The Finance Bill, 2008 received the assent of the President of India on
2. Transaction between associated enterprises:
2.1 In the Finance Act, 2008, section 67 has been amended. As per this amendment, service tax is required to be paid by the person liable to pay service tax on the taxable services provided even if the consideration for the taxable services provided is not actually received. In such cases, service tax is required to be paid immediately after crediting/debiting of the amount in the books of accounts or receipt of payment, whichever is earlier. However, this provision is restricted to transaction between associated enterprises and shall come into force w.e.f.
3. Certain provisions relating to the levy of service tax in the Finance Act, 2008 shall come into force from a date to be notified. For this purpose, notifications No.18/2008 to 24/2008-Service Tax, all dated
4. Following changes / amendments shall come into force w.e.f. 16.05.2008:
· Seven services which are specifically mentioned in the category of taxable services and amendments made relating to existing taxable services.
· Amendments made in section 65 (defines taxable services and specified terms used in relation to taxable services) and section 66 (charging section) vide the Finance Act, 2008.
· Amendments made in Export of Services Rules, 2005 and the Taxation of Services (Provided from Outside India and Received in
· Optional Scheme for payment of service tax on Purchase or
5. Government of India has already notified, vide notifications No.41/2007-Service Tax, dated 06.10.07 and 43/2007-ST, dated 29.11.07, sixteen taxable services attributable to export goods, whether or not in the nature of input services, providing refund of service tax paid on the said sixteen taxable services. Consequent upon the enactment of the Finance Act, 2008, Government has notified 16.05.2008 as the effective date for the specifically included taxable services vide the Finance Act, 2008. Out of the said taxable services, refund of service tax paid by exporters has been extended to the following additional 3 services:
· Purchase or sale of foreign currency under banking and other financial service,
· Purchase or sale of foreign currency under foreign exchange broking service,
· Supply of tangible goods for use service [Refer notification No.24/2008-ST, dated 10.05.08]
6. Notifications No.18/2008 to 24/2008-Service Tax, all dated
Ministry of Finance, Department of Revenue Tax Research Unit, Government of
SB:PM
[TO BE PUBLISHED IN THE GAZETTE OF
GOVERNMENT OF
MINISTRY OF FINANCE
(Department of Revenue)
Notification
No. 18/2008 – Service Tax
G.S.R. (E). In exercise of the powers conferred by clauses (A) and (B) of section 90 of the Finance Act, 2008 (18 of 2008), the Central Government hereby appoints the 16th day of May, 2008, as the date on which the provisions of the said Act shall come into force.
[F. No. B1/5/2008-
(G.G. Pai)
Under Secretary to the Government of
[TO BE PUBLISHED IN THE GAZETTE OF
Government of
Ministry of Finance
(Department of Revenue)
New Delhi the 10th May, 2008
Notification
No.19/2008-Service Tax
G.S.R. (E).- In exercise of the powers conferred by sub-sections (1) and (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules to further amend the Service Tax Rules, 1994, namely :-
1. (1) These rules may be called the Service Tax (Second Amendment) Rules, 2008.
(2) Save as otherwise provided in these rules, they shall come into force on the date of their publication in the Official Gazette.
2. In the Service Tax Rules, 1994,-
(i) in rule 4A, for the words “to a customer” wherever they occur, the words “to any person” shall be substituted with effect from the 16th day of May, 2008;
(ii) in rule 4B, for the words “to the customer”, the words “to the recipient of service” shall be substituted with effect from the 16th day of May, 2008;
(iii) in rule 6,-
(a) in sub-rule (1), after the third proviso, the following Explanation shall be inserted, namely:-
“Explanation.- For the removal of doubts, it is hereby declared that where the transaction of taxable service is with any associated enterprise, any payment received towards the value of taxable service, in such case shall include any amount credited or debited, as the case may be, to any account, whether called ‘Suspense account’ or by any other name, in the books of account of a person liable to pay service tax.”;
(b) after sub-rule (7A), the following sub-rule shall be inserted with effect from the 16th day of May, 2008, namely:-
“(7B). The person liable to pay service tax in relation to purchase or sale of foreign currency, including money changing, provided by a foreign exchange broker, including an authorised dealer in foreign exchange or an authorized money changer, referred to in sub-clauses (zm) and (zzk) of clause (105) of section 65 of the Act, shall have the option to pay an amount calculated at the rate of 0.25 per cent. of the gross amount of currency exchanged towards discharge of his service tax liability instead of paying service tax at the rate specified in section 66 of Chapter V of the Act:
Provided that such option shall not be available in cases where the consideration for the service provided or to be provided is shown separately in the invoice, bill or, as the case may be, challan issued by the service provider.
