Analysis ServiceTax PDF

SERVICE TAX
BUDGET ANALYSIS 2016-17

NEW NOTIFICATION / CIRCULAR ISSUED UNDER SERVICE TAX
Notification/Section Amendment Existing Provision Amendment in Existing / New Analysis
W.E.F. Provision
65B clause 11 On assent of (11) "approved vocational education Omitted It has been deleted
Interpretations the President course" means,– from Negative list and
(i) a course run by an industrial training considered in
institute exemption Notification
or an industrial training center affiliated to which may be or may
the National Council for Vocational not be withdrawn any
Training offering courses in designated time without waiting
trades notified under the Apprentices Act, for amendment in
1961; or Finance Act.
(ii) a Modular Employable Skill Course,
approved by the National Council of
Vocational Training,
or State Council for Vocational Training]
run by a person registered with the
Directorate General of Employment and
Training, Union Ministry of Labour and
Employment;
65B clause 44 in On assent of by a lottery distributor or selling agent, in by a lottery distributor or selling Activity carried out by
Explanation 2 in sub the President relation to promotion, marketing, agent on behalf of the State Lottery distributor or
clause(ii) for item (a) organizing, selling of lottery or facilitating Government, in relation to selling Agent of state
Interpretations in organizing lottery of any kind, in any promotion, marketing, Government is leviable
other manner, in accordance with the organizing, selling of lottery or to service tax
provisions of the Lotteries (Regulation) facilitating in organizing lottery of
Act, 1998;” any kind, in any other manner, in
accordance with the provisions of

W.E.F. Provision
the Lotteries (Regulation) Act,
1998
66D (i) 1st June 2015 betting, gambling and lottery Omitted Under reverse charge
Negative List of (Explanation: For the purpose of this and hence Omitted
Services clause, the expression “betting, gambling
and lottery” shall not include any activity
specified in explanation 2 to clause (44) of
section 65B)
66D (o) 1st June 2016 service of transportation of passengers, Omitted It has been deleted
Negative List of with or without accompanied belongings, from Negative list and
Services by - considered in
(i) a stage carriage; exemption Notification
(ii) railways in a class other than - which may be or may
(A) first class; or not be withdrawn any
(B) an air-conditioned coach; time without waiting
for amendment in
(iii) metro, monorail or tramway; Finance Act.
(iv) inland waterways;
(v) public transport, other than Public Transportation
predominantly for tourism purpose, in a Services are being
vessel between places located in India; taxed since it has been
and omitted from Negative
(vi) metered cabs or auto rickshaws; List of Services.
Accordingly
exemptions/abetments
have been introduced
66D (p) 1st June 2016 services by way of transportation of goods Omitted It has been deleted
Negative List of - from Negative list and
Services (i) by road except the services of - considered in
(A) a goods transportation agency; or exemption Notification
(B) a courier agency; which may be or may
not be withdrawn any

W.E.F. Provision
(ii) by an aircraft or a vessel from a place time without waiting
outside India to the first customs station for amendment in
of clearance in India; or Finance Act.
(iii) by inland waterways;
Services towards
Transportation of
Goods even Goods
Transport operator is
now subject to Service
Tax. Accordingly
exemptions/abetments
have been introduced
Section 66 E (j)- On assent of - “(j) assignment by the Right to use Spectrum
Insertion the President Government of the right to use Services are subject to
Declared Service the radio-frequency spectrum Service Tax earlier
and subsequent anamoly on taxability.
Transfers thereof.” Decision in the case of
Karnataka High Court
in the matter of Bharti
Airtel Vs. State of
Karnataka(2012(25)514
STR) has been
accepted
Section 67A- Insertion On assent of - “(2) The time or the point in time Section 67A is
Date of determination the President with respect to the rate of service proposed to be
of rate of Tax, value of tax shall be such as may be amended to obtain
taxable service and prescribed specific rule making
rate of exchange power in respect of
point of taxation Rule.
Similarly point of
taxation rule is also
amended accordingly.

W.E.F. Provision
Earlier the time of rate

of service Tax was
when the taxable
services has been
provided or agreed to
be provided whereas,
now it will be as
prescribed.
Section 73 On assent of Where any Service Tax has not been levied (i) in sub-sections (1), (1A), (2A) Period of Limitation for
Recovery of Service the President or paid or short levied or short paid or and (3), for the words “eighteen Serving notice u/s 73
Tax erroneously refunded, the Central excise months”, wherever they occur, has been enhanced
officer may within eighteen months from the words “thirty months” shall from 18 months to 30
the relevant date, serve notice… be substituted; months in
(ii) in sub-section (4B), in clause department’s favour.
(a), for the words “whose
limitation is specified as eighteen
months in”, the words “falling
under” shall be substituted.
Section 75- On assent of [Provided Substitution Any person who
Substitution the President that in the case of a service provider, ‘‘Provided that in the case of a collects Service Tax and
Interest on delayed whose value of taxable services provided person who collects any amount fails to deposit with
payment of Service in a financial year as service tax but fails to pay the the Central
Tax does not exceed sixty amount so Government will pay
lakh rupees during any of the financial collected to the credit of the interest @ 24% instead
years covered by the notice or during the Central Government, on or of 15% as amended in
last preceding financial year, as the case before the date on which such this budget.
may be, such rate of interest, shall be payment is due, the Central
reduced by three percent per annum Government may, by notification
in the Official Gazette, specify
such other rate of interest, as it
may deem necessary

