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In case of the developers (Other than those opting for composition scheme), if MVAT Audit report for the F. Y. 2012-13 is filed up to 31st March, 2014 it is decided administratively not to levy penalty u/s. 61(2) of the MVAT Act.
This Notification has been issued by CBEC for implementing the changes proposed in the Interim Budget presented by the Finance Minister.
The Notification amends Mega Exemption Notification No. 25/2012-ST to provide that service tax would not be payable on rice from the staple’s loading to the storage stage. It may be noted that rice was originally exempt from service tax. However, later, the Finance Ministry had taken a view that only paddy is an agricultural produce, while rice is a processed item.
This notification also exempts services provided by cord blood banks by way of preservation of stem cells or any other service in relation to such preservation.
These existing Notifications are now amended by the Notification No. 46/2011 & 47/2011, respectively to reduce service tax to the extent of R & D Cess subject to the fulfilment of the following cumulative conditions :
(a) R&D Cess is paid within 6 months of booking of invoice;
(b) R&D Cess is paid within 6 months of date of credit in books in case of associated companies;
(c) In any case R&D Cess should be paid before payment for the service.
By Circular No. 138/07/2011 — Service Tax, dated 6-5-2011 it was clarified that the services provided by the sub-contractors/consultants and other service providers to the works contract service (WCS) provider in respect of construction of dams, tunnels, road, bridges, etc. are classifiable as per section 65A of the Finance Act, 1994 under respective sub-clauses (105) of section 65 of the Finance Act and are chargeable to service tax accordingly.
It is thus apparent that just because the main contractor is providing the WCS service in respect of projects involving construction of roads, airports, railways, transport terminals, bridges, tunnels, dams, etc., it would not automatically lead to the classification of services being provided by the sub-contractor to the contractor as WCS. Rather, the classification would have to be independently done as per the rules and the taxability would get decided accordingly.
However, it is also apparent that in case the services provided by the sub-contractors to the main contractor are independently classifiable under WCS, then they too will get the benefit of exemption so long as they are in relation to the infrastructure projects mentioned above. Thus, it may happen that the main infrastructure projects of execution of works contract in respect of roads, airports, railways, transport terminals, bridges tunnels and dams, is sub-divided into several subprojects and each such sub-project is assigned by the main contractor to the various sub-contractors. In such cases, if the sub-contractors are providing works contract service to the main contractor for completion of the main contract, then service tax is obviously not leviable on the works contract service provided by such sub-contractors.
SERVICE TAX UPDATE
Time for MVAT refund application in Form No. 501 for the financial year 2009-10 has been extended from 30-9-2011 to 31-12-2011.
(i) The words should be interpreted to mean that ‘the benefit of the service should accrue outside India’;
(ii) The words ‘accrual of benefit’ is not restricted to mere impact on the bottomline of the person who pays for the services;
(iii) The above interpretations should not apply to services which are merely performed from India and where the accrual of benefit and their use outside India are not in conflict with each other. The relation between the parties may also be relevant in certain circumstances.
The Circular has given detailed guideline to the field formulations regarding prosecution provisions in relation to:
(a) Provisions of services without issue of invoice;
(b) Availment and utilisation of CENVAT credit without actual receipt of input services;
(c) Maintaining false books of account or supplying of false information; and
(d) Non-payment of service tax collected for a period of more than 6 months, etc.
It is clarified that the services provided by the subcontractors/ consultants and other service providers are classifiable as per section 65A of the Finance Act, 1994 under respective sub-clauses of clause (105) of section 65 of the Finance Act, 1944 and chargeable to service tax accordingly.
(a) Services provided by restaurant having facility of AC and having licence to serve alcoholic beverages shall be exempt from the service tax leviable thereon as is in excess of the service tax calculated @ 30% of the gross amount charged for providing such services.
(b) Services provided by hotel, inn, guest-house, club or camp-site shall be exempt from service tax leviable thereon as is in excess of the service tax calculated @ 50% of the gross amount charged for providing such services.
Notification No. 33/2011, dated 25-4-2011.
(a) Construction in respect of commercial or industrial buildings;
(b) Construction service of residential complex;
(c) Telecommunication services;
(d) Internet telecommunication services;
(e) Works contract services.
The exemption shall be claimed either on the basis of rates specified in the Schedule to the Notification or on the basis of documents. The procedure for claiming refund under both the options has been prescribed.
