In the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007, in rule 3, after sub-rule (2), the following sub-rule (2A) shall be inserted, namely:-
“(2A) The CENVAT credit of tax paid on taxable services as referred to under sub-clauses (zzd) i.e. Erection Commissioning and installation service , (zzq) i.e. Business Support Service and (zzzh)i.e. Construction of Residential Complex Service ,of clause (105) of section 65 of the Finance Act, 1994, shall be available only to the extent of 40% of the service tax paid when such tax has been paid on the full value of the service after availing CENVAT credit on inputs.”
For all other Works contract services still sub rule (2) of Rule 3 of the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 shall continue to apply i.e. The provider of taxable service shall not take CENVAT credit of duties or cess paid on any inputs, used in or in relation to the said works contract, under the provisions of CENVAT Credit Rules, 2004.
For Transport of passengers by Air
Words “rupees one hundred” and “in any class”, the words “rupees one hundred fifty” and “economy class” shall respectively be substituted;
Words “rupees five hundred”, the words “rupees seven hundred fifty” shall be substituted’
Exempts the taxable service referred to in sub-clause (zzzzo) of clause (105) of section 65 (i.e. Health Services) of the Finance Act, from the whole of the service tax leviable thereon under section 66 of the said Act.
Exempts the taxable service as referred to in sub-clause (zzzzw) of clause (105) of section 65 (i.e Service provided by a hotel guest house or club to any person for less that 3 months) of the said Act, when the declared tariff for providing of such accommodation is less than rupees 1000 per day from the whole of the service tax leviable thereon under section 66 of the said Act.
In the Service Tax (Determination of Value) Rules, 2006(hereinafter referred to as the said rules),- after rule 2A, the following shall be inserted, namely :-
“2B. Determination of value of service in relation to money changing.-
Subject to the provisions of section 67, the value of taxable service provided for the services referred to in sub-clause (zm) and (zzk) of clause (105) of section 65 of the Act, so far as it pertains to purchase or sale of foreign currency, including money changing, shall be determined by the service provider in the following manner:-
For a currency, when exchanged from, or to, Indian Rupees (INR), the value shall be equal to the difference in the buying rate or the selling rate, as the case may be, and the Reserve Bank of India (RBI) reference rate for that currency for that day, multiplied by the total units of currency.
Example I: US$100 are sold by a customer at the rate of Rupees 45 per US$.
RBI reference rate for US$ is Rupees 45.50 for that day.
The taxable value shall be Rupees 500.
Example II: INR70000 is changed into Great Britain Pound (GBP) and the exchange rate offered
is Rupees 70, thereby giving GBP 1000.
RBI reference rate for that day for GBP is Rupees 69.
The taxable value shall be Rupees 1000.
Provided that in case where the RBI reference rate for a currency is not available, the value shall be 1% of the gross amount of Indian Rupees provided or received, by the person changing the money:
Provided further that in case where neither of the currencies exchanged is Indian Rupee, the value shall be equal to 1% of the lesser of the two amounts the person changing the money would have received by converting any of the two currencies into Indian Rupee on that day at the reference rate provided by RBI;”
In the said rules, in rule 5, after sub-rule (1), the following „Explanation‟ shall be inserted, with effect from the 1st day of March, 2011 namely:-
“Explanation.- For the removal of doubts, it is hereby clarified that for the services specified in subclause (zzzx) of clause (105) of section 65 of the Finance Act, 1994, the value of the taxable service shall be the gross amount paid by the person to whom telecom service is provided by the telegraph authority”
Service Tax Rules, 1994
Rule 4A. Taxable service to be provided or credit to be distributed on invoice, bill or challan - Every person providing taxable service shall, not later than fourteen days from the date of Provision of (As amended in place of “completion of”) such taxable service or receipt of any payment towards the value of such taxable Service, whichever is earlier issue an invoice….
In the said rules, after rule 5A, the following shall be inserted, namely:-
“5B. Date for determination of rate.- The rate of tax in case of services provided, or to be provided, shall be the rate prevailing at the time when the services are deemed to have been provided under the rules made in this regard.”. ( Rule 5B is inserted after amendment, - Where the provision of the whole or part of the service is determined periodically on the completion of an event in terms of a contract, which requires the service receiver to make any payment to service provider, the date of completion of each such event as specified in the contract shall be deemed to be the date of completion of provision of service.)
In the said rules, in rule 6 Payment of Service Tax
(i) in sub-rule (1),-
(a) for the words, “payments are received, towards the value of taxable services”, the words “service is deemed to be provided as per the rules framed in this regard” shall be substituted; (Therefore now date of deposit of service tax 5 day of month immediately following calendar moth in which service is deemed to be provided as per the rules framed in this regard”)
Similarly in case of individual, proprietary firm or partnership firm the service tax is to be deposited by 5 day of month immediately following quarter in which “service is deemed to be provided as per the rules framed in this regard”
(b) for the third proviso, the following shall be substituted, namely:-
“Provided also that the service tax on the service deemed to be provided in the month of March, or the quarter ending in March, as the case may be, shall be paid to the credit of the Central Government by the 31st day of March of the calendar year.”;
(ii) for sub-rule (3), the following shall be substituted, namely:-
“(3) Where an assessee has issued an invoice, or received any payment, (As amended, earlier if assessee had paid service tax to government then it could be refunded as earlier service tax was paid when payments received) against a service to be provided which is not so provided by him either wholly or partially for any reason, the assessee may take the credit of such excess service tax paid by him, if the assessee.-
(a) Has refunded the payment or part thereof, so received along with the service tax payable thereon for the service to be provided by him to the person from whom it was received; or
(b) Has issued a credit note for the value of the service not so provided to the person to whom such an invoice had been issued.”;(This condition is introduced after introduction of Point of Taxation Rules.)
(iii) In sub-rule (4B), in clause (iii), for the words, “one lakh rupees”, the words “two lakh rupees” shall be substituted;(This is for adjustment that was allowed to be made in case excess amount is paid for reason other than specified ones)
(iv) after sub-rule (6), the following shall be inserted, namely:-
“(6A) Where an amount of service tax payable has been self-assessed under sub-section (1) of section 70 of the Act, but not paid, either in full or part, the same, shall be recoverable along with interest in the manner prescribed under section 87 of the Act.”.
(v) in sub-rule (7B),-
a) for the figures and words “0.25 per cent. of the gross amount”, the figures and words “0.1 per cent. of the gross amount” shall be substituted; (This is for persons engaged in purchase and sale of foreign currency)
