Budgetary changes 2016

Discussion on Budgetary Implications on Service Tax, 02.03.2016

S.Nagalingam IRS.,Assistant Commissioner, Service Tax II

Commissionerate

Changes coming into effect immediately with effect from:

1st day of March, 2016; 1st day of April, 2016; on enactment of the Finance Bill, 2016;

from 1st day of June, 2016 after the enactment of the Finance Bill, 2016

Service Tax exemption to canal, dam or other irrigation works with retrospective effect- new section Retrospective effect“101. (1) Notwithstanding anything contained in section 66B, no service tax shall be levied orcollected during the period commencing from the 1st day of July, 2012 and ending with the 29th day of January, 2014 (both days inclusive) in respect of taxable services provided to an authority or a board or any other body––

BUDGET HIGHLIGHTS – SERVICE TAX

(i) set up by an Act of Parliament or a State Legislature; or(ii) established by the 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.



Restoration of exemption on servicesProvided to the Govt, a local authority or a govtl. Authority Sec.102To an airport, port Sec.103

102. (1) Notwithstanding anything contained in section 66B, no service tax shall be levied orcollected during the period commencing from the 1st day of April, 2015 and ending with the 29th day of February, 2016 (both days inclusive), in respect of taxable services provided to the Government, a local authority or a Governmental authority, by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of––

Restoration of certain exemptions withdrawn last year for projects, contracts in respect of which were entered into before withdrawal of the exemption- new section

inserted

(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..


(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 the 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.


103. (1) Notwithstanding anything contained in section 66B, no service tax shall be levied or collected during the period commencing from the 1st day of April, 2015 and ending with the 29th day of February, 2016 (both days 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 entered into before the 1st day 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 entered into before the 1st day of March, 2015.(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.”.



Changes coming into effect immediately w.e.f. the

1st day of March, 2016

Exemption withdrawn

Sl. No(vi)A of notification No. 9/2016-ST, dated 1st March, 2016

Exemption to construction, erection, commissioning or installation of original works pertaining to monorail or metro (under S. No 14 of the notification No. 25/12-ST) is being withdrawn, in respect of contracts entered into on or after 1st March 2016. The other exemptions under S. No. 14 of notification No. 25/12-ST shall continue unchanged.

come into effect from 1st March, 2016.

New Exemptions

New entry at S. No. 13 (ba) of notification No. 25/2012-ST

Services by way of construction, erection etc. of a civil structure or any other original works pertaining to the “In-situ Rehabilitation of existing slum dwellers using land as a resource through private participation” component of Housing for All (HFA) (Urban) Mission / Pradhan Mantri Awas Yojana (PMAY), except in respect of such dwelling units of the projects which are not constructed for existing slum dwellers


New Exemptions

New entry at S. No. 13 (bb) of notification No. 25/2012-ST

Services by way of construction, erection etc., of a civil structure or any other original works pertaining to the “Beneficiary-led individual house construction / enhancement” component of Housing for All (HFA) (Urban) Mission/ Pradhan Mantri Awas Yojana (PMAY)


New Exemptions

new entry at S. No. 14 (ca) of notification No. 25/2012-ST

Services by way of construction, erection, etc., of original works pertaining to low cost houses up to a carpet area of 60 sq.m per house in a housing project approved by the competent authority under the “Affordable housing in partnership” component of PMAY or any housing scheme of a State Government


New Exemptions

New entry at S. No. 9B of notification No. 25/2012-ST

Services provided by the Indian Institutes of Management (IIM) by way of 2 year full time Post Graduate Programme in Management(PGPM) (other than executive development programme), admissions to which are made through Common Admission Test conducted by IIMs, 5 year Integrated Programme in Management and Fellowship Programme in Management


