Presentation on Service tax at Ernakulam dated 28.07.2013

Presentation

on

Service Tax

Organized By By Indirect Tax Committee of ICAI Dr. Sanjiv Agarwal@ Ernakulam FCA, FCS, 28th July, 2013 Jaipur

© Dr. Sanjiv Agarwal

Certificate Course on Indirect Taxes

SESSION – III

Exemptions

&

Abatements

2


3


This Presentation covers –

General exemptionsExempted services under N. No. 25/2012-ST Abatements in Service Tax

Exemptions under Service Tax General Exemptions

Small Scale Exemption

• The threshold exemption limit of Rs. 10 lakh continues to exist and it is over and above the exemptions notified in Notification No. 25/2012-ST dated 20.6.2012.

• W.e.f. 1.4.2012, aggregate value of Rs. 10 lakh would mean the sum total of value of first consecutive invoices issued during a financial year, but does not include value charged in invoices towards such services which are exempt from whole of service tax. (Refer Notification No. 33/2012-ST dated 20.6.2012)

to be contd….

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Exemption under Service Tax General Exemptions

• W.e.f.1.07.2012, Notification No. 6/2005 as amended shall no longer be applicable. There is a change in scope of aggregate value which shall mean as follows and subject to following conditions-total of value of taxable services value shall be as charged in first consecutive

invoices issued during financial yearvalue charged in invoices issued for taxable

services which are exempt from whole of Service Tax shall be excluded in determining the aggregate value

5


Exemption for Exporters/SEZ Transportation of export goods by Goods Transport Agency in a

goods carriage received by an exporter for transport of goods. (Refer Notification No. 31/2012- ST dated 20.6.2012)

Refund of service tax paid on all input taxable services received by an exporter of goods and used for export of goods, subject to certain specified conditions. (Refer Notification No. 39/2012-ST dated 20.6.2012)

Refund of service tax paid on the specified services received by the SEZ Unit / Developer and used for the authorised operations. In case where the specified services received by the SEZ Unit or the Developer are used exclusively for the authorised operations, the person liable to pay service tax has the option not to pay the service tax ab initio (Refer Notification No. 12/2013-ST dated 01.07.2013 superseding N. No. 40/2012 – ST, dated 20.6.2012)

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Exemption for Exporters/SEZ Rebate of Service Tax paid on taxable services

received by exporter of goods and used for export of goods, subject to conditions (Refer Notification No. 41/2012-ST dated 29.6.2012)

Exemption to services provided by commission agent located outside India and engaged by Indian exporter for promotion of export goods exported upto Service Tax calculated on 10% of free on board value of export goods (Refer Notification No. 42/2012-ST dated 29.6.2012)

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Exemption to Import of Technology Taxable service involving import of technology, from so

much of service tax, as is equivalent to the extent of amount of cess payable on the said transfer of technology under the provisions of section 3 of the Research and Development Cess Act, 1986.(Refer Notification No. 14/2012-ST dated 17.3.2012)

Exemption for Services to Foreign Diplomatic Mission

Taxable services provided for the official use of a foreign diplomatic mission or consular post in India, or for personal use or for the use of the family members of diplomatic agents or career consular officers posted therein. (Refer Notification No. 27/2012-ST dated 20.6.2012)

8


Exemption to Services by TBI or STEP Taxable services provided by a Technology Business

Incubator (TBI) or a Science and Technology Entrepreneurship Park (STEP) recognized by the National Science and Technology Entrepreneurship Development Board (NSTEDB) of the Department of Science and Technology, Government of India. (Refer Notification No. 32/2012-ST dated 20.6.2012)

Exemption to Renting of an Immovable Property Taxable service of renting of an immovable property, from

so much of the service tax leviable thereon, as is in excess of the service tax calculated on a value which is equivalent to the gross amount charged for renting of such immovable property less taxes on such property, namely property tax levied and collected by local bodies. (Refer Notification No. 29/2012-ST dated 20.6.2012)

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Specific Exempted Services

(Vide mega Exemption Notification No. 25/2012-ST dated 20.6.2012)

W.e.f. 1.7.2012Covers 39 specific exemptions Negative List services – not taxable at all ;

can be amended only by Parliament Exempted services – taxable but exempt

under notification; can be modified by notification.