W.E.F. Provision
Section 78A On assent of - “Explanation.–– For the removal It is welcome step i.e.
Penalty for Offences the President of doubts, it is hereby clarified Directors responsible
by Directors, etc of that where any service tax has to discharge service tax
Company not liability will not be
been levied or paid or has been liable to pay any
short-levied or short-paid or service tax liability of
erroneously refunded, and the service tax alongwith
proceedings interest and 25% of
with respect to a notice issued penalty is paid within
under sub-section (1) of section 30 days.
73 or the proviso to sub-section
(1) of
section 73 is concluded in
accordance with the provisions of
clause (i) of the first proviso to
section 76 or clause (i) of the
second proviso to section 78, as
the case may be, the proceedings
pending against any person
under this section shall also be
deemed to have been
concluded.”.
Section 89 On assent of (i) in the case of an offence specified in for the words “fifty lakh rupees”, It is welcome step
Offences and Penalty the President clauses (a), (b) or (c) where the amount at both the places where they unnecessarily threat of
exceeds fifty lakh rupees, with occur, the words “two hundred imprisonment will be
imprisonment for a term which may lakh rupees” shall be substituted avoided. Imprisonment
extend to three years for a term which may
(ii) in the case of the offence specified in exceed to three years
clause (d), where the amount exceeds fifty for offences such as
lakh rupees, availment of Cenvat
with imprisonment for a term which may credit without receipt
extend to seven years: of taxable service,

W.E.F. Provision
Provided that in the absence of special and maintaining false
adequate reasons to the contrary to be books of Accounts,
recorded in the judgment of the court, collects Service Tax but
such fails to pay to the
imprisonment shall not be for a term of les Government has been
s than six months enhanced to 200 lakhs
from 50 lakhs.
Section 90 (2) On assent of Notwithstanding anything contained in the Omitted Since amount has been
Cognizance of the President Code raised from 50 lakhs to
offences of Criminal Procedure, 1973, all offences, 2 crore this provision
except the offences specified in sub- becomes redundant
section (1), shall be non-cognizable and and hence omitted.
bailable
Section 91 On assent of (1) If the Commissioner of Central Excise (a) in sub-section (1), the words, Existing, Cognizable
Power to arrest the President has reason to believe that any person has brackets and letter “clause (i) or” offence is only when
committed an offence specified shall be omitted; the amount exceeds 50
in clause (i) or clause (ii) of sub-section (1) (b) Sub-section (3) shall be lakhs, whereas Power
of omitted. to Arrest was also for
section 89, he may, by general or special below 50 lakhs. By this
order, authorise any officer of Central amendment anomoly
Excise, not below has been removed and
the rank of Superintendent of Central now Power to Arrest
Excise, to will be only in case of
arrest such person. amount exceeding 200
lakhs in the case of tax
(3) In the case of a non-cognizable and collected but not paid.
bailable offence, the Assistant
Commissioner, or the Deputy
Commissioner, as the case may be, shall,
for the purpose of releasing an arrested
person on bail or otherwise, have the

W.E.F. Provision
same powers and be subject to the same
provisions as an office in charge of a police
station has, and is subject to, under
section 436 of the Code of Criminal
Procedure, 1973
Section 93A On assent of Where any goods or services are exported, for the word “prescribed”, the Amendment has been
Power to grant rebate the President the Central Government may grant rebate words “prescribed or specified by made so as to enable
of service tax paid on taxable notification in the Official to allow rebate by way
services which are used as input services Gazette” shall be substituted Notification as well
for the manufacturing or processing 4“or Rules.
removal or export of such goods” or for
providing any taxable services and such
rebate shall be subject to such extent and
manner as may be prescribe
Section 101- Insertion On assent of - “101. (1) Notwithstanding Retrospective

Special the President anything contained in section exemptions for
provision for 66B, no service tax shall be levied services relating to
exemption in or construction ,
certain cases collected during the period errection,
relating to commencing from the 1st day of commissioning,etc of
construction , July, 2012 and ending with the Canal, Dams or other
errection, 29th day irrigation works for a
commissioning,etc of of January, 2014 (both days specified period of 1st
Canal, Dams or other inclusive) in respect of taxable July 2012 to 29th
irrigation works services provided to an authority January 2014,along
or a with Refund procedure
board or any other body–– in case if Service tax
(i) set up by an Act of Parliament paid.
or a State Legislature; or
(ii) established by the

W.E.F. Provision
Government,
with ninety per cent. or more
participation by way of equity or
control, to carry out any function
entrusted to a municipality under
article 243W of the Constitution,
by way of construction, erection,
Commissioning, installation,
completion, fitting out, repair,
maintenance, renovation or
alteration of canal, dam or other
irrigation works.
(2) Refund shall be made of all
such service tax which has been
collected but which would not
have been so collected had sub-
section (1) been in force at all
material times.
(3) Notwithstanding anything
contained in this Chapter, an
application for the claim of
refund of
service tax shall be made within a
period of six months from the
date on which the Finance Bill,
2016 receives the assent of the
President, been paid before that
date, subject to the condition
that Ministry
of Civil Aviation or, as the case
may be, the Ministry of Shipping
in the Government of India

W.E.F. Provision
certifies
that the contract had been
entered into before the 1st day
of March, 2015.
material times.
refund of
2016
receives the assent of the
President.”.
Section 102- Insertion On assent of 102. (1) Notwithstanding Retrospective
Special the President anything contained in section amendment for
provision for 66B, no service tax shall be levied exemption of services
exemption in or relating to construction
certain cases collected during the period of Government
relating to commencing from the 1st day of buildings for a period
construction of April, 2015 and ending with the 1st April 2015 to 29th
Government 29th day Feb 2016 and its
Buildings. of February, 2016 (both days refund process in case
inclusive), in respect of taxable if paid.
services provided to the
Government,

W.E.F. Provision
a local authority or a
Governmental authority, by way
of construction, erection,
commissioning,
installation, completion, fitting
out, repair, maintenance,
renovation or alteration of––
(a) a civil structure or any other
original works meant
predominantly for use other than
for
commerce, industry or any other
business or profession;
(b) a structure meant
predominantly for use as––
(i) an educational establishment;
(ii) a clinical establishment; or
(iii) an art or cultural
establishment;
(c) a residential complex
predominantly meant for self-use
or for the use of their employees
or
other persons specified in
Explanation 1 to clause (44) of
section 65B of the said Act,
under a contract entered into
before the 1st day of March,
2015 and on which appropriate
stamp
duty, where applicable, had been
paid before that date.