It has been informed by Secretary, Ministry of Human Resource Development (MHRD) vide letter D. O. No.2-14/2009-TS.V dated 8th July, 2014 and 5th February, 2014 that MHRD is vested with the power to recognise educational courses [DoPT O.M. dated 08.01.1975], for the purpose of recruitment to posts under Government of India. It has been further stated by MHRD in their above mentioned letters that IIMs have been conducting Post Graduate Programmes in Management and Fellowship Programmes which are equivalent to MBA and Ph.D degrees. It has been reiterated by Secretary, MHRD vide letter D.O. 3/5/2013-TS.V dated 15.1.2016 that the IIMs have been conducting Post Graduate Programmes in Management and Fellowship Programmes which are equivalent to MBA and Ph.D degrees, respectively, (as also clarified by associations like Association of Indian Universities, Inter –University Board of India etc.). In view of this, the exemption being given to the above programmes of IIMs is clarificatory in nature and in view of the same, liability to pay service tax in respect of the said programmes for the past period will also become infructuous.


1.Assessment of media with recorded Informational Technology software when RSP is affixed(exempted from Service Tax) ; or

2.Assessed when RSP is not required(CVD/Central Excise duty levied only on the portion

of value representing the value of the medium on which the ITS is recorded along with freight and insurance)

CVD/Central Excise duty/Service Tax is mutually exclusive


1.The Point of Taxation Rules, 2011 have been framed under provisions of clause (a) and (hhh) of sub-section (1) of section 94, now specific powers is also being obtained under section 67A to make rules regarding point in time of rate of service tax. Thus, any doubt about the applicability of service tax rate or apparent contradiction between section 67A and POTR would be taken care of. Therefore, consequent modifications have been done in POTR.

BUDGET HIGHLIGHTS – Point of Taxation Rules, 2011

Rule 5 old provision(a)no tax shall be payable to the extent the invoice has been issued and the payment received against such invoice before such service became taxable;(b)no tax shall be payable if the payment has been received before the service becomes taxable and invoice has been issued within fourteen days of the date when the service is taxed for the first time.

Doubt- applicability in case of new levy


Rule 5 New insertionExplanation:Applicable in case of new levy on servicesIn situations other than those specified where new levy or tax is not payable, the new levy or tax shall be payable


Shipping Industry - Taxability

Particulars Taxability Remarks

Transportation of Goods by a vessel by an Indian Shipping Line from the Customs Station in India to outside India.

This will be Zero Rated with effect from 1.3.2106Amendment to Rule 2(e) of Cenvat Credit Rules, 2004

Credit of input, input services and Capital Goods will be allowed

This amendment will provide a level playing field for Indian Shipping Lines

CENVAT CREDIT RULES - AMENDMENTSCenvat Credit Rule 6 has been amended and provides as

under

Input Tax Credit exclusively used in relation to exempted goods or services still in place.

Avail all Input Credits but pay an amount equivalent to 6% of the value of exempted goods or 7% of the value of exempted services.

Maximum Limit has been prescribed to ensure that the amount to be reversed does not exceed the amount availed.

A new formula has been prescribed for proportionate reversal of credit.

Cenvat Credit Rules – New Formula No credit on input or input services

exclusively used for exempted goods or services.

Full credit on input or input services exclusively used for taxable goods or services.

Common Credit used for taxable and exempted goods or services will be based on turnover.

Refer Illustration

Cenvat Credit Rule 6 formulaParticulars Amount Remarks

Taxable Service Rs 2.00 croreExempted Service Rs 1.00 crore

Input Credit of Services – exclusively used for

taxable services

Rs 10.00 Lacs

Input Credit of Services – exclusively used for exempted services

Rs 4.00 Lacs

Common Input Services Rs 6.00 LacsAmount to be reversed as

per new formulaRs 4.00 Lacs + Rs( 6.00

Lacs * 1/3 )Total Amount to be

reversed is Rs 6.00 LacsAmount to be reversed as

per old formulaRs 4.00 Lacs +Rs (16.00

Lacs * 1/3)Total Amount to be

reversed is Rs 9.33 Lacs

Refund of Cenvat Credit Notification No. 27/2012 – C.E. (N.T.) is being

amended so as to provide that time limit for filing application for refund of Cenvat Credit under Rule 5 of the Cenvat Credit Rules, 2004, in case of export of services, shall be 1 year from the date of –

(a) receipt of payment in convertible foreign exchange, where provision of service has been completed prior to receipt of such payment; or

(b) the date of issue of invoice, where payment for the service has been received in advance prior to the date of issue of the invoice.

