exemption notifications ….refer Guidance note no.6
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EXEMPTIONS UNDER MEGA NOTIFICATION
1. Services provided to United Nations or specified International
Organisations
PRESENTLY
POST AMENDMENT
SCENARIO
Services provided to United Nations or
International Organisation declared by
Central Government in pursuance of
Section 3 of United Nations (Privileges
&Immunities) Act, 1947 is made exempt
vide Notification No 16/2002 St dated 2nd
August, 2002
•Exemption to UN/Specified IO
•List of specified 23 specified IO
stated in guidance note no. 6 (
refer page 60)
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2. Health Care Services by a Clinical Establishment, an authorised
medical practitioner or para- medics
PRESENTLY
POST AMENDMENT
SCENARIO
•W.e.f 1st July, 2010..Such services provided by
hospitals, nursing home or multi speciality clinic to
employees of business organisations and under
health insurane schemes were made taxable under
the category of “ Health Checkup & Treatment
Services”
Services in recognised
systems of medicine are
exempt..e.g.
•Allopathy, /Yoga,
•Naturopathy/ Ayurveda,
•Homeopathy/Siddha/ Unani,
Any other system of medicine
that may be recognised by CG
•w.e.f. 1st May, 2011..Definition amended and Such
services provided by a clinical establishment or a
doctor made taxable
•Supply of meals …
transportation of
•However vide exemption Notification No. 30/2011 – patients….are also
ST dated 25th April, 2011..Total exemption provided exempted…refer definition of
to this category of service w.e.f. 1st May, 2011
Health care service
•Hair transplant or
cosmetic/plastic surgery not
exempted unless medically
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required.
3. Services by a veterinary clinic in relation to health care of animals or
birds
PRESENTLY
POST AMENDMENT SCENARIO
Such services not taxable under
any category of taxable service
Such services provided by a
veterinary CLINIC only are made
exempt
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4. Services by an entity registered under section 12AA of the Income
Tax Act, 1961 by way of charitable activities
PRESENTLY
POST AMENDMENT SCENARIO
No specific
exemption to
services provided by
way of charitable
activities by a
charitable institution
Services by way of “charitable activities” are exempt
Charitable activities is defined as..
Activities relating to
a) Public health by way of –
I) Care or counseling of :
i) terminally ill persons or persons with severe
physical or mental disability,
ii) persons afflicted with HIV or AIDS, or
iii)persons addicted to a dependence-forming
substance such as narcotic drugs or alcohol, or
II) Public awareness of preventive health, family
planning or prevention of IV infection
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4.
Services by an entity registered under section 12AA of the Income Tax
Act, 1961 by way of charitable activities
PRESENTLY
POST AMENDMENT SCENARIO
b) Advancement of religion
c) Advancement of educational programmes or skill
development relating to
i)
abandoned, orphaned or homeless children
ii) Physically or mentally abused and traumatized
persons
iii) Prisoners or
iv) Persons over the age of 65 years residing in rural
area
d) Preservation of environment including watershed,
forests and wildlife or
e) advancement of any other object of general public
utility upto a value of Rs. 25 Lakhs in a F.Y. subject
to the condition that total value of such activities had
not exceeded 25 Lakh Rs. In the preceding F.Y
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5. Services by a person by way of
a) renting of precincts of a religious place meant for general public or
b) conduct of any religious ceremony
PRESENTLY
POST AMENDMENT
SCENARIO
•Renting of precincts of religious place..
Specifically made exempt under the category of
Mandap Keeper Services vide Notification No
14/2003 ST dated 20th June, 2003
•Not taxable under Renting of Immovable
Property…...since the definition of renting of
immovable property specifically excludes Renting of
Immovable Property by or to a religious body
Services by a person for conduct of any religious
ceremony presently not taxable under any category
of service
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Specifically made exempt
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S.No.6…Services provided by
An Arbitral Tribunal
Any person other than a
business entity (B.E.); or
 B.E. with a
turnover upto Rs.10
Lacs in P.Y.
29th July, 2012
An Individual as an advocate
or
Partnership firm of advocates
By way of legal Services
A person represented on
an arbitral Tribunal
An advocate or firm of advocates
providing legal services
Any person other than B.E.
