Automatic Service tax late payment interest calculator

As we all know that with effect from 01.10.2014 rate of interest on delayed payment of service Tax has been revised based on delay and Turnover  in Payment of service tax vide Notification No. 12/2014 dated 11.07.2014. To make the calculation of Interest on delayed payment of Service Tax Easy we have created a Calculator in Excel by which Readers can calculate Interest on delayed Service Tax

Payment. All our readers have to do after downloading the sheet is to fill Turnover of last financial year, Service tax payable amount, swachh bharat cess payable , due date and payment date, interest will come automatically.

Download Automatic Service Tax Late payment interest calculator

It may be noted that:

1) 3 percent interest rate concession allowed u/s 75 shall continue to be allowed  to Assessee whose  value of taxable services provided during the last preceding financial year does not exceed sixty lakh rupees.

2) This rate structure will not be applicable to VCES cases as interest @ 18% p.a. is payable under the scheme which ends on 31 December, 2014

3) The rate of interest is simple interest per annum

4)  New interest rate will be operational only on or after 1 October, 2014. Upto 1.10.2014, rate of interest @ 18% p.a. will continue to apply.

Updated List of Exempt Services under Service Tax

Vide Finance Act, 2012 Concept of Negative list of Services been introduced according to which all services except the those specified in Negative list  or been exempted specifically from service Tax  are liable for Service Tax. First Notification  issued notifying exempt services was Principal Notification No. 25/2012 – Service Tax, dated 20th June, 2012.   While Negative list of services was specified in section 66D of Finance Act, 1994. In this Article we have prepared a List of Services which are exempt from Service Tax as on 13.04.2016 from Service Tax after considering Principal Service Tax Notification 25/2012-Service Tax and subsequent Notifications issued by CBEC from time to time.

Details of Notifications effecting Subsequent Amendment to Exempt List of Services are as follows (Updated till 13.04.2016) :-

S. No.	Notification No.	Title
1	Notification No. 22/2016-Service Tax, dated: 13th April, 2016	CBEC notifies 10 types of govt services exempt from Service Tax
2	Notification No. 9/2016-Service Tax, Dated: March 01, 2016	Budget 2016: Notification for Changes in Service Tax Exemption
3	Notification number 07/2016 – Service Tax, dated: 18th February, 2016	Tax on services by Govt to businesses with turnover below 10 Lakh
4	Notification No. 20/2015-Service Tax, Dated- 21st October, 2015	Amendment in Negative List of Service Tax
5	Notification No. 12/2015 – Service Tax, dated the 30th April, 2015	Service Tax Exemption to Bima, Jan Dhan Yojna and to Atal Pension Yojana
9	Notification No. 6/2015-Service Tax, Dated: March 01, 2015	Changes in Mega Exemption List of Services Vide Budget 2015
7	Notification No.17/2014–Service Tax, dated: 20th August, 2014	Haj and Mansarovar pilgrimage gets Service Tax exemption
8	Notification No.06/2014 –Service Tax- Dated: 11th July, 2014	Budget 2014 – Changes in Mega Exemption List of Services
9	Notification No.04/2014 – Service Tax, dated 17th February, 2014	Exempting Services related to ‘Rice’ and Services provided by cord blood banks
10	Notification No. 02/2014 – Service Tax, Dated–30th January, 2014	Change in Definition of governmental authority in Mega Exemption Notification
11	Notification No.01/2014- Service Tax, dated 10thJanuary, 2014	Regarding Exemption to Services by way of sponsorship of sporting events organised
12	Notification No.14/2013- Service Tax, dated 22ndOctober, 2013 –	No Services tax on serving of food in canteen by Factory
13	Notification No.13/2013 – Service Tax, Dated- 10thSeptember, 2013 –	Service Tax Exemption to National Skill Development Corporation & others related to it
14	Notification No. 49/2012 – Service Tax, Dated- 24th December, 2012 –	Govt exempts Janashree and Aam Aadmi Bima Yojana from service tax
15	Notification No. 44/2012-Service Tax, dated  7th August, 2012–	Service Tax exemption extended to slaughtering of all animals

On the basis of Analysis of above mentioned Notifications we have Compiled Updated List of Services Under Exempt List as on 13.04.2016 on which no Service tax is payable. There are few exemption which will be available from 1st June 2016 and in respect of such exemptions we have mentioned either  before or after the exemption details the date of applicability of such exemption.

We have kept the Serial No. in  Exempt List Compiled below as per Various Notification issued by CBEC from time to time :-

