Exemption of Krishi Kalyan cess on all taxable services where invoice for the same has been issued on or before 31st May,2016, subject to the condition that the provision of the same has been completed on or before 31st May 2016.

The central government has exempt whole of the krishi Kalyan cess on the taxable services in respect to which invoice has been issued on or before 31^st May 2016, subject to the condition that the provision of such service has been completed on or before 31^st May 2016.

(Notification No.35/2016, Dated 23 June 2016).

Budget 2016 introduced the Krishi Kalyan Cess (0.5%) on all taxable services with effect from 1^st June 2016, to promote and finance initiatives to improve agriculture.

Whole of service tax exempt on transportation of goods by a vessel from outside India upto a custom station where the invoice for the same has issued on or before 31st May,2016.

Central government has exempt whole of service tax on service of transportation of goods by a vessel from outside India upto a custom in India where invoice for the same has been issued on or before the 31at May 2016, subject to the following conditions.

     

       1.   The import manifest or import report required to be delivered (Section 30 of the custom Act, 1962 (52 of 1962)) has been delivered on or before the 31 May 2016 and

       2.  The certified copy of such import manifest or import report has been produced to custom be service provider or service recipient.

(Notification No.36/2016, Dated 23^rd June 2016).

Budget 2016 imposed service tax on transportation of goods by a vessel from outside India up to a custom station in India with effect from 1^st June 2016 in order to complete the credit chain and enable Indian shipping lines to avail and utilize input tax credits.

Service tax on senior advocates will be applicable on reverse charge basis, as opposed forward charge as proposed in budget 2016.

In budget it is proposed service tax on senior advocate or partnership firm of advocates is being levied under forward charge. It means senior advocate would have to collect tax on every service provided and deposit the same in department.

The provision was challenged in different courts, Gujrat and Delhi high court granted a stay on the same.

Three notifications have been issued by the department in order to affect the amendment.

As per notification no. 32/2016, dated 6 June 2016,

The following services provided by senior advocate are exempt from service Tax.

1.    Service provided to any person other than a business entity or

2.    Service provided to business entity with a turnover up to rupees ten lakhs in the preceding financial year.

This meant that service provided by senior advocates comes under service tax preview only when the service is provided to business entities with turnover more than ten lakhs in the preceding financial year.

As per Notification No. 33/2016 and 34/2016, dated 6 June 2016,

Service tax on taxable services provided by senior advocate is applicable on reverse charge basis, i.e. the recipient of the service is liable to pay the service tax.

Service Tax amendments Applicable with effect from 1st day of June, 2016 after enactment of the Finance Bill, 2016.

1. Explanation 2in section 65B(44) is to be modified. 

2. Clause(l) of section 66D would be omitted and clause (11) of section 65B is to beomitted. [educational services]

3. Insertion of right to use the radio-frequency spectrum and subsequent transfers in section 66E as a Declared Service.

4. Section 67A is being amended to obtain rule making powers.

5. Section 73 proposed to be amended to increase time limit from 18 months to thirty months.

6. Insertion of Explanation in section 78A.

7. Amendments in sections 89, 90 and 91.

8. In section 93A of the 1994 Act, the words “prescribed or by notification in the Official Gazette” shall be substituted.

9. Insertion of proviso to section 75.

10. Retrospective effect to notification No. 41/2012- ST, dated the 29th June, 2012 as amended by notification No. 01/2016- ST.

11. Retrospective exemption is to be extended to the construction, repair, maintenance etc ofcanal, dam or other irrigation works provided to entities set up by Govt.provided during the period from the 1st July, 2012 to 29.01.2014. 

12. Approvedvocational education course‟ is to be incorporated in the general exemptionnotification and exemption to specified educational services.

13. Exemptionfrom Service Tax on services provided to the Government, a local authority or agovernmental authority. 

14. Exemptionfrom Service Tax on services by way of construction, erection, etc. of originalworks pertaining to an airport, port. 

15. Rationalisation of rate ofinterest in case where is service tax is collected and not credited in Govt.account and others.

