amendments to service tax

8/3/2019 Amendments to Service Tax

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furniture, air-conditioner, refrigerators etc., but does not include any

discount offered on the published charges for such unit. Notification No.

31/2011 Service Tax the 25th April, 2011

4) Services of CAs, CSs, CWAs provided in respect of representing

the client before statutory authority WITHDRAWN -Notification

No.32/2011 Service Tax the 25th April, 2011 w.e.f. 1st day of

May,2011

Legal Consultancy Service: 65(105)(zzzzm) w.e.f. 01-09-2009

Any service provided or to be provided to a business entity, by any other

business entity, in relation to advice, consultancy or assistance in any branch

of law, in any manner is a taxable service provided the receiver and the

provider both are non-individual Business Entity.

As in the case of management consultancy or engineering consultancy

service, any consultancy, advice or technical assistance provided in any

discipline of law is subjected to service tax.

However, the tax is limited to services provided by a business entity to

another business entity. It has been defined that a business entity includes

firms, associates, enterprises, companies etc. but does not include an

individual. Thus, services provided by an individual advocate either to an

individual or even to a business entity is outside the scope of the taxableservice. Similarly, the services provided by a corporate legal firm to an

individual is also outside the purview of taxable service.

Any service of appearance before any court of law or any statutory

authority is outside this levy.

The above provisions were applicable mainly to Advocates and Lawyers. CAs,

CSs and CWAs were not covered by clause 65(105)(zzzzm).

However the services of CAs, CSs and CWAs were covered under different

classes and taxable since 01-03-2006 as under:

1) 65(105)(s) Chartered Accountant

2) 65(105)(u) Company Secretary

3) 65(105)(t) Cost Accountant


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rendered in his professional capacity, to a client, relating to representing the

client before any statutory authority in the course of proceedings initiated

under any law for the time being in force, by way of issue of notice, from the

whole of service tax leviable thereon under section 66 of the said Finance

Act.

Service tax is leviable on all the services provided by a practising Chartered

Accountant/Cost Accountant/Company Secretary to a client with effect from

1-3-2006.

Representations were received from the Institute of Chartered Accountants of

India, the Institute of Cost and Works Accountants of India and the

Association of Company Secretaries of India requesting the Government to

consider exemption from levy of service tax on certain specified services

provided by them which are also provided by other professionals and those

other professionals providing similar services are not taxable. It has beenstated that such an exemption is required till such time other professionals

providing similar services are also taxed.

Government has considered the representations. Taking into account the

views expressed by the Institutes and the Association and the other material

facts, Government has exempted from levy of service tax only

representational services provided to a client by a practising Chartered

Accountant/Cost Accountant/Company Secretary to appear before a statutory

authority in the course of proceedings initiated under any law for the time

being in force, by way of issue of notice.

Accordingly Notification No. 25 / 2006-Service Tax Dated: July 13, 2006 was

issued to provide full exemption to representational services provided to

a client by a practising Chartered Accountant/Cost

Accountant/Company Secretary to appear before a statutory

authority in the course of proceedings initiated under any law for the

time being in force, by way of issue of notice.

The above stated exemption is NOW WITHDRAWN by rescinding the

Notification No. 25 / 2006-Service Tax Dated: July 13, 2006. The effect of therescinding the Notification is that the representational services of CAs, CSs,

CWAs is now fully taxable. However Advocates and Lawyers are EXEMPT in

respect ofrepresentational services.

Note: Lawyers providing the representational services are EXEMPT from

service tax. As always, CAs, CSs, CWAs are on the receiving end vis--vis


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Lawyers. A classic example of discrimination against CAs, CSs, CWAs. ICAI,

ICSE and ICWAI should join together to fight before appropriate authority

against this discrimination. But which Lawyer would like to take this case

where his own interest is involved.

