|
The effective service tax rate of 12.24% is applicable from 18th
April 2006, since that is the day on which the Finance Bill 2006 was
assented to by the Hon. President. A gist of the slew of service tax notifications issued today (though these
are dated 19th April 2006) is here. All these notifications are
effective from 19th April, 2006. - The rate of interest for delayed service tax payment is 13% p.a. [Notification
No. 8/2006]
- Service tax to be payable, even if any taxable service is provided from any
other country, but is received in India [Notification
No. 9/2006]. The clause, prior to this amendment, did not specify the place
of providing or receiving the taxable service. It refered to the person
providing the service.
- Notification
No. 10/2006 amends the definition of 'Person Liable for Paying Service Tax'
in the Service Tax Rules. The receipient of a taxable service which is received
in India from any person from any other country, irrespective of from
where the service is provided. The earlier definition made the receipent liable
to pay service tax only if the provider was a non-resident or from outside India
and did not have any office in India. This notification also removes the
valuation methods for computing the service tax payable by clearing and
forwarding agents and insurance agents.
- A new set of Rules (yes, yet another set of rules) called the
Taxation of Services (Provided from Outside India and Received in India)
Rules, 2006 are notified vide Notification
No. 11/2006. Under these rules, input, input service, output service are
defined to have the same meaning as in the CENVAT Credit Rules, 2004. The list
of taxable services provided from outside India and received in India is
mentioned therein; and includes some services in relation to immovable property
situated in India, and some other services. There are a few exceptions also
specified. These rules require the receipent of the services to register and pay
service tax. It is clarified that the taxable services provided from outside
India and received in India shall not be treated as output services for availing
credit of excise duty / service tax paid on any input / input service.
- And yet more more set of rules ... this time they are to be known as
Service Tax (Determination of Value) Rules, 2006. These rules
specify the method to value taxable services where the consideration is not
wholly / partly received in money, i.e. by valuing the service at an
equivalent gross amount charged by the service provided for similar services in
the ordinary course of business; failing which the service provider is to
determine the equivalent money value of such consideration which cannot be less
than the cost of provision of the service. These rules also specify that the
authority and powers of the Central Excise Officer to reject the valuation, and
the procedure for the same. These rules, along with illustrations and examples,
clarifies the inclusion and exclusion of certain costs from the value of service
provided. [Notification
No. 12/2006].
- Notification
No. 13/2006 amends the Export of Service Rules, 2005. This amendment
specifies the what is export of taxable service and clarifies that any service
that is partly performed outside India will be deemed to be performed outside
India. The provision of any service shall be treated as export of service when
the service is delivered outside India and used outside India; and the payment
is received by the service provider in convertible foreign exchange.
- And finally, Notification
No. 14/2006 rescinds two earlier notifications; namely, notification no
22/2005 [service provided to an individual by a service provider, where the
services are received and consumed outside India, not in the course business]
and notification no 25/2005 [specified services provided by a non-resident
person outside India and consumed outside India, in the course of sailing of a
ship].
|
|
