1. BY-CA. ANKIT AGARWAL Chartered Accountant AMENDMENTS IN SERVICE TAX 1

2. AMENDMENTS IN SERVICE TAX Amendments in Various Notifications:- Mega Exemption Notification [N/No. 25/2012-ST, dated 20-06-2012]. Abatements under [N/No. 26/2012-ST, dated 20-06-2012]. Reverse Charge under [N/No. 30/2012-ST, dated 20-06-2012]. Amendments in Various Sections of Chapter V of Finance Act, 1994 Other Amendments 2 2

3. AMENDMENTS IN SERVICE TAX Rules/ Provisions Original Notification as amended Amendment Reference Mega Exemption N/No. 25/2012-ST, dated 20-06-2012 06/2015-ST, dated 01-03-2015 Reverse Charge N/No. 30/2012-ST, dated 20-06-2012 07/2015-ST, dated 01-03-2015 Abatements N/No. 26/2012-ST, dated 20-06-2012 08/2015-ST, dated 01-03-2015 1. In Important Notifications Amendments Substitution with New Section 65BSection 76 Section 66BSection 78 Section 66D Section 66FInsertion Section 67Section 78B Section 73 Section 86Omission Section 94Section 80 2. In Chapter V of Finance Act, 1994 3. Other Amendments Other Amendments Revision in Composite Rate on Specified Services Swachh Bharat Cess @ 2% [ On Taxable Value of All / Specified Taxable Services] Time limit for taking CENVAT Credit on inputs and input services is being increased from 6 months to 1 year. 3 3

4. Mega Exemption Notification N/No. 06/2015-ST MEGA EXEMPTION NOTIFICATION N/No.-25/2012-ST, DATED 20-06-2012, as amended 4 4

5. Serial No. 2 N/No. 06/2015-ST Old ProvisionsNew /Amended Provisions Health care services by a clinical establishment, an authorised medical practitioner or para-medics; 1. Health care services by a clinical establishment, an authorised medical practitioner or para-medics 2. Services provided by way of transportation of a patient in an ambulance other than above New W.E.F. 01.04.2015 Effect: Earlier only ambulance services provided by a clinical establishment etc. were tax free but now all ambulance services have been exempted from tax. Mega Exemption Notification 5 5

6. Serial No. 16 Old ProvisionsNew /Amended Provisions Services by a performing artist In folk or classical art forms of (i)Music/(ii) dance/(iii) theatre Services by an artist by way of a performance In folk or classical art forms of (i) Music/(ii) dance/(iii) theatre, If the consideration charged for such performance is not more than Rs. 1,00,000/- (One lakh rupees). Services provided by such artist as A Brand Ambassador shall not be exempt. New W.E.F. 01.04.2015 Mega Exemption Notification N/No. 06/2015-ST 6 6

7. Serial No. 26A Old ProvisionsNew /Amended Provisions Services of life insurance business provided under following schemes - a.Janashree Bima Yojana (JBY); or b.Aam Aadmi Bima Yojana (AABY) a.Janashree Bima Yojana (JBY); or b.Aam Aadmi Bima Yojana (AABY) c. Varishtha Pension Bima Yojana New W.E.F. 01.04.2015 N/No. 06/2015-ST Mega Exemption Notification 7 7

8. New Serial No. 43, 44, 45, 46 New Sl. No. New Exemption 43Services by operator of Common Effluent Treatment Plant by way of treatment of effluent; 44Services by way of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labelling of fruits and vegetables which do not change or alter the essential characteristics of the said fruits or vegetables; 45Services by way of admission to a museum, national park, wildlife sanctuary, tiger reserve or zoo; 46Service provided by way of exhibition of movie by an exhibitor to the distributor or an association of persons consisting of the exhibitor as one of its members. New W.E.F. 01.04.2015 N/No. 06/2015-ST Mega Exemption Notification 8 8

9. New Serial No. 47 New Exemption Condition for Exemption Services by way of right to admission to: (i)Exhibition of : Cinematographic film, Circus, Dance, or Theatrical performance including drama or ballet; Exemption without any limit i.r.t. entry fee. (ii)recognised sporting event; Exemption without any limit i.r.t. entry fee. (iii) Award function, Concert, Pageant, Musical performance or Any sporting event other than a recognised sporting event, New Exemptions (Date to be notify) CONDITION FOR EXEMPTION: Where Consideration for admission (may be called as entry fees) is not more than Rs. 500 per person. N/No. 06/2015-ST Mega Exemption Notification 9 9

10. Serial No. 12 Services provided to By way of Government, a Local Authority or a Governmental Authority Construction, Erection, Commissioning, Installation, Completion, Fitting out, Repair, Maintenance, Renovation, or Alteration of followings- a)a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment; b)a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958); c)a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; d)canal, dam or other irrigation works; e)pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal; or f)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 65 B of Act; Clause (a), (c), (f) Omitted w.e.f. 01.04.2015 Effects: Now Taxable N/No. 06/2015-ST Mega Exemption Notification 10

11. Serial No. 14 Services provided By way of of Original Work pertaining to followings- Construction, Erection, Commissioning, Installation, ( a) an airport, port or railways, including monorail or metro; (b) Remain same as earlier………. (c) Remain same as earlier………. (d) Remain same as earlier………. (e) Remain same as earlier………. Words Omitted w.e.f. 01.04.2015 N/No. 06/2015-ST Mega Exemption Notification 11

