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May 2011

Service tax rules amended — Notification No. 03/2011, dated 1-3-2011.

By Tarun Ghia, Brijesh Cholera, Pratik Mehta, Hardik Shah Chartered Accountants
Reading Time 1 mins
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Service Tax (Amendment) Rules, 2011 notified by the Central Government effective from 1-4-2011 provide that:

1. Applicable rate of service tax should be the rate applicable at the time when the services are deemed to have been provided.

2. Service tax shall be payable upon deemed provision of services.

3.
When an invoice has been issued or a payment is received for a service
which is not subsequently provided, the service provider can take credit
of service tax paid earlier, provided the amount has been refunded to
the payer.

4. Maximum amount admissible for adjustment of excess
service tax under Rule 6(4B)(iii) has been increased from Rs.1 lac to
Rs.2 lac.

5. Self-assessed amount of service tax, if not paid,
shall be recovered along with interest as per the provisions of section
87 of the Finance Act, 1994.

6. Composition rate applicable in
relation to purchase or sale of foreign currency including money
changing has been reduced from 0.25% to 0.10%.

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