S.N.	SERVICES COVERED UNDER MEGA EXEMPTION NOTIFICATION
1.	Services provided to the United Nations or a specified international organization;
2.	(i) Health care services by a clinical establishment, an authorised medical practitioner or para-medics;
	(ii) Services provided by way of transportation of a patient in an ambulance, other than those specified in (i) above;
2A.	Services provided by cord blood banks by way of preservation of stem cells or any other service in relation to such preservation;
2B.	Services provided by operators of the Common Bio-medical Waste Treatment Facility to a clinical establishment by way of treatment or disposal of bio-medical waste or the processes incidental thereto;
3.	Services by a veterinary clinic in relation to health care of animals or birds;
4.	Services by an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) by way of charitable activities;
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;
5A.	Services by a specified organisation in respect of a religious pilgrimage facilitated by the Ministry of External Affairs of the Government of India, under bilateral arrangement;
6.	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;
	(As Substituted with effect from  1st day of April, 2016)(b) a partnership firm of advocates or an individual as an advocate other than a senior advocate, 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 Senior advocate‟ has the meaning assigned to it in section 16 of the Advocates Act, 1961 (25 of 1961);
	(As Substituted with effect from  1st day of April, 2016)(c) a senior advocate by way of legal services to a person other than a person ordinarily carrying out any activity relating to industry, commerce or any other business or profession
7	Omitted
8.	Services by way of training or coaching in recreational activities relating to arts, culture or sports;
9.	Services provided,-
	(a) by an educational institution to its students, faculty and staff;
	(b) to an educational institution, by way of,-(i) transportation of students, faculty and staff; (ii) catering, including any mid-day meals scheme sponsored by the Government; (iii) security or cleaning or house-keeping services performed in such educational institution; (iv) services relating to admission to, or conduct of examination by, such institution;
	“educational institution” means an institution providing services by way of:(i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force; (iii) education as a part of an approved vocational education course; ( with effect from such date on which the Finance Bill, 2016 receives assent of the President of India)
	“approved vocational education course” means, –(i) a course run by an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training or State Council for Vocational Training offering courses in designated trades notified under the Apprentices Act, 1961 (52 of 1961); or (ii) a Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person registered with the Directorate General of Training, Ministry of Skill Development and Entrepreneurship;‟ ( with effect from such date on which the Finance Bill, 2016 receives assent of the President of India)
9A	Any services provided by, _
	(i) the National Skill Development Corporation set up by the Government of India;
	(ii) a Sector Skill Council approved by the National Skill Development Corporation;
	(iii) an assessment agency approved by the Sector Skill Council or the National Skill Development Corporation;
	(iv) a training partner approved by the National Skill Development Corporation or the Sector Skill Council in relation to (a) the National Skill Development Programme implemented by the National Skill Development Corporation; or (b) a vocational skill development course under the National Skill Certification and Monetary Reward Scheme; or (c) any other Scheme implemented by the National Skill Development Corporation.
9B	(with effect from 1st March, 2016)Services provided by the Indian Institutes of Management, as per the guidelines of the Central Government, to their students, by way of the following educational programmes, except Executive Development Programme, –
	(a) two year full time residential Post Graduate Programmes in Management for the Post Graduate Diploma in Management, to which admissions are made on the basis of Common Admission Test (CAT), conducted by Indian Institute of Management;
	(b) fellow programme in Management;
	(c)  five year integrated programme in Management.
9C	(With effect from 1st day of April, 2016)services of assessing bodies empanelled centrally by Directorate General of Training, Ministry of Skill Development and Entrepreneurship by way of assessments under Skill Development Initiative (SDI) Scheme
9D	(With effect from 1st day of April, 2016)services provided by training providers (Project implementation agencies) under Deen Dayal Upadhyaya Grameen Kaushalya Yojana under the Ministry of Rural Development by way of offering skill or vocational training courses certified by National Council For Vocational Training.
10.	Services provided to a recognised sports body by-
	(a) an individual as a player, referee, umpire, coach or team manager for participation in a sporting event organized by a recognized sports body;
	(b) another recognised sports body;
11.	Services by way of sponsorship of sporting events organised,-
	(a) by a national sports federation, or its affiliated federations, where the participating teams or individuals represent any district, State, zone or Country;
	(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 or 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 (PYKKA) Scheme;
12.	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) Omitted
	(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) Omitted
	(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;
	(f) Omitted
12A	(With effect from 1st March, 2016)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 structure meant predominantly for use as (i) an educational, (ii) a clinical, or(iii) an art or cultural establishment; or (c) 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; under a contract which had been entered into prior to the 1st March, 2015 and on which appropriate stamp duty, where applicable, had been paid prior to such date: provided that nothing contained in this entry shall apply on or after the 1st April, 2020;
13.	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;
	(ba) a civil structure or any other original works pertaining to the „In-situ rehabilitation of existing slum dwellers using land as a resource through private participation‟under the Housing for All (Urban) Mission!Pradhan Mantri Awas Yojana, only for existing slum dwellers. (with effect from 1st March, 2016)
	(bb) a civil structure or any other original works pertaining to the „Beneficiary-led individual house construction/ enhancement under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana; (with effect from 1st March, 2016)
	(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 a structure meant for funeral, burial or cremation of deceased;
14.	Services by way of construction, erection, commissioning, or installation of original works pertaining to,-
	(As substituted with effect from 1st March, 2016)(a)  railways, excluding monorail and metro; Explanation.-The services by way of construction, erection, commissioning or installation of original works pertaining to monorail or metro, where contracts were entered into before 1st March, 2016, on which appropriate stamp duty, was paid, shall remain exempt.
	(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;
	(with effect from 1st March, 2016)(ca) low cost houses up to a carpet area of 60 square metres per house in a housing project approved by the competent authority under: (i) the “Affordable Housing in Partnership” component of the Housing for All (Urban) Mission!Pradhan Mantri Awas Yojana; (ii) any housing scheme of a State Government.
	(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;
14A	(with effect from 1st March, 2016)Services by way of construction, erection, commissioning, or installation of original works pertaining to an airport or port provided under a contract which had been entered into prior to 1st March, 2015 and on which appropriate stamp duty, where applicable, had been paid prior to such date: provided that Ministry of Civil Aviation or the Ministry of Shipping in the Government of India, as the case may be, certifies that the contract had been entered into before the 1st March, 2015: provided further that nothing contained in this entry shall apply on or after the 1st April, 2020;
15.	Services provided by way of temporary transfer or permitting the use or enjoyment of a copyright,-
	(a) covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957 (14 of 1957), relating to original literary, dramatic, musical or artistic works; or
	(b) of cinematograph films for exhibition in a cinema hall or cinema theatre;
16.	Services by an artist by way of a performance in folk or classical art forms of (i) music, or (ii) dance, or (iii) theatre, if the consideration charged for such performance is not more than one lakh and fifty thousand rupees:Provided that the exemption shall not apply to service provided by such artist as a brand ambassador. (Rs. One Lakh Been substituted by Rs. 1.50 Lakh wef 01.04.2016)
17.	Services by way of collecting or providing news by an independent journalist, Press Trust of India or United News of India;
18.	Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having declared tariff of a unit of accommodation below one thousand rupees per day or equivalent;
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;
19A.	Services provided in relation to serving of food or beverages by a canteen maintained in a factory covered under the Factories Act, 1948 (63 of 1948), having the facility of air-conditioning or central air-heating at any time during the year.
20.	Services by way of transportation by rail or a vessel from one place in India to another of the following goods –
	(a) Omitted
	(b) relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap;
	(c) defence or military equipments;
	(d) Omitted
	(e) Omitted
	(f) newspaper or magazines registered with the Registrar of Newspapers;
	(g) railway equipments or materials;
	(h) agricultural produce;
	(i) milk, salt and food grain including flours, pulses and rice;
	(j) chemical fertilizer, organic manure and oil cakes;
	(k) cotton, ginned or baled.
21.	Services provided by a goods transport agency, by way of transport in a goods carriage of,-
	(a) agricultural produce;
	(b) goods, where gross amount charged for the transportation of goods on a consignment transported in a single carriage does not exceed one thousand five hundred rupees;
	(c) goods, where gross amount charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred fifty;
	(d) milk, salt and food grain including flours, pulses and;
	(e) chemical fertilizer, organic manure and oil cakes;
	(f) newspaper or magazines registered with the Registrar of Newspapers;
	(g) relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap; or
	(h) defence or military equipments;
	(i) cotton, ginned or baled.
22.	Services by way of giving on hire –
	(a) to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; or
	(b) to a goods transport agency, a means of transportation of goods;
23.	Transport of passengers, with or without accompanied belongings, by –