12. Clause ( i ) of Serial No. 20 Services provided By way of of Following Goods: Transportation by RAIL or A VESSEL from one place in India to another W.E.F. 01.04.2015 N/No. 06/2015-ST Mega Exemption Notification FLOURS, PULES AND RICE. Old ProvisionsNew /Amended Provisions Foodstuff including Flours, tea, coffee, jaggery, sugar, Milk Products, Salt and edible oil, Excluding alcoholic beverages. tea, coffee, jaggery, sugar, edible oil, excluding alcoholic beverages. Agricultural Produce is separately exempt which would continue [ Clause ( h ) of Serial No. 20] MILK SALT FOOD GRAINS including- 12

13. Clause ( d ) of Serial No. 21 Services provided By By way of of Following Goods: Good Transport AgencyTransport in a Goods carriage FLOURS, PULES AND RICE. W.E.F. 01.04.2015 N/No. 06/2015-ST Mega Exemption Notification Old ProvisionsNew /Amended Provisions Foodstuff including Flours, tea, coffee, jaggery, sugar, Milk Products, Salt and edible oil, Excluding alcoholic beverages. tea, coffee, jaggery, sugar, edible oil, excluding alcoholic beverages. FOOD GRAINS including- Agricultural Produce is separately exempt which would continue [ Clause ( a ) of Serial No. 21] MILK SALT 13

14. Serial No. 29 Services provided BY Following Persons in respective capacities: a)Same as earlier……… b)Same as earlier……… c)mutual fund agent to a mutual fund or asset management company; d)distributor to a mutual fund or asset management company; e)selling or marketing agent of lottery tickets to a distributer or a selling agent; f)Same as earlier……… g)Same as earlier……… h)Same as earlier……… Clause (c), (d) and (e) are Omitted W.E.F. 01.04.2015 N/No. 06/2015-ST Mega Exemption Notification Effect: Therefore, these 3 services are now taxable. Also brought under the ambit of full reverse charge mechanism i.e. 100% Reverse Charge Mechanism (RCM) has been introduced for these 3 services. Also amendments in Expln. 2 to “Service” 14

15. Serial No. 30 Carrying out an intermediate production process as job work in relation to- a)Remain same as earlier……… b)Remain same as earlier……… c)Any Goods on which appropriate duty is payable by the principal manufacturer a)Remain same as earlier……… EXCLUDING ALCOHOLIC LIQOURS FOR HUMAN CONSUMPTION Date to be notify Effect of inserting such exclusion: Service tax to be levied on service by way of carrying out any processes as job work for production or manufacture of alcoholic liquor for human consumption. N/No. 06/2015-ST Mega Exemption Notification Note: Also corresponding amendment has been made in Negative List 15

16. Serial No. 32 has been fully omitted Service by way of making telephone calls from : (a) Departmentally run public telephone; (b) Guaranteed public telephone operating only for local calls; or (c) Free telephone at airport and hospital where no bills are being issued; Omitted W.E.F. 01.04.2015 N/No. 06/2015-ST Mega Exemption Notification 16

17. Mega Exemption Notification N/No. 07/2015-ST Reverse Charge Mechanism (RCM) N/No. 06/2015-ST Reverse Charge Mechanism N/No.-30/2012-ST, dated 20-06-2012, as amended 17

18. Change under existing Services Mega Exemption Notification N/No. 07/2015-ST Reverse Charge Mechanism (RCM) N/No. 06/2015-ST Services Old Provision New Provision Service Provider Service Receiver Service Provider Service Receiver Manpower Recruitment Agency Security Service 25%75%Nil100% Effect: “JOINT CHARGE” system has been changed to the “100% REVERSE CHARGE” system. Therefore, the service receiver will be liable for the 100% liability in this regard. 18