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Health Care Services

Health care services by a clinical establishment, an authorised

medical practitioner or para-medicsWhat is health care

• “Health care services” means any service by way of diagnosis or treatment or care

• For illness, injury, deformity, abnormality or pregnancy in any organization system of medicine and includes services by way of supply of meals for the patient or transportation of the patient to and from a clinical establishment

• Does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or to reconstruct anatomy or functions of body affected due to congenital defects, developmental abnormalities, injury or trauma. 11


All health care services shall not be exempt but only recognized systems of medicine are covered under exemption.

Recognized systems of medicine include • Allopathy • Yoga • Naturopathy • Ayurveda • Homeopathy • Siddha • Unani • Any other system of medicine that may be recognized

by Central Government.

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Health care Services by a Clinical Establishment or Authorized Medical Practitioner or Para medics

“Clinical establishment” means • a hospital • nursing home• clinic,• sanatorium or an institution by, whatever name called,• that offers services, or facilities requiring diagnosis or

treatment or care for• illness,• injury,• deformity,• abnormality or • pregnancy,

• in any recognized system of medicine, established and administered or maintained by any person or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases.

13


• Paramedics are trained health care professionals, e.g. nursing staff, physiotherapists, technicians, lab assistants etc.

• The services to be exempt must• be health care services• be provided by -

(i) a clinical establishment, or(ii) an authorised medical practitioner, or (iii) para-medics

• Earlier exempted under Notification No. 30/2011-ST dated 25.4.2011 w.e.f. 1.5.2011.

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Services by way of Charitable Activities

Services by an entity registered under section 12AA of the Income tax

Act, 1961 by way of charitable activities

“Charitable activities”- Clause (k) means activities relating to – (a) public health by way of –

• care or counselling 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 narcotics drugs or alcohol or • public awareness of preventive health, family

planning or prevention of HIV infection (b) advancement of religion or spirituality

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(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 a rural

area

(d) preservation of environment including watershed, forests and wildlife , or

(e) advancement of any other object of general public utility up to a value of twenty five lakhs rupees in any FY provided that total value of such activities had not exceeded twenty five lakhs rupees during the preceding FY

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Conditions for this exemption -services should be provided by an entity

registered u/s 12AA of Income Tax Act, 1961, andservices should be charitable activities (as above)

17

Services relating to Religious Place and

Religious Ceremony Services by a person by way of-

renting of precincts of a religious place meant for general public or

conduct of any religious ceremony• Renting of precinct of a religious place as well as

conduct of any religious ceremony, both shall be exempt• Religious place is a place which is primarily meant for

conduct of prayers or worship pertaining to a religion• ‘Precincts’ means an area within the walls or perceived

boundaries of a particular building or place; an enclosed or clearly defined area of ground around a cathedral, church, temple etc.

18

Services relating to Religious Place and Religious Ceremony

• Exemption is available only if the place is meant for general public

• General public means the body of people at large sufficiently defined by some common quality of public or impersonal nature

• E.g.- if a marriage is performed in precincts of a church by renting of that place, it would be exempt but if only a reception is hosted, it may be taxable

19

Services provided by arbitral tribunal

Services provided by- (a) an arbitral tribunal to - (i) any person other than a business entity; or (ii) a business entity with a turnover up to rupees ten

lakh in the preceding financial year; (b) an individual as an advocate or a partnership firm of

advocates by way of legal services to,- (i) an advocate or partnership firm of advocates

providing legal services ; (ii) any person other than a business entity; or (iii) a business entity with a turnover up to rupees ten

lakh in the preceding financial year; or (c) a person represented on an arbitral tribunal to an

arbitral tribunal20

Services provided by arbitral tribunal

Taxability for Arbitral Tribunal Sole / Panel

to Arbitral Tribunal exemptto any person (non business entity) exempt to business entity (turnover upto 10 lakh) exemptto business entity (turnover > 10 lakh) taxed under reverse charge

Taxability for advocates Individual / firm to Individual / firm exemptto business entity (turnover upto 10 lakh) exemptto business entity (turnover > 10 lakh) taxed under reverse charge

• Firm includes LLP• Effectively, no tax to be paid by advocates / arbitral tribunal • Legal services – advice, consultancy or assistance in any branch of

law in any manner, includes representational services (N. No. 25/2012-ST dated 20.6.2012)

21

Services by way of technical testing or analysis of newly developed drugs

Services by way of technical testing or analysis of newly developed drugs, including vaccines and herbal remedies, on human participants by a clinical research organization approved to conduct clinical trials by the Drug Controller General of India

Conditions to be satisfied –

(a) service of conduct of technical testing and analysis

(b) service in relation to newly developed drugs/vaccines/herbal remedies

(c) service of testing on human participants

(d) service by clinical research organization approved by Drug Controller General of India.