	(a) air, embarking from or terminating in an airport located in the state of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or Tripura or at Bagdogra located in West Bengal;
	(b) non-airconditioned contract carriage other than radio taxi, for transportation of passengers, excluding tourism, conducted tour, charter or hire; or;
	bb) stage carriage other than air-conditioned stage carriage; (with effect from 1st June 2016)
	(c) Exemption to services for transport of passengers, with or without accompanied belongings, by ropeway, cable car or aerial tramway –Omitted With effect from 1st day of April, 2016
24.	Omitted
25.	Services provided to Government, a local authority or a governmental authority by way of –
	(a) water supply, public health, sanitation conservancy, solid waste management or slum improvement and up-gradation; or;
	(b) repair or maintenance of a vessel
26.	Services of general insurance business provided under following schemes –
	(a) Hut Insurance Scheme;
	(b) Cattle Insurance under Swarnajaynti Gram Swarozgar Yojna (earlier known as Integrated Rural Development Programme);
	(c) Scheme for Insurance of Tribals;
	(d) Janata Personal Accident Policy and Gramin Accident Policy;
	(e) Group Personal Accident Policy for Self-Employed Women;
	(f) Agricultural Pumpset and Failed Well Insurance;
	(g) premia collected on export credit insurance;
	(h) Weather Based Crop Insurance Scheme or the Modified National Agricultural Insurance Scheme, approved by the Government of India and implemented by the Ministry of Agriculture;
	(i) Jan Arogya Bima Policy;
	(j) National Agricultural Insurance Scheme (Rashtriya Krishi Bima Yojana);
	(k) Pilot Scheme on Seed Crop Insurance;
	(l) Central Sector Scheme on Cattle Insurance;
	(m) Universal Health Insurance Scheme;
	(n) Rashtriya Swasthya Bima Yojana; or
	(o) Coconut Palm Insurance Scheme;
	(p) Pradhan Mantri Suraksha Bima Yojna
	(q) Niramaya‟ Health Insurance Scheme implemented by Trust constituted under the provisions of the National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999).  (with effect from 1st April, 2016)
26A.	Services of life insurance business provided under following schemes –
	(a) Janashree Bima Yojana (JBY); or
	(b) Aam Aadmi Bima Yojana (AABY);
	(c) life micro-insurance product as approved by the Insurance Regulatory and Development Authority, having maximum amount of cover of fifty thousand rupees.
	(d) Varishtha Pension Bima Yojana;
	(e) Pradhan Mantri Jeevan Jyoti Bima Yojana;
	(f) Pradhan Mantri Jan Dhan Yogana
26B	26B Services by way of collection of contribution under Atal Pension Yojana (APY).
26C	(With effect from 1st day of April, 2016)Services of life insurance business provided by way of annuity under the National Pension System regulated by Pension Fund Regulatory and Development Authority of India (PFRDA) under the Pension Fund Regulatory And Development Authority Act, 2013 (23 of 2013)
27.	Services provided by an incubatee up to a total turnover of fifty lakh rupees in a financial year subject to the following conditions, namely:-
	(a) the total turnover had not exceeded fifty lakh rupees during the preceding financial year; and
	(b) a period of three years has not been elapsed from the date of entering into an agreement as an incubatee;
28.	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; 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;
29.	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) Omitted
	(d) Omitted
	(e) Omitted
	(f) selling agent or a distributer of SIM cards or recharge coupon vouchers;
	(g) business facilitator or a business correspondent to a banking company with respect to a Basic Savings Bank Deposit Account covered by Pradhan Mantri Jan Dhan Yojana in the banking company’s rural area branch, by way of account opening, cash deposits, cash withdrawals, obtaining e-life certificate, Aadhar seeding;Basic Savings Bank Deposit Account means a Basic Savings Bank Deposit Account opened under the guidelines issued by Reserve Bank of India relating thereto.
	(ga) any person as an intermediary to a business facilitator or a business correspondent with respect to services mentioned in clause (g);
	(gb) business facilitator or a business correspondent to an insurance company in a rural area;
	(h) sub-contractor providing services by way of works contract to another contractor providing works contract services which are exempt;
30.	Carrying out an intermediate production process as job work in relation to –
	(a) agriculture, printing or textile processing;
	(b) cut and polished diamonds and gemstones; or plain and studded jewellery of gold and other precious metals, falling under Chapter 71 of the Central Excise Tariff Act ,1985 (5 of 1986);
	(c) any goods excluding alcoholic liquors for human consumption, on which appropriate duty is payable by the principal manufacturer; or
	(d) processes of electroplating, zinc plating, anodizing, heat treatment, powder coating, painting including spray painting or auto black, during the course of manufacture of parts of cycles or sewing machines upto an aggregate value of taxable service of the specified processes of one hundred and fifty lakh rupees in a financial year subject to the condition that such aggregate value had not exceeded one hundred and fifty lakh rupees during the preceding financial year;
31.	Services by an organiser to any person in respect of a business exhibition held outside India;
32.	Omitted
33.	Services by way of slaughtering of animals;
34.	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;
35	Services of public libraries by way of lending of books, publications or any other knowledge- enhancing content or material;
36.	Services by Employees’ State Insurance Corporation to persons governed under the Employees’ Insurance Act, 1948 (34 of 1948);
37.	Services by way of transfer of a going concern, as a whole or an independent part thereof;
38.	Services by way of public conveniences such as provision of facilities of bathroom, washrooms, lavatories, urinal or toilets;
39.	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.
40.	Services by way of loading, unloading, packing, storage or warehousing of rice, cotton, ginned or baled;
41.	Services received by the Reserve Bank of India, from outside India in relation to management of foreign exchange reserves;
42.	Services provided by a tour operator to a foreign tourist in relation to a tour conducted wholly outside India.
Provisions Applicable from Such date as the Central Government may, by notification in the Official Gazette, appoint
43.	Services by operator of Common Effluent Treatment Plant by way of treatment of effluent;
44.	Services by way of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labelling of fruits and vegetables which do not change or alter the essential characteristics of the said fruits or vegetables;
45.	Services by way of admission to a museum, national park, wildlife sanctuary, tiger reserve or zoo;
46.	Service provided by way of exhibition of movie by an exhibitor to the distributor or an association of persons consisting of the exhibitor as one of its members;
47.	Services by way of right to admission to,-
	(i) exhibition of cinematographic film, circus, dance, or theatrical performance including drama or ballet;
	(ii) recognised sporting event;
	(iii) award function, concert, pageant, musical performance or any sporting event other than a recognised sporting event, where the consideration for admission is not more than Rs 500 per person..
48	(48) Services provided by Government or a local authority to a business entity with a turnover up to rupees ten lakh in the preceding financial year.
49	(With effect from 1st day of April, 2016)Services provided by Employees‟ Provident Fund Organisation (EPFO) to persons governed under the Employees‟ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952)
50	(With effect from 1st day of April, 2016)Services provided by Insurance Regulatory and Development Authority of India (IRDA) to insurers under the Insurance Regulatory and Development Authority of India Act, 1999 (41 of 1999)
51	(With effect from 1st day of April, 2016)Services provided by Securities and Exchange Board of India (SEBI) set up under the Securities and Exchange Board of India Act, 1992 (15 of 1992) by way of protecting the interests of investors in securities and to promote the development of, and to regulate, the securities market;
52	(With effect from 1st day of April, 2016)Services provided by National Centre for Cold Chain Development under Ministry of Agriculture, Cooperation and Farmer‟s Welfare by way of cold chain knowledge dissemination
53	(Inserted with effect from 1st June 2016)Services by way of transportation of goods by an aircraft from a place outside India upto the customs station of clearance in India.
54	Services provided by Government or a local authority to another Government or local authority:Provided that nothing contained in this entry shall apply to services specified in sub-clauses (i),(ii) and (iii) of clause (a) of section 66D of the Finance Act, 1994;
55	Services provided by Government or a local authority by way of issuance of passport, visa, driving licence, birth certificate or death certificate;
56	Services provided by Government or a local authority where the gross amount charged for such services does not exceed ₹ 5000/- :Provided that nothing contained in this entry shall apply to services specified in sub-clauses (i), (ii) and (iii) of clause (a) of section 66D of the Finance Act, 1994: Provided further that in case where continuous supply of service, as defined in clause (c) of rule 2 of the Point of Taxation Rules, 2011, is provided by the Government or a local authority, the exemption shall apply only where the gross amount charged for such service does not exceed ₹ 5000/- in a financial year;
57	Services provided by Government or a local authority by way of tolerating non-performance of a contract  for which consideration in the form of fines or liquidated damages is payable to the Government or the local authority under such contract;
58	Services provided by Government or a local authority by way of-(a)    registration required under any law for the time being in force; (b)   testing, calibration, safety check or certification relating to protection or safety of workers, consumers or public at large, required under any law for the time being in force;
59	Services provided by Government or a local authority by way of assignment of right to use natural resources to an individual farmer for the purposes of agriculture;
60	Services by Government, a local authority or a governmental authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution;
61	Services provided by Government or a local authority by way of assignment of right to use any natural resource where such right to use was assigned by the Government or the local authority before the 1st April, 2016:Provided that the exemption shall apply only to service tax payable on one time charge payable, in full upfront or in installments, for assignment of right to use such natural resource;
62	Services provided by Government or a local authority by way of allowing a business entity to operate as a telecom service provider or use radiofrequency spectrum during the financial year 2015-16 on payment of licence fee or spectrum user charges, as the case may be;
63	Services provided by Government by way of deputing officers after office hours or on holidays for inspection or container stuffing or such other duties in relation to import export cargo on payment of Merchant Overtime charges (MOT).”.