19. Mega Exemption Notification N/No. 07/2015-ST Reverse Charge Mechanism (RCM) N/No. 06/2015-ST Taxable Services provided or agreed to be Provided by: ToService Receiver Liable to Pay ST under RCM With Effect From a person involving an aggregator in any manner Any Person 100% 01.03.2015 Effect: Booking a cab via web-based aggregators such as Meru, Uber and TaxiforSure is likely to cost you more. Any company providing service under the aggregator model will be liable to pay service tax. Also, the service tax will be levied on the total fare and not just the commission being earned by the aggregators for every ride. New Services under RCM 19 Corresponding amendments in STR, 1994: [vide N/No. 5/2015-ST, dated 01-03-2015]  New Definition under Rule 2(1) has been inserted as follows: New Definition under Rule 2(1) has been inserted as follows: (aa) “aggregator” means a person, who owns and manages a web based software application, and by means of the application and a communication device, enables a potential customer to connect with persons providing service of a particular kind under the brand name or trade name of the aggregator. (bca) “brand name or trade name” means, a brand name or a trade name, whether registered or not, that is to say, a name or a mark, such as an invented word or writing, or a symbol, monogram, logo, label, signature, which is used for the purpose of indicating, or so as to indicate a connection, in the course of trade, between a service and some person using the name or mark with or without any indication of the identity of that person  New Clause under sub-clause (i) of Rule 2(1)(d) “Person liable for paying service tax”: New Clause under sub-clause (i) of Rule 2(1)(d) “Person liable for paying service tax”: (AAA)………………………………………………(refer notification) Corresponding amendments in STR, 1994: [vide N/No. 5/2015-ST, dated 01-03-2015]  New Definition under Rule 2(1) has been inserted as follows: New Definition under Rule 2(1) has been inserted as follows: (aa) “aggregator” means a person, who owns and manages a web based software application, and by means of the application and a communication device, enables a potential customer to connect with persons providing service of a particular kind under the brand name or trade name of the aggregator. (bca) “brand name or trade name” means, a brand name or a trade name, whether registered or not, that is to say, a name or a mark, such as an invented word or writing, or a symbol, monogram, logo, label, signature, which is used for the purpose of indicating, or so as to indicate a connection, in the course of trade, between a service and some person using the name or mark with or without any indication of the identity of that person  New Clause under sub-clause (i) of Rule 2(1)(d) “Person liable for paying service tax”: New Clause under sub-clause (i) of Rule 2(1)(d) “Person liable for paying service tax”: (AAA)………………………………………………(refer notification)

20. Mega Exemption Notification N/No. 07/2015-ST Reverse Charge Mechanism (RCM) N/No. 06/2015-ST Taxable Services provided or agreed to be Provided by: ToService Receiver Liable to Pay ST under RCM With Effect From Mutual Fund Agent, or Distributor Mutual Fund or AMC 100% 01.04.2015 Selling or Marketing Agent of lottery tickets Lottery distributor or Selling Agents 100% 01.04.2015 Effect: Earlier these services are exempted under Mega Exemption List, Now These are made taxable under 100% Reverse Charge Mechanism (RCM). New Services under RCM Entry 29 of Mega Exemption List Also amendments in Expln. 2 to “Service” 20 Corresponding amendments in STR,1994: [vide N/No. 5/2015-ST, dated 01-03-2015]  New Clause under sub-clause (i) of Rule 2(1)(d) “Person liable for paying service tax”: (EEA)………………………………………………(refer notification) (EEB) ………………………………………………(refer notification) Corresponding amendments in STR,1994: [vide N/No. 5/2015-ST, dated 01-03-2015]  New Clause under sub-clause (i) of Rule 2(1)(d) “Person liable for paying service tax”: (EEA)………………………………………………(refer notification) (EEB) ………………………………………………(refer notification)

21. Mega Exemption Notification N/No. 07/2015-ST Reverse Charge Mechanism (RCM) N/No. 06/2015-STN/No. 08/2015-ST ABATEMENTS Abatement Provisions N/No.-26/2012-ST, dated 20-06-2012, as amended 21

22. Mega Exemption Notification N/No. 07/2015-ST Reverse Charge Mechanism (RCM) N/No. 06/2015-ST Description of Taxable Services Taxable ValueNew Condition OldNew 2. Transport of Goods by RAIL. 30% (No Change) No CENVAT of Inputs, Capital Goods or Input Service can be taken. (Earlier abatement without any condition, Now This condition has been newly inserted, rest all remained same) 3. Transport of Passengers, by RAIL with or without accompanied belongings 7. GTA Service 25% 30% No CENVAT of Inputs, Capital Goods or Input Service can be taken. 10. Transport of Goods in a Vessel 40% 30% No CENVAT of Inputs and Capital Goods Can be taken. CENVAT on Input Services of renting of Motorcab is allowed to taken in taken in specified manner. (No Changes in this condition) 5. Transport of passengers by AIR, with or without accompanied belongings in (i) Economy Class (ii) Other than Economy Class 60% 40% 60% No CENVAT of Inputs and Capital Goods Can be taken. (No Changes in this condition) [Now, New Categories viz. Economy and Other Class has been inserted] 8. Services provided in relation to Chit Fund 70 N.A. Entry Deleted, meaning thereby No Abatement., Also an Explanation has been added to “Service”Service N/No. 08/2015-ST ABATEMENTS Amendment in Value & Conditions. 22

23. Mega Exemption Notification N/No. 07/2015-ST Reverse Charge Mechanism (RCM) N/No. 06/2015-ST N/No. 08/2015-ST ABATEMENTS Clause (j) of section 66D Section 66D Negative List Earlier Position: Following service was defined in the negative list under clause (j): “admission to entertainment events or access to amusement facilities” “Entertainment Event" means Which is intended to provide By way of Exhibition of An event or A performance, Recreation, Pastime, Fun or Enjoyment Cinematographic Film, Circus, Concerts, Sporting Event, Pageants, Award Functions, Dance, Musical or Theatrical performances Including drama, ballets or any such event or programme “Amusement Facility" means By means ofIn A facility where fun or recreation is provided Rides, Gaming Devices or Bowling Alleys Amusement Parks, Amusement Arcades, Water Parks, Theme Parks or Such Other Places But does not include: A place within such facility where other services are provided. Clause (9) of Sec. 65B Clause (24) of Sec. 65B 23