The exemption by way of refund shall be available only where no CENVAT credit of service tax paid on the specified taxable services used for export of the said goods has been taken under the CENVAT Credit Rules, 2004.
The exemption shall not be available to a Unit or Developer of a Special Economic Zone.
Where any refund of service tax paid on specified taxable service utilised for export of said goods has been allowed to an exporter, but the sale proceeds in respect of export of goods are not received by or on behalf of the exporter, in India, within the period allowed by the RBI including any extension of such period, such refund shall be deemed never to have been allowed and recovered, as if it is a recovery of service tax erroneously refunded.
(a) If the movie is exhibited by the theatre-owner or exhibitor on his account — i.e., the copyrights are temporarily transferred — Service tax would be levied under copyright service to be provided by distributor or sub-distributor or area distributor or producer, etc., as the case may be.
(b) If the movie is exhibited on behalf of distributor or sub-distributor or area distributor or producer, etc. i.e., no copyrights are temporarily transferred — Service tax would be levied under business support service/renting of immovable property service, as the case may be, to be provided by theatre owner or exhibitor.
2. Where the arrangement between the distributor/ sub-distributor/area distributor and the movie exhibitor/theatre-owner is on unincorporated partnership/ joint collaboration basis, services provided by each of the persons i.e., the ‘new entity’/theatreowner or exhibitor/distributor or sub-distributor or area distributor or producer, etc. as the case may be, would be liable to service tax based on the nature of transaction under applicable service head.
It is further clarified that the arrangements mentioned in this Circular will apply mutatis mutandis to similar situations across all the services taxable under the Finance Act, 1994.
(i) Deemed dealer
Deemed dealers whose tax liability during the previous year was Rs.1 crore or less subject to permission of joint commissioner were filing yearly return. Now they will be required to upload returns on six-monthly basis within 30 days from the end of the six-monthly period and required to furnish details for the entire year in Annexure J1, J2 that is party-wise sales & purchases and Annexure C & D that is TDS Certificates received and issued, within 90 days from the end of the financial year along with 2nd half-yearly return.
(ii) Dealers not covered under Mvat Audit
Dealers not covered under Mvat audit are now required to furnish annual details in Annexure JI & J2 that is party-wise sales & purchase and Annexure G, H & I that is for declaration forms received and not received along with last monthly, quarterly or six-monthly returns within 90 days from the end of the financial year. These details are also required to be furnished for the first year of registration and last year, that is, year in which RC is cancelled where Mvat audit is not applicable.
All the dealers covered under these amendments will be required to make payment of tax within 21 days in case of monthly or quarterly returns and within 30 days in case dealers are required to file returns on half-yearly basis.
From 1st January, 2012 Professional Tax Registration certificate holder and professional tax enrolment certificate holder can make the payment of professional tax electronically, at their option. For making payment on website of the Department PTRC holder should first get enrolled for professional tax e-services, no such requirement for PTEC payment. Detailed instructions are given in the Circular.
(a) Tripartite Business Model
(b) Redevelopment including Slum Rehabilitation Projects
(c) Investment Model
(d) Conversion Model
(e) Non-requirement of Completion Certificate/ where it is waived or not prescribed
(f) Build-Operate-Transfer (BOT) Projects
(g) Joint Development Agreement Model
It is also clarified that renting, leasing or licensing of vacant land by the NHAI or State Authority to a SPV for construction of road will not attract service tax.
In Rule 52, for the words ‘the Commissioner shall’ the words ‘the Commissioner shall subject to the provisions of Rules 53, 54 and 55’ are substituted. This amendment is effective from 1st April 2005. This amendment is clarificatory in nature and has no effect on the position of set-off after amendment.
Rule 53 amended to provide that if the dealer manufacturer, of high-speed diesel oil, aviation turbine fuel, aviation gasoline and motor spirit covered under entries 5, 6, 7, 8, 9 and 10 of Schedule D, dispatches the goods by way of branch transfer, reduction in set-off should be calculated @2% of the values of goods dispatched.
Rule 54 amended with effect from 1-4-2005 so that set-off will not be admissible on purchase of the high-speed diesel oil, aviation turbine fuel (duty paid), aviation turbine fuel (bonded), aviation gasoline (duty paid or bonded), and petrol, unless such motor spirits are sold/resold in the course of interstate trade or commerce or in the course of export outside India.
