Service Tax Updates
110. Withdrawal of exemption – online information and
database access or retrieval services
Notification No. 5/2017-ST dated 30. 01. 2017
CBEC has withdrawn the exemption
for services by way of online information database access or retrieval services
which is being provided by a person located in a non-taxable territory and
received by an entity providing charitable activities and registered u/s. 12AA of the Income-tax
Act,1961.
111. Relaxation for deposit of tax – services provided by way
online information and database access or retrieval services
Notification No. 6/2017-ST dated 30. 01. 2017
CBEC has provided relaxation on
due date for payment of service tax payable on services provided by any person
located in a non-taxable territory and received by non-assessee online
recipient, for the month of December, 2016 & January 2017, so as to deposit
the same by the 6th day of March, 2017 to the credit of Central
Government.
112. Budget Notification enabling various changes under the
present exemption structure
Notification No. 7/2017-ST dated 02 02 2017
Manufacturing related
exemption:
– Hitherto,
manufacturing related activities are
excluded from the scope of service tax. However, the proposed amendment
omits the same from negative list and the exemption to the same is being placed
here. The amendment provides categorical exemption to any intermediate
production process as job work not amounting to manufacture or production in
relation to agriculture, printing or textile processing etc. [Effective from date of enactment of Finance Bill,
2017]
– The term
“process amounting to manufacture or production of goods” has been defined in
Notification 25/2012 dated 20.06.2012 to mean a process on which duties of
excise are leviable u/s. 3 of the Central Excise Act, 1944 (1 of 1944), or the
Medicinal and Toilet Preparation (Excise Duties) Act, 1955(16 of 1955) or any
process amounting to manufacture of opium, Indian hemp and other narcotic drugs
and narcotics on which duties of excise are leviable under any State Act for
the time being in force.
Transport related exemptions:
– Exemption
scope widened under the said sector to provide relief to Government employees.
Accordingly, services of transport of passengers, with or without accompanied
belongings, by air embarking from or terminating at Regional Connectivity
Scheme and consideration received in form of Viability Gap Funding is exempted
from payment of service tax. [Applicable from 02.02.2017]
Education related exemptions:
– Education
being a primary role for country’s development, broadens the scope of exemption
which is as under:
• 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 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.
[Applicable from 02.02.2017]
• The word “residential” is
deleted from the above mentioned exemption entry which substantiates that fees
collected for both residential and non-residential or online 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 are exempted from payment of service tax.
Insurance related exemption:
• Services of life insurance
business provided or agreed to be provided by the Army, Naval and Air Force
Group Insurance Funds to members of the Army, Navy and Air Force, respectively,
under the Group Insurance Schemes of the Central Government are exempted from payment of service tax.
[Applicable from 02.02.2017]
113. Exemption –
services provided by operators of Common Effluent Treatment Plant
Notification No. 8/2017-ST dated 20. 02. 2017
CBEC has provided relaxation by
way of exemption on services provided by operators of Common Effluent Treatment
Plant by way of treatment of effluent for the period from 1st July,
2012 to 31st March 2015.
114. Introduction of
Minor head code for accounting of Refund
Circular No: 203/1/2017 – Service Tax dated 02.02.2017
CBEC has introduced minor head
code for accounting of refund to identify the appropriate head of account under
which the service wise refunds are to accounted for eventually leading to
better compliance with respect to accounting of refunds.
115. Clarification on
applicability of service tax on services by way of transportation of goods by a
vessel from a place outside India to the customs station in India w.r.t. goods
intended for transhipment to any country outside India
Circular No: 204/1/2017 – Service Tax dated 16.02.2017
CBEC has clarified the long
lasting issue w.r.t. applicability of service tax on services provided to goods
intended for transhipment to any country outside India. Thus, the said
clarification is in line with position under the Customs Act, 1962 which states
that no customs duty is payable in cases where the goods entered into
territorial waters for transhipment and the destination of goods which is other
than India is mentioned in the import manifest/import report.
Accordingly, in case of
transhipped goods, services by way of transportation of goods by a vessel from
a place outside India to the customs station in India are not taxable in India
as the destination of such goods is a country other than India.
MVAT UPDATE
116. Go live of : 1)
Improved functionality of new registration with integrated payment gateways. 2)
Functionality of amendment and cancellation of registration certificate.
Trade Circular 4T of 2017 dated 02.02.2017
The SAP based system for online
registration has been upgraded with effect from 19.12.2016 with additional
features of Integration of Payment Gateways for payment of fee or Deposit or
both along with application for new registration as well as online facility of
application for amendment or
cancellation of registration certificate.
Detailed Instructions given in the circular
regarding applicants who have already paid deposit and fee prior to this new
system but not able to obtain registration certificate.