24. Mega Exemption Notification N/No. 07/2015-ST Reverse Charge Mechanism (RCM) N/No. 06/2015-ST N/No. 08/2015-ST ABATEMENTS Clause (j) of section 66D Section 66D Negative List Position after amendment: Clause (j) has been omitted from Negative List “admission to entertainment events or access to amusement facilities” “Entertainment Event" means Which is intended to provide By way of Exhibition of An event or A performance, Recreation, Pastime, Fun or Enjoyment Cinematographic Film, Circus, Concerts, Sporting Event, Pageants, Award Functions, Dance, Musical or Theatrical performances Including drama, ballets or any such event or programme “Amusement Facility" means By means ofIn A facility where fun or recreation is provided Rides, Gaming Devices or Bowling Alleys Amusement Parks, Amusement Arcades, Water Parks, Theme Parks or Such Other Places But does not include: A place within such facility where other services are provided. Clause (9) of Sec. 65B Clause (24) of Sec. 65B Now this service has been removed from Negative List Wait……… Scope of services has been reduced and made tax free but from Exemption Route (Now defined under Mega Exemption Notification) 24

25. N/No. 07/2015-ST Reverse Charge Mechanism (RCM) Clause (j) of section 66D, Now Entry No. 45 of Mega Exemption List N/No. 08/2015-ST ABATEMENTS Section 66D Negative List N/No. 06/2015-ST Mega Exemption Notification “Amusement Facility" means By means ofIn A facility where fun or recreation is provided Rides, Gaming Devices, Bowling Alleys. Amusement Parks, Amusement Arcades, Water Parks, Theme Parks or Such Other Places But does not include: A place within such facility where other services are provided. Earlier defined in Negative List Services by way of admission to A Museum, National Park, Wildlife Sanctuary, Tiger Reserve Or Zoo; New Entry No. 45 in Mega Exemption List (W.E.F. 01.04.2015) Therefore, entry to amusement facilities such as rides, gaming, bowling alleys, amusement parks, water parks etc made taxable. Only Admission to a Museum, National Park, Wildlife Sanctuary, Tiger Reserve or Zoo are made exempted. 25

26. N/No. 07/2015-ST Reverse Charge Mechanism (RCM) Clause (j) of section 66D, Now Entry No. 47 of Mega Exemption List N/No. 08/2015-ST ABATEMENTS Section 66D Negative List N/No. 06/2015-ST Mega Exemption Notification Earlier defined in Negative List Now defined under Mega Exemption List New Exemption under Entry No. 47 Condition for Exemption Services by way of right to admission to: (i)Exhibition of : Cinematographic film, Circus, Dance, or Theatrical performance including drama or ballet; Exemption without any limit i.r.t. entry fee. (ii)recognised sporting event; (iii) Award function, Concert, Pageant, Musical performance or Any sporting event other than a recognised sporting event, CONDITION FOR EXEMPTION: Where Consideration for admission (may be called as entry fees) is not more than Rs. 500 per person. Now, For services referred into point (iii), a Condition of entry fee (Max. Rs. 500/-) per person has been imposed. 26

27. In Chapter V of Finance Act, 1994 Amendments Substitution with New Section 65B [ Date of Enactment]/ [Date to be Notify] Section 76 [ Date of Enactment] Section 66B [ Date of Enactment]/ [Date to be Notify] Section 78 [ Date of Enactment] Section 66D [ Date of Enactment]/ [Date to be Notify] Section 66F [ Date of Enactment]Insertion Section 67 [ Date of Enactment] Section 78B (Transitory Provisions) [ Date of Enactment] Section 73 [ Date of Enactment] Section 86 [ Date of Enactment]Omission Section 94 [ Date of Enactment] Section 80 [ Date of Enactment] Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 27

28. Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 ClauseDefinition InsertedClauseDefinition Deleted (23A)Foreman of Chit fund(9)Amusement Facility- (already discussed) (already discussed) (26A)Government(24)Entertainment Event - (already discussed) (already discussed) (31A)Lottery Distributer or Selling Agent(49)Support Service [Read with Sec. 66D(a)] [Read with Sec. 66D(a)] ClauseExplanation SubstitutedClauseOmission of Word (44)Explanation 2 to “Service”(40)The word Alcoholic liquors for human consumption” has been omitted in the Definition of “Process amounting to Manufacture or Production of Goods” In Chapter V of Finance Act, 1994 Date of Enactment Date to be Notify Note: Corresponding amendments in section 65B as referred above are made as result of amendment made in Mega Exemption Notification and Negative List. Section 65B : Interpretations 28

29. “Government” Means Departments of the Central Government, A State Government and its Departments and A Union territory and its Departments, But shall not include - Any entity, whether created by a statute or otherwise, the accounts of which are not required to be kept in accordance with article 150 of the Constitution or the rules made there-under. “Foreman of Chit Fund” “ Foreman of chit fund” shall have the same meaning as is assigned to the term foreman” in clause (j) of section 2 of the Chit Funds Act, 1982. “Foreman" means the person who under the chit agreement is responsible for the conduct of the chit and includes any person discharging the functions of the chit and includes any person discharging the functions of the foreman under section 39. Clause (23A) Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 “Lottery Distributor or Selling Agent” Means A person appointed or authorised by a State for the purposes of promoting, marketing, selling or facilitating in organising lottery of any kind, in any manner, organized by such State in accordance with the provisions of the Lotteries (Regulation) Act, 1998’ Corresponding Changes: This has been omitted from explanation(i) to rule 6(7C) of STR, 1994 Clause (26A) Clause (31A) Date of Enactment 29