22

Services of training or coaching in recreational activities

Services by way of training or coaching in recreational activities relating to arts, culture or sports

• Exemption is to training or coaching Such coaching or training must relate to any one

or more of — arts, culture, sports

• Activities by performing artists in folk or classical art forms of music, dance or theatre are not liable to service tax

23

Services provided to educational institution

Services provided to or by an educational institution in respect of education exempted from service tax, by way of -

auxiliary educational services or renting of immovable property

• Auxiliary education services shall cover the services in relation to

educational activities only and include –i. any service relating to imparting any

skill knowledge education development of course conduct other knowledge enhancement activity

ii. whether for students or faculty iii. out sourced activities ordinarily carried out by educational

institutions

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Services provided by educational institution

iii. services in relation to – admission conduct of examination catering of students under any mid day meal

scheme sponsored by Government Transportation of students or faculty

iv. Services in relation to catering under mid day scheme and transportation were hitherto exempt under different notifications under outdoor catering services

and tour operator’s services

25

Services provided to the Government, a

local authority or a governmental authority Services provided to the Government, a local authority or a

governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of -

a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession;

b) a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 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) water supply (ii) water treatment,

or (iii) sewerage treatment or disposal; orf) 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 Act;

26

Services provided to the Government, a local authority or a governmental authority

Government (States or Central) or any local authority (such as municipal corporation, development authority etc) or governmental authority (such as Revenue Board, Water Board etc) shall be exempt from levy of service tax on• construction, • erection,• commissioning, • installation, • completion, • fitting out, • repair, • maintenance,• renovation, or• alteration, in relation to specified structure, buildings or complex.

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Services provided to the Government, a local authority or a governmental authority

Construction of buildings or structures such as hospitals or educational institutes for the government or local authority or governmental authority –Exempt

if such construction is for others – Taxable A civil structure or any other original works meant

predominantly for use other than for commerce, industry, or any other business or profession – Exempt

If client is other than the Government, a local authority or a governmental authority, service tax is required to paid

Service tax is payable on construction of a residential complex having more than one single residential unit

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Services provided by way of construction, erection, commissioning, installation, completion, fitting out,

repair, maintenance, renovation, or alteration Services provided by way of construction, erection,

commissioning, installation, completion, fitting out, repair, maintenance,

renovation, or alteration of,-

a) a road, bridge, tunnel, or terminal for road transportation for use by general public;

b) a civil structure or any other original works pertaining to a scheme under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana;

c) a 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;

d) a pollution control or effluent treatment plant, except located as a part of a factory; or

e) a structure meant for funeral, burial or cremation of deceased

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Services provided by way of construction, erection, commissioning, installation, completion, fitting out,

repair, maintenance, renovation, or alteration

• Construction of roads for use by general public - Exempt• Construction of roads which are not for general public use

e.g. construction of roads in a factory, residential complex etc –Taxable

• If assessee is constructing such structures for the government, a local authority or a governmental authority – Exempt

• If assessee is constructing for others – Taxable• construction of a building owned by an entity registered

under section 12 AA of the Income tax Act, 1961 and meant predominantly for religious use by general public – Exempt

• Repair, maintenance of airports, ports and railways -Taxable

30

Services by way of construction, erection,

commissioning, or installation of original works Services by way of construction, erection, commissioning, or

installation of original works pertaining to,-a) an airport, port or railways, including monorail or metro;b) a single residential unit otherwise than 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) mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages;

31

Services by way of construction, erection, commissioning, or installation of original works

• “Original works” as defined in Valuation Rules means – (a) all new constructions; or (b) all types of additions and alterations to abandoned or

damaged structures on land that are required to make them workable,

(c) erection, commission or installation of plant, machinery or equipment or structures, whether prefabricated or otherwise

• No service tax liability on erection or installation of machineries or equipments for units processing agricultural produce

