Tuesday, June 5, 2012

SERVICE TAX NEW SECTIONS WEF 01.07.2012:NOTIFICATION


on Tuesday, June 5, 2012

As we have already informed you earlier that Finance minister has announced that New service tax regime is applicable with effect from 01.07.2012.Now formal notification in regard has been issued vide notification number 19/2012,20/2012,21/2012,22/2012, 23/2012 dated 05/07/2012.

After these notification in brief following main changes will be applicable in service tax wef 01.07.2012

The following sections will become ineffective from 01.07.2012 .

  1. Section 65 – Definition of Taxable Service 
  2. Section 65A – Classification of Taxable service 
  3. Section 66 -Charge of Section Tax 
  4. Section 66A – Charge of Service Tax on Services received from outside India
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 
  6. Section 66F – Principles of interpretation of specified description of Services or bundled Services 
Further new service has been added in reverse charge of service tax vide notification 15/2012 applicable from 01.07.2012

In continuance of DYN-171, Do You Know Series Team has made an attempt to provide a gist of provisions applicable from 1st July, 2012:-
 
S. No.
Provision
Gist of Provisions
Relevant Notification/ Provision
1.
Negative List Approach
Service Tax would apply on all Services except those mentioned in Negative List.
Section 66B of Finance Act, 1994
2.
Reverse Charge Mechanism
In existing reverse charge mechanism some additional services has been added in respect of which instead of service provider service receiver or both service provider as well as service receiver is/are liable to pay tax e.g. in respect of  Services provided by individual lawyer to any business entity, business entity is liable to pay service tax.
Notification No. 15/2012-ST
3.
Mega Exemption Notification
Exemption would be applicable in respect of services mentioned in Mega Exemption Notification e.g. Services by way of motor vehicle parking to general public, Services provided to the Government or local authority by way of erection, construction, maintenance, repair, alteration, renovation or restoration of a civil structure
Notification No. 12/2012-ST
4.
New Abatement Scheme
New Abatement scheme will provide benefit of abatement as well as CENVAT Credit e.g. in respect of Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, CENVAT Credit of input services will be available.

Notification No. 13/2012-ST
5.
Changes in Service Tax (Determination of Value) Rules, 2006
Amended provisions will interalia provide new valuation provisions for Work Contract Service, Restaurant Service and Outdoor Caterer Service.
Notification No. 11/2012-ST


However, above sections will become effective from 01.07.2012

Notification in these regard is given here under for your ready reference.19-23/2012 dated 05/06/2012

Notification No. 19 /2012-Service Tax
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]

Notification No. 20 /2012-Service Tax
G.S.R.___(E).- In exercise of the powers conferred by the proviso to section 65 of the Finance Act, 1994(32 of 1994), the Central Government hereby appoints the 1st day of July, 2012 as the date with effect from which the provisions of the said section 65 of the said Act shall not apply, except as respects things done or omitted to be done before the said section 65 so ceases to apply.
[F. No. 334 /1 /2012-TRU]

Notification No. 21 /2012-Service Tax
G.S.R.___(E).- In exercise of the powers conferred by the sub-section (3) of section 65A of the Finance Act, 1994(32 of 1994), the Central Government hereby appoints the 1st day of July, 2012 as the date with effect from which the provisions of the said section 65A of the said Act shall not apply, except as respects things done or omitted to be done before the said section 65A so ceases to apply.
[F. No. 334 /1 /2012-TRU]

Notification No. 22 /2012-Service Tax
G.S.R.___(E).- In exercise of the powers conferred by the proviso to section 66 of the Finance Act, 1994(32 of 1994), the Central Government hereby appoints the 1st day of July, 2012 as the date with effect from which the provisions of the said section 66 of the said Act shall not apply, except as respects things done or omitted to be done before the said section 66 so ceases to apply.
.[F. No. 334/1 /2012-TRU]

Notification No. 23 /2012-Service Tax
G.S.R.___(E).- In exercise of the powers conferred by the sub-section (3) of section 66A of the Finance Act, 1994(32 of 1994), the Central Government hereby appoints the 1st day of July, 2012 as the date with effect from which the provisions of the said section 66A of the said Act shall not apply, except as respects things done or omitted to be done before the said section 66A so ceases to apply.
[F. No. 334 /1 /2012-TRU]

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