W.E.F. Provision
section (1) been in force at all the
material times.
refund
of service tax shall be made
within a period of six months
from the date on which the
Finance Bill,
2016 receives the assent of the
President.
Section 103- Insertion On assent of 103. (1) Notwithstanding Retrospective
Special the President anything contained in section amendment for
provision for 66B, no service tax shall be levied exemption of services
exemption in or relating to construction
certain cases collected during the period of Airport or Port for a
relating to commencing from the 1st day of period 1st April 2015
construction of April, 2015 and ending with the to 29th Feb 2016 and
Airport or Port 29th day its refund process in
of February, 2016 (both days case if paid.
inclusive), in respect of services
provided by way of construction,
erection, commissioning or
installation of original works
pertaining to an airport or port,
under a contract which had been

W.E.F. Provision
of March, 2015 and on which
appropriate
stamp duty, where applicable,
had been paid before that date,
subject to the condition that
Ministry
of Civil Aviation or, as the case
may be, the Ministry of Shipping
in the Government of India
certifies
that the contract had been
of March, 2015.
material times.
refund of
2016
receives the assent of the
President.”
Section 93A On assent of 1. Amendment in notification No. (1) The notification of the The said is being given
Rebate by way of the President 41/2012-ST dated the 29th June, 2012 so Government of India in the the Retrospective
refund of Service Tax as to allow refund of service tax on Ministry of Finance (Department effect from 1st July

W.E.F. Provision
services used beyond the factory or any of Revenue) 2012. Hence Rebate by
other place or premises of production or number G.S.R. 519(E), dated the way of refund will be
manufacture of the said goods for the 29th June, 2012 issued under allowed on all cases of
export of the said goods and to increase section 93A of the Finance Act, Export beyond Factory
the refund amount commensurate to the 1994 or any other Place of
increased service tax, published in the granting rebate of service tax Production or
Gazette of India, Extraordinary, vide paid on the taxable services Manufacture.
number G.S.R. 519(E), dated the 29th which are received by an
June, 2012. exporter of goods
and used for export of goods,
shall stand amended and shall be
deemed to have been amended
retrospectively, in the manner
specified in column (2) of the
Tenth Schedule, on and from and
up to the
corresponding dates specified in
column (3) of the Schedule, and
accordingly, any action taken or
anything done or purported to
have taken or done under the
said notification as so amended,
shall be
deemed to be, and always to
have been, for all purposes, as
validly and effectively taken or
done as if the said notification as
amended by this sub-section had
been in force at all material
times.
(2) Rebate of all such service tax
shall be granted which has been

W.E.F. Provision
denied, but which would not
have been so denied had the
amendment made by sub-section
(1) been in force at all material
times.
contained in the Finance Act,
1994, an application for the claim
of
rebate of service tax under sub-
section (2) shall be made within
the period of one month from
the
date of commencement of the
Finance Act, 2016.
Krishi Kalyan Cess 1st June 2016 - Krishi Kalyan Cess @ 0.5% on the Krishi Kalyan cess
value of all taxable services. introduced for
This cess shall be in addition to financing and
any cess or service tax leviable on promoting initiatives to
such taxable services. improve agriculture.

W.E.F. Provision
8/2016 (Abatement) 1/04/2016 NA Abatement @ 70% will be allowed Cenvat Credit on Input Services
on transport of goods by Indian can be availed
rail subject to non availment of
Cenvat credit on input and capital
goods
8/2016 (Abatement) 1/04/2016 NA Abatement @ 60% will be allowed Reduced abatement of 60% is
for transport of goods in prescribed for transport of
containers by rail by any person goods in containers by rail by
other than Indian Railways subject persons other than Indian
to non-availment of cenvat credit Railways.
on input and capital goods Cenvat Credit on Input Services
can be availed
8/2016 (Abatement 1/04/2016 CENVAT credit on inputs, capital “CENVAT credit on inputs and Cenvat Credit on Input Services
Notification) goods and input services, used for capital goods, used for providing can be availed. Service
providing the taxable services, has the taxable service, has not been providers of transport of
passengers with or without
not been taken under the taken under the provisions of the
accompanied.
provisions of the CENVAT Credit CENVAT Credit Rules, 2004.”.
Rules, 2004..
8/2016 (Abatement 1/04/2016 NA Abatement @ 60% will be Earlier, transport of
Notification) allowed for services of goods household goods was
transport agency in relation to clubbed with GTA. Now a
transportation of used separate entry has been
household goods subject to provided. Additional
non-availment of cenvat credit. abatement of 10% has been
given for transporting of
household goods by GTA.
Subject to non availment of

W.E.F. Provision
Cenvat Credit.
8/2016 (Abatement 1/04/2016 NA Abatement @ 30% will be New entry.

Notification) allowed for services provided
by a foreman of chit fund in
relation to chit fund subject to
non-availment of cenvat credit.
8/2016 (Abatement 1/04/2016 NA Abatement @ 40% will be Stage carriers (AC) will be
Notification) allowed for transport of entitled for abatement scheme
passengers, with or without to the extent of 40%.
accompanied belonging by a
stage carrier will be allowed
subject to non-availment of
cenvat credit.
8/2016 (Abatement 1/04/2016 CENVAT credit on inputs, capital “CENVAT credit on inputs and Service providers of transport
Notification) goods and input services, used for capital goods, used for providing of goods in vessels will be
providing the taxable services, has the taxable service, has not been entitled for credit of input
services even after claiming
not been taken under the taken under the provisions of the
abatement scheme as notified
provisions of the CENVAT Credit CENVAT Credit Rules, 2004.”. in the notification.
Rules, 2004..
8/2016 (Abatement 1/04/2016 A package tour was entitled for 75% Service provided by tour operator The abatement for package tour
Notification) abatement subject to non- other than services solely of has been reduced from 75% to
availment of cenvat arranging or booking 70%. Also, for other services,
the abatement is increased from
accommodation for any person
60% to 70%.
will be entitled for 70%
abatement
8/2016 (Abatement 1/04/2016 Two rates of abatement have been Construction of a complex, A uniform abatement at the rate
Notification) prescribed for services of building, civil structure or a part of 70% is now being prescribed
construction of complex, building, thereof, intended for a sale to a for services of construction of

