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CA GAURAV GUPTA

507 B, D-Mall, Netaji Subhash Place,


Pitampura, Delhi - 110034
P: 011 -32962487, 9811013940

B.Com (Hons.), FCA, LLB, DISA

UPDATES FOR APRIL 2015


NOTIFICATION / CIRCULAR

Changes effective in Service Tax from April 1, 2014


-

Rationalization of Ambulance Services


Service provided by a Ambulance when belonging to a clinical establishment was already
exempt vide clause 2 of Notification No. 25/2012-Service Tax dated 20.06.2012. However,
ambulances when provided by private entities which are not clinical establishments were
taxable. Vide Notification No. 6/2015-Service Tax, dated March 1, 2015, services of private
ambulance operators has also been exempted.

Exemption to certain construction services when provided to Government removed


Service of construction, erection, commissioning, installation, completion, fitting out, repair,
maintenance, renovation, or alteration of certain specified building of Government, a local
authority or a governmental authority were exempt vide Entry 12 of Notification No. 25/2012Service Tax dated 20.06.2012. However, same services when provided to similar buildings
in Private Sector were taxable. Accordingly, to equate the provision of such services in
relation to same buildings when provided to either government or private sector, the said
exemption has been removed when provided in relation to following buildings:
- a civil structure or any other original works meant predominantly for use other than for
commerce, industry, or any other business or profession;
- a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art
or cultural establishment;
- a residential complex predominantly meant for self-use or the use of their employees or
other persons specified in the Explanation 1 to clause 44 of section 65 B of the said Act.

Exemption to construction activities in relation to airport, port withdrawn


Service by way of construction, erection, commissioning, or installation of original works
pertaining to an airport and port has now been made taxable by deleting existing exemption
in clause 14 of Notification No. 25/2012-Service Tax dated 20.06.2012. Such services are
now exempt only when provided pertaining to Railways.

Exemption to folk artists restricted A


Service by a performing artist in folk or classical art forms of (i) music, or (ii) dance, or (iii)
theatre were earlier exempt vide Clause 16 of Notification No. 25/2012-Service Tax dated
20.06.2012. The exemption has now been restricted and shall now be available when:
(a) the consideration charged for such performance is not more than one lakh rupees; and
(b) such service are not provided by such artist as a brand ambassador

Exemption to carriage of foodstuff restricted to few food items


Service of transportation of all foodstuff including flours, tea, coffee, jiggery, sugar, milk
products, salt and edible oil, excluding alcoholic beverages by rail or a vessel or GTA was
earlier exempt vide Clause 20 and 21 of Notification No. 25/2012-Service Tax dated
20.06.2012. The exemption has now been restricted and shall now be available in relation to

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CA GAURAV GUPTA
B.Com (Hons.), FCA, LLB, DISA

507 B, D-Mall, Netaji Subhash Place,


Pitampura, Delhi - 110034
P: 011 -32962487, 9811013940

milk, salt and food grain including flours, pulses and rice. Accordingly, transportation of all
other foodstuff including tea, coffee, jiggery, sugar, milk products, edible oil etc shall be
taxable henceforth.
-

Exemption to Mutual fund agents and Lottery agents withdrawn and made liable under
reverse charge:
Service of mutual fund agent to a mutual fund or asset management company, distributor to a
mutual fund or asset management company, selling or marketing agent of lottery tickets to a
distributer or a selling agent were exempt vide Clause 29 of Notification No. 25/2012-Service
Tax dated 20.06.2012. The exemption has now been withdrawn as their services have now
been made taxable. However, such liability has been fastened on the service provider i.e.
mutual fund or asset management company or distributer or a selling agent of lottery as the
case may be.

New exemptions provided:


o Exemption to Varishtha Pension Bima Yojana provided
o Services by operator of Common Effluent Treatment Plant by way of treatment of effluent
has been exempted by introducing Clause 43 in Notification No. 25/2012-Service Tax
dated 20.06.2012.
o Services by way of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labelling
of fruits and vegetables has been exempted by introducing Clause 44 in Notification No.
25/2012-Service Tax dated 20.06.2012. As a condition it has been provided that such
activities when provided on fruits or vegetables should not change or alter the essential
characteristics of the said fruits or vegetables.
o Services by way of admission to a museum, national park, wildlife sanctuary, tiger
reserve or zoo has been exempted by introducing Clause 45 in Notification No. 25/2012Service Tax dated 20.06.2012.