Annexure C: details of TDS certificates received by dealer, Annexure D: details of TDS certificates issued by the dealer, Annexure G: details of the various certificates or declarations as provided under the Central Sales Tax Act, 1956 received by the dealer, Annexure H: details of the declarations in Form H (Local Form H) received by the dealer, Annexure I: details of the various certificates or declarations as provided under the Central Sales Tax Act, 1956 that are not received, Annexure J1: Customer-wise sales, Annexure J2: Customer-wise purchases.
Such dealers will make payments as per earlier provisions i.e., before 21st/30th April for the period ended 31st March, 2012 and for filing return the due date has been extended by 90 days that is before 30th June. Uploading of the said annexures shall be a pre-requisite for uploading the last return. The deemed dealers i.e., Custom Dept., Dept. of Union Govt., Insurance & Finance Corporations, institutions, banks who are not required to file audit report in Form 704 are also required to file the said annexures.
Further, the definition of ‘aggregate value’ is amended to mean the sum total of value of taxable services charged in the first consecutive invoices issued during a financial year, but does not include value charged in invoices issued towards such services which are exempt from whole of service tax leviable thereon under any other notification.
By this Notification changes are effected in Entry 59 in Schedule A: Raisins & Currants Nil Rates of tax : Period extended up to 31st May, 2013.
Accordingly, an application for compounding of offences and getting immunity from prosecution may be made, either before or after the institution of prosecution. Rules also prescribe forms, procedure, authorities, fixation of amount and powers to grant and withdraw immunity granted from prosecution.
By this Notification every PTRC holder has to make payment electronically of tax, interest, penalty or any amount under the law with effect from 1-7-2012.
As the remittance of foreign currency from abroad is a transaction in money, therefore, it will fall outside the ambit of service. It is further clarified that even the Indian counterpart bank or financial institution who charges the foreign bank or any other entity for the services provided at the receiving end, is not liable to service tax as the place of provision of such service shall be the location of the recipient of the service, i.e., outside India, in terms of Rule 3 of the Place of Provision of Services Rules, 2012.
(i) In the case of continuous supply, where the invoice had been issued or payment received before or on 31st March 2012, the point of taxation is governed by Rule 6 of the Point of Taxation Rules, 2011 as it stood at that point of time.
(ii) In the case of works contracts, which have been subjected to certain changes in service tax treatment effective from 1st July, if there has been a change in the effective rate of tax, the point of taxation will be determined under Rule 4, and if not, it will be determined under Rule 3. Introduction of service tax for a service that was not exempted by Notification, but was outside the scope of taxable service, does not constitute a change in the effective rate of taxation, and will be dealt with under Rule 3. (iii) For services where partial reverse charge has been introduced from 1st July, it will apply only when the point of taxation is on or after 1st July.
(a) Service of transportation of passengers (with or without accompanied belongings) in 1st class or in air-conditioned coach and
(b) Services by way of transportation of goods. The exemption would be effective up to 30th September 2012.
It is also not available for export by the Indian partner with equity participation in an overseas joint venture or wholly-owned subsidiary. The said Notification also contains the procedure in detail and the forms in which the exporter is required to inform Dy. Commissioner/ Assistant Commissioner of Central Excise regarding before claiming exemption.
For excisable goods, it applies to services used beyond the place of removal, for export of the goods. For non-excisable goods, it applies to services used for the export of the goods. Rebate is given as per the schedule of rates in the Notification; however if actuals are over twenty per cent more than the notified rate, the rebate can be claimed on the actuals as supported by documents.
The exclusions under definition of ‘input services’ in the Cenvat Credit Rules, as contained in clauses A, B, BA and C of Rule 2(l) apply to rebate also. Rebate is not available if Cenvat credit of service tax paid on specified service used for export of goods has been taken.
The Government of Maharashtra has gazetted the Maharashtra Act No. VIII [Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2012] on 25th April, 2012 after receiving consent of the Governor.
APMCs provide basic facilities in the market area out of the ‘market fee’ collected by them mainly to facilitate farmers, purchasers and others and a host of services to the licensees in relation to procurement of agricultural produce, which are ‘inputs’ as per section 65(19) of the Act; therefore, services provided by the APMCs are classifiable under ‘Business Auxiliary services’ and hence, benefit of exemption under Notification No. 14/2004-ST is available. However, any other service provided by the APMCs for a separate charge (other than ‘market fee’) either to the licensees or to the farmers or to any other person, e.g., renting of shops in the market area, etc. would be liable to tax under the respective taxable heads.