(UPDATED ON 15.04.2016)

Service Tax Change W.e.f. 01/06/2106 Krishi Kalyan Cess: @ 0.5% [w.e.f. 01/06/2016] New Levy- Cenvat Available

Prevailing Service Tax Rate: @14% Cenvat Available

Swachchh Bharat Cess: @ 0.5% [w.e.f. 15/11/2015]- Cenvat Not Available

Krishi Kalyan Cess: @ 0.5% [w.e.f. 01/06/2016] New Levy- Cenvat Available

1. CHANGES IN NEGATIVE LIST AS GIVEN U/S 66D OF CHAPTER-V OF FINANCE ACT, 1994

♠ ENTRY RELATED TO EDUCATIONAL SERVICES PROPOSED TO BE REMOVED FROM NEGATIVE LIST

• Presently, clause (I) of section 66D of the Act [Negative List] covers specified educational services. These services are proposed to be omitted from the Negative List.
• But the service tax exemption on them is being continued by incorporating them in the general exemption notification(Notification No. 25/2012-ST as amended by notification No. 09/2016-ST, dated 01.03.2016);
• Consequently, the definition of “approved vocational education course” [clause (11) of section 65B] is also proposed to be omitted from the Finance Act and is being incorporated in the general exemption notification (Notification No. 25/2012-ST as amended by notification No 09/2016- ST, dated 01.03.2016). This amendment in the notificationshall come into effect from the date of enactment of Finance Bill, 2016.

♠ ENTRY RELATED TO “SERVICE OF TRANSPORTATION OF PASSENGERS” PROPOSED TO BE REMOVED FROM NEGATIVE LIST;

• The Negative List entry that covers “service of transportation of passengers, with or without accompanied belongings, by a stage carriage” is proposed to be omitted [section 66D (o) (i)] with effect from 01.06.2016.

• However, such services by a non-air-conditioned contract carriage will continue to be exempted by way of exemption notification [Notification No. 25/2012-ST, as amended by notification No. 09/2016-ST, dated 01.03.2016]
• Therefore, Service Tax will be levied on transportation of passengers by air conditioned stage carriage with effect from 01.06.2016, at the same level of abatement as applicable to the transportation of passengers by a contract carriage that is 60% without credit of inputs, input services and capital goods.

• As per Existing provision, Service of Transportation of passengers, with or without accompanied belongings, by a stage carriage is covered under the negative list, hence not liable to service tax. Consequently cenvat for the same are also not available.

♠ ENTRIES RELATED WITH “SERVICE OF TRANSPORTATION OF GOODS” OF NEGATIVE LIST PROPOSED TO BE AMENDED;

• The entry in the Negative List that covers services by way of transportation of goods by an aircraft or a vessel from a place outside India up to the customs station of clearance [section 66D (p) (ii)] is proposed to be omitted with effect from 01.06.2016.
• However such services by an aircraft will continue to be exempted by way of exemption notification [NN 25/2012-ST, as amended by NN. 09/2016-ST dated 01.03.2016].
• Therefore, Service Tax will be levied on provided services provided by a vessel by way of transportation of goods from outside India up to the customs station in India with effect from 01.06.2016.
• The domestic shipping lines registered in India will pay service tax under forward charge while the services availed from foreign shipping line by a business entity located in India will get taxed under reverse charge at the hands of the business entity. The service tax so paid will be available as credit with the Indian manufacturer or service provider availing such services (subject to fulfilment of the other existing conditions).
• Cenvat credit of eligible inputs, capital goods and input services is being allowed for providing the service by way of transportation of goods by a vessel from the customs station of clearance in India to a place outside India.

• Service by way of transportation of goods by a vessel from customs station of clearance in India to a place outside India is being excluded from the definition of “exempted service”. This would allow shipping lines to take credit on inputs and input services used in providing the said service. [Amendment in rule 2, clause (e) refers]

• As per Existing provision, Service of Transportation of goods by an aircraft or a vessel from a place outside India up to the customs station of clearance in India is covered under the negative list, hence not liable to service tax. Consequently cenvat for the same are also not available.

EXEMPTED SERVICES CLARIFIED:

• Export of service under Rule 6A of Service Tax Rules, 1994 has excluded the Service by way of transportation of goods by vessel from custom station of clearance in India to place outside India.
• The exclusion of outward transportation of goods by vessel from exempted services would enable the shipping lines to avail CENVAT credit of input services. The same is vital since the service of inward transportation of goods by shipping lines has been made taxable by excluding the same from negative list.