[Notification No. 14/2016-CE(NT) dated 01.03.2016

Services provided by Container Train Operators (CTOs) Notification No. 26/2012-ST is being amended to provide that transport of goods by rail (other than transport of goods in containers by any person other than Indian Railway) shall be eligible for abatement at the rate of 70% with credit of input services. Transport of goods in containers by any person other than Indian Railway shall be eligible for abatement at the rate of 60% with credit of input services.

Services provided by Container Train Operators (CTOs) It is hereby also clarified that service provided by

the Indian Railways to Container Train Operators (CTOs) of haulage of their container train (rake of wagons with containers) is a service of „Transport of Goods by Rail‟ and is, therefore, eligible for abatement and tax treatment accordingly, that is, for abatement at the rate of 70% with credit of input services.

Changes with effect from 01.04.2016

Exemption withdrawn

Sl. No. (i) of Notification No.

9/2016-ST, dated 1st March, 2016 refers

Services provided by a senior advocate to an advocate or partnership firm of advocates, and A person represented on an arbitral tribunal to an arbitral tribunal; Service tax in the above instances would be levied under forward charge. However, the existing dispensation regarding legal services provided by a firm of advocates or an advocate other than senior advocate is being continued.

come into effect from 1st April, 2016.

Amendment in Rule 2(1)(d)(i) (D)(II) - Forward charge

SPECIFIED SERVICES….

Sl. No (ix) B of notification No. 9/2016-ST, dated 1st March, 2016 refers

Exemption under Sl. No. 23 (c) of the notification No.25/2012-ST on transport of passengers, with or without accompanied belongings, by ropeway, cable car or aerial tramway is being withdrawncome into effect from

1st April, 2016.

Services provided by government or local authorities to business entities;

notification No. 15/2016-ST

Taxable from 01.04.2016 Consequently, 1st April, 2016 also being notified as the date from which the definition of support services shall stand deleted {Rule (2(1)(d)(i)(e)}from the Finance Act, 1994


New exemptions

New entry at S. No. 26C of notification No. 25/2012-ST

The services of life insurance business provided by way of annuity under the National Pension System (NPS) regulated by Pension Fund Regulatory and Development Authority (PFRDA) of India


New exemptions

New entry at S. No. 51 of notification No. 25/2012-ST

Services provided by Securities and Exchange Board of India (SEBI) set up under SEBI Act, 1992, by way of protecting the interests of investors in securities and to promote the development of,and to regulate, the securities market


New exemptions


Services provided by Employees‟ Provident Fund Organisation (EPFO) to employees are being exempted from service tax. come into effect from

1st April, 2016.

New exemptions

Amendment in notification No. 32/2012-ST

Services provided by Biotechnology Industry Research Assistance Council (BIRAC) approved biotechnology incubators to the incubateescome into effect from

1st April, 2016.

New exemptions


Services provided by National Centre for Cold Chain Development under Department of Agriculture, Cooperation and Farmer‟s Welfare, Government of India, by way of knowledge dissemination


New exemptions


Services provided by Insurance Regulatory and Development Authority (IRDA) of India


New exemptions

New entry at S. No. 26(q) of notification No. 25/2012-ST

Services of general insurance business provided under „Niramaya‟ Health Insurance scheme launched by National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability in collaboration with private/public insurance companies


New exemptions

Notification No.09/2016-ST, dated 1st March 2016

The threshold exemption limit of consideration charged for services provided by a performing artist in folk or classical art forms of music, dance or theatre, is being increased from Rs 1 lakh to Rs 1.5 lakh per performance. come into effect from

1st April, 2016.

New exemptions

New entry at S. No. 9D of notification No. 25/2012-ST

Services provided by way of skill/vocational training by Deen Dayal Upadhyay Grameen Kaushalya Yojana training partners are being exempted from service tax.