16. Disputeresolution scheme, 2016.

17. Returns

Service Tax amendments applicable with effect from 1st April 2016.

1.       Exemptionon services by senior advocate to other advocate or to a law firm is beingwithdrawn. Levy under forward charge. A personrepresented on an arbitral tribunal to an arbitral tribunal.

2.   Exemptionbeing withdrawn from the services of transport of passengers, by ropeway, cablecar or aerial tramway.

3.     Date from which the definition of support services shall stand deleted from theFinance Act, 1994.

4.   New exemptions for services by,-

a.       Annuity under the National Pension System

b.      Securities and Exchange Board of India (SEBI)

c.       Employees‟ Provident Fund Organisation (EPFO)

d.  Biotechnology incubators approved by BiotechnologyIndustry Research Assistance Council (BIRAC).

e.      National Centre for Cold Chain Development

f.        Insurance Regulatory and Development Authority(IRDA) of India.

g.       Niramaya‟ Health Insurance scheme implementedby National Trust

h.    Threshold exemption to services provided by aperforming artist in folk or classical art form is being increased from Rs 1lakh charged per event to Rs 1.5 lakh charged per event.

i.         Deen Dayal Upadhyay Grameen Kaushalya Yojanatraining partners .

j.     Assessing bodies empanelled centrally byDirectorate General of Training, Ministry of Skill Development &Entrepreneurship.

5. Rationalisation of abatement rates and conditions thereof in respect of services by,-

(i)                  Tour operator services

(ii)                transport of passengers by rail.

(iii)              transport of goods by rail.

(iv)              shifting of used household goods by a GTA

(v)                foreman to a chit fund.

(vi)              renting of motor-cab services.

(vii)             transport of goods by vessel.

(viii)           Construction of complex, building, civilstructure, etc.

6.     Service tax Rules,-

(i)            The benefit of (a) quarterly payment of servicetax being extended to OPC and HUF and (b) payment on receipt basis beingextended to OPC.

(ii)             Rule 2(1)(d)(i) (D)(II) modified as an individual advocate other than senior advocate.

(iii)          (The word “support” shall stand deleted from rule 2(1)(d)(i) (E)

(iv)           Rule 2(1)(d)(EEA) making mutual fund agents/distributor as person liable for paying   service tax will be deleted

(v)              The service tax composition scheme for single premium annuity policies.

7. Reverse charge mechanism

(i)           mutual fund agents/distributors to an asset managementcompany under forward charge.

(ii)      service provided by Government or local authorities to business entities shall be on the service recipient. 

8. Cenvat Credit Rules, 2004

(i)           Invoice issued by Service provider for removal of inputs and capital goods shall be a valid document.

(ii)     To give option to banking company, a financial institution including non-banking financial company for Cenvat Credit reversal under sub-rule (1), (2) and (3) of the Rule 6 along with rule 6(3B) of the Cenvat Credit Rules, 2004.

(iii)        Cenvat credit of service tax paid on upfront charges for assignment of spectrum/ mining rights etc.

(iv)              Reversal of Cenvat Credit of inputs/input services which have been commonly used in a taxable output service as well as an activity which is not a „service‟.

(v)                Sub-rule (2) of rule 14 being omitted.

Service Tax amendments applicable from 1st March 2016.

1. Specified Services provided bythe Indian Institutes of Management (IIM) are being exempted from Service Tax.
2. Amendment in point of taxation Rule,2011.
3. Information Technology Softwareon media bearing RSP  is  being exempted  from  Service Tax subject to certain conditions.
4. Restoration of exemption on services provided to the Government, a local authority or a governmental authority. Restoration of exemption on services to an airport, port.
5. Withdrawal of exemption on services to monorail or metro, in respect of contracts entered into on or before 01.03.2016
6. Exemption to services by way of construction etc. in respect of specified housing projects.
7. Notification to ensure that Information Technology Software is subjected to either central excise duty or service tax. To deal with assessment of media with recorded Information Technology Software, where RSP is affixed or assessment when RSP is not required.
8. Service provided by Container Train Operators.