W.E.F. Provision
civil structure, or a part thereof,- buyer, wholly or partly except complex, building, civil
where entire consideration is structure, or a part thereof,
 75% of the amount charged in subject to fulfilment of the
received after issuance of
case of a residential unit having existing conditions.
completion certificate by the
carpet area of less than 2000 competent authority will be
square feet and costing less entitled for 70% of abatement
than Rs 1 crore, and subject to non-availment of cenvat
 70% of the amount charged in credit and addition of value of
case of other than (a) above land in the amount charged from
the service receiver.
8/2016 (Abatement 1/04/2016 NA Rent-cab Service Explanation has been added for
Notification) For the purposes of exemption at value of renting of motor cab
Serial number 9, the amount services. The explanation
provides that fair market value
charged shall be the sum total of
of all goods (including that of
the amount charged for the fuel) supplied by service
service including the fair market recipient to be added in the
value of all goods (including fuel) gross value.
and services supplied by the
recipient(s) in or in relation to the
service, whether or not supplied
under the same contract or any
other contract:
Provided that the fair market
value of goods and services so
supplied may be determined in
accordance with the generally
accepted accounting principles.”.

W.E.F. Provision
9/2016 (Mega 1/04/2016 “(b) an individual as an advocate or “(b) a partnership firm of Exemption in respect of the
Exemption a partnership firm of advocates by advocates or an individual as an following services is being
Notification – way of legal services to- advocate other than a senior withdrawn,-
25/2012) (i) an advocate or partnership firm
advocate, by way of legal services
of advocates providing legal - Services provided by a
services; to-
(i) an advocate or partnership senior advocate to an
(ii) any person other than a business
firm of advocates providing legal advocate or partnership
entity; or
(iii) a business entity with a services; firm of advocates, and
turnover up to rupees ten lakhs in (ii) any person other than a - A person represented
the preceding financial year; or business entity; or
(c) a person represented on an on an arbitral tribunal to
(iii) a business entity with a an arbitral tribunal
arbitral tribunal to an arbitral
tribunal. turnover up to rupees ten lakh in
the preceding financial year; or
(c) a senior advocate by way of
legal services to a person other
than a person ordinarily carrying
out any activity relating to
industry, commerce or any other
business or profession;”
9/2016 (Mega 1/03/2016 NA 9B. Services provided by the Services provided by the Indian
Exemption Indian Institutes of Management, Institutes of Management (IIM)
Notification – as per the guidelines of the by way of 2 year full time Post
25/2012)
Central Government, to their Graduate Programme in
students, by way of the following Management (PGPM) (other
educational programmes, except than executive development
Executive Development programme), admissions to
Programme, - which are made through
(a) two year full time residential Common Admission Test

W.E.F. Provision
Post Graduate Programmes in conducted by IIMs, 5 year
Management for the Post Integrated Programme in
Graduate Diploma in Management and Fellowship
Management, to which Programme in Management are
admissions are made on the basis being exempted from service
of Common Admission Test (CAT), tax.
conducted by Indian Institute of
Management;
(b) fellow programme in
Management;
(c) five year integrated
programme in Management.”;
9/2016 (Mega 1/03/2016 NA “9C. services of assessing bodies Services of assessing bodies
Exemption empanelled centrally by empanelled centrally by
Notification – Directorate General of Training, Directorate General of Training,
25/2012)
Ministry of Skill Development and Ministry of Skill Development &
Entrepreneurship by way of Entrepreneurship are being
assessments under Skill exempted from service tax
Development Initiative (SDI)
Scheme;
9/2016 (Mega 1/03/2016 NA 9D. services provided by training Services provided by way of
Exemption providers (Project skill/vocational training by Deen
Notification – implementation agencies) under Dayal Upadhyay Grameen
25/2012)
Deen Dayal Upadhyaya Grameen Kaushalya Yojana training
Kaushalya Yojana under the partners are being exempted
Ministry of Rural Development by from service tax.
way of offering skill or vocational
training courses certified by

W.E.F. Provision
National Council For Vocational
Training.
9/2016 (Mega 1/03/2016 NA Exemption from Service Tax on The said exemption was
Exemption services provided to the withdrawn with effect from
Notification – Government, a local authority or a 1.4.2015. The same is being
25/2012)
governmental authority by way of restored for the services
construction, erection, etc. of - provided under a contract which
had been entered into prior to
i. a civil structure or any other 01.03.2015 and on which
original works meant appropriate stamp duty, where
predominantly for use other than applicable, had been paid prior
for commerce, industry, or any to that date. The exemption is
other business or profession; being restored till 31.03.2020.
ii. a structure meant
predominantly for use as (i) an
educational, (ii) a clinical, or (iii) an
art or cultural establishment;
iii. 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 65B of the said Act;
under a contract which had been

entered into prior to the 1st
March, 2015 and on which

W.E.F. Provision
appropriate stamp duty, where
applicable, had been paid prior to
such date:
provided that nothing contained in

this entry shall apply on or after
the 1st April, 2020
9/2016 (Mega 1/03/2016 “(ba) a civil structure or any other Services by way of construction,
Exemption original works pertaining to the erection etc. of a civil structure
Notification – „In-situ rehabilitation of existing or any other original works
25/2012) slum dwellers using land as a
pertaining to the “In-situ
resource through
private participation ‟under the Rehabilitation of existing slum
Housing for All (Urban) dwellers using land as a
Mission/Pradhan Mantri Awas resource through private
Yojana, only for existing slum participation” component of
dwellers. Housing for All (HFA) (Urban)
(bb) a civil structure or any other Mission / Pradhan Mantri Awas
original works pertaining to the
Yojana (PMAY), except in
„Beneficiary-led individual house
construction / enhancement respect of such dwelling units of
under the Housing for All (Urban) the projects which are not
Mission/Pradhan Mantri Awas constructed for existing slum
Yojana;”; dwellers, is being exempted
from service tax.
Services by way of construction,

erection etc., of a civil structure
or any other original works
pertaining to the “Beneficiary-