 B.E. with a
turnover upto Rs.10 Lacs
in P.Y
CA Rajiv Luthia
An Arbitral
Tribunal
EXEMPTIONS UNDER MEGA NOTIFICATION
7. Services by way of technical testing or analysis of newly developed
drugs , including vaccines and herbal remedies on human
participants by a clinical research organisation approved to conduct
clinical trials by the Drug Controller General of India
Presently…
Such services taxable under the category of “Technical Testing &
Analysis Service”…. Specifically made exempt vide Notification No
11/2007 ST dated 1st March, 2007
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EXEMPTIONS UNDER MEGA NOTIFICATION
8. Services by way of training or coaching in recreational activities relating
to arts, culture or sports
Presently,
•
•
Such services provided by Recreational Training Institute are
specifically made exempt vide Notification No 24/2004 ST dated 10th
September, 2004 under the category of “Commercial Training or
Coaching Service” &
Service provided by Vocational Training Institute exempted Vide
notification no. 03/2010-ST dated 27th February, 2010
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EXEMPTIONS UNDER MEGA NOTIFICATION No. 9
PRESENTLY
POST AMENDMENT SCENARIO
•Outdoor catering services provided by
a registered NGO under Centrally
Assisted Mid day Meal Scheme is
exempted vide Notification No 47/2010
ST dated 3rd September, 2010
•Services provided to an educational
institution by any person by way of
catering under any centrally assisted mid
day meals scheme
•Transportation
services
of
•Transportation service for use by an transportation of students or staff
educational body is excluded from provided to or by an institution whose
definition of TOUR OPERATOR educational services are exempt from
SERVICE & not taxable.
levy of service tax is made exempt
•Presently not notified service
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• Services provided to or by an institution
in relation to services relating to
admission to education… where such
educational services are exempt from
the levy of service tax
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EXEMPTIONS UNDER MEGA NOTIFICATION
10. Services provided to a recognised sports body by :
a) an individual as a player, referee, umpire, coach, or manager for
participation in a tournament or championship organized by a
recognized sports body
b) another recognised sports body
•
•
PRESENTLY, such Services not taxable under any category of Taxable
service
Services by selector, commentator, curator, technical experts are not
exempted.
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11. Services by way of sponsorship of tournaments or championships
organized:
a)
By a national sports federation or its affiliated federations where the participating teams or
individuals represent any district, state, or zone
b)
By association of Indian Universities, Inter University Sports Board, School Games Federation
of India, All India Sports Council for the Deaf, Paralympic Committee of India, Special
Olympics Bharat
c)
By Central Civil Services Cultural and Sports Board
d)
As part of National Games, By Indian Olympic Association or
e)
Under Panchayat Yuva Kreeda aur Khel Abhiyaan Scheme
Presently,
Services in relation to sponsorship of sports events are taxable under the category of
“Sponsorship services” w.e.f. 1st July, 2010
Sponsorship services provided for specified tournaments or championships as referred
in the mega notificationAre presently also exempted vide Notification no 30/2010 ST
dated 22nd June, 2010 w.e.f. 1st July, 2010
12. Services provided to the government or local authority by way of
erection, construction, maintenance, repair, alteration, renovation or
restoration of :
a)
A civil structure or any other original works meant predominantly for a non
industrial or non commercial use
b)
A historical monument, archaeological site or remains of national importance,
archaeological excavation, or antiquity specified under ancient Monuments and
Archaeological Sites and Remains Act, 1958
c) a structure meant predominantly for use as (i) an educational, (ii) a
clinical, or (iii) an art or cultural establishment;
d) canal, dam or other irrigation works;
e) pipeline, conduit or plant for (i) drinking water supply (ii) water
treatment (iii) sewerage treatment or disposal; or
f) a residential complex predominantly meant for self-use or the use of
their employees or other persons specified in the Explanation 1 to clause
44 of section 65 B of the said Finance Act
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12.PRESENTLY:
•
Construction, repairs etc. of non-commercial/non-industrial buildings
are not taxable….eg. Post office, IT office etc.
•
Construction of educational institute for charitable trust not liable to
service tax ….even if it is does not belong to GOVT.
•
Construction of Canal, dams etc. presently also not taxable
•
Construction, repairs etc. of Water Pipeline line, water treatment,
sewerage treatment etc. presently not taxable
•
Construction, repairs etc. Residential complex for self use is also
presently not taxable
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13. Services provided by way of erection, construction, maintenance,
repair, alteration, renovation or restoration of,-
a) road, bridge, tunnel, or terminal for road transportation for use by
general public;
Construction of road which are not for general public use for e.g.
construction of roads in a factory, residential complex etc. would
be taxable…..which is exempted presently
b) building owned by an entity registered under section 12 AA of the
Income tax Act, 1961(43 of 1961) and meant predominantly for
religious use by general public;
c) pollution control or effluent treatment plant, except located as a part of
a factory; or
d) electric crematorium; …….other crematorium taxable ?????????....
which is not liable to service tax presently.