Changes in the various Schedule entries under the Maharashtra Value Added Tax Act, 2002 are briefly explained in this Circular.
The said Notification also contains conditions and limitations of such rebate along with procedures and forms of application for rebate claims.
The other three services which were also notified as continuous supply of service vide Notification No. 28/2011-ST, but now removed are
(i) Commercial or industrial construction;
(ii) Construction of complex and
(iii) Internet telecommunication.
(i) omitting the definition of associated enterprises and taxable services as given in sub-rule 2(b) and 2(f), respectively, from the said rules and
(ii) substituting the words ‘provided or to be provided’ wherever they occur in the said rules, with the words ‘provided or agreed to be provided’.
(i) Various definitions of the terms used in Rules are inserted in Rule 2.
(ii) Changes brought in Rule 2(1)(d) for effecting the revised reverse charge mechanism.
(iii) Substitution of the word and figures ‘Section 66B’ for the word and figure ‘Section 66’ wherever used in the said rules.
(iv) Insertion of new Rule 6A for determining whether the service is exported or not.
(v) Omission of Rule 5B-Date for determination
of rate.
Further the services provided by an entrepreneur located within the premises of so recognised TBI/ STEP were also exempted vide Notification No. 10/2007-ST. In the new service tax regime, the benefits of exemption given to entrepreneurs under Notification No. 10/2007-ST is totally rescinded but TBI/STEP are provided with similar benefits as they were enjoying before, vide this Notification No. 32/2012-ST. The new Notification also contains revised formats for information to be furnished in this regard.
In respect of services specified at Sl. No. 7, 8 & 9, this reverse charge mechanism shall be applicable only where service provider is a non-corporate entity and the service recipient is a corporate entity.
(1) Place of provisions of services generally;
(2) Place of provision of performance based services;
(3) Place of provision of services relating to immovable property;
(4) Place of provisions of services relating to events;
(5) Place of provision of services provided at more than one location;
(6) Place of provision of services where provider and recipient are located in taxable territory;
(7) Place of provision of specific services;
(8) Place of provision of goods transportation services;
(9) Place of provision of passenger transportation services;
(10) Place of provision of services provided on board a conveyance.
The Notification will be effective from 1st July, 2012.
The Notification will be effective from 1st July, 2012.
WEF 01.08.2012, there is no need to file Form 304 for cancellation of UAO. MAHAVIKAS system automatically ascertains the return filing status for a particular period and if filed then the system shall cancel the UAO and will inform the dealer by email. The dealer may also access his e-mail at <Your mail> menu at department’s web-site.
(a) Services provided or agreed to be provided by director of a company to the said company: 100% of the service tax payable by the person receiving services;
(b) Security services provided or agreed to be provided by an Individual, HUF, partnership firm or association of persons to a business entity registered as a body corporate : 25% of the service tax payable by person providing service & 75% of service tax payable by person receiving service.
The term “Security Services” has been defined vide Notification No. 46/2012 as services relating to the security of any property, whether movable or immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity.
In extension of requirements of Trade Circular No.14T of 2012 dated 6-8-2012, the developer shall submit year wise annexure showing the working of his tax liability up to the period ending 31-10-2012 after uploading returns.
Format for the annexures given on website and it is to be sent as attachment to email builderscell@ gmail.com.
Extension of dates for Grant of Registration, ADM Relief and payment of taxes etc. as per Trade Circular No.14T of 2012 dated 6-8-2012.
Vide Trade Circular No.14T of 2012 dated 6-8-2012, the Commissioner has announced grant of administrative relief to builders and developers. If the builders and developers are not registered under the VAT Act, then they were required to apply for VAT TIN on or before 16-8-2012 which is extended to 15-10-2012. Further, they are also required to pay all taxes and upload all the returns from 20-6-2006 till date and apply for administrative relief on or before 31-8-2012 which is extended to 31-10-2012.
Vide this Circular, the Commissioner has explained the implications of Notification issued to levy tax on Furnishing cloth.
CBEC vide this Order has extended the due date for submission of the return in ST-3 for the period 1st April 2012 to 30th June 2012, from 25th October, 2012 to 25th November, 2012.