W.E.F. Provision
led individual house
construction / enhancement”
component of Housing for All
(HFA) (Urban) Mission/ Pradhan
Mantri Awas Yojana (PMAY) is
being exempted from service
tax.
9/2016 (Mega 1/03/2016 Services by way of construction, Services by way of construction, Exemption to construction,
Exemption erection, commissioning or erection, commissioning or erection, commissioning or
Notification – installation of original works installation of original works installation of original works
25/2012)
pertaining to, pertaining to, pertaining to monorail or metro
“(a) railways, including monorail “(a) railways, excluding monorail (under S. No 14 of the
and metro; and metro; notification No. 25/12-ST) is
Explanation.-The services by way being withdrawn, in respect of
of construction, erection, contracts entered into on or
commissioning or installation of after 1st March 2016.
original works pertaining to
monorail or metro, where
contracts were entered into
before 1st March, 2016, on which
appropriate stamp duty, was
paid, shall remain exempt.
9/2016 (Mega 1/03/2016 “(ca) low cost houses up to a Services by way of construction,
Exemption carpet area of 60 square metres erection, etc., of original works
Notification – per house in a housing project pertaining to low cost houses up
25/2012)
approved by the competent to a carpet area of 60 sq.m per
authority under: house in a housing project

W.E.F. Provision
(i) the “Affordable Housing in approved by the competent
Partnership” component of the authority under the “Affordable
Housing for All (Urban) housing in partnership”
Mission/Pradhan Mantri Awas component of PMAY or any
Yojana; housing scheme of a State
(ii) any housing scheme of a State Government are being
Government exempted from service tax
9/2016 (Mega 1/03/2016 14A. Services by way of The said Exemption from Service
Exemption construction, erection, Tax on services by way of
Notification – commissioning, or installation of construction, erection, etc. of
25/2012)
original works pertaining to an original works pertaining to an
airport or port provided under a airport, port was withdrawn
contract which had been entered with effect from 1.4.2015. The
into prior to 1st March, 2015 and same is being restored for the
on which appropriate stamp duty, services provided under a
where applicable, had been paid contract which had been
prior to such date: entered into prior to 01.03.2015
provided that Ministry of Civil and on which appropriate stamp
Aviation or the Ministry of duty, where applicable, had
Shipping in the Government of been paid prior to that date
India, as the case may be, subject to production of
certifies that the contract had certificate from the Ministry of
been entered into before the 1st Civil Aviation or Ministry of
March, 2015: Shipping, as the case may be,
provided further that nothing that the contract had been
contained in this entry shall apply entered into prior to
on or after the 1st April, 2020 01.03.2015. The exemption is

W.E.F. Provision
being restored till 31.03.2020.
9/2016 (Mega 1/04/2016 Consideration upto Rs One Lakh by Consideration upto Rs One Lakh Exemption limit for every
Exemption way of services by an artist by way and Fifty Thousand by way of performance for consideration
Notification – of a performance in folk or classical services by an artist by way of a charged for services provided by
25/2012) art forms of music or dance or
performance in folk or classical a performing artist in folk or
theater are exempt from service
tax. art forms of music or dance or classical art forms of music,
theater are exempt from service dance or theatre, is being
tax. increased from Rs 1 lakh to Rs
1.5 lakh per performance
9/2016 (Mega 1/06/2016 Transport of passengers, with or Service for non-air conditioned
Exemption without accompanied belongings stage carriers are exempted
Notification – by, from service tax
25/2012)
A stage carriage other than air-
conditioned stage carriage are
exempted from service tax.
9/2016 (Mega 1/04/2016 NA Services of General Insurance Service tax exemption has been
Exemption business provided under granted for services provided in
Notification – following scheme Niramaya Health Insurance.
25/2012)
Niramaya‟ Health Insurance
Scheme implemented by Trust
constituted under the provisions
of the National Trust for the
Welfare of Persons with Autism,
Cerebral Palsy, Mental
Retardation and Multiple

W.E.F. Provision
Disabilities Act, 1999 (44 of 1999).
9/2016 (Mega 1/04/2016 NA Services of life insurance business The services of life insurance
Exemption provided by way of annuity under business provided by way of
Notification – the National Pension System annuity under the National
25/2012)
regulated by Pension Fund Pension System (NPS) regulated
Regulatory and Development by Pension Fund Regulatory and
Authority of India (PFRDA) under Development Authority (PFRDA)
the Pension Fund Regulatory And of India is being exempted from
Development Authority Act, 2013 service tax.
(23 of 2013)
9/2016 (Mega 1/04/2016 NA Services provided by Employees‟ Services provided by
Exemption Provident Fund Organisation Employees‟ Provident Fund
Notification – (EPFO) to persons governed Organisation (EPFO) to
25/2012)
under the Employees‟ Provident employees are being exempted
Funds and Miscellaneous from service tax.
Provisions Act, 1952 (19 of 1952)
9/2016 (Mega 1/04/2016 NA Services provided by Insurance Services provided by Insurance
Exemption Regulatory and Development Regulatory and Development
Notification – Authority of India (IRDA) to Authority (IRDA) of India are
25/2012)
insurers under the Insurance being exempted from service
Regulatory and Development tax.
Authority of India Act, 1999 (41 of
1999)
9/2016 (Mega 1/04/2016 NA Services provided by Securities Services provided by Securities
Exemption and Exchange Board of India and Exchange Board of India
Notification – (SEBI) set up under the Securities (SEBI) set up under SEBI Act,
25/2012)
and Exchange Board of India Act, 1992, by way of protecting the

W.E.F. Provision
1992 (15 of 1992) by way of interests of investors in
protecting the interests of securities and to promote the
investors in securities and to development of, and to
promote the development of, and regulate, the securities market
to regulate, the securities market are being exempted from
service tax.
9/2016 (Mega 1/04/2016 NA Services provided by National Services provided by National