30. “Service” means shall not include Any activity carried out by a person for another for consideration, and includes a declared service, but shall not include- (a)an activity which constitutes merely,–– (i)……………… (ii)…………….. a transaction in money or actionable claim. (iii) a transaction in money or actionable claim. (b) ……………………………. (c) ……………………………. Explanation 1, 3 and 4 are same as earlier……. Explanation 2 Explanation 2 –“Transaction in money or actionable claim” shall not include– Explanation 2 for which a separate consideration is charged (i) any activity relating to use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged. (ii) any activity carried out, for a consideration, in relation to, or for facilitation of, a transaction in money or actionable claim, including the activity carried out– a)by a lottery distributor or selling agent in relation to promotion, marketing, organizing, selling of lottery or facilitating in organizing lottery of any kind, in any other manner; b) by a foreman of chit fund for conducting or organizing a chit in any manner. Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 Explanation 2 to clause (44) has been substituted Removed from Mega Exemption List Covered under RCM Abatement Withdrawn Double Exclusion clause.i.e. Activity referred in Explanation 2 below have been brought within the meaning of “Service”. Date of Enactment nwlj k 30

31. Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 “Process Amounting to Manufacture or Production of Goods” means A process on which duties of excise are leviable under section 3 of the Central Excise Act, 1944, or The Medicinal and Toilet preparation (Excise Duties) Act, 1955 (16 of 1955), or Any process amounting to manufacture of -  Alcoholic Liquors For Human Consumption,  Opium,  Indian Hemp and  Other Narcotic Drugs and Narcotics on which duties of excise are leviable under any State Act. The “ Process Amounting to Manufacture or Production of Goods” was covered under the Negative List [Clause (f) of section 66D], Now This Clause of Negative List has been substituted, namely- “Services by way of carrying out any process amounting to manufacture or production of goods excluding alcoholic liquor for human consumption ”. “Services by way of carrying out any process amounting to manufacture or production of goods excluding alcoholic liquor for human consumption ”. Omitted Effect: Now “Any Process amounting to Manufacture of Alcoholic Liquors For Human Consumption” has been made out of the purview of Negative List, So now liable to ST. Note: Also corresponding amendment has been made in clause (40) of Mega Exemption List to tax the any intermediate Process related to Alcoholic Liquors For Human Consumption. Date to be notify nwl jk Date to be notify Clause (40) 31

32. Rate of Service Tax There shall be levied a tax (hereinafter referred to as the service tax) twelve per cent at the rate of twelve per cent. On the value of all services, provided or agreed to be provided in the taxable territory By one person to another Other than those services specified in the Negative List. Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 Charge of Service Tax EC and SHEC shall be subsumed in the new service tax rate. The revised rate shall come into effect from a date to be notified. Date to be notify 32 fourteen per-cent (14%) EC and SHEC

33. Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 ClauseAmendments (a) In sub-clause (iv), “support services”“any service” for the words “support services”, the words “any service” shall be substituted. (f) Substituted with namely:- excluding alcoholic liquor for human consumption excluding alcoholic liquor for human consumption “Services by way of carrying out any process amounting to manufacture or production of goods excluding alcoholic liquor for human consumption”.excluding alcoholic liquor for human consumption (i) In Clause (i), “Betting, Gambling or Lottery” Following Explanation shall be inserted, namely:— Explanation 2 to clause (44) of section 65B Explanation 2 to clause (44) of section 65B ‘Explanation.– For the purposes of this clause, the expression “betting, gambling or lottery” shall not include the activity specified in Explanation 2 to clause (44) of section 65B’Explanation 2 to clause (44) of section 65B’ ( j) Admission to entertainment event or access to amusement facilities has been omittedAdmission to entertainment event or access to amusement facilities has been omitted. Section 66D [Negative List of Services] Date to be notify nwl jk 33

34. Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 Clause (a) Services by Govt./Local Authority Excluding the following services [To the extent they are not covered elsewhere]- (i) Services by the department of posts by way of Speed Post, Express Parcel Post, Life Insurance And Agency Services Provided to a person other than government, Taxable [No Change with regard to sub-clauses (i) to (iii)] (ii) Services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport, (iii) Transport of goods or passengers, (iv) Support services Support services Support services Support services, (Other than services covered under clauses (i) to (iii) above, Provided to Business Entities) Earlier the residuary charge under 66D(a)(iv) was only on support service. Now the same has been extended to all services. Section 66D [Negative List of Services] Any Services Date to be notify Effect: All services provided by the Government or local authority to a business entity, except the services that are specifically exempted and defined under Negative List. 34

35. Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 (1) Unless otherwise specified, reference to a service (herein referred to as “main service”) shall not include reference to a service which is used for providing main service. Now, following example has been added to this sub-section(1), namely:- ‘ Illustration The services by the RBI, being the main service within the meaning of clause ( b) of section 66D, does not include any agency service provided or agreed to be provided by any bank to the RBI. Such agency service, being input service, used by the RBI for providing the main service, for which the consideration by way of fee or commission or any other amount is received by the agent bank, does not get excluded from the levy of service tax by virtue of inclusion of the main service in clause (b) of the negative list in section 66D and hence, such service is leviable to service tax.’. (2)………….. Same as earlier ………… (3)………….. Same as earlier ………… Sec. 66F : Principals of interpretation of specified descriptions of services or bundled services Effect: To give clarity to this section that: “Reference to a service shall not include reference to its input services” 35

36. Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 Sub section (1) to (4) ……….. same as earlier…………. Explanation :For the purpose of this section,- “consideration” includes - (a) “consideration” includes - any amount that is payable for the taxable services provided or to be provided. This clause (a) has been substituted with following, namely:- ‘(a) “Consideration” includes– (i) any amount that is payable for the taxable services provided or to be provided; (ii) any reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service, except in such circumstances, and SUBJECT TO SUCH CONDITIONS, AS MAY BE PRESCRIBED. (iii) in addition to the fee or commission any amount retained by the lottery distributor or selling agent from gross sale amount of lottery ticket in addition to the fee or commission, if any, or, as the case may be, the discount received, that is to say, the difference in the face value of lottery ticket and the price at which the distributor or selling agent gets such ticket.’. Sec. 67 : Valuation of Taxable Services (i) is same as earlier Date of Enactment Also Corresponding Amendment under section 94 (Power to make rules): (aa) Determination of amount and value of taxable service under sec.67. (aa) Determination of the amount and value of taxable service, the manner thereof, and the circumstances and conditions under which an amount shall not be a consideration, under sec.67. Date of Enactment 36 Contd/-……..

37. Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 Analysis of Explanation (a) (ii) Any reimbursable expenditure or cost incurred by the service provider AND CHARGED, in the course of providing or agreeing to provide a taxable service, except in such circumstances, and subject to such conditions, as may be prescribed. BACKGROUND: Section 67: Value = Gross Amount Charged by the service provider. Rule 5(1) ST Valuation Rules, 2006: Where any expenditure or costs are incurred by the service provider in the course of providing taxable service, all such expenditure or costs shall be treated as consideration for the taxable service provided or to be provided and shall be included in the value for the purpose of charging service tax on the said service. Intercontinental Consultants and Technocrats Pvt. Ltd. vs. UOI & Anr. [(2012): Hon’ble Delhi HC held that Rule 5 (1) of the Valuation Rules is ultra vires Sec. 66 (Now Sec. 66B) and Sec. 67 of the Finance Act, 1994, since it travels beyond the scope of the aforesaid section. The expenditure or costs incurred by the service provider in the course of providing the taxable service can never be considered as part of the gross amount charged by the service provider for the services provided. Without further touching the issue whether rule 5(1) is ultra-vires the section 67 or not, Govt. has incorporate such clause within the sec.67 itself & amend the explanation of ‘consideration’ accordingly, So now, The reimbursement of expenses for air travel tickets, train, hotel, etc INCURRED AND CHARGED by the service providers shall be liable to Service Tax, EXCEPT IN PRESCRIBED CIRCUMSTANCES. Sec. 67 : Valuation of Taxable Services nwl jk Contd/-…….. Date of Enactment 37

38. Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 [Section 73(1B)] : Inserted Sub-Section 78(1B) has been inserted, which are as follows: Recovery u/s 87 (Sec. 87: Recovery of amount due to CG ), without issuing SCN u/s 73(1) [18m/60m] Condition: Where amount of ST payable has been self-assessed in the STR furnished u/s 70(1), But not paid either in full or in part, Then, The same shall be recovered along with interest thereon in any of the modes specified in Sec. 87 (as an arrear of Land Revenue) [Section 73(4A)] : Omitted In certain cases liability = ST + Intt. u/s 75 + Penalty (Max. 25% of ST), BUT, Now this section has been omitted. Corresponding transitory provision has been incorporated u/s 78B. Sec. 73: Recovery of ST Not Levied/Paid, Short Levied/Paid or Erroneously refunded Date of Enactment 38 Corresponding amendments in STR,1994: [vide N/No. 5/2015-ST, dated 01-03-2015]  Rule 6 : Payment of service tax: Rule 6 : Payment of service tax: Clause 6(A) shall be omitted from the date of enactment. Corresponding amendments in STR,1994: [vide N/No. 5/2015-ST, dated 01-03-2015]  Rule 6 : Payment of service tax: Rule 6 : Payment of service tax: Clause 6(A) shall be omitted from the date of enactment. Effect: Now same power comes within the Act from STR, 1994 Date of Enactment

39. Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 Sec. 86 : Appeals to Appellate Tribunal 39 2 Cases has been inserted as a provisos to section 86(1) where appeal against the order passed u/s 85, shall not be lie with Appellate Tribunal. These cases shall be dealt with in accordance with the provisions of 35EE of CEA, 1944. Cases for dealt in accordance with Sec. 35EE of CEA, 1944 1.Where an order, relating to a service which is exported, has been passed u/s 85 and The matter relates to grant of –  Rebate of Service Tax on Input Services, or  Rebate of Duty paid on Inputs, used in providing such service. 2.All appeals filed before the Appellate Tribunal in respect of aforementioned matters, after the coming into force of the FA, 2012, and pending before it up to the date on which the FB, 2015 receives the assent of the President shall be transferred. Section 35EE of CEA, 1944: Revision by Central Government Date of Enactment

40. Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 Sec. 94 : Power to make rules. 40 Already discussed with section 67 Date of Enactment Following Clause has been redrafted : (aa) Determination of amount and value of taxable service under sec.67. (aa) Determination of the amount and value of taxable service, the manner thereof, and the circumstances and conditions under which an amount shall not be a consideration, under sec.67. More Power

41. Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 Sec. 76: Penalty for failure to Service Tax 41 Date of Enactment Earlier, Penalty was : Rs. 100 Per Day or 1% p.m. of ST Which ever is Higher Max. Penalty under this section = 50% of Such Tax Max. Penalty under this section = 50% of Such Tax Now, this section has been substituted, namely (On Next Slide)

42. If such ST and Intt. thereon paid within 30 days Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 Sec. 76: Penalty for failure to pay Service Tax 42 Corresponding Section: Transitory provision u/s section 78B Date of Enactment Where ST has -For the reason OTHER THAN not been levied/paid been short levied/paid erroneously refunded fraud OR collusion OR wilful misstatement OR suppression of facts OR contravention of any of the provisions of Ch.V, FA, 1994 or rules made thereunder with the intent to evade payment of service tax Then penalty shall be liable to pay as follows: Contd/-…….. Date of Service of notice u/s 73(1) Specifying the amount of ST & Intt. 30 Days Date of receipt of order u/s 73(2) Specifying the amount of ST, Intt. And Penalty (Max: 10% of ST) No Penalty 10% Penalty 1 1 2 2 If such ST and Intt. & PENALTY has been paid 30 Days If such ST and Intt. & PENALTY has been paid Penalty = 25% of penalty specified in such order 3 3 4 4 Penalty specified in such order

43. If such ST and Intt. thereon paid within 30 days Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 Sec. 76: Penalty for failure to pay Service Tax 43 Corresponding Section: Transitory provision u/s section 78B Date of Enactment Where ST has -BY REASON OF not been levied/paid been short levied/paid erroneously refunded fraud OR collusion OR wilful misstatement OR suppression of facts OR contravention of any of the provisions of Ch.V, FA, 1994 or rules made thereunder with the intent to evade payment of service tax Then penalty shall be liable to pay as follows: Contd/-…….. Date of Service of notice u/p to Sec.73(1) Specifying the amount of ST & Intt. 30 Days Date of receipt of order u/s 73(2) Specifying the amount of ST, Intt. And Penalty (100% of ST) 15% Penalty 100% Penalty 1 1 2 2 If such ST and Intt. & PENALTY has been paid 30 Days If such ST and Intt. & PENALTY has been paid Penalty specified in such order Penalty = 25% of SERVICE TAX so determined Penalty = 25% of SERVICE TAX so determined 3 3 4 4

44. Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 Sec. 76 & 78 : Penalty for failure to pay Service Tax 44 Corresponding Section: Transitory provision u/s section 78B Date of Enactment Contd/-……..WhereModifiesThen The Commissioner (Appeals), The Appellate Tribunal or, The court, (as the case may be) Service Tax ( determined u/s 73(2)) the amount of penalty payable thereon, shall also stand modified accordingly The benefit of reduced penalty shall be available: - if such service tax, interest and reduced penalty is paid, within a period of 30 days from the date of receipt of the order of modification.

45. Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 Sec. 78B : Transitory Provisions [With regard to Section 73(4A), 76 & 78] 45 1.Section 73(4A) has been deleted. So transitory provisions are given, in case - Where the notice under proviso to 73(1) has not been served, or Where such notice so served but order u/s 73(2) has not been passed Before the date on which Finance Act, 2015 received the President’s assent. 2.Also Section 76 and Section 78 have been substituted with new one. So transitory provisions are given, in case – Where the notice u/s 73(1) or under proviso to 73(1) has not been served, or Where such notice so served but order u/s 73(2) has not been passed. Before the date on which Finance Act, 2015 received the President’s assent. Pictorial Presentation is on next slide………………………… Contd/-……..

46. Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 Sec. 78B : Transitory Provisions [With regard to Section 73(4A), 76 & 78] 46 Date on which FA, 2015 receives President’s assent Whether Order u/s 73(2) has been passed ? Yes No Whether SCN u/s 73(1) [18m] or SCN under proviso to 73(1) [60m] Has been served ? Sec. 76 or Sec.78, (as the case may be) As amended by the FA, 15 Shall be applicable. For Cases Falling Section 76 or Section 78 No Whether SCN under proviso to 73(1) [60m] Has been served ? For Cases Falling u/s 73(4A) Whether Order u/s 73(2) has been passed ? Yes Max. Penalty = 50% of ST (Earlier it was 25% in the deleted section 73(4A) Contd/-…….. Simply means that it has retrospective effect for all pending cases where no order u/s 73(2) has been passed by CEO.