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14. Services by way of erection or construction of original works
pertaining to,a) airport, port or railways;
b) single residential unit (defined) otherwise as a part of a residential
complex;
c) low- cost houses up to a carpet area of 60 square metres per house
in a housing project approved by competent authority empowered
under the ‘Scheme of Affordable Housing in Partnership’ framed by
the Ministry of Housing and Urban Poverty Alleviation, Government
of India;
d) post- harvest storage infrastructure for agricultural produce
including a cold storages for such purposes; or
e) mechanized food grain handling system, machinery or equipment
for units processing agricultural produce as food stuff excluding
alcoholic beverages; ……exemption to errection or installation of
machines for units processing dal mills, rice mills, floor mills, cotton
ginning mills……presently exempted under notification 12/2010
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EXEMPTIONS UNDER MEGA NOTIFICATION
15. Temporary transfer or permitting the use or enjoyment of a copyright covered
under clause (a) or (b) of Sec 13(1) of the Indian Copyright Act, 1957 relating to
original literary, dramatic, musical, artistic works or cinematographic films
PRESENTLY
CHANGES BROUGHT
•Sec 13(1) (a) i.e. Copyright relating
to Original Literary, Dramatic,
Musical, Artistic works is not taxable
under the taxable category of
“Copyright Services”
•Copyrights related to Cinematographic Films are also
made exempt along with
copyrights related to Original
Literary, Dramatic, Musical,
Artistic works
•Sec 13(1) (b) i.e. Copyright relating
to cinematographic film is taxable
under the taxable category of
“Copyright Services”
26th October,2012
•Copy right relating to sound
recording is continue to be
taxable.
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16.
Services by a performing artist in folk or classical art forms of i) music or ii)
dance or iii) theatre excluding services provided by such artist as a brand
ambassador
PRESENTLY
PROPOSED
•Services by a performing artist in
music, dance or theatre not taxable
under any category of service
Services provided by a performing
artist is made taxable ..Except if it
relates to folk or classical art forms of
music, dance or theatre
•Services provided by a brand
ambassador is taxable under the
category of “ Promotion of Brand of
Goods, Services, events, Business
entity etc” .W.e.f. 1st July, 2010
•For claiming above exemption.. such
services should not be provided as a
brand ambassador
26th October,2012
•Activities of actor or artist participating
in magic show, mimicry, film, TV serial
are proposed to be taxable .
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17. Services by way of collecting or providing news by an Independent
journalist, Press Trust of India or United News of India
PRESENTLY
CHANGES BROUGHT
•Conditional Exemption granted for
such services provided by specific
notified Indian News agency under
BAS service & ONLINE DATA
Retrieval service vide Notification
No 13/2010 ST dated 27th Feb,
2010..
•Such services by Press Trust of
India or United News of India are
made exempt
•Also services by Independent
Journalists are made exempt
•Independent Journalist….. Was
not a notified service
26th October,2012
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18. Services by way of renting of a hotel, inn, guesthouse,
club, campsite or other commercial places meant for
residential or lodging purposes having declared tariff of a
room below one thousand rupees per day or equivalent
Presently..
•
Such services if provided for a continuous period of less than 3 months were
made taxable under the category of “ Hotels etc.-Short Term Accomodation”
w.e.f 1st
•
May, 2011
However vide Notification No 31/2011 ST dated 25th April, 2011 exemption
granted when the declared tariff for providing such accomodation was less
than Rs. 1000/- per day.