• Erection or installation of machineries or equipments for dal mills, rice mills, milk dairies or cotton ginning mills -Exempt

• Only erection and construction of original works is covered • Exemption will cover low cost houses under the scheme of

affordable housing in partnership

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Temporary transfer or permitting the use or

enjoyment of a copyright covered under

clause (a) or (b) of sub-section 91) of section

13 of the Indian Copyright Act, 1957, relating

to original literary, dramatic , musical, artistic

works or cinematograph films for exhibition

in a cinema hall or cinema theatre

Copyright Services

Services by a performing artist in folk or classical art forms

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;• The service provided by any person being a performing artist in

the form of -• folk, or• classical in relation to -• music, • dance, or• theatre

are exempt • if such an artist provides services as a brand ambassador for any

product, service, event or company etc for a consideration - Taxable

34

Services by way of renting of a hotel, inn, guest

house, club, campsite or other commercial places Services by way of renting of a hotel, inn, guest house, club,

campsite or other commercial places meant for residential or lodging

purposes, having declared tariff of a unit of accommodation below rupees one thousand per day or equivalent

• “Declared tariff” includes charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air-conditioner, refrigerators or any other amenities, but does not include any discount offered on the published charges for such unit

• Abatement under Notification No. 26/2012-ST is also available to such services where declared tariff is Rs. 1000 or more and Service Tax is payable only on 60 per cent of the gross value of taxable service

35

Serving of food or beverages by a restaurant / eating joints

Services provided in relation to serving of food or

beverages by a restaurant, eating joint or a

mess, other than those having

(i) the facility of air-conditioning or central air-

heating in any part of the establishment, at any

time during the year, and

(ii) a licence to serve alcoholic Beverages

36

Services by way of transportation by rail or a

vessel from one place in India to another Services by way of transportation by rail or a vessel from one place in India to another of the following goods -a. petroleum and petroleum products falling under Chapter heading

2710 and 2711 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);

b. relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap;

c. defence or military equipments;d. postal mail or mail bags; e. household effects;f. newspaper or magazines registered with the Registrar of

Newspapers; g. railway equipments or materials; h. agricultural produce;i. foodstuff (includes milk) including flours, tea, coffee, jaggery, sugar,

milk products, salt and edible oil, excluding alcoholic beverages; or j. chemical fertilizer and oilcakes;

37

Services provided by a goods transport agency for transportation of goods

Services provided by a goods transport agency by way of transportation of -

a) fruits, vegetables, eggs, milk, food grains or pulses in a goods carriage;

b) goods where gross amount charged for the transportation of goods on a consignment transported in a single goods carriage does not exceed one thousand five hundred rupees; or

c) goods, where gross amount charged for transportation of all such goods for a single consignee in the goods carriage does not exceed rupees seven hundred fifty;

d) agricultural produce;e) foodstuff including flours, tea, coffee, jaggery, sugar, milk products,

salt and edible oil, excluding alcoholic beverages; or f) chemical fertilizer and oilcakes; g) relief materials meant for victims of natural or man-made disasters,

calamities, accidents or mishap;h) defence or military equipments;i) newspaper or magazines registered with the Registrar of Newspapers;

38

Services by way of transportation by rail or a vessel from one place in India to another

• The exemption is in relation to – (a) transportation of specified goods only (b) in a rail or a vessel.(c) from one place to other by rail or vessel

• Goods specified are of general nature, transportation of which is in national and public interest

39

Services provided by a goods transport agency for transportation of goods

Services provided by a goods transport agency by way of transportation of -a) fruits, vegetables, eggs, milk, food grains or pulses in a

goods carriage;b) goods where gross amount charged for the

transportation of goods on a consignment transported in a single goods carriage does not exceed one thousand five hundred rupees; or

c) goods, where gross amount charged for transportation of all such goods for a single consignee in the goods carriage does not exceed rupees seven hundred fifty;

40

Services by way of giving on hire

Services by way of giving on hire -a) to a state transport undertaking, a motor vehicle

meant to carry more than twelve passengers; orb) to a goods transport agency, a means of

transportation of goods

Exemption shall be available subject to following conditions – • hiring to a State transport undertaking or to a goods

transport agency • hiring of motor vehicle to carry more than 12

passengers or in case of GTA, for transportation of goods

• In both the cases, vehicle should be given on hire

41

Services by way of vehicle parking to general public

Services by way of vehicle parking to general

public excluding leasing of space to an entity for providing such parking facility

