By this Notification, Service Tax Rules, 1994 have been amended with respect to the following matters :
(1) In respect of any service provided under aggregator model, the aggregator, or any of his representative offices located in India, is being made liable to pay service tax, if the service is so provided using the brand name of the aggregator in any manner. If an aggregator does not have any presence, including that by way of a representative, in such a case any agent appointed by the aggregator shall pay the tax on behalf of the aggregator. In this regard appropriate amendments have been made in Rule 2 of the Service Tax Rules, 1994 and Notification No. 30/2012 dated 20.06.2012. This change comes into effect immediately i.e., w.e.f. 1st March, 2015.
(2) Presently, services provided by Government or a local authority, excluding certain services specified under clause (a) of section 66D, are covered by the Negative List. The term ‘support’ has been omitted from the Clause (E) providing for liability of service receiver to pay Service tax under Reverse Charge in relation to support services provided or agreed to be provided by Government or Local authority.
(3) Exemptions are being withdrawn on the following services:
(a) service provided by a mutual fund agent to a mutual fund or assets management company,
(b) distributor to a mutual fund or AMC,
(c) selling or marketing agent of lottery ticket to a distributor.
Service Tax on these services shall be levied on reverse charge basis.
(4) In respect of certain services like money changing service, service provided by air travel agent, insurance service and service provided by lottery distributor and selling agent, the service provider has been allowed to pay service tax at an alternative rate subject to the conditions as prescribed under rule 6 (7), 6(7A), 6(7B) and 6(7C) of the Service Tax Rules, 1994.
Consequent to the upward revision in Service tax rate, the composition rate is proposed to be revised proportionately on specified services, namely,
Air Travel Agent: From “0.6%” and “1.2 %”, to “0.7 per cent.” and “1.4 per cent of basic fares in the case of domestic bookings and international bookings respectively.
Life insurance service: From “3%” and “1.5%”, to “3.5%” of the premium charged from policy holder in the first year and “1.75% in the subsequent year”.
These amendments shall come into effect as and when the revised Service Tax rate comes into effect.
(5) New Rule 4C has been inserted and Rule 5 has been amended to include provision for issuing digitally signed invoices along with the option of maintenance of records in electronic form and their authentication by means of digital signatures. It is further provided that the conditions and procedure in this regard shall be specified by the CBEC.