GTA Services to exporter to goods till Land Customs station added to existing
exemption
Following services of GTA were exempt when provided to an exporter of goods vide
Notification No. 31/2012-Service Tax dated 20.06.2012:
o Service provided to an exporter for transport of the goods by goods transport agency in a
goods carriage from any container freight station or inland container depot to the port or
airport [or land customs station], as the case may be, from where the goods are exported.
o Service provided to an exporter in relation to transport of the goods by goods transport
agency in a goods carriage directly from their place of removal, to an inland container
depot, a container freight station, a port, airport [or land customs station], as the case
may be, from where the goods are exported
In addition such delivery when made to land customs station has now been added vide
Notification No. 4/2015-Service Tax dated March 1, 2015 with effect from April 1, 2015.

Rationalization of abatement in transport of goods by GTA and Vessel


At present, service tax is payable on 30% of the value of rail transport for goods and
passengers, 25% of the value of goods transport by road by a goods transport agency and
40% for goods transport by vessels. The conditions prescribed also vary. A uniform

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CA GAURAV GUPTA
B.Com (Hons.), FCA, LLB, DISA

507 B, D-Mall, Netaji Subhash Place,


Pitampura, Delhi - 110034
P: 011 -32962487, 9811013940

abatement is now being prescribed for transport by rail, road and vessel and Service Tax
shall be payable on 30% of the value of such service subject to a uniform condition of nonavailment of Cenvat Credit on inputs, capital goods and input services
-

Reduction of abatement in higher class of air transport


The abatement for classes other than economy is being reduced and Service Tax would be
payable on 60% of the value of such higher classes.

Reverse charge on Aggregator of Services


An Aggregator shall be liable to pay Service Tax under reverse charge when such services
are provided to such Aggregator by any person including another Aggregator.
It has also been provided that if the aggregator does not have a physical presence in the
taxable territory, any person representing the aggregator for any purpose in the taxable
territory shall be liable for paying service tax. Also, if the aggregator does not have a physical
presence or does not have a representative for any purpose in the taxable territory, the
aggregator shall appoint a person in the taxable territory for the purpose of paying service tax
and such person shall be liable for paying service tax.
An aggregator means a person, who owns and manages a web based software application,
and by means of the application and a communication device, enables a potential customer
to connect with persons providing service of a particular kind under the brand name or trade
name of the aggregator.

Complete liability under reverse charge in certain cases of Manpower Supply


Manpower supply and security services when provided by an individual, HUF, or partnership
firm to a body corporate are being brought to full reverse charge. Presently, these are taxed
under partial reverse charge mechanism where 75% only is to be paid by service recipient.

Cenvat Credit rules


Rule 4(7) is being amended to allow Cenvat Credit of Service Tax paid under partial reverse
charge by the service receiver without linking it to the payment to the service provider.

No change in rate of Service Tax


It is pertinent to mention that there is no change in rate of Service Tax from April 1, 2014. The
rate continues to remain at 12.36% (including cess). The change of rate is proposed to be
effective from a date which shall be notified after enactment of Finance Act, 2015. It is also
important to note that Swach Cess shall also be notified on services and is not automatically
applicable from the date of enactment of Finance Act, 2015.
Further, the tax computed at alternate rate as available for following services shall also be
applicable from a date which shall be notified by the government after the enactment of Finance
Act, 2015:

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CA GAURAV GUPTA

507 B, D-Mall, Netaji Subhash Place,


Pitampura, Delhi - 110034
P: 011 -32962487, 9811013940

B.Com (Hons.), FCA, LLB, DISA

Service Provider

Services

Existing Rate

Air Travel Agent for


booking of tickets
for passenger travel
by air
An insurer carrying
on life insurance
business

In the case of domestic


bookings
In
the
case
of
international bookings
on the gross premium
charged from a policy
holder reduced by the
amount allocated for
investment, or savings
on behalf of policy
holder, if such amount is
intimated to the policy
holder at the time of
providing of service
in all other cases in the
first year
in all other cases in
subsequent years
Services in relation to
purchase or sale of
foreign currency for an
amount upto rupees
100,000

0.6% of Basic Fare

3% of the premium
charged
1.5%
of
the
premium charged
0.12 % of the gross
amount (subject to
minimum amount of
Rupees 30)

3.5%
of
the
premium charged
1.75%
of
the
premium charged
0.14 % of the
gross
amount
(subject
to
minimum amount
of Rupees 35)

Services in relation to
purchase or sale of
foreign currency for an
amount exceeding Rs.
100,000 but upto rupees
1000,000