New exemptions


Services of assessing bodies empanelled centrally by Directorate General of Training, Ministry of Skill Development & Entrepreneurship are being exempted from service tax. come into effect from

1st April, 2016.

New exemptions


Services of assessing bodies empanelled centrally by Directorate General of Training, Ministry of Skill Development & Entrepreneurship are being exempted from service tax. come into effect from

1st April, 2016.

Changes in Abatement NotificationService Type Earlier

AbatementRevised

AbatementServices provided by a Tour Operator

in relation to a package tour75% 70%

Services provided by a Tour Operator other than package tour or solely

arranging or booking accommodation

60% 70%

Services in respect of construction of a complex / building structure or residential complex unit having a carpet area less than 2000 square

feet

75% 70%

Changes in Abatement NotificationService Type Earlier Abatement Revised Abatement

Transport of Goods by Rail 70% 70% (Input Credit on Services is now

allowed)Transport of Goods by

Container on Rail by any person other than Railways

70% 60% Input Credit of Services is now

permitted)Transport of passengers

with or without accompanied belongings by

rail

70% 70% (Input Credit of Services is now

permitted)

Services provided by a GTA in respect of used household

goods

75% 60%

Changes in Abatement Notification

Service Type Proposed Abatement

By foreman to a Chit fund

30% (Input Credit on

Services is not allowed)

Amendment in ST Rules

Rule 6 of ST rules amendment

The benefits of (a) quarterly payment of service tax and (b) payment of service tax on receipt basis, which are available to individual and partnership firms, are being extended to One Person Company (OPC) whose aggregate value of services provided is up to Rs. 50 lakh in the previous financial year. Further, the benefit of quarterly payment of service tax is also being extended to HUF.




The benefits of (a) quarterly payment of service tax and (b) payment of service tax on receipt basis, which are available to individual and partnership firms, are being extended to One Person Company (OPC) whose aggregate value of services provided is up to Rs. 50 lakh in the previous financial year. Further, the benefit of quarterly payment of service tax is also being extended to HUF.




The service tax liability on single premium annuity (insurance) policies is being rationalised and the effective alternate service tax rate (composition rate) is being prescribed at 1.4% 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


Reverse Charge Mechanism Reverse Charge Mechanism is no longer

applicable for services provided by Mutual fund agencies/ distributors to an Asset Management company under Reverse Charge .

Service Tax on any service provided by Government or a local authority to business entities will now be applicable for a all services including support services.

Recipient of services availed from foreign shipping line by a business entity located in India will get taxed under reverse charge at the hands of the business entity.

CENVAT CREDIT RULES - AMENDMENTSEquipment and Appliance used in an office located

within a factory are included in the definition of Capital Goods which allows availment of Cenvat Credit

Cenvat credit on inputs and capital goods used for pumping of water , for captive use in the factory is being allowed even if equipments are installed outside the factory.

Capital Goods having a value of upto Rs 10,000/are including the same in the definition of inputs.

Direct transfer of tools, jigs and fixtures , moulds and dies can now be sent directly to other manufacturer or job worker .

CENVAT CREDIT RULES - AMENDMENTSThe permission given by a AC or DC for sending inputs or

partially processed inputs outside his factory to a job worker and clearance there from on payment of duty is valid now for 3 financial years.

Cenvat Credit on Service Tax paid on amount charged for assignment by Government or any other person of a natural resource such as radio frequency spectrum , mines etc will be spread over the period of time for which the rights have been assigned.

If the assignment is sold then the Cenvat Credit to the extent of the service tax payable on the consideration is allowed in the year of assignment.