First Notification exempts sale of furnishing fabrics notified under schedule entry C-101 when sold other than last point of sale within the state. Second Notification adds; furnishing fabrics notified under Schedule Entry C-101, in exclusions from sales turnover under composition scheme for retailers in the notification issued on 1-06-2005 Vat 1505/C.R.105/ Taction-1 for Composition Scheme. Third Notification specifies varieties of furnishing fabrics under Schedule Entry No.C-101 (a). Fourth Notification amends list of varieties of sugar, tobacco textiles and textile articles by Schedule Entry C-101 issued in Notification 1505/C.R. 120/Taxtion 1, Dated 1-6-2005. All the notifications are effective from 1-9-2012.
CBEC- TRU has issued this Circular clarifying certain issues in relation to levy of service tax on certain vocational education/training/skill development courses (VEC). Accordingly, VEC offered by the Central Government or State Government or local authority themselves ,is covered in the Negative List under Section 66D and hence, service tax is not leviable. When the VEC is offered by an institution, as an independent entity in the form of society or any other similar body, service tax treatment is determinable by the application of either sub-clause (ii) or (iii) of clause (l) of section 66D. Services provided by way of education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force, are not chargeable to service tax. Services provided by way of education as a part of an approved vocational education course are not chargeable to service tax.
By this Notification Schedule Entry D-11 has been amended to add more areas.
Notification No. VAT 1514/CR-8/Taxation-1 dated 20-02-2014
By this Notification Schedule Entry A-9A: paddy rice, wheat, etc.; A-51: papad, gur, etc.; A-59: raisins and currants, C-108: tea in leaf or powdered form etc., have been amended by extending the period up to 31st March, 2015.
Notification No. VAT 1514/CR-10/Taxation-1 dated 20-02-2014
By this Notification Schedule Entry B-1, B-2 has been amended by reducing rate from 1.1% to 1 % again.
This Notification has been issued by CBEC for implementing the changes proposed in the Interim Budget presented by the Finance Minister.
The Notification amends Mega Exemption Notification No. 25/2012-ST to provide that service tax would not be payable on rice from the staple’s loading to the storage stage. It may be noted that rice was originally exempt from service tax. However, later, the Finance Ministry had taken a view that only paddy is an agricultural produce, while rice is a processed item.
This notification also exempts services provided by cord blood banks by way of preservation of stem cells or any other service in relation to such preservation.
i) Exemption by way of auxiliary educational services and renting of immovable property is restricted only to services provided by any person to specified educational institutions and thus auxiliary education service or renting of immovable property provided by educational institution will not be exempted.
ii) Temporary transfer or permitting the use or enjoyment of a copyright relating to original literary, dramatic, musical, artistic works or cinematograph films had, were exempted by the notification No. 25/2012; this benefit of exemption is now restricted to films exhibited in cinema halls only.
iii) Services provided by all the restaurants, eating joints or mess having the facility of air condition during any time of the previous year is now under the service tax net.
iv) The exemptions available to transportation of goods by railway or a vessel under Sl. No. 20 and services provided by a goods transportation agency (GTA) under Sl. No. 21 are being amended. Accordingly, exemption to transportation of petroleum and petroleum products, postal mails or mail bags and household effects by railways and vessels will not be available, while the benefit of transportation of agricultural produce, foodstuffs, relief materials for specified purposes, chemical fertilisers and oilcakes, registered newspapers or magazines, relief 4 materials meant for victims of natural or manmade disasters, calamities, accidents or mishap and defense equipments will be available to GTAs. v) The exemptions in respect of Vehicle Parking Service to general public is being withdrawn. vi) The exemption of services provided to Government, a local authority or a governmental authority for repair or maintenance of an Aircraft is being withdrawn. vii) Definition of Charitable Activities as given in Clause (k) in Paragraph 2 of Mega Notification No. 25/2012-ST dated 20-06-2012 is being amended so that there will be no separate threshold limit for granting the exemption from payment of service tax to activities relating to advancement of any other object of general public utility. MVAT UPDATE Notification No VAT.1512/CR-149/Taxation-1 dated 02.02.2013 It is notified that w.e.f. 15-02-2013 government will collect tax at source from dealer who has been awarded the rights for excavation of sand. Prescribed tax collection authority is District Collector or Cantonment Board or any other authority under the State government or Central government having jurisdiction over the area. Rate of tax collection is 10% of the auction amount to be collected in addition to the amount fixed for the auction of sand. Maharashtra Ordinance No . V of 2013 MVAT Act, 2002 has been amended by extending the period of limitation for the order of assessment for the years 2005-06 and 2008-09 from 31st March, 2013 to 30th June, 2013.