Buying rate $US 1 = Rs.38, selling rate $US 1 = Rs.40
(i) Person exchanged $100 for equivalent rupees
Transaction value = Rs.3800 (Rs.38 x 100)
Service tax payable = Rs.9.5 (0.25% x 3800)
(ii) Person exchanged equivalent rupees for $100
Transaction value = Rs.4000 (40 x 100)
Service tax payable = Rs.10 (0.25% x 4000).”.
[F. No. B1/5/2008-
(G.G. Pai)
Under Secretary to the Government of
Note.- The principal rules were notified vide notification No.2/94-Service Tax, dated the 28th June, 1994 and published in the Gazette of India, Extraordinary vide number G.S.R.546 (E), dated the 28th June, 1994 and were last amended vide notification No.4/2008-Service Tax, dated the 1st March, 2008 and published vide number G.S.R. 148(E), dated the 1st March, 2008.
[TO BE PUBLISHED IN THE GAZZETE OF
GOVERNMENT OF
MINISTRY OF FINANCE
(Department of Revenue)
No. 20/2008 – Service Tax
G.S.R. (E).- In exercise of the powers conferred by sections 93 and 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Export of Services Rules, 2005, namely :-
1. (1) These rules may be called the Export of Services (Second Amendment) Rules, 2008.
(2) They shall come into force on the 16th day of May, 2008.
2. In the Export of Services Rules, 2005, in rule 3, in sub-rule (1),-
(a) in clause (ii), for the brackets, letters and word “(zzzf) and (zzzp)”, the brackets, letters and word “(zzzf), (zzzp), (zzzzg), (zzzzh) and (zzzzi)” shall be substituted;
(b) in clause (iii), after the proviso, the following proviso shall be inserted, namely:-
“Provided further that where the taxable service referred to in sub-clause (zzzzj) of clause (105) of section 65 of the Act is provided to a recipient located outside India, then such taxable service shall be treated as export of taxable service subject to the condition that the tangible goods supplied for use are located outside India during the period of use of such tangible goods by such recipient.”
[F. No. B1/5/2008-
(G.G. Pai)
Under Secretary to the Government of
Note.- The principal rules were notified vide notification no. 9/2005-Service Tax, dated the 3rd March, 2005 and published in the Gazette of India, Extraordinary vide number G.S.R. 151(E), dated the 3rd March 2005 and were last amended vide notification No. 5/2008-Service Tax, dated the 1st March, 2008 vide number G.S.R. 149(E), dated the 1st March, 2008.
[TO BE PUBLISHED IN THE GAZZETE OF
GOVERNMENT OF
MINISTRY OF FINANCE
(Department of Revenue)
Notification
No. 21/2008 – Service Tax
G.S.R. (E).- In exercise of the powers conferred by sections 93 and 94 read with section 66A of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, namely :-
1. (1) These rules may be called the Taxation of Services (Provided from Outside India and Received in
(2) They shall come into force on the 16th day of May, 2008.
2. In the Taxation of Services (Provided from Outside India and Received in
(a) in clause (ii), for the brackets, letters and word “(zzzf) and (zzzp)”, the brackets, letters and word “(zzzf), (zzzp), (zzzzg), (zzzzh) and (zzzzi)” shall be substituted;
(b) in clause (iii), the following proviso shall be inserted at the end, namely:-
“Provided that where the taxable service referred to in sub-clause (zzzzj) of clause (105) of section 65 of the Act is received by a recipient located in India, then such taxable service shall be treated as taxable service provided from outside India and received in India subject to the condition that the tangible goods supplied for use are located in India during the period of use of such tangible goods by such recipient.”
[F. No. B1/5/2008-
(G.G. Pai)
Under Secretary to the Government of
Note.- The principal rules were notified vide notification No. 11/2006-Service Tax, dated the 19th April, 2006 and published in the Gazette of India, Extraordinary, vide number G.S.R. 227(E), dated the 19th April, 2006 and were last amended vide notification No. 6/2008-Service Tax, dated the 1st March, 2008 vide number G.S.R. 150(E), dated the 1st March, 2008.