SERVICE TAX LEVIABLE UNDER REVERSE CHARGE ON ANY SERVICES PROVIDED BY GOVERNMENT OR LOCAL AUTHORITY TO A BUSINESS ENTITY W.E.F APRIL 1, 2016

• Effective from April 1, 2016, under clause (iv) of Section 66D(a) of the Finance Act, 1994 (“the Finance Act”), the words ‘support services’ will be substituted by the words ‘any service’ thereby, to exclude from the Negative List, any services provided by the Government or Local authority to a Business Entity [Section 109(1) of the Finance Act, 2015 read with Notification No. 06/2016-ST dated February 18, 2016]. However, the services provided by Government or Local authority to a Business Entity having turnover upto Rs. 10 lakh in the preceding Financial Year would remain exempt [New entry inserted vide after Entry No. 47 in the Mega Exemption Notification No. 25/2012- ST dated June 20, 2012 (“the Mega Exemption Notification”) amended vide Notification No. 07/2016-ST dated February 18, 2016].

• Amendment in the Reverse Charge Notification: The Union Budget, 2016 vide Notification No. 18/2016-ST dated March 1, 2016, has amended Reverse Charge Notification No. 30/2012-ST dated June 20, 2012 (“the Reverse Charge Notification”), to delete the words “by way of support services” appearing at Sl. No. 6 of the Table in the said notification with effect from April 1, 2016.
• Corresponding changes in the Service Tax Rules, 1994 (“the Service Tax Rules”) & the Finance Act:Corresponding changes have also been made in Rule 2(1)(d)(i)(E) of the Service Tax Rules and Section 65B(49) of the Finance Act containing definition of the term ‘support services’ is also proposed to be deleted.
• Thus, the liability to pay Service tax on any service provided by Government or a Local Authority to Business Entities shall be on the service recipient w.e.f. April 1, 2016 except

(1) renting of immovable property, and

(2) services specified in sub-clauses (i), (ii) and (iii) of clause (a) of Section 66D of the Finance Act.

• Immediate clarification required: Given that the definition of the term ‘service’ under Section 65B(44) of the Finance Act is wide enough to cover any activity carried out by a person for another for consideration, it appears that effective from April 1, 2016, all Governmental services (sovereign, regulatory fees, statutory charges etc.) would be exigible to Service tax – Immediate clarification is required from the Board to provide exclusion list of the Governmental services covered under the Service tax net.

• Amendment in Section 66E of the Finance Act to be effective from date of enactment of the Finance Bill, 2016(“FB, 2016”) – Mismatch in taxability for interim period: In the Union Budget, 2016, under Section 66E of the Finance Act, after clause (i), clause (j) is proposed inserted to include “assignment by the Government of the right to use the radio-frequency spectrum and subsequent transfers thereof” under the list of Declared services. Meaning thereby, assignment by Government of the right to use the spectrum as well as subsequent transfers of assignment of such right to use is a ‘service’ leviable to Service tax and not sale of intangible goods and the liability to pay Service tax will on the Business Entity under Reverse Charge. But such changes shall be effective from the date of enactment of FB, 2016, leading to dispute for taxability for the interim period i.e. from April 1, 2016 to date of enactment of FB, 2016.

2. CHANGES IN DECLARED LIST AS GIVEN U/S 66E OF CHAPTER V OF FINANCE ACT, 1994

♠ INSERTION OF NEW ENTRY IN DECLARED LIST

• New Entry “J” Inserted as a Declared Service (Applicable w.e.f. the enactment of Finance Bill’ 2016)
• Assignment by the Government of the right to use the radio-frequency spectrum and subsequent transfers thereof is proposed to be declared as a service under section 66E of the Finance Act, 1994 so as to make it clear that assignment by Government of the right to use the spectrum as well as subsequent transfers of assignment of such right to use, is a service leviable to service tax and not sale of intangible goods.
• As per the existing provisions, the same was taxable but the same was not covered in the list of declared services. Now it is being covered in the list of declared services to remove all controversies.

3. UNIFORM RATE OF INTEREST FOR DELAYED PAYMENT OF TAX

Section 73 amended: Interest rates on delayed payment of tax is proposed to be made uniform at 15% (earlier 18% in some cases), except in case of service tax collected but not deposited with the Central Government, where the rate of interest will be 24% (earlier as per the slab) from the date on which the service tax payment became due. [NN 13/2016-STand NN 14/2016-ST dated 01/03/2016]

Date of Effect – From the date of enactment of Finance Bill, 2016

Interest rates under Service Tax at various point of time are as hereunder;

Sr. No.	Period	Rate of Interest
1.	Till 11.05.2001	1.5% per month
2.	11.05.2001 to 11.05.2002	24% per annum
3.	11.05.2002 to 10.09.2004	15% per annum
4.	From 10.09.2004 to 31.03.2011	13% per annum
5.	From 01.04.2011	18% per annum
6.	From 01.10.2014 to date of enactment of Finance Bill, 2016	• Upto 6 months of delay……… 18% p.a. • Delay more than 6 months and upto 12 months.….24% p.a. • Delay more than a year……..30% p.a
7.	From date of enactment of Finance Bill, 2016 onward	@15% per annum

4. AMENDMENTS IN REVERSE CHARGE MECHANISM

I. MUTUAL FUND AGENTS SERVICE IS NO LONGER UNDER REVERSE CHARGE

Services provided by mutual fund agents/distributor to a mutual fund or asset management company are being put underdirect charge mechanism, i.e. the service provider is being made liable to pay service tax.

The small sub-agents down the distribution chain will still be eligible for small service provider exemption [threshold turnover of Rs 10 lakh/year] and a very small number will be liable to pay service tax. Earlier the same was taxable under reverse charge mechanism.

Date of Effect – Immediate effect i.e. from 01 April 2016

II. LEGAL SERVICE PROVIDED BY SENIOR ADVOCATE IS NO LONGER UNDER REVERSE CHARGE

From 01/04/2016 onwards, the amendment in Notification No. 30/2012 (Reverse Charge….removed) is that legal service provided by senior advocate to:-

(i) Advocates or firm of advocates

(ii) Business entity,

will be chargeable to service tax on forward basis, i.e. service tax will be charged by senior advocates to the above persons. Other services provided by senior advocates are exempted by entry 6 of Notification Number 25/2012-ST.

Now, ‘senior advocates’ are liable to pay service tax under direct charge mechanism as service providers since payment of service tax by a service receiver under reverse charge mechanism is no longer applicable.

On the other hand, legal service provided by a firm of advocates or an advocate (other than senior advocate) is continued to be taxable under reverse charge mechanism.

Date of Effect – Effective from 01 April 2016

5. AMENDMENT IN MEGA EXEMPTION NOTIFICATION NO. 25/2012-ST DATED 20.06.2012

♣ Withdrawal of existing entries from exemption notification number 25/2012-ST

I. Exemption on services provided by,-

i. a senior advocate to an advocate or partnership firm of advocates providing legal service; and

ii. a person represented on an arbitral tribunal to an arbitral tribunal,

is being withdrawn with effect from 01.04.2016 Refer Entry No. 6 [substituted]

and Service Tax is being levied under forward charge.