Exemption Centre for Cold Chain Centre for Cold Chain
Notification – Development under Ministry of Development under
25/2012)
Agriculture, Cooperation and Department of Agriculture,
Farmer’s Welfare by way of cold Cooperation and Farmer’s
chain knowledge dissemination;” Welfare, Government of India,
by way of knowledge
dissemination are being
exempted from service tax
9/2016 (Mega 1/06/2016 NA Services by way of transportation Services by way of

Exemption of goods by an aircraft from a transportation of goods by an
Notification – place outside India upto the aircraft from a place outside
25/2012)
customs station of clearance in India up to the customs station
India.”; of clearance in India were in
negative list of services [clause
(p)(ii) of section 66D]. As this
entry is proposed to be omitted
through the Finance Bill
2016[para 4.1(C) above refers],
the said service is being
exempted by amending

W.E.F. Provision
notification No.25/2012-ST
10/2016 (Amendment 1/03/2016 NA Explanation inserted under Rule In order to remove doubts
in POT Rule, 2011) 5 of POT Rules, 2011 regarding applicability of POTR
Explanation 1.- This rule shall to new levy, this explanation
apply mutatis mutandis in case of have been inserted in Rule 5 of
new levy on services. POT Rules. This will be
Explanation 2.- New levy or tax applicable Krishi Kalyan Cess
shall be payable on all the cases which will be effective from 1st
other than specified above. June 2016.
11/2016 (Exemption 1/03/2016 NA Service Tax exemption has been In order to avoid duplication of
Notification) granted on Information levies i.e. Central excise and
Technology Software recorded on service tax, IT Software on
media on which RSP (MRP) is which RSP is mentioned are
required to be mentioned. exempted from service tax.
These being goods will be
subjected to central excise or
custom duty as the case may be.
12/2016 (Amendment 1/04/2016 NA Services provided by bio- Service provided by

to exemption incubators recognized by the Biotechnology Industry
Notification 32/2012- Biotechnology Industry Research Research Assistance Council
Service Tax)
Assistance Council, under approved Biotechnology
Department of Biotechnology, incubators to the incubatees will
Government of India be exempted from service tax.
13/2016 (New Assent to Interest on delayed payment of Interest on delayed payment of Irrational interest rate have
Notification – Interest Finance Bill, service tax, service tax, been rationalized. This is most
Provisions) 2016  Upto 6 months- 18%  Collection of any amount as

W.E.F. Provision
 More than 6 months & upto 1 service tax but failing to pay welcome step.
year- 18% for first 6 months, the amount so collected to
24% thereafter the credit of the Central
 More than 1 year- 18% for first Government on or before the
6 months, 24% for next 6 date on which such payment
months and 30% thereafter becomes due- 24%
 Any conditions other than
above- 15%
14/2016 (New Assent to Interest payable u/s 73B (Interest Interest payable u/s 73B (Interest Interest rate reduced from 18%
Notification) Finance Bill, on amount collected in excess) is on amount collected in excess) is to 15%.
2016 18% 15%
15/2016 , 16/2016 & 1/04/2016 Rule 2 (1)(d)(i) Rule 2 (1)(d)(i) Finance Act, 1994 was amended
17/2016 (Amendment vide Finance Act, 2015 so as to
related to removal of (E) in relation to services provided (E) in relation to services provided make any service (and not only
“support services” by or agreed to be provided by or agreed to be provided by
support services) provided by
Government) Government or local authority Government or local authority Government or local authorities
except,- except,- to business entities taxable from
a date to be notified later. 1st
(a) renting of immovable property, (a) renting of immovable property, April, 2016 has already been
and and notified as the date from which
any service provided by
(b) services specified sub-clauses (i), (b) services specified sub-clauses
Government or local authorities
(ii) and (iii) of clause (a) of section (i), (ii) and (iii) of clause (a) of to business entities shall be
66D of the Finance Act,1994, to any section 66D of the Finance taxable. Consequently, 1st April,
business entity located in the Act,1994, to any business entity
2016 is also being notified as the
taxable territory, the recipient of located in the taxable territory, date from which the definition
such service; the recipient of such service; of support services shall stand
deleted from the Finance Act

W.E.F. Provision
1994
18/2016 (Reverse 1/04/2016 (ic) provided or agreed to be (ic) provided or agreed to be More specific entry has been
Charge Notification provided by a selling or marketing provided by a selling or marketing made
30/2012-Service Tax) agent of lottery tickets to a lottery agent of lottery tickets in relation
distributor or selling agent. to a lottery in any manner to a
lottery distributor or selling agent
of the State Government under
the provisions of the Lottery
(Regulations) Act, 1998 (17 of
1998)
18/2016 (Reverse 1/04/2016 an individual advocate or a firm of (B) a firm of advocates or an As senior advocates are liable to
Charge Notification advocates, by way of legal services, individual advocate other than service tax, necessary
30/2012-Service Tax) or senior advocate, by way of legal amendment has been made in
services, or reverse charge notification. Now
the business entities have to pay
service tax on reverse charge
basis on the services received
from an individual advocate
(other than senior advocate) or
firm of advocates. It has to be
ensured by business entity
whether the services are availed
from Senior advocates or
otherwise.
Senior Advocates means

advocate designated senior

W.E.F. Provision
advocate by SC / HC.
18/2016 (Reverse 1/04/2016 Sl. No. 1B and the entries relating In respect of service provided by
Charge Notification thereto shall be omitted mutual fund agent/ distributor
30/2012-Service Tax) to a mutual fund or asset
management company will be
out of the purview of reverse
charge.
19/2016 (Amendment 1/04/2016 Proviso to Rule 6, sub rule (1) Proviso to Rule 6, sub rule (1) One person company having
to Service Tax Rules) taxable service turnover 50
assessee is an individual or assessee is a one person company Lakhs or less and HUF will be
partnership firm or partnership whose aggregate value of taxable entitled to pay service tax on
firm, the service tax shall be paid to services provided from one or
quarterly basis.
the credit of the Central more premises is fifty lakh rupees
Government by the 6th day of the or less in the previous financial
month if the duty is deposited year, or is an individual or
electronically through internet proprietary firm or partnership
banking, or, in any other case, the firm or Hindu Undivided Family,
5th day of the month, as the case the service tax shall be paid to
may be, immediately following the the credit of the Central
quarter in which the service is Government by the 6th day of the
deemed to be provided month if the duty is deposited
electronically through internet
banking, or, in any other case, the
5th day of the month, as the case
may be, immediately following
the quarter in which the service is
deemed to be provided