Changes get incorporated on enactment of bill

Lottery: Explanation 2 in section 65B(44) is proposed to be amended to clarify that activity carried out by a lottery distributor or selling agents of the State Government under the provisions of the Lotteries (Regulation) Act, 1998 (17 of 1998), is leviable to service tax.‟ (Clauses 145 of the Bill refers)


66D(l) services by way of— (i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force; (iii) education as a part of an approved vocational education course;

Stands omitted. service tax exemption on them is being continued by incorporating them in the general exemption notification (Notification No. 25/2012-ST as amended by notification No. 09/2016-ST, dated 1st March, 2016 refers)


Sec.65B(11) "approved vocational education course" means,–– (i) a course run by an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training offering courses in designated trades notified under the Apprentices Act, 1961; or

(ii) a Modular Employable Skill course, approved by the National Council of Vocational Training, run by a person registered with the Directorate General of Employment and Training. Union Ministry of Labour and employmentomitted - being incorporated in the general exemption notification (Notification No. 25/2012-ST as amended by notification No 09/2016- ST, dated 1st March, 2016 refers). come into effect from the date of enactment of Finance Bill,


New levy- Declared Services-Section 66E (j)Assignment by the Government of the right to use the radio-frequency spectrum and subsequent transfers thereof

This is to make it clear that assignment by Government of the right to use the spectrum as well as subsequent transfers of assignment of such right to use is a service leviable to service tax and not sale of intangible goods. (Clauses 147 of the Bill refers)


Section 67A. (1)The rate of service tax, value of a taxable service and rate of exchange, if any, shall be the rate of service tax or value of a taxable service or rate of exchange, as the case may be, in force or as applicable at the time when the taxable service has been provided or agreed to be provided.

(2) The time or the point in time with respect to the rate of service tax shall be such as may be prescribed.”. with effect from the date of enactment of the Finance Bill, 2016


section 73,––(i) in sub-sections (1), (1A), (2A) and (3), for the words “eighteen months”, wherever they occur,the words “thirty months” instead of “eighteen months” shall be substituted;(ii) in sub-section (4B), in clause (a), for the words “whose limitation is specified as eighteenmonths in”, the words “falling under” shall be substituted.


section 75, for the words ‘‘Provided that’’, the following shall be substituted,‘‘Provided that in the case of a person who collects any amount as service tax but fails to pay the amount so collected to the credit of the Central Government, on or before the date on which such payment is due, the Central Government may, by notification in the Official Gazette, specify such other rate of interest, as it may deem necessary:


Interest rates on delayed payment of duty/tax across all indirect taxes is proposed to be made uniform at 15%, except in case of service tax collected but not deposited with the Central Government, in which case the rate of interest will be 24% from the date on which the service tax payment became due. Notification Nos. 13 and 14/2016-ST dated 1st March, 2016


section 78A, the following Explanation shall be inserted, namely:––“Explanation.–– For the removal of doubts, it is hereby clarified that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, and the proceedings with respect to a notice issued under sub-section (1) of section 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.”.



clause (i) of the first proviso to

section 76

The date of service of notice under sub-section(1) of Section 73, no penalty shall be payable; and proceedings in respect of such service tax and interest shall be deemed to have been concluded.


clause (i) of the second proviso to

section 78

The date of service of notice under the proviso to sub-section(1) of section 73, the penalty payable shall be fifteen percent of such service tax; and proceedings in respect of such service tax, interest and penalty shll be deemed to be concluded

section 78A, the following Explanation shall be inserted, namely:––“Explanation.–– For the removal of doubts, it is hereby clarified that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, and the proceedings with respect to a notice issued under sub-section (1) of section 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, in sub-section (1), for the words “fifty lakh rupees”, at both the places where they occur, the words “two hundred lakh rupees” shall be substituted.


section 90, sub-section (2) shall be omitted.section 91,–– Only for amount collected but not paid(a) in sub-section (1), the words, brackets and letter “clause (i) or” shall be omitted;(b) sub-section (3) shall be omitted91. Power to arrest._ (1) If the Commissioner of Central Excise has reason to believe that any person has committed an offence specified in clause (i) or clause (ii) of sub-section (1) of section 89, he may, by general or special order, authorise any officer of Central Excise, not below the rank of Superintendent of Central Excise, to arrest such person.