42

Services provided to Government, a local

authority or a governmental authority Services provided to Government, a local authority or a governmental

authority by way of -

a) carrying out any activity in relation to any function ordinarily entrusted to a municipality in relation to water supply, public health, sanitation conservancy, solid waste management or slum improvement and upgradation; or

b) repair or maintenance of a vessel or an aircraft

Services provided to the Government or a local authority or Governmental

Authority may cover services by way of – (a) repair of a ship, boat or vessel (b) effluents and sewerage treatment; (c) waste collection or disposal; (d) storage, treatment or testing of water for drinking purposes; or (e) transport of water by pipeline or conduit for drinking purposes;

43

Specified schemes of general insurance business are exempt ( Insurance of Huts, cattles, tribals, export credit, crops, seeds crop, coconut palm, specified health schemes etc.)

Specified schemes of life insurance business are exempt (Janashree Bima Yojana , Aam Adami Bima Yojana)

Exemptions to Insurance Sector

Services provided to Government, a local authority or a governmental authority

Activities carried out in relation to functions ordinarily

entrusted to municipality in relation to – water supply public health sanction conservation solid waste management slum improvement / upgradation

45

Service by an unincorporated body or a non- profit entity

Service by an unincorporated body or a non- profit entity registered under any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution - a) as a trade union;b) for the provision of carrying out any activity which is

exempt from the levy of service tax; orc) 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

• Services should be provided to own members and not to non- members.

• Service of an unincorporated body or a non- profit entity registered under any law for the time being in force to its own members up to an amount of Rs 5,000 per member per month by way of reimbursement of charges or share of contribution is exempt from service tax

46

Services provided by Intermediaries

Services by the following persons in respective capacities -a) sub-broker or an authorised person to a stock broker; b) authorised person to a member of a commodity exchange;c) mutual fund agent to a mutual fund or asset management

company;d) distributor to a mutual fund or asset management

company;e) selling or marketing agent of lottery tickets to a

distributer or a selling agent; f) selling agent or a distributer of SIM cards or recharge

coupon vouchers; g) business facilitator or a business correspondent to a

banking company or an insurance company, in a rural area; or

h) sub-contractor providing services by way of works contract to another contractor providing works contract services which are exempt;

47

Services by an organizer to any person in respect of a

business exhibition held outside India

Services by an organizer to any person in respect of a business exhibition held outside India

Organizer should be in India Exhibition should be held outside India It should be in relation to business

48

Services received from a provider of

service located in a non- taxable territory Services received from a provider of service located in a

non- taxable territory by -a) Government, a local authority, a governmental authority

or an individual in relation to any purpose other than commerce, industry or any other business or profession;

b) an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) for the purposes of providing charitable activities; or

c) a person located in a non-taxable territory• If services are used for industry, business or commercial

purpose, service tax is payable under reverse charge basis

• For other purposes, it will be exempt from service tax

49

Services of Public Libraries

Services of public libraries by way of lending of books, publications or any other knowledge- enhancing content or material

Following services of public libraries shall be exempt –

lending of books lending of publications lending of other knowledge enhancing content

or material, (i.e. in soft or hard version, digital content, web content etc)

• ‘Public library’ has not been defined

50

Services by way of transfer of a going concern

Services by way of transfer of a going concern, as a whole or an independent part thereof

Going Concern as per AS-1Sale of business as a wholeRelated services are taxable

51

Services by a governmental authority by way of any activity in

relation to any function entrusted to a municipality Services by a governmental authority by way of any activity

in relation to any function entrusted to a municipality under article 243 W of the

Constitution

All services are not exempt Services by a governmental authority by way of any activity

in relation to any function entrusted to a municipality under article 243W of the Constitution are exempt

52

53

Abatements in Service Tax

• Over and above full exemption to 39 categories of services vide Notification No. 25/2012-ST dated 20.06.2012

• Earlier there were a number of exemption notifications that prescribed the abatements for various categories of services (including 1/2006)

• Abatements merged into a single Notification No 26/2012 - ST dated 20/6/12

• Valuation rules contain abatement for Works Contract and Supply of Food Services

Specific AbatementsSl. No. Description of taxable service Taxable

value(%)

Conditions

1 Financial leasing services including

equipment leasing and hire purchase

10 Nil

2 Transport of goods by rail (exempted upto

30.9.2012)

30 Nil

3 Transport of passengers, with or without

accompanied belongings by rail

( exempted upto 30.9.2012)

30 Nil

4 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

70 CENVAT credit on any

goods classifiable under

chapter 1 to 22 of the

Central Excise Tariff Act,

1985 has not been taken

under the provisions of the

CENVAT Credit Rules, 2004. 54

55

Specific AbatementsSl.