W.E.F. Provision
19/2016 (Amendment 1/04/2016 Where an assessee is, for any Where an assessee is, for any Technical amendment w.r.t
to Service Tax Rules) reason, unable to correctly reason, unable to correctly Central Excise Rule referance
estimate, on the date of deposit, estimate, on the date of deposit, has been made
the actual amount payable for any the actual amount payable for
particular month or quarter, as the any particular month or quarter,
case may be, he may make a as the case may be, he may make
request in writing to the Assistant a request in writing to the
Commissioner of Central Excise or Assistant Commissioner of
the Deputy Commissioner of Central Excise or the Deputy
Central Excise, as the case may be, Commissioner of Central Excise,
giving reasons for payment of as the case may be, giving
service tax on provisional basis and reasons for payment of service
the Assistant Commissioner of tax on provisional basis and the
Central Excise or the Deputy Assistant Commissioner of
Commissioner of Central Excise, as Central Excise or the Deputy
the case may be, on receipt of such Commissioner of Central Excise,
request, may allow payment of as the case may be, on receipt of
service tax on provisional basis on such request, may allow payment
such value of taxable service as may of service tax on provisional basis
be specified by him and the on such value of taxable service
provisions of the Central Excise as may be specified by him and
(No.2) Rules, 2001, relating to the provisions of the Central
provisional assessment, except so Excise Rules, 2002, relating to
far as they relate to execution of provisional assessment, except so
bond, shall, so far as may be, apply far as they relate to execution of
to such assessment. bond, shall, so far as may be,
apply to such assessment.

W.E.F. Provision
19/2016 (Amendment 1/04/2016 NA in sub-rule (7A), after clause (i), The service tax liability on single
to Service Tax Rules) the following clause shall be premium annuity (insurance)
inserted, namely:- “(ia) in case of policies is being rationalised and
single premium annuity policies the effective alternate service
other than (i) above, 1.4 per cent. tax rate (composition rate) is
of the single premium charged being prescribed at 1.4%
from the policy holder (brought down from 3.5%) of
the total premium charged, in
cases where the amount
allocated for investment or
savings on behalf of policy
holder is not intimated to the
policy holder at the time of
providing of service.
Amendments are being made in
rule 7A of Service Tax Rules,
1994 accordingly.
19/2016 (Amendment 1/04/2016 NA “(3A) Notwithstanding anything New annual return has been
to Service Tax Rules) contained in sub-rule (1), every specified for the service
assessee shall submit an annual provider by 30th November
return for the financial year to every year. The class of service
which the return relates, in such provider will be exempted from
form and manner as may be this compliance. This is in line
specified in the notification in the with ER-4 submitted by the
Official Gazette by the Central central excise assessees.
Board of Excise and Customs, by
the 30th day of November of the

W.E.F. Provision
succeeding financial year;
(3B) The Central Government
may, subject to such conditions
or limitations, specify by
notification an assesse or class of
assesses who may not be
required to submit the annual
return referred to in sub-rule(3A)
19/2016 (Amendment 1/04/2016 (2) An assessee who has filed the Annual return can be revised
to Service Tax Rules) annual return referred to in sub- within one month from the date
rule (3A) of rule 7 by the due date of submission.
may submit a revised return
within a period of one month
from the date of submission of
the said annual return.
19/2016 (Amendment 1/04/2016 “(2) Where the annual return Penalty of 100Rs per day
to Service Tax Rules) referred to in sub-rule (3A) of rule maximum upto 20,000/- has
7 is filed by the assessee after the been proposed for delay filing of
due date, the assessee shall pay annual return.
to the credit of the Central
Government, an amount
calculated at the rate of one
hundred rupees per day for the
period of delay in filing of such
return, subject to a maximum of
twenty thousand rupees.

INFRASTRUCTURE CESS (Notification No. 1/2016 dated 01.03.2016)
Clause 159 of the Finance Bill 2016 introduces Infrastructure Cess and made effective from 01.03.2016
under provisional collection of taxes Act, 1961.
Sl. No. Heading Description of excisable goods Rate Condition

Duty of Excise as No.
infrastructure Cess
Motor vehicles cleared as ambulances
1 8703 duly fitted with all the fitments, Nil -
furniture and accessories necessary for
an ambulance from the factory
manufacturing such motor vehicles
2 Motor vehicles (other than three Nil
8703 wheeled motor vehicles for transport 1
of upto seven persons), which after
clearance has been registered for use
solely as ambulance
3 Motor vehicles (other than three
8703 wheeled motor vehicles), which after Nil 1
clearance has been registered for use
solely as taxi
4 Electrically operated vehicles, including

8703 three wheeled electric motor vehicles Nil -
Explanation.- For the purpose of
this entry, “electrically operated
vehicles”
mean vehicles which are run solely
on electrical energy derived from an

external source or from one or more
electrical batteries fitted to such
road vehicles and shall include
electric motor-assisted cycle
rickshaws driven by rechargeable
solar batteries, also known as
“soleckshaw”
5 8703 Hybrid motor vehicles Nil -
Explanation.- For the purpose of this
entry, “hybrid motor vehicle” means a
motor vehicle, which uses a combination
of battery powered electric motor and an
internal combustion engine to power the
vehicle to drive trains, but does not
include such micro-hybrid motor vehicle
with start and stop technology, using
battery powered electric motor only
while in static condition
6 8703 Three wheeled vehicles Nil -
7 8703 Cars for physically handicapped persons Nil 2
8 8703 Hydrogen vehicles based on fuel cell Nil -

technology
entry, “Hydrogen vehicle” means a motor
vehicle that converts the chemical energy
of hydrogen to mechanical energy by
reacting hydrogen with oxygen in a fuel
cell to run electric motor to power the
vehicle drive trains
9 8703 Motor vehicles of length not exceeding 1% -