Presently the same are covered under the exemption notification, hence the same are not liable to service tax.

II. Exemption on the services of transport of passengers, with or without accompanied belongings, by ropeway, cable car or aerial tramway is being withdrawn with effect from 01.04.2016. Refer Entry No. 23(c) [withdrawn]

Presently, the same are covered under the exemption notification, hence the same are not liable to service tax.

III. Exemption on construction, erection, commissioning or installation of original works pertaining to monorail or metro,in respect of contracts entered into on or after 01.03.2016, is being withdrawn with effect from 01.03.2016. Refer Entry No. 14(a) [partially withdrawn]

Presently the same are covered under the exemption notification, hence the same are not liable to service tax.

♣ New entries in Mega Exemption Notification

S.No.	Particulars
1	Services by way of construction etc. in respect of- i. housing projects under Housing For All (HFA) (Urban) Mission/Pradhan Mantri Awas Yojana (PMAY); ii. low cost houses up to a carpet area of 60 square meters in a housing project under “Affordable housing in Partnership” component of PMAY; iii. low cost houses up to a carpet area of 60 square meters in a housing project under any housing scheme of the State Government; Refer new Entry 14(ca) are being exempted from Service Tax with effect from 01.03.2016. Presently, the same are not covered under the exemption notification, hence the same are liable to service tax @5.6%.
2	The service of life insurance business provided by way of annuity under the National Pension System regulated by Pension Fund Regulatory and Development Authority (PFRDA) of India is being exempted from Service Tax with effect from 01.04.2016. Refer new Entry 26C Presently, the same are not covered under the exemption notification, hence the same are liable to service tax @ 3.5%.
3	Services provided by Employees’ Provident Fund Organisation (EPFO) to employees are being exempted from Service Tax with effect from 01.04.2016. Refer new Entry 49 Presently, the same are not covered under the exemption notification, hence the same are liable to service tax @ 14%.
4	Services provided by Insurance Regulatory and Development Authority (IRDA) of India are being exempted from Service Tax with effect from 01.04.2016. Refer new Entry 50 Presently, the same are not covered under the exemption notification, hence the same are liable to service tax @ 14%.
5	The regulatory services provided by Securities and Exchange Board of India (SEBI) are being exempted from Service Tax with effect from 01.04.2016. Refer new Entry 51 Presently, the same are not covered under the exemption notification, hence the same are liable to service tax @ 14%.
6	The services of general insurance business provided under ‘Niramaya’ Health Insurance scheme launched by National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability in collaboration with private/public insurance companies are being exempted from Service Tax with effect from 01.04.2016. Refer new Entry 26(q) Presently, the same are not covered under the exemption notification, hence the same are liable to service tax @ 14%.
7	Services provided by National Centre for Cold Chain Development under Department of Agriculture, Cooperation and Farmer’s Welfare, Government of India, by way of knowledge dissemination are being exempted from Service Tax with effect from 01.04.2016. Refer new Entry 52 Presently, the same are not covered under the exemption notification, hence the same are liable to service tax @ 14%.
8	Services provided by Biotechnology Industry Research Assistance Council (BIRAC) approved biotechnology incubators to incubates are being exempted from Service Tax with effect from 01.04.2016. Earlier the same are not covered under the exemption notification, hence the same are liable to service tax @ 14%.
9	Services provided by way of skill/vocational training by training partners under Deen Dayal Upadhyay Grameen Kaushalya Yojana are being exempted from Service Tax with effect from 01.04.2016. Refer new Entry 9D Earlier the same are not covered under the exemption notification, hence the same are liable to service tax @ 14%.
10	Services of assessing bodies empanelled centrally by Directorate General of Training, Ministry of Skill Development & Entrepreneurship are being exempted from Service Tax with effect from 01.04.2016. Refer new Entry 9C Earlier the same are not covered under the exemption notification, hence the same are liable to service tax @ 14%.
11	The threshold exemption to services provided by a performing artist in folk or classical art forms of music, dance or theatre is being enhanced from Rs 1 lakh to Rs 1.5 lakh charged per event with effect from 01.04.2016. Entry 16 amended
12	Exemptions on services of: (a) Construction provided to the Government, a local authority or a governmental authority, in respect of construction of govt. schools, hospitals etc. (b) construction of ports, airports, are being restored in respect of services provided under contracts which had been entered into prior to 01.03.2015 on payment of applicable stamp duty, with retrospective effect from 01.04.2015. Refer new Entry 12A Presently, the same are not covered under the exemption notification, hence the same are liable to service tax @ 5.6%.
13	Services provided by way of construction, maintenance etc. of canal, dam or other irrigation works provided to bodies set up by Government but not necessarily by an Act of Parliament or a State Legislature, during the period from the 1st July, 2012 to 29th January, 2014, are being exempted from Service Tax with consequential refunds, subject to the principle of unjust enrichment. Refer new Entry 14A Presently, the same are not covered under the exemption notification, hence the same are liable to service tax @ 5.6%.
14	Services provided by the Indian Institutes of Management (IIM) by way of 2 year full time Post Graduate Programme in Management (PGPM) (other than executive development programme), Integrated Programme in Management and Fellowship Programme in Management (FPM) are being exempted from Service Tax with effect from 01.03.2016. Refer new Entry 9B Earlier the same are not covered under the exemption notification, hence the same are liable to service tax @ 14%.

ENABLING PROVISIONS FOR CONSEQUENTIAL REFUNDS

FOR THE PERIOD……….01/04/2015 TO 29/02/2016

Section 101. (1) Notwithstanding anything contained in section 66B, no service tax shall be levied or collected during the period commencing from the 1st day of July, 2012 and ending with the 29th day of January, 2014 (both days inclusive) in respect of taxable services provided to an authority or a board or any other body––

(i) set up by an Act of Parliament or a State Legislature; or

(ii) established by the Government,

with ninety per cent. or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution, by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of canal, dam or other irrigation works.

(2) Refund shall be made of all such service tax which has been collected but which would not have been so collected had sub-section (1) been in force at all material times.

(3) Notwithstanding anything contained in this Chapter, an application for the claim of refund of service tax shall be made within a period of six months from the date on which the Finance Bill, 2016 receives the assent of the President.

Section 102. (1) Notwithstanding anything contained in section 66B, no service tax shall be levied or collected during the period commencing from the 1st day of April, 2015 and ending with the 29th day of February, 2016 (both days inclusive), in respect of taxable services provided to the Government, a local authority or a Governmental authority, by way ofconstruction, 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 structure meant predominantly for use as––

(i) an educational establishment;

(ii) a clinical establishment; or

(iii) an art or cultural establishment;

(c) a residential complex predominantly meant for self-use or for the use of their employees or other persons specified in Explanation 1 to clause (44) of section 65B of the said Act,

under a contract entered into before the 1st day of March, 2015 and on which appropriate stamp duty, where applicable, had been paid before that date.