Rs 120 + 0.06% of
the amount above
Rs 100,000

Rs 140 + 0.07% of
the amount above
Rs 100,000

Services in relation to
purchase or sale of
foreign currency for an
amount exceeding Rs.
1000,000

Rs 660 + .012% of
the amount above
Rs
1000,000
subject
to
maximum of Rs
6000
Rs. 7000 on every
Rs. 10 Lakh (or part
of Rs. 10 Lakh) of
aggregate
face
value of lottery
tickets

Rs 770 + 0.014%
of the amount
above
Rs
1000,000 subject
to maximum of Rs
7000
Rs. 8200 on every
Rs. 10 Lakh (or
part of Rs. 10
Lakh) of aggregate
face
value
of
lottery tickets

Rs.
11,000
on
every Rs. 10 Lakh

Rs. 12,800 on
every Rs. 10 Lakh

Money Changer

Distributor or selling
agent of Lottery

taxable
service
of
promotion,
marketing,
organising or in any
other manner assisting
in organising lottery, if
the lottery or lottery
scheme is one where
the guaranteed prize
payout is more than
80%
taxable
service
of
promotion,
marketing,

1.2% of Basic Fare


12.36%
amount

of

such

Proposed
rate
(from
notified
date
and
not
April 1, 2015)
0.7% of Basic
Fare
1.4% of Basic
Fare
14%
of
such
amount

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CA GAURAV GUPTA

507 B, D-Mall, Netaji Subhash Place,


Pitampura, Delhi - 110034
P: 011 -32962487, 9811013940

B.Com (Hons.), FCA, LLB, DISA

organising or in any
other manner assisting
in organising lottery, if
the lottery or lottery
scheme is one where
the guaranteed prize
payout is less than 80%

(or part of Rs. 10


Lakh) of aggregate
face value of lottery
tickets printed by
the
organising
State for a draw

(or part of Rs. 10


Lakh) of aggregate
face
value
of
lottery
tickets
printed by the
organising State
for a draw

IMPORTANT CASES OF SERVICE TAX

In the case of M/s Life Cell International (P) Ltd Vs UoI, Honble Madras High Court has said
that an amendment will usually take effect only from the date of its enactment and will have no
application to prior transactions, in the absence of an expressed intent or an intent clearly implied
to the contrary' and that where a statutory provision is in its nature clarificatory, it will be
presumed to be retrospective unless the contrary intention is clearly indicated by the Legislature,
the reason being that its underlying purpose of explaining or clarifying the existing law will be
effectively served only by giving it such a retrospective construction. Accordingly, exemption as
made available to the services provided by cord blood banks by way of preservation of stem cells
shall be available only from the introduction of such exemption (in absence of any retrospective
provision) i.e. from 17.2.2014 only and they cannot claim it with retrospective effect. Accordingly,
such services shall be taxable from 01.07.2012 to 17.2.2014.

In the case of Vodafone Cellular Ltd Vs UoI, Honble Madras High Court held that an exparte
order after three dates when adjournment was requested by the Appellant was against the
principles of natural justice and deprieved him of fair hearing and thus, is impugned order was set
aside.

In the case of Mann And Hummel Filter Pvt Ltd Vs CST, it has been held that deputation of
manpower by foreign company to its Indian arm cannot be said to be manpower supply. As a
fact, remuneration was paid by the Indian arm to the employees and for their social benefits to the
entity abroad.

In the case of Dy Commissioner Of Central Excise & Service Vs M/s Barnala Builders &
Property Consultants, Honble Supreme Court has deferred its decision on the issue as to
whether an appeal against the order of rejection of declaration under VCES, 2013 filed by the
assessee is maintainable under the Finance Act, 1994.

In the case of CC, CE & ST Vs Hyundai Motor India Engineering (P) Ltd, Honble AP High
Court has held that the relevant date in case of export claims for services, shall be date of receipt
of payment. Honble High Court upheld that decision of Tribunal as Honble Tribunal has held
that the relevant date would be the date of receipt of consideration as held in 2011-TIOL-166CESTAT-MUM and, when such decision has not been appealed against nor it has been reversed
or overruled by any superior forum, the said judgment is binding.

IMPORTANT DATES FOR APRIL 2015


25th Apr 2015

Submission of return for half year ending March 31, 2015 by all assessees
electronically.
It is also advisable to submit the intimation for opting proportionate reversal
under Rule 6(3)(ii) of Cenvat Credit Rules, 2004 by the assessee for FY 2015-16
within the month of April 2015.

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