4000 mm, namely petrol, liquefied
petroleum gases (LPG) or compressed
natural gas (CNG) driven vehicles of
engine capacity not exceeding 1200 cc
entry, the specification of the motor
vehicle shall be determined as per the
Motor Vehicles Act, 1988 (59 of 1988)
and the rules made there under
10 8703 Motor vehicles of length not exceeding 2.5% -

4000 mm, namely diesel driven vehicles
of engine capacity not
exceeding 1500 cc
entry, the specification of the motor
vehicle shall be determined as per the
Motor Vehicles Act, 1988 (59 of 1988)
and the rules made there under
11 8703 Other than above 4%

Clean Energy Cess
Notification No.1/2016 and 2/2016 dated 01.03.2016 (Effective from 01st March 2016)
 Notification No.1/2015 dt. 01st March 2015 rescinded which was exempting the cess as is in excess of the
amount calculated at the rate of Rs. 200 per tonne
 Clean energy cess is exempted for the goods produced or extracted as per traditional and customary rights
enjoyed by local Tribals in the State of Meghalaya and State of Nagaland

INDIRECT TAX
DISPUTE RESOLUTION
SCHEME

INDIRECT TAX DISPUTE RESOLUTION SCHEME, 2016
 It will be applicable for all the disputes pending before Commissioner (Appeals) as on 01.03.2016 and will
be valid upto 31.12.2016.
 Applicable for dispute related to Central Excise, Customs and Service Tax matters.
 Assistant Commissioner / Deputy Commissioner will be designated authority under the scheme as notified.
 Declaration needs to be filed by the declarant (Appellant) opting for such scheme in the prescribed format.
 Declarant (Appellant) will have to discharge duty liability along with interest and 25% penalty within 15
days after declaration is filed and acknowledged.
 Submit the proof of payment within 7 days from the date of payment.
 Designated authority will pass an order of discharging the dues
 Provision of this scheme is not applicable if,
(a) the impugned order is in respect of search and seizure proceeding; or
(b) prosecution for any offence punishable under the Act has been instituted before the 1st day of
June, 2016; or
(c) the impugned order is in respect of narcotic drugs or other prohibited goods; or

(d) impugned order is in respect of any offence punishable under the Indian Penal Code, the Narcotic
Drugs and Psychotropic Substances Act, 1985 or the Prevention of Corruption Act, 1988; or
(e) any detention order has been passed under the Conservation of Foreign Exchange and Prevention
of Smuggling Act, 1974.
 After getting the discharge order, Appeals before Commissioner (Appeals) will be stand disposed and
immunity from other proceedings will be granted.
 No re-opening of discharge order is permitted.
 No refund also will be granted after the payment by the declarant.
 Such declaration & discharge order will not be considered merit and will not have any binding effect.
 Central Govt will make necessary rules in this regard.

AMENDMENT TO THE CENTRAL SALES TAX ACT, 1956
Explanation 3 to Section 3
221. In the Central Sales Tax Act, 1956, in section 3, after Explanation 2, the following Explanation
shall be inserted, namely:—
“Explanation 3.-– Where the gas sold or purchased and transported through a common carrier
pipeline or any other common transport or distribution system becomes co-mingled and fungible with
other gas in the pipeline or system and such gas is introduced into the pipeline or system in one State
and is taken out from the pipeline in another State, such sale or purchase of gas shall be deemed to be
a movement of goods from one State to another.”.
Analysis
Explanation 3 has been inserted to consider inter-state sale where the gas sold or purchased and
transported through a common carrier pipeline or any other common transport or distribution system
becomes co-mingled and fungible with other gas in the pipeline or system and such gas is introduced
into the pipeline or system in one State and is taken out from the pipeline in another State, such sale or
purchase of gas shall be deemed to be a movement of goods from one State to another.”.

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SERVICE TAX

BUDGET ANALYSIS 2016-17

BUDGET ANALYSIS 2016-17

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Earlier the time of rate

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Section 101- Insertion On assent of - “101. (1) Notwithstanding Retrospective

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8/2016 (Abatement 1/04/2016 NA Abatement @ 30% will be New entry.

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iii. a residential complex

under a contract which had been

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provided that nothing contained in

Services by way of construction,

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9/2016 (Mega 1/04/2016 NA Services provided by National Services provided by National

9/2016 (Mega 1/06/2016 NA Services by way of transportation Services by way of

BUDGET ANALYSIS 2016-17

12/2016 (Amendment 1/04/2016 NA Services provided by bio- Service provided by

BUDGET ANALYSIS 2016-17

BUDGET ANALYSIS 2016-17

Senior Advocates means

BUDGET ANALYSIS 2016-17

BUDGET ANALYSIS 2016-17

BUDGET ANALYSIS 2016-17

BUDGET ANALYSIS 2016-17

BUDGET ANALYSIS 2016-17

Sl. No. Heading Description of excisable goods Rate Condition

4 Electrically operated vehicles, including

BUDGET ANALYSIS 2016-17

7 8703 Cars for physically handicapped persons Nil 2

8 8703 Hydrogen vehicles based on fuel cell Nil -

9 8703 Motor vehicles of length not exceeding 1% -

BUDGET ANALYSIS 2016-17

10 8703 Motor vehicles of length not exceeding 2.5% -

11 8703 Other than above 4%

BUDGET ANALYSIS 2016-17

BUDGET ANALYSIS 2016-17

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 Designated authority will pass an order of discharging the dues

 Provision of this scheme is not applicable if,

(a) the impugned order is in respect of search and seizure proceeding; or

BUDGET ANALYSIS 2016-17