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19. Services provided in relation to serving of food or beverages by a restaurant,
eating joint or a mess, other than those having the facility of air conditioning or
central air heating in any part of the establishment at any time during the year
and which has a license to serve alcoholic beverages
PRESENTLY
MEGA NOTIFICATION
•Services provided by a restaurant
with air conditioning facility and
having license to serve alcoholic
beverages were made taxable under
the category of “ Restaurant
Services” w.e.f. 1st May, 2011
•Exemption granted to such services
provided by restaurants not having
air conditioned/air heating facility and
license to serve alcoholic beverages
•Services provided by restaurants
having central air heating system
were not taxable
26th October,2012
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20. Services by way of transportation by rail or a vessel from one port in India to
another of the following goods:
a) Petroleum & Petroleum Products…
b) Relief materials meant for victims of natural or manmade disasters etc..
c) Defense or military equipment
d) Postal Mail, Mail Bags or Household Effects
e) Newspaper or Magazines
f) Railway equipment or Materials
g) Agricultural Produce
h) Foodstuff
i) Chemical fertilizer and oilcakes
Presently, all such services would fall under two separate category:
•“ Transport of Goods By Rail Service” – Made exempt vide Notification No 8/2010 ST
dated 27th February, 2010
•“ Transportation through National Waterways ” – Made exempt vide Notification No
30/2009 ST dated 31st August, 2009
Presently transportation of following were also exempt under “Transportation through
National waterways” :
i)
Hank Yarn made from cotton, (ii) Luggage of passengers (iii) Raw Jute & Jute
Textiles
26th October,2012
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21. Services provided by GTA by way of transportation of :
a)
Fruits, Vegetables, Eggs, Milk, Food grains, or pulses in a goods carriage
b)
Goods where gross amount charged on a consignment transported in a single
goods carriage does not exceed Rs. 1,500/-
c)
Goods where gross amt charged for transportation of all such goods for a single
consignee in the goods carriage does not exceed Rs. 750/-
•PRESENTLY,
•exemption on such taxable service relating to small and single consignment is given
vide Notification No 34/2004 ST dated 3rd December, 2004 under the category of “
Transport of Goods By Road Service”
•Vide notification no. 33/2004-ST dated 3rd December, 2004 Exemption to 6-specified
items
•Transportation service in 3-wheeler shall be liable to tax????????? Since it is not
goods carriage
26th October,2012
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EXEMPTIONS UNDER MEGA NOTIFICATION
22. Services by way of giving on hire..
a) To a state transport undertaking , a motor vehicle meant to carry more
than 12 passengers or
b) To a GTA, a means of transportation of goods
PRESENTLY
a) Exemption vide notification no. 1/2009 dated 5th january,2009 for service
of supply of tangible goods for use to GTA for rendering transport
service.
26th October,2012
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EXEMPTIONS UNDER MEGA NOTIFICATION
23. Transport of Passengers with or without accompanied belongings by
a)
b)
Air, Embarking or terminating in an airport located in the specified states, or
A contract carriage…….. for the transportation of passengers excluding tourism,
conducted tour, charter or hire.
•
•
Presently,
such journey by air is exempted under the category of “ Transportation of
passengers by Air Service” vide Notification No 27/2010 ST dated 22nd June,
2010
•
Exemption vide notification 20/2009-ST dated 7th July,2009 to TOUR Operator
having contract carriage permit for transportation of passengers excluding
tourism, conducted tour, charter or hire.
26th October,2012
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EXEMPTIONS UNDER MEGA NOTIFICATION
24. Services by way of motor vehicle parking to general public excluding leasing of
space to an entity for providing parking facility
PRESENTLY,
•
LAND USED FOR PARKING PURPOSES is not considered as an immovable
property……… Hence was not taxable presently under “Renting of Immovable
Property”
•
Vacant land given to a car dealer for parking their vehicle shall be liable to service
tax.
