Notification No. 08/2016 dated 01. 03. 2016 CBEC vide this notification has made the following changes in Abatement Notification No. 26/2012, which will be effective from 1st April 2016 :
Notification No.2 :
Transport of Goods by Rail (other than service specified below): Taxable Value 30%: Subject to condition that Cenvat Credit of Input & Capital Goods used for providing the said service is not availed. Earlier, credit of Input service was also not allowed along with Inputs & Capital Goods. However, now Cenvat credit of Input Service is allowed.
Notification No.2A :
Transport of goods in containers by rail by any person other than Indian Railways : Taxable Value 40% : Subject to condition that Cenvat Credit of Input & Capital Goods used for providing the said service is not availed. This is a newly inserted entry.
Notification No.3:
Transport of passengers, with or without accompanied belongings, by rail : Taxable Value 30% : Subject to condition that Cenvat Credit of Input & Capital Goods used for providing the said service is not availed. Earlier credit of Input service was also not allowed along with Inputs & Capital Goods. However, now Cenvat credit of Input Service is allowed.
Notification No.7:
Services of goods transport agency in relation to transportation of goods OTHER THAN USED HOUSEHOLD GOODS : Taxable Value 30% : Subject to condition that Cenvat Credit of Input, Input Service & Capital Goods used for providing the said service is not availed. Earlier, this was applicable for “Services of goods transport agency in relation to transportation of goods”. So, all goods including household goods were covered. Now, same is omitted from this Entry & separate entry No. 7A is provided for the same.
Notification No.7A:
Services of goods transport agency in relation to transportation of USED HOUSEHOLD GOODS : Taxable value 40% : Subject to condition that Cenvat Credit of Input, Input Service & Capital Goods used for providing the said service is not availed. This is a newly inserted entry.
Notification No.8:
Services provided by a foreman of chit fund in relation to chit: Taxable value 70% : Subject to condition that Cenvat Credit of Input, Input Service & Capital Goods used for providing the said service is not availed. This is a newly inserted entry.
Notification No.9:
Transport of passengers, with or without accompanied belongings, by- a) a contract carriage other than motorcab. b) a radio taxi c) a Stage carrier : Taxable value 40%: Subject to condition that Cenvat Credit of Input, Input Service & Capital Goods used for providing the said service is not availed.
Notification No.10:
Transport of goods in a vessel : Taxable value 30% : Subject to condition that Cenvat Credit of Input & Capital Goods used for providing the said service is not availed. Earlier, credit of Input service was also not allowed along with Inputs & Capital Goods. However now, Cenvat credit of Input Service is allowed.
Notification No.12:
Construction of a complex, building, civil structure 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 : Taxable value 30% : Subject to condition that (i) CENVAT credit on inputs used for providing the taxable service has not been availed. This entry was earlier also in existence, however it includes categories such as carpet area less than 2000 sq.ft. or more than that etc. (ii) The value of land is included in the amount charged from the service receiver. Now these categories are removed and such taxable service is charged at 30% of total value.
Notification No.11 :
Substituted (Defin. of ‘Package Tour’ given at para-2 is omitted)
Service by Tour Operator in respect of : (i) tour, only for arranging or booking accommodation : Taxable value 10 : This abatement of 90% cannot be claimed in such cases where the invoice, bill or challan issued by the tour operator, in relation to a tour, only includes the service charges for arranging or booking accommodation for any person and does not include the cost of such accommodation.; (ii) other than (i) above : Taxable value 30 : CENVAT credit on inputs, capital goods and input services other than input services of a tour operator, used for providing the taxable service is not availed.
Changes in Mega Exemption Notification No. 25/2012 dated 01. 03. 2016
[A] New Entries inserted to exempt services :
(1) Entry 9B w.e.f. 01.03.2016: Services provided by the Indian Institutes of Management (IIM), 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 residential 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 the IIM;
b. fellow programme in Management;
c. five year integrated programme in Management.
(2) Entry 9C: Services of assessing bodies empanelled centrally by Directorate General of Training, Ministry of Skill Development and Entrepreneurship by way of assessments under Skill Development Initiative (SDI) Scheme.
(3) Entry 9D: Services provided by training providers (Project implementation agencies) under Deen Dayal Upadhyaya Grameen Kaushalya Yojana under the Ministry of Rural Development by way of offering skill or vocational training courses certified by National Council For Vocational Training.
(4) Entry 12A and 14A w.e.f. 01.03.2016: Restoration of certain exemptions withdrawn last year for projects, contracts in respect of which, contracts were entered into before withdrawal of the exemption. [Refer changes discussed supra under newly proposed Section 102 and Section 103 of the Finance Act, for details].