section 93A, for the word “prescribed”, the words “prescribed or specified by notification in the Official Gazette” shall be substituted.Where any goods or services are exported, the Central Government may grant rebate of service tax paid on taxable services which are used as input services for the manufacturing or processing 4“or 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 prescribed or specified by notification in the Official Gazette”


Notification No. 41/2012- ST, dated the 29th June, 2012 was amended vide notification No.1/2016-ST dated 3rd February, 2016 so as to, inter alia, allow refund of service tax on services used beyond the factory or any other place or premises of production or manufacture of the said goods, for export of the said goods. The said amendment is being given retrospective effect from the date of application of the parent notification, i.e., from 01.07.2012. Time period of one month is proposed to be allowed to the exporters whose claims of refund were earlier rejected in absence of amendment carried out vide notification No.1/2016-ST dated 3rd February, 2016.


In the said notification, in the Explanation,–(a) in clause (A), for sub-clause (i), the following sub-clause shall be substituted and shall be deemed to have been substituted, namely:––“(i) in the case of excisable goods, taxable services that have been used beyond factory or any other place or premises of production or manufacture of the said goods, for their export;”;(b) clause (B) shall be omitted.1st day of July, 2012 to 2nd February, 2016 (both days inclusive)

BUDGET HIGHLIGHTS – SERVICE TAX new

In the said notification, in the Explanation,–(a) in clause (A), for sub-clause (i), in the case of excisable goods, taxable services that have been used beyond the place of removal, for the export of said goods;(b) clause (B) “place of removal” shall have the meaning assigned to it in Section 4 of the Central Excise Act,1944


old

Indirect tax Dispute Resolution Scheme, 2016, in respect of cases pending before Commissioner (Appeals), the assessee, after paying the duty, interest and penalty equivalent to 25% of duty, can file a declaration, is being introduced. In such cases the proceedings against the assessee will be closed and he will also get immunity from prosecution. However, this scheme will not apply in certain specified type of cases.

Indirect tax Dispute Resolution Scheme, 2016

Service tax assessees above a certain threshold will also be required to file an annual return. This change shall come into effect from 1st April, 2016.

Returns

Changes get incorporated on 1st June,2016 after enactment of

bill


Krishi Kalyan Cess is proposed to be levied with effect from 1st June, 2016 on any or all the taxable services at the rate of 0.5% on the value of such taxable services. Credit of Krishi Kalyan Cess paid on input services shall be allowed to be used for payment of the proposed Cess on the service provided by a service provider.

(Chapter VI/Clause 158 of the Bill refers)

section 66D (o)(i) service of transportation of passengers, with or without accompanied belongings, by— (i) a stage carriage;proposed to be omitted with effect from 1.06.2016. become taxable with effect from 1.06.2016. However, such services by a non-air-conditioned contract carriage will continue to be exempted by way of exemption notification [Notification No. 25/2012-ST, as amended by notification No. 09/2016-ST, dated 1st March, 2016 refers].


The service of transportation of passengers by air-conditioned stage carriage is being taxed at the same level of abatement (60%) as applicable to the transportation of passengers by a contract carriage, with same conditions of non-availment of Cenvat credit. [notification No. 08/2016-St dated 29th February, 2016 refers]


section 66D (p)(ii)] transportation of goods by an aircraft or a vessel from a place outside India up to the customs station of clearance in India; or -proposed to be omitted with effect from 1.06.2016. However such services by an aircraft will continue to be exempted by way of exemption notification [Not. No. 25/2012-ST, as amended by notification No. 09/2016-ST dated 1st March, 2016 refers].


Shipping Industry - TaxabilityParticulars Taxability Remarks

Transportation of Goods by a vessel by an Indian Shipping Line from outside India up to the Customs station in India

This will be taxable with effect from 1.6.2016- Indian vessel – Forward chargeForeign - RCM

The Cenvat Credit chain gets completed.

This amendment will provide a level playing field for Indian Shipping Lines

Disclaimer: This presentation is provided purely for your information and knowledge. Information provided in this presentation do not purport or should not be treated as legal opinion in the fact specific situations that may effect you and your business.

Budgetary changes 2016

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