TYPE OF AMENDMENT
SUMMARY OF CHANGES
This rule defines the person liable for paying service tax. Below changes are made :
1) Earlier it is provided that In case of service of Individual Advocate or Firm of advocate to Business entity, recipient of service is liable to pay service tax.
However now in case service are provided by senior advocate to business entity, then such advocate is supposed to charge and pay service tax to government.
2) Earlier it was provided that in relation to service provided by a mutual fund agent or distributor to a mutual fund or asset management company, the recipient of the service is liable to pay service tax
However now it is provided that henceforth such agent/distributor will charge & pay service tax to government
· Now senior advocate has to charge service tax on its invoice.
· In last fiscal budget (Budget 2015-16), it was provided that is case of services of mutual fund agent/distributor to Mutual Fund/Asset Management Company, recipient of service will be liable to pay service tax.
However this amendment is exactly opposite to what was incorporate in last budget.
· Consequent to above changes, necessary amendment is also made in reverse charge Notification No 30/2012 through Notification No 18/2016 ST dt 1.3.16
Proviso to Rule 6(1)
It is now provided that,
1) quarterly service tax payment benefit is available to:
a) Individual / Proprietary Firm
b) Partnership Firm
d) One Person Company, whose total taxable value of service in preceding year is less than Rs 50 lakhs.
Service Tax liability on cash basis ( that is Service Tax will be payable, when payment for service is received and not on accrual basis) facility is now allowed to:
a) Individual / Proprietary Firm
b) Partnership Firm
c) One Person Company,
whose total taxable value of service in preceding year is less than Rs 50 lakhs.
· HUF was unnecessarily deprived off benefit of quarterly payment facility of service tax till date, unlike individual or Firm.
Late but finally HUF is now allowed quarterly payment facility.
However HUF is still required to make service tax payment on accrual basis as per Point of Taxation Rules and not as per cash basis.
· Boost to One Person Company (OPC) concept. Now OPC can also pay service tax quarterly, provided his turnover in preceding year is less than Rs 50 lakhs.
Also OPC can pay service tax only after payment received for services.
Insurer carrying on life Insurance Business shall have below additional option to pay tax:
“In case of single premium annuity policies other than (i) above, 1.4 percent of the single premium charged from the policy holder”
Service tax liability on single premium annuity policies is being rationalized and the effective alternative service tax rate is being prescribed @ 1.4 % of the total premium charged.
Rule 7(3A), (3B)
Rule 7 provides for service tax returns.
Now Annual Service Tax Returnis incorporated in service tax to be filed before 30th November of the succeeding financial year.
Annual Service Tax Return is introduced as step towards GST and in line with Excise Annual Return Requirement.
Form of Annual Return Form is yet to be prescribed
This Rule provides that revised Annual Return can be filed within one month from date of submission of original Annual Return, provided original return is submitted within due date.
Revised Return facility is also allowed for Annual Return.
This Rule provides that, if Annual Return is filed after due date, then penalty is payable as under:
a) Rs 100 per day delay in filing of Annual Return
b) Subject to maximum of Rs 20,000/-
Penalty for delayed filing of Annual Return is incorporated in line with ST 3 Return.
CHANGES MADE IN SERVICE TAX RULES 1994 APPLICABLE FROM 01.04.2016
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