[TO BE PUBLISHED IN THE GAZZETE OF
GOVERNMENT OF
MINISTRY OF FINANCE
(Department of Revenue)
Notification
No. 22/2008 – Service Tax
G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 1/2006-Service Tax, dated the 1st March, 2006 vide number G.S.R. 115 (E), dated the 1st March, 2006, namely:-
In the said notification, in the Table,-
(i) against S.No.1, in column (3), for the words “to the client”, the words “to any person” shall be substituted;
(ii) against S.No.4, in column (4), for the words “client”, the words “recipient of service” shall be substituted;
(iii) against S.No.5, in column (4), for the words “customer”, the words “recipient of service” shall be substituted.
2. This notification shall come into force on the 16th day of May, 2008.
[F. No. B1/5/2008-
(G.G. Pai)
Under Secretary to the Government of
Note.- The principal notification No. 1/2006-Service Tax, dated the 1st March, 2006, was published in the Gazette of India, Extraordinary vide number G.S.R. 115(E), dated the 1st March, 2006 and was last amended by notification No. 12/2008-Service Tax, dated the 1st March, 2008, vide number G.S.R. 156(E), dated the 1st March, 2008.
TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3,
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(Department of Revenue)
New Delhi, the 10th May, 2008
Notification
No. 23/2008 – Service Tax
G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following amendments in the notifications of the Government of India in the Ministry of Finance (Department of Revenue), specified in column (2) of the Table below, to the extent specified in the corresponding entry in column (3) of the said Table, namely:-
|
S.No. |
Notification No. and date |
Amendments |
|
(1) |
(2) |
(3) |
|
1. |
18/2002-Service Tax, dated the 16th December, 2002 [G.S.R. 823(E), dated the 16th December, 2002] |
In the said notification, for the words “to a client”, the words “to any person” shall be substituted. |
|
2. |
33/2004-Service Tax, dated the 3rd December, 2004 [G.S.R. 788(E), dated the 3rd December, 2004] |
In the said notification, for the words “to a customer”, the words “to any person” shall be substituted. |
|
3. |
34/2004-Service Tax, dated the 3rd December, 2004 [G.S.R. 789(E), dated the 3rd December, 2004] |
In the said notification, for the words “to a customer”, the words “to any person” shall be substituted. |
2. This notification shall come into force on the 16th day of May, 2008.
[F. No. B1/5/2008-
(G.G. Pai)
Under Secretary to the Government of India
Note.-
(1) The principal notification No. 18/2002-Service Tax, dated the 16th December, 2002, was published in the Gazette of India, Extraordinary vide number G.S.R. 823(E), dated the 16th December, 2002;
2) The principal notification No. 33/2004-Service Tax, dated the 3rd December, 2004, was published in the Gazette of India, Extraordinary vide number G.S.R. 788(E), dated the 3rd December, 2004;
(3) The principal notification No. 34/2004-Service Tax, dated the 3rd December, 2004, was published in the Gazette of India, Extraordinary vide number G.S.R. 789(E), dated the 3rd December, 2004.
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, IN PART II, SECTION 3,
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(Department of Revenue)
New Delhi, the 10th May, 2008
Notification
No.24/2008-Service Tax
G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.41/2007-Service Tax, dated the 6th October, 2007 which was published in the Gazette of India, Extraordinary, Part II, section 3, Sub-section (i) vide number G.S.R. 645(E), dated the 6th October, 2007, namely:-
In the said notification, in the Schedule, after Sr.No.15 and the entries relating thereto, the following shall be inserted, namely:-
|
(1) |
(2) |
(3) |
(4) |
|
“16. |
section 65(105)(zm) |
services of purchase or sale of foreign currency, including money changing provided to an exporter in relation to export goods. |
exporter shall produce evidence to prove that the services specified in column (3) are in relation to goods exported. |
|
17. |
section 65(105)(zzk) |
services of purchase or sale of foreign currency, including money changing provided to an exporter in relation to export goods. |
exporter shall produce evidence to prove that the services specified in column (3) are in relation to goods exported. |
|
18. |
section 65(105)(zzzzj) |
services of supply of tangible goods for use, without transferring right of possession and effective control of tangible goods, provided to an exporter in relation to goods exported by the exporter. |
exporter shall produce evidence to prove that the services specified in column (3) are used in relation to export of goods.” |
2. This notification shall come into force on the 16th day of May, 2008.
[F.No.B1/5/2008-
(G.G. Pai)
Under Secretary to the Government of India
Note.- The principal notification was published in the Gazette of India, Extraordinary vide number G.S.R. 645(E), dated the 6th October, 2007 and was last amended by notification No.17/2008-Service Tax, dated the 1st April, 2008 which was published in the Gazette of India, Extraordinary vide number G.S.R. 260(E), dated the 1st April, 2008.
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