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Abatement under Service Tax: Budget 2016

Karan Sahi 
Updated on 24 June 2016

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Proposed changes in abatement shall come into effect from the 1st April 2016. Contained herein detailed revised list of abatement.





Sl.No.

Description of taxable service

Abatement %

Taxable Value %

Conditions

1

Services in relation to financial leasing including hire purchase

90

10

Nil.

2

Transport of goods by rail

70

30

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

2A

Transport of goods in containers by rail by any person other than Indian Railway

60

40

CENVAT credit on inputs, and  capital goods, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.

Credit of input services is being allowed for transport of goods in containers by rail by any person other than Indian Railway.

3

Transport of passengers, with or without accompanied belongings by rail

70

30

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

ii) Cenvat credit on input services shall be allowed

4

Bundled service by way of 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 other place, specially arranged for organizing a function) together with renting of such premises (Refer Note-2)

30

70

(i) CENVAT credit on any goods classifiable under Chapters 1 to 22 of the Central Excise Tariff Act, 1985 (5 of 1986) used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.

5

Transport of passengers by air, with or without accompanied belongings in

   

CENVAT credit on inputs and capital goods, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.

 

(i) economy class

60

40

 

(ii) other than economy class

40

60

6

Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes.

40

60

Same as above.

7

Services of goods transport agency in relation to transportation of goods.

70

30

CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken by the service provider under the provisions of the CENVAT Credit Rules, 2004.

7A

Services of goods transport agency in relation to transportation of used household goods.

60

40

CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken by the service provider under the provisions of the CENVAT Credit Rules, 2004 .

8

Services provided in relation to chit

70

30

CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken by the service provider under the provisions of the CENVAT Credit Rules, 2004.

9

Renting of motorcab (Note 1)

60

40

(i) CENVAT credit on inputs and capital goods, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004;(ii) CENVAT credit on input service of renting of motorcab has been taken under the provisions of the CENVAT Credit Rules, 2004, in the following manner:

(a) Full CENVAT credit of such input service received from a person who is paying service tax on forty percent of the value; or

(b) Up to forty percent CENVAT credit of such input service received from a person who is paying service tax on full value;

(iii) CENVAT credit on input services other than those specified in (ii) above, has not been taken under the provisions of the CENVAT Credit Rules, 2004.

9A

Transport of passengers, with or without accompanied belongings, by- a) contract carriage and air conditioned stage carriage other than motorcab. b) aradio taxi.

60

40

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.

10

Transport of goods in a vessel

70

 30

i) CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken by the service provider under the provisions of the CENVAT Credit Rules, 2004.

ii) Cenvat credit on input services is allowed.

11

Services by a tour operator in relation to:-

70

30

(i) CENVAT credit on inputs and capital goods, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004;(ii) CENVAT credit on input service of renting of motorcab has been taken under the provisions of the CENVAT Credit Rules, 2004, in the following manner:(a) Full CENVAT credit of such input service received from a person who is paying service tax on forty percent of the value; or(b) Up to forty percent CENVAT credit of such input service received from a person who is paying service tax on full value;(iii) CENVAT credit on input services other than those specified in (ii) above, has not been taken under the provisions of the CENVAT Credit Rules, 2004.

(ii) a tour, if the tour operator is providing services solely of arranging or booking accommodation for any person in relation to a tour

90

10

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.

(iii) any services other than specified at (i) and (ii) above.

70

30

(i) CENVAT credit on inputs, capital goods and input services other than the input service of a tour operator, 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.

12

Construction of a complex, building, civilstructure 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) CENVAT credit on inputs used for providing the taxable service has not been taken under the provisions of the CENVAT Credit Rules, 2004;

 

(a) for a residential unit satisfying both the following conditions, namely:–(i) the carpet area of the unit is less than 2000 square feet; and (ii) the amount charged for the unit is less than rupees one crore;

70

30

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

 

(b) for other than the (a) above.

70

30

 

Note 1: 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.

Karan Sahi is qualified company Secretary and Founder of Linking Tribes. Linking Tribes is research and media Based Startup which taps on the entrepreneurship and business from all across the globe. 


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