(2) Refund shall be made of all such service tax which has been collected but which would not have been so collected had sub-section (1) been in force at all the material times.

(3) Notwithstanding anything contained in this Chapter, an application for the claim of refund of service tax shall be made within a period of six months from the date on which the Finance Bill, 2016 receives the assent of the President.

Section 103. (1) Notwithstanding anything contained in section 66B, no service tax shall be levied or collected during the period commencing from the 1st day of April, 2015 and ending with the 29th day of February, 2016 (both days inclusive), in respect of services provided by way of construction, erection, commissioning or installation of original works pertaining to an airport or port, under a contract which had been entered into before the 1st day of March, 2015 and on which appropriate stamp duty, where applicable, had been paid before that date, subject to the condition that Ministry of Civil Aviation or, as the case may be, the Ministry of Shipping in the Government of India certifies that the contract had been entered into before the 1st day of March, 2015.

(2) Refund shall be made of all such service tax which has been collected but which would not have been so collected had sub-section (1) been in force at all material times.

(3) Notwithstanding anything contained in this Chapter, an application for the claim of refund of service tax shall be made within a period of six months from the date on which the Finance Bill, 2016 receives the assent of the President.”.

6. AMENDMENTS IN ABATEMENT NOTIFICATION NUMBER 27/2012-ST) All changes are effective from 01/04/2016

S.No.	PARTICULARS
1	Credit of input services is being allowed on transport of passengers by rail at the existing rate of abatement of 70%. Refer Entry 3 Presently service tax payable on 30% of the value of transport of passengers by rail without the credit of input service. The proposed amendment will come into effect from 01.04.2016.
2	Credit of input services is being allowed on transport of goods, other than in containers, by rail at the existing rate of abatement of 70%. Refer Entry 2A Presently service tax payable on 30% of the value of transport of goods, other than in containers, by rail without the credit of input service. The proposed amendment will come into effect from 01.04.2016.
3	Credit of input services is being allowed on transport of goods in containers by rail at a reduced abatement rate of 60%. Refer Entry 2 Presently service tax payable on 30% of the value of transport of goods in containers by rail without the credit of input service. The proposed amendment will come into effect from 01.04.2016.
4	Credit of input services is being allowed on transport of goods by vessel at the existing rate of abatement of 70%. Refer Entry 10 Presently service tax payable on 30% of the value of transport of goods by vessel without the credit of input service. The proposed amendment will come into effect from 01.04.2016.
5	The abatement rate in respect of services by way of construction of residential complex, building, civil structure, or a part thereof, is being rationalized at 70% by merging the two existing rates (70% for high end flats and 75% for low end flats) hence the taxable portion will be 30%. Refer Entry 12 The proposed amendment will come into effect from 01.04.2016.
6	The abatement rate in respect of services by a tour operator in relation to packaged tour (defined where tour operator provides to the service recipient transportation, accommodation, food etc) and other than packaged tour is being rationalized at 70%, hence the taxable portion will be 30%. Refer Entry 11 & 11(i) Presently service tax payable on 25% and 40% of the value of tour operator in relation to packaged tour. The proposed amendment will come into effect from 01.04.2016.
7	Abatement on transport of used household goods by a Goods Transport Agency (GTA) is being rationalised at the rate of 60% without availment of cenvat credit on inputs, input services and capital goods by the service provider. Refer Entry 7A Existing rate of abatement of 70% allowed on transport of other goods by GTA continues unchanged. The proposed amendment will come into effect from 01.04.2016.
8	The abatement rate on services of a foreman to a chit fund is being rationalised at the rate of 30%, without CENVAT credit on inputs, input services and capital goods. Refer Entry 8 Presently, services of a foreman to a chit fund, is liable to service tax without any abatement. The proposed amendment will come into effect from 01.04.2016.

Insertion of Explanation ‘BA’ after paragraph B: At present, there is abatement of 60% on the gross value of renting of motor-cab services, provided no Cenvat credit has been taken. It is being made clear by way of inserting an explanation that cost of fuel should be included in the consideration charged for providing renting of motor-cab services for availing the abatement.

7. Important changes in STR & CCR w.e.f. 01.04.2016

I. Changes in Service Tax Rules Vide Notification Number 19/2016-ST dated March 1, 2016

Relevant Rule	Particulars
Rule 2	Legal services provided by a senior advocate shall be on forward charge[Rule 2(1)(d)(i)(D)(II)] Services provided by mutual fund agents/distributor to a mutual fund or asset management company put under forward charge [Rule 2(1)(d)(EEA)] Liability to pay Service tax on any service provided by Government or local authorities to business entities shall be on the service recipient under reverse charge [Rule 2(1)(d)(i)(E) read with Notification No. 17/2016 – ST dated March 1, 2016]
Rule 6	Rule 6(1): Following benefits presently available to individual or proprietary firm or partnership firm, are being extended to One Person Company (OPC) whose aggregate value of taxable services provided from one or more premises is up to Rs. 50 lakhs in the previous financial year: • Quarterly payment of Service tax and • Payment of Service tax on receipt basis Further, the benefit of quarterly payment of Service tax is also being extended to HUF. Rule 6(7A): The Service tax liability on single premium annuity (insurance) policies is being rationalised and the effective alternate Service tax rate (composition rate) is being prescribed at 1.4% of the total premium charged, in cases where the amount allocated for investment or savings on behalf of policy holder is not intimated to the policy holder at the time of providing of service
Rule 7	Annual Return: • Service tax assessees above a certain threshold limit shall also submit an annual return for the financial year, in such form and manner as may be specified by the CBEC, by the 30thday of November of the succeeding financial year.