(5) Entry 14 (ca): Services by way of construction, erection, commissioning, installation of original works pertaining to low cost houses up to a carpet area of 60 sq. m. per house in a housing project approved by the competent authority under the “Affordable housing in partnership” component of PMAY or any housing scheme of a State Government.
(6) Entry No. 23(bb): Service of transportation of passengers, with or without accompanied belongings, by a stage carriage, was in the Negative list of services vide Section 66D(o)(i) of the Finance Act. With the proposed deletion of said entry under the Negative List, a new entry is being inserted under the Mega Exemption Notification so as to exempt services by a stage carriage other than air conditioned stage carriage.
(7) Entry No. 26(q): Services of general insurance business provided under ‘Niramaya’ Health Insurance scheme launched by National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability Act, 1999 (44 of 1999).
(8) Entry No. 26C: Services of life insurance business provided by way of annuity under the National Pension System regulated by Pension Fund Regulatory and Development Authority of India (PFRDA) under the Pension Fund Regulatory And Development Authority Act, 2013 (23 of 2013).
(9) Entry No. 49: Services provided by Employees’ Provident Fund Organisation (EPFO) to persons governed under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952).
(10) Entry No. 50: Services provided by Insurance Regulatory and Development Authority of India (IRDA) to insurers under the Insurance Regulatory and Development Authority of India Act, 1999 (41 of 1999).
(11) Entry No. 51: Services provided by Securities and Exchange Board of India (SEBI) set up under the Securities and Exchange Board of India Act, 1992 (15 of 1992) by way of protecting the interests of investors in securities and to promote the development of, and to regulate, the securities market.
(12) Entry No. 52: Services provided by National Centre for Cold Chain Development under Ministry of Agriculture, Cooperation and Farmer’s Welfare by way of cold chain knowledge dissemination.
(13) Entry No. 53 w.e.f 01.06.2016: Services by way of transportation of goods by an aircraft from a place outside India upto the customs station of clearance in India.
[B] Withdrawal of Exemption :
(1) Entry No. 6(b) & (c) has been amended to withdraw exemption in respect of the following: Services provided by a senior advocate to an advocate or partnership firm of advocates and to a person other than a person ordinarily carrying out any activity relating to industry, commerce or any other business or profession; and a person represented on an arbitral tribunal to an arbitral tribunal.
Hence, Service tax in the above instances would be levied under forward charge. However, legal services provided by a firm of advocates or an advocate other than senior advocate is being continued i.e. under Reverse Charge.
(2) Entry 14(a): Exemption to construction, erection, commissioning or installation of original works pertaining to monorail or metro is being withdrawn. However, the said services, where contracts were entered into before 01.03.2016, on which appropriate stamp duty, was paid, shall remain exempt.
(3) Entry No. 23(c): Exemption to services for transport of passengers, with or without accompanied belongings, by ropeway, cable car or aerial tramway is being withdrawn by deletion of this entry.
[C] Expansion of Scope :
(1) Entry No. 13: Scope expanded to also cover the following: Services provided by way of construction , erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of:
(ba) a civil structure or any other original works pertaining to the ‘In-situ rehabilitation of existing slum dwellers using land as a resource through private participation’ under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana, only for existing slum dwellers;
(bb) a civil structure or any other original works pertaining to the ‘Beneficiary led individual house construction / enhancement under the Housing for All(Urban) Mission/ Pradhan Mantri Awas Yojana’.
(2) Entry 16 : The threshold exemption limit of consideration charged for services provided by a performing artist in folk or classical art form of (i) music, or (ii) dance, or (iii) theatre, has been extended from Rs. 1 lakh to Rs. 1.5 lakh per performance (except brand ambassador).
[D] New definitions inserted :
(1) “approved vocational education course” means, –
(i) a course run by an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training or State Council for Vocational Training offering courses in designated trades notified under the Apprentices Act, 1961 (52 of 1961); or
(ii) a Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person registered with the Directorate General of Training, Ministry of Skill Development and Entrepreneurship.
(2) “senior advocate” has the meaning assigned to it in Section 16 of the Advocates Act, 1961 (25 of 1961).
(3) “(oa) “educational institution” means an institution providing services by way of:
(i) pre-school education and education up to higher secondary school or equivalent;
(ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force;
(ii) education as a part of an approved vocational education course;”
These definitions will be effective from the date of enactment of the Finance Bill, 2016.