26th October,2012
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EXEMPTIONS UNDER MEGA NOTIFICATION
25. Services provided to the Government or a local authority by way of –
a) repair of a ship, boat or vessel;…..Presently exempted under port
service..Notification no. 31/2010 dated 22nd june,2010
b) effluents and sewerage treatment; …Presently not notified service
c) waste collection or disposal;…Presently not notified service
d) storage, treatment or testing of water for drinking purposes; or…..Storage &
treatment service to drinking water not notified service ……testing of water
exempted vide notification no. 6/2006-ST dated 1st march,2006, when provided by
Govt. owned laboratory
e) transport of water by pipeline or conduit for drinking purposes……Presently
transportation of water is excluded under “transport of goods through pipeline”;
26th October,2012
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EXEMPTIONS UNDER MEGA NOTIFICATION
26. Services of general insurance business provided under following schemes –
SCHEMES MENTIONED IN THE NOTIFICATION
PRESENTLY EXEMPT
OR NOT
HUT INSURANCE SCHEME
CATTLE INSURANCE UNDER SWARNAJAYNTI GRAM
SWAROZGAR YOJNA
SCHEME FOR INSURANCE OF TRIBALS
JANATA PERSONAL ACCIDENT POLICY AND GRAMIN
ACCIDENT POLICY
GROUP PERSONAL ACCIDENT POLICY FOR SELFEMPLOYED WOMEN
EXEMPT VIDE
NOTIFICATION NO
3/1994 ST dated 30th
June, 1994
AGRICULTURAL PUMPSET AND FAILED WELL
INSURANCE
PREMIA COLLECTED ON EXPORT CREDIT INSURANCE
26th October,2012
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EXEMPTIONS UNDER MEGA NOTIFICATION
26. Services of general insurance business provided under following schemes –
PROPOSED SCHEMES
PRESENTLY EXEMPT OR NOT
WEATHER BASED CROP INSURANCE SCHEME
EXEMPT-Notification No 58/2010
St dated 21st Dec,2010
JAN AROGYA BIMA POLICY
EXEMPT-Notification No 12/97 St
dated 14th February, 1997
NATIONAL AGRICULTURAL INSURANCE SCHEME
PILOT SCHEME ON SEED CROP INSURANCE
EXEMPT-Notification No 3/2000
St dated 6th July, 2000
CENTRAL SECTOR SCHEME ON CATTLE INSURANCE
EXEMPT-Notification No 4/2000
St dated 31st July, 2000
UNIVERSAL HEALTH INSURANCE SCHEME
EXEMPT-Notification No 16/2003
St dated 11th July, 2003
RASHTRIYA SWASTHYA BIMA YOJANA
EXEMPT-Notification No 7/2011 St
dated 1st March, 2011
COCONUT PALM INSURANCE SCHEME
NOT EXEMPT
26th October,2012
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EXEMPTIONS UNDER MEGA NOTIFICATION
27. Services provided by an incubatee up to a total business turnover of fifty lakh
rupees in a financial year subject to the following conditions, namely:•the total business turnover had not exceeded fifty lakh rupees during the
preceding financial year; and
•a period of three years has not lapsed from the date of entering into an
agreement as an incubatee;
Incubatee means “an entrepreneur located within premises of TBI or STEP
recognised by National Science & Technology Entrepreneurship Development
Board and who has entered into an agreement with TBI or STEP to enable
himself to develop and produce hi tech and innovative products
•
Presently, exempt vide Notification No 10/2007 ST dated 1st March, 2007
26th October,2012
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EXEMPTIONS UNDER MEGA NOTIFICATION
28. Service by an unincorporated body or an entity registered as a society to own
members by way of reimbursement of charges or share of contribution a) as a trade union; ….. Presently trade union are excluded from definition of
club or Association
b) for the provision of exempt services by the entity to third persons; or
c) up to an amount of five thousand rupees per month per member for sourcing
of goods or services from a third person for the common use of its members in
a housing society or a residential complex; …Presently exemption of monthly
contribution to the limit of Rs.3,000/- under club or association service
26th October,2012
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EXEMPTIONS UNDER MEGA NOTIFICATION
29. Services by the following persons in respective capacities
SERVICES BY
PRESENT STATUS
A sub-broker or an
authorised person to a
stock broker
Services provided by sub broker to stock broker in
relation to sale or purchase of securities listed on a
recognised Stock Exchange is made exempt under the
category of Business Auxiliary Services vide
Notification No 31/2009 ST dated 1st September, 2009
An authorised person to
a member of a
commodity exchange
Presently taxable under BAS
26th October,2012
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EXEMPTIONS UNDER MEGA NOTIFICATION
29. Services by the following persons in respective capacities
SERVICES BY
PRESENT STATUS
A mutual fund agent or distributor to
mutual fund or asset management
company for distribution or marketing
of mutual fund
•Such services are taxable under the
category of “Business Auxiliary
Service”
•Service tax on such services is to be
paid by the AMC or MF receiving
such service under reverse charge
mechanism
A selling agent or a distributer of SIM
cards or recharge coupon vouchers
Presently not taxable…..since it is
trading in goods
A business facilitator or a business
correspondent to a banking company
or an insurance company in a rural
area
26th October,2012
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EXEMPTIONS UNDER MEGA NOTIFICATION