II. Changes in Cenvat Credit Rules, 2004 (“the Credit Rules”) vide NN 13/2016-Central Excise (N.T) dated March 1, 2016

Relevant Rule	Particulars
Rule 2(a)	Definition of ‘capital goods’: • Wagons of Sub Heading 8606 92 of the CETA and equipment and appliance used in an office located within a factory are being included in the definition of capital goods; • Cenvat credit on inputs and capital goods used for pumping of water, for captive use in the factory, is being allowed even where such capital goods are installed outside the factory.
Rule 2(e)	Definition of ‘exempted service’: • Service by way of transportation of goods by a vessel from customs station of clearance in India to a place outside India is being excluded from the definition of “exempted service”. This would allow domestic shipping lines to take credit on inputs and input services used in providing the said services.
Rule 2(k)	Definition of ‘inputs’ • All capital goods having value up to Rs. 10,000 per piece are being included in the definition of inputs. This would allow an assessee to take whole credit on such capital goods in the same year in which they are received.
Rule 4	• Rule 4(5)(b): Manufacturer of final products is being allowed to take Cenvat credit on tools of Chapter 82 of the CETA in addition to credit on jigs, fixtures, moulds & dies, when intended to be used in the premises of job-worker or another manufacturer, who manufactures the goods as per specification of manufacturer of final products. It is also being provided that a manufacturer can send these goods directly to such other manufacturer or job-worker without bringing the same to his premises; • Rule 4(6): The validity of permission given by an Assistant Commissioner or Deputy Commissioner to a manufacturer of the final products for sending inputs or partially processed inputs outside his factory to a job-worker and clearance there from on payment of duty is extended from a financial year to 3 financial years; • Rule 4(7):Cenvat credit of Service tax paid on amount charged for assignment by Government or any other person of a natural resource such as radio-frequency spectrum, mines etc. shall be spread over the period of time for which the rights have been assigned.
Rule 6	Revamp changes in Rule 6 of Credit Rules providing for reversal of Cenvat credit in respect of inputs and input services used in manufacture of exempted goods or for provision of exempted services, on following broad principles : Option 1 – The assessee can pay an amount equal to 6% of value of the exempted goods and 7% of value of the exempted services. This amount will be capped at a maximum of the total credit taken with the assessee at the end of the period to which the payment relates; Option 2 – Pay an amount as determined under Rule 6(3A) Formula. Cenvat credit on common inputs/input services is to be identified and the same is to be apportioned based on the exempted/dutiable turnover as only proportionate Cenvat credit on common inputs/input services will be allowed; • No Cenvat credit will be allowed on inputs/input services used exclusively in the manufacture of exempted goods / services; • Full credit is allowed on the inputs/input services used exclusively in the manufacture of dutiable goods / taxable service; • Credit left thereafter is common credit and shall be attributed towards exempted goods and exempted services by multiplying the common credit with the ratio of value of exempted goods manufactured or exempted services provided to the total turnover of exempted and non-exempted goods and exempted and non-exempted services in the previous financial year; ü Final reconciliation and adjustments are provided for after close of financial year by 30th June of the succeeding financial year, as provided in the existing Credit Rules No Cenvat credit on capital goods used for the manufacture of exempted goods or provision of exempted service for 2 years from the date of commencement of commercial production/date of installation or provision of service. Ø Explanation 3 to substituted Rule 6(1) of the Credit Rules provides that for the purpose of Rule 6 of the Credit Rules, ‘exempted services’ as defined in Rule 2(e) of the Credit Rules shall include an activity, which is not a ‘service’ as defined in Section 65B(44) of the Finance Act.
Rule 7	Distribution of Cenvat credit by Input Service Distributor (“ISD”) • Credit can be distributed to outsourced manufacturing unit – Outsourced manufacturing unit means job-worker paying duty under 10A of Central Excise Valuation (Determination of Price Of Excisable Goods) Rules, 2000 or contract manufacturer paying under Section 4A of the Central Excise Act, 1944; • Credit common to more than one unit to be distributed to respective unit; • Credit common to all units to be distributed to all the units; • Credit on services with ISD upto March 31, 2016 not to be distributed to outsourced manufacturing unit
Rule 9(a)(i)	Invoice issued by a service provider for clearance of inputs or capitals goods shall also be a valid document for availing Cenvat credit
Rule 9A	Annual return by a manufacturer of final products or provider of output services for each financial year to be filed by the 30th day of November of the succeeding year in the form as specified by a notification by the Board
Rule 14(2)	FIFO method for determining whether a particular credit has been utilized is being omitted. Now, whether a particular credit has been utilised or not shall be ascertained by examining whether during the period under consideration, the minimum balance of credit in the account of the assessee was equal to or more than the disputed amount of credit.

8. TIME LIMIT FOR RECOVERY OF SERVICE TAX INCREASED

The limitation period for recovery of service tax not levied or paid or short- levied or short paid or erroneously refunded, for cases not involving fraud, collusion, suppression etc. is proposed to be enhanced by one year, that is, from eighteen months to thirty months by making suitable changes in the Bill

Analysis: After the proposed amendment, the supremacy of the department would be enhanced as department can ask for the records of the assessee, required for recovering the impugned service tax, within thirty months from the relevant date

Date of Effect – From the date of enactment of Finance Bill, 2016

9. CLARIFICATION PROVIDED – THE POINT OF TAXATION RULES (POTR)

Addition of two explanations are proposed in Rule 5 of POTR i.e.

Explanation 1.- This rule shall apply mutatis mutandis in case of new levy on services

Explanation 2.- New levy or tax shall be payable on all the cases other than specified above

Analysis: This is a much needed clarification that was required from the department and has been finally provided in the Bill. The genesis of the confusion was the introduction of the Swachh Bharat Cess that was levied under Rule 5. As per the bare reading, the applicability of rule 5 comes into existence when the service is taxed for the first time. Thus, in order to place Swachh Bharat cess and Krishi Kalyan Cess under rule 5, the said explanation has been added

Date of Effect – 01 April 2016

10. DISPUTE RESOLUTION SCHEME

Finance Bill, 2016 has attempted to bridge the issues faced by the assessee at the level of Commissioner (Appeals) through ‘Indirect Tax Dispute Resolution Scheme, 2016’.

The scheme shall provide as under:

The scheme shall come into force with effect from June 01, 2016. Assessees who have filed an appeal with Commissioner (Appeals) till March 01, 2016 are required to make a declaration till December 31, 2016. Such declaration is required to be made to Commissioner (Appeals)

Application can only be made in disputes relating to Central Excise Act, 1944, Customs Act, 1962 or Chapter V of 25 Finance Act, 1994he Commissioner (Appeals) shall issue an acknowledgement for such declaration. The assessee is required to pay tax, interest and 25% of penalty mentioned in impugned order within 15 days of the receipt of acknowledgment and shall disclose payment to Commissioner (Appeals) within 7 days of making payment. The Commissioner Appeals, within 15 days of receipt of the proof of payment, shall pass the Order disposing the appeal.

The scheme shall not apply in the following cases:

• Search & seizure proceedings have been initiated
• Assessee is charged for a prosecution of a punishable offence instituted before June 01, 2016
• Subject goods are narcotic drugs or any other prohibited goods
• Order is in respect of an offence under the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985 or the Prevention of Corruption Act, 1988
• Detention order under the Conservation of Foreign Exchange and Prevention of Smuggling Act, 1974 has been passed

Following issues merit consideration:

• The order passed under this scheme shall not be deemed to be an ‘order-on-merits’
• It will have no binding effect on other disputes on similar subject matters except the one on which it stands disposed,
• Assessees shall have immunity from all the proceedings under this act.
• On the basis of declaration made by assessee, the order would be issued, which shall become conclusive. No matter relating to the impugned order shall be reopened thereafter in any proceedings under the Act before any authority or court.