5) Coaching or Training Services FULL EXEMPTION- NotificationNo.33/2011 Service Tax the 25th April, 2011 w.e.f. 1st day of

May,2011

(i) Any preschool coaching and training;

(ii) Any coaching or training leading to grant of a certificate or diploma or

degree or any educational qualification which is recognised by any law for

the time being in force; when provided by any commercial coaching or

training centre from the whole of the service tax leviable thereon under

section 66 of the Finance Act, 1994.

6) Service tax in respect of the services stated in the following table shall

be EXEMPT PARTIALLY as provided in the Table: Notification No.34/2011 Service Tax , the 25th April, 2011 w.e.f. 1st day of May,2011

TABLE

(1

)

(2) (3) (4) Taxable

(5)

Exempt

(6)

13

.

(zzzz

v)

Services provided or to be provided, to any

person, by a restaurant, by whatever name

called, having the facility of air-conditioning in

any part of the establishment, at any time during

the financial year, which has licence to serve

alcoholic beverages, in relation to serving of food

or beverage, including alcoholic beverages or

both, in its premises;

No

Conditi

on

30% 70%

14. (zzzzw) Services provided or to be provided, to anyperson, by a hotel, inn, guest house, club or

campsite, by whatever name called, in relation to

providing of accommodation for a continuous

period of less than three months;

NoConditi

on

50% 50%
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7) Life Insurance business [section 65 (105) (zx): Notification

No.35/2011 Service Tax , the 25th April, 2011 w.e.f. 1st day of May,2011

Life insurance companies provide services relating to risk cover and

managing investment for the policy holders. The former is already subjected

to service tax. The latter was brought into the tax net by Finance Bill 2011.

When the entire premium is only for risk cover the same shall continue to be

taxed even in the revised definition. However in the case of other schemes, a

significant portion of the premium is used towards investment, while the rest

is allocated towards various overheads and mortality. IRDA in its circular Ref:

IRDA/ACT/CIR/VIP/171/2010 dated November 21, 2010 has made it mandatory

for the insurance companies to share this break-up with the policy holders in

the case of Variable Insurance Policies under the heads:

1) Premium received,

2) Deductions towards mortality,

3) Commission and expenses,

4) Interest added and

5) Closing balance.

Thus amounts relating to deductions for mortality, commission and expenses

are not available for investment. It is now proposed to give an insurer

carrying on life insurance business the option to pay tax :

1) 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;

2) 1.5 per cent of the gross amount of premium charged from a policy

holder in all other cases;


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towards the discharge of his service tax liability instead of paying service tax

at the rate specified in section 66 of Chapter V of the said Act. However such

option shall not be available in cases where the entire premium paid by the

policy holder is only towards risk cover in life insurance.

8) Export of Services Rules, 2005 have been amended by

Notification No. 36/2011 Service Tax, the 25th April, 2011 w.e.f. 1st

May 2011 so as to include the following services as export of services

provided in relation to an immovable property situated outside India; namely

1) (zzzzv) to any person, by a restaurant, by whatever name called,

having the facility of air-conditioning in any part of the

establishment, at any time during the financial year, which has

licence to serve alcoholic beverages, in relation to serving of food orbeverage, including alcoholic beverages or both, in its premises;

2) (zzzzw) Services provided or to be provided, to any person, by a

hotel, inn, guest house, club or campsite, by whatever name called,

in relation to providing of accommodation for a continuous period of

less than three months;

9) Import of Services : Taxation of Services (Provided from

Outside India and Received in India) Rules, 2006, have been

amended by Notification No. 37/2011 Service Tax, the 25th April,

2011 w.e.f. 1st May 2011 so as to include the following services as Taxation

of Services Provided from Outside India and Received in India namely :-

1) (zzzzv) to any person, by a restaurant, by whatever name called,

having the facility of air-conditioning in any part of the

establishment, at any time during the financial year, which has

licence to serve alcoholic beverages, in relation to serving of food orbeverage, including alcoholic beverages or both, in its premises;

2) (zzzzw) Services provided or to be provided, to any person, by a

hotel, inn, guest house, club or campsite, by whatever name called,
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in relation to providing of accommodation for a continuous period of

less than three months;

amendments to service tax

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