No

Description of taxable service Taxable

value(%)

Conditions

5 Transport of passengers by air, with or

without accompanied belongings

40 CENVAT credit on inputs or capital goods,

used for providing the taxable service, has

not been taken under the provisions of the

CENVAT Credit Rules, 2004.

6 Renting of hotels, inns, guest houses,

clubs, campsites or other commercial

places meant for residential or lodging

purposes

60 Same as above.

7 Transport of goods by road by Goods

Transport Agency

25 CENVAT credit on inputs, capital goods and

input services, used for providing the taxable

service, has not been taken under the

provisions of the CENVAT Credit Rules, 2004.

8 Services provided in relation to chit

[ quashed by Delhi High Court in Delhi

Chit Fund case (2013) 39 STT 955 ]

70 Same as above.

56

Specific Abatements

Sl.

No

Description of taxable service Taxable

value(%)

Conditions

9 Renting of any motor vehicle

designed to carry passengers

40 Same as above.

10 Transport of goods in a vessel from

one port to another

50 Same as above.

11 Tour operator services

(i) provided by a tour operator in relation

to a package tour

25 (i) CENVAT credit on inputs, capital

goods and input services, used for

providing the taxable service, has not

been taken under the provisions of the

CENVAT Credit Rules, 2004.

(ii) The bill issued for this purpose

indicates that it is inclusive of charges

for such a tour.

57

Sl. No Description of taxable

service

Taxable

value(%)

Conditions

(ii) provided by a tour operator in

relation to a tour, solely arranging

or booking accommodation

10 (i) CENVAT credit on inputs, capital goods

and input services, used for providing the

taxable service, has not been taken under

the provisions of the CENVAT Credit Rules,

2004.

(ii) The invoice, bill or challan issued

indicates that it is towards the charges for

such accommodation.

(iii) This exemption shall not apply in such

cases where the invoice, bill or challan

issued by the tour operator, in relation to a

tour, only includes the service charges for

arranging or booking accommodation for

any person and does not include the cost

of such accommodation.

Specific Abatements

58

Sl. No Description of taxable service Taxable

value(%)

Conditions

(iii) Services, other than

services specified above in (i)

or (ii)

40 (i) CENVAT credit on inputs, capital

goods and input services, used for

providing the taxable service, has not

been taken under the provisions of

the CENVAT Credit Rules, 2004.

(ii) The bill issued indicates that the

amount charged in the bill is the gross

amount charged for such a tour.

Specific Abatements

59

Sl. No Description of taxable service Taxable

value(%)

Conditions

12. 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 -

(i) For residential unit having carpet area upto 2000 sq. ft. or ( and w.e.f. 8.05.2013) where the amount charged is less than rupees one crore;

(ii) For other than the (i) above

25 (upto 28.02.2013)

25 ( w.e.f. 1.03.2013)

30 ( w.e.f. 1.03.2013)

(i) CENVAT credit on inputs used for providing the taxable service has not been taken under the provisions of the CENVAT Credit Rules, 2004.

(ii) The value of land is included in the amount charged from the service recipient.

Specific Abatements

60

Specific Abatements

Draft Circular F. No.354 /146/2012 – TRU dated 27.09.2012 (Air Travel)

Charges which are directly related to journey such as re-confirmation fee, date change fee, seat upgrade fee, preferred seat charges etc. will be covered by abatement

Charges which are not related to journey such as meal charges, escort charges etc. will not be covered by abatement.

Excess baggage charge may be leviable to service tax without abatement

Pet charges may be leviable to service tax without abatement

For cancellation charges billed separately as administrative charge, abatement will not be applicable

Health & Medicine

Presentation on Service tax at Ernakulam dated 28.07.2013