29. Services by the following persons in respective capacities
SERVICES BY
PRESENT STATUS
A selling or marketing agent of lottery
tickets to a distributer or a selling
agent
•Such services are taxable under the
category of “Promotion, Marketing or
Organizing of Games, including
Lottery “ Services w.e.f 1st July, 2010
•Presently , made exempt vide
Notification No 50/2010 ST dated 8th
October, 2010 ..if provided to
i) Distributor or selling agent not
appointed by a lottery organising
State and…
ii) Such distributor or selling agent
has availed benefit of optional
composition scheme as provided
in Rule 6 (7C) of the Service tax
Rules
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EXEMPTIONS UNDER MEGA NOTIFICATION
30. Carrying out an intermediate production process as job work in relation to –
SERVICES BY
Existing position
1. Agriculture, printing
or textile processing
Production or processing of goods for , or on behalf of
client and services incidental or auxiliary to it are
taxable under the category of “Business Auxiliary
Services”
Services related to
i) Production or processing of goods for or on behalf
of client
ii) Procurement of goods, for or on behalf of client,
iii) Provision of service on behalf of client or
iv) Service incidental or auxiliary to above …
if provided in relation to agriculture, printing, textile
processing or education made exempt under the
category of BAS vide Notification No 14/2004 ST
dated 10th September, 2004
EXEMPTIONS UNDER MEGA NOTIFICATION
30. Carrying out an intermediate production process as job work in relation to –
SERVICES BY
Existing Position
2. Cut and polished diamonds and
gemstones; or plain and studded
jewellery of gold and other precious
metals
exempt vide Notification No 21/2005
St dated 7th June, 2005 under the
category of BAS
3. Any goods on which appropriate
duty is payable by the principal
manufacturer
Any activity that amounts to
manufacture of excisable goods is
excluded from the definition of BAS
4.Manufacturers of parts of cycles or Made exempt vide Notification No
sewing machines
42/2009 St dated 12th
November,2009 under the category
of BAS
26th October,2012
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EXEMPTIONS UNDER MEGA NOTIFICATION
31. Services by an organiser to any person in respect of a business exhibition held
outside India
Presently, ………such services are taxable under the category of “ Business
Exhibition Services”..Made exempt vide Notification No 5/2011 St dated 1st
March, 2011
26th October,2012
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EXEMPTIONS UNDER MEGA NOTIFICATION
32. Services by way of making telephone calls from –
•departmentally run public telephones;
•guaranteed public telephones operating only for local calls; or
•free telephone at airport and hospitals where no bills are being issued;
Presently, such services are taxable under the category of “ Telecommunication
Services ”..Made exempt vide Notification No 3/1994 St dated 30th June, 1994
26th October,2012
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EXEMPTIONS UNDER MEGA NOTIFICATION
33. Services by way of slaughtering of animals
Were made taxable w.e.f. 16th October, 1998 under the category of
“Mechanised Slaughter House”
Exemption provided to taxable service provided by a mechanised slaughter house
from so much of the service tax leviable on such slaughter house as is in excess of
Rs. 100/- per bovine animal vide Notification No 58/1998 ST dated 7th October,
1998
Exemption to slaughter house from the whole of service tax vide Notification No
2/2000- St dated 1st March,2000
26th October,2012
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EXEMPTIONS UNDER MEGA NOTIFICATION
34. Services received from a service provider located in a non- taxable territory by •the Government, a local authority or an individual in relation to any purpose
other than industry, business or commerce; or
•an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961)
for the purposes of providing charitable activities….. …..Presently service tax is
payable u/s 66A if services are provided from outside india & received by
charitable trust in india.
26th October,2012
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EXEMPTIONS UNDER MEGA NOTIFICATION
35. Services of Public Libraries by way of lending of books, publications or any other
knowledge enhancing content or material
36. Services by Employee State Insurance Corporations to persons governed under
the Employees Insurance Act, 1948
37. Services by way of transfer of going concern, as a whole or independent part
thereof
38. Services by way of public conveniences such as provision of facilities of bathroom,
washrooms, lavoratories, urinals or toilets
39. Services by a governmental authority by way of any activity in relation to any
function entrusted to a municipality under Article 243W of the Constitiution
26th October,2012
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Any questions ???????
73
CA. Rajiv Luthia
R.J.Luthia & Associates,
Chartered Accountants
610/611, Parmeshwari Centre, Above Galaxy Motors, Dalmia Estate,
Off. LBS Marg, Mulund (West), Mumbai-400 090.
Ph : 2564 1553/2569 4989
Email: [email protected]
26th October,2012
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