- Lending of books and other knowledge enhancing material is now exempt from service tax.
- Services provided by Employees State Insurance Corporation to persons governed under the Employees Insurance Act, 1948 is now exempt.
- Services by way of transfer of a going concern, as a whole or an independent part thereof.
- Provision of facilities of public conveniences like bathroom, washrooms, toilets, urinals or lavatories is now exempt.
- Any service provided by Government authority in relation to any function entrusted to a municipality under article 243W of Constitution is now exempt.
- Services provided by a sub-contractor to other contractor in relation to works contract is exempt from service tax, if the other contractor is also providing works contract services which are exempt.
- In relation to Supply of food or any other article of human consumption or any drink, in a premises, including hotel, convention center, club, pandal, shamiana or any place specially arranged for organizing a function, abetment is available for service tax calculated on the value of service as is in excess of the service tax computed on 70% of gross value of service, when the service is bundled together with renting of such premises.
- In the old notification, service tax computed on 50% of the value of service is abated in relation to “Transport of goods in a vessel”,when provided from one port in India to another. Now the same benefit is available without any such condition.
- A new abatement in relation to below mentioned service is added to the new notification, where service tax computed on total value in excess of service tax computed on 25% of value shall be exempt
- Service by way of “Construction of a complex, building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly except where entire consideration is received after issuance of completion certificate by the competent authority”.Subject to the conditions that value of land should be included for computing the value of service provided and CENVAT credit of inputs used for providing the taxable service has not been taken.
- Insurance Auxiliary service by an agent
- Services in relation to General Insurance business
- Services in relation to distribution of Mutual Fund by a distributor or agent of mutual fund.
- Services provided or agreed to be provided by an arbitral tribunal to business entity – 100% reverse charge.
- services provided or agreed to be provided by individual advocate or a firm of advocates by way of legal services to business entity – 100% reverse charge.
- 100% reverse charge for services provided or agreed to be provided by Government or local authority by way of support services to business entity excluding
- renting of immovable property, and
- services specified in Section
- 66D(a)(i): service by department of Posts to any person other than government.
- 66D(a)(ii): services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport
- 66D(a)(iii): transport of goods or passengers.
- Service provided by any individual, partnership firm or an HUF whether registered or not including association of persons to a body corporate in relation to:
- supply of manpower for any purpose – 75% reverse charge
- service portion in execution of works contract – 50% reverse charge
- provision of service in relation to Rent a cab service on abated value to any person who is not engaged in the similar line of business – 100% reverse charge
- provision of service in relation to Rent a cab service on non-abated value to any person who is not engaged in the similar line of business – 40% reverse charge.
- Service provided by a commission agent located outside India and received by an exporter of goods, who is engaged under a contract or agreement or any other document by the exporter in India, to act on behalf of the exporter, to cause sale of goods exported by him is now taxable i.e. exemption from such services is withdrawn.
- Earlier there was a condition to pay an amount of service tax even on such specified services equivalent to the service tax in excess of 1% of the F.O.B. value of goods exported. Now this condition is no more effective.
“aggregate value means the sum total of value of taxable services charged in the first consecutive invoices issued during a financial year but does not include value charged in invoices issued towards such services which are exempt from whole of service tax leviable thereon under Section 66B of the said Finance Act under any other notification”.
- In Rule 2-Definitions: there is an insertion of various definitions of the terms used in these rules like legal service, life insurance business etc…
- Changes brought in Rule 2(1)(d) for effecting the revised reverse charge mechanism.
- Substitution of the word and figures “Section 66B” for the word and figure “Section 66” wherever used in the said rules.
- Insertion of new Rule 6A for determining whether the service is exported or not.
- Omission of Rule 5B-Date for determination of rate.
- Various other changes primarily focused to give operational and legal stability to the various changes made to the Act.
- From Rule 2 of the said rules, the definition of associated enterprises and taxable services as given in sub-rule 2(b) and 2(f) respectively is omitted.
- the words, “provided or to be provided” wherever they occur in the said rules, are substituted by the words “provided or agreed to be provided”
- taxable services of telecommunication service, and
- service portion in execution of a works contract
read Detailed Analysis of Provisions related to works Contract ,Meaning , Valuation, effective Service Tax rate on works contract and reverse charge on works contract wef 01.07.2012
B Com (Hons) FCA, FCMA, MIMA, CIQA, PGDEMM
Former Chairman NIRC of ICAI
Former Chairman NIRC of ICWAI
Author of “An Introduction to Service Tax”
Author of “Comprehensive Guide to Service Tax”