47. Sec. 65B Sec. 66B Sec. 66D Sec. 66F Sec. 67 Sec. 73 Sec. 86 Sec. 94 Sec. 76 Sec. 78 Sec. 78B Sec. 80 In Chapter V of Finance Act, 1994 Sec. 80 : Penalty not to be imposed in certain cases 47 Earlier, No Penalty u/s 76,77 shall be imposed if –  Assesses proves that there was reasonable cause for the failure u/s 76,77 Now, this relaxation has been omitted.

48. Other Amendments 48 Amendments in STR, 1994Remarks  New Definition Inserted [under Rule 2(1) of STR, 1994] (aa) Aggregator (bca) brand name or trade name  New Persons liable for paying Service Tax under RCM has been defined, [under Rule 2(1)(d)(i) of STR, 1994] (AAA) the aggregator of the service (EEA) Mutual Fund or Assets Management Company (EEB) Lottery Distributer/Selling Agent. Already Discussed with RCM  New Rule 4C : Authentication by digital signature  New Rule 5(3) & 5(4) has been added in corresponding to New Rule 4C To be Discussed  Rule 6: Payment of Service Tax Subrule (6A)- omitted, Now same provision incorporated u/s 73(1B) Already Discussed  Rule 6: Payment of Service Tax Due to Revision in ST Rate (From 12% to 14% ), Special optional Rate of ST under sub-rule (7), (7A), (7B) and (7C) has also been changed. To be discussed  Rule 6: Payment of Service Tax Explanation (i) to subrule (7C) of Rule 6: Definition of “Lottery Distributor or Selling Agent” has been omitted and same has been added within the section 65B (31A). Already Discussed w.e.f. 01.03.2015 w.e.f. 01.04.2015 w.e.f. 01.03.2015 Date FB, 15 Receive the President Assent Date to be notify Date FB, 15 Receive the President Assent N/No. 05/2015-ST, dated 01-03-2015 N/No. 09/2015-ST, dated 01-03-2015 N/No. 04/2015-ST, dated 01-03-2015

49. Other Amendments 49 Rule 4C : Authentication by Digital Signature (1)Any invoice, Bill or Challan issued under rule 4A or Consignment note issued under rule 4B May be authenticated by means of a DIGITAL SIGNATURE. (2)The Board may, by notification, specify the conditions, safeguards and procedure to be followed by any person issuing digitally signed invoices. Rule 5: Records Sub-rule (4)  Records under this rule may be preserved in Electronic Form and  Every page of the record so preserved shall be authenticated by means of a Digital Signature. Sub-rule (5) : The Board may, by notification, specify the conditions, safeguards and procedure to be followed by an assessee preserving digitally signed records. Explanation – For the purposes of rule 4C and sub-rule (4) and (5) of this rule,- (i) The expression “authenticate” shall have the same meaning as assigned in the IT Act, 2000. (ii)The expression “digital signature” shall have the meaning as defined in the IT Act, 2000 and the expression “digitally signed” shall be construed accordingly.” N/No. 05/2015-ST, dated 01-03-2015 N/No. 09/2015-ST, dated 01-03-2015 N/No. 04/2015-ST, dated 01-03-2015

50. Other Amendments 50 RuleServiceSpecified Rate Old (EC & SHEC Extra) New Rule 6(7) Service by Air Travel Agent:  Domestic Bookings  International Bookings 0.60% 1.20% 0.70% 1.40% Rule 6(7A) Insurer – Carrying Life Insurance Business 3.00% First Year 1.50% Later Year 3.50% 1.75% Rule 6(7B) Currency Sale or Purchase (Transaction Amount) Old Rate (EC & SHEC Extra) New Rate (a) Up to Rs. 1,00,000/-0.12 % (Min Rs. 30) 0.14% (Min Rs. 35) (b) Exceeding Rs. 1 Lac Up to Rs. 10 Lacs Rs. 120 + 0.06 %Rs. 140 + 0.07 % (c) Exceeding Rs. 10 LacsRs. 660 + 0.012 % (Max. Rs. 6,000) Rs.770 + 0.014 % (Max. Rs. 7,000) Rule 6(7C) Lottery Tickets: Where Guarantee Prize more than 80% Where Guarantee Prize less than 80% Rs. 7,000/- Rs. 11,000/- Rs. 8,200/- Rs. 12,800/- Simply, Date to be notify N/No. 05/2015-ST, dated 01-03-2015 N/No. 09/2015-ST, dated 01-03-2015 N/No. 04/2015-ST, dated 01-03-2015 New Rate = Old Rate * 7676 Or New Rate = Old Rate * 14 12

51. Other Amendments 51 SECTION 96A OF CHAPTER VA Clause (b) “applicant” means- (i)………. (ii)……… (iii) CG may specify the class or category of a RESIDENT And CG has time to time notify the class of resident as “applicant” for Advance Ruling in this regard as follows: “Resident Public Limited Company” N/No. 4/2013-ST, dated 01-03-2013 “Resident Private Limited Company” N/No.15/2014-ST, dated 11-07-2014 “Resident Firm” N/No.9/2014-ST, dated 01-03-2015 Meaning of Firm means Partnership Firm and includes:  LLP  Sole Proprietorship  OPC “Resident” Meaning as defined under sec 2(42) of Income Tax Act, 1961 N/No. 05/2015-ST, dated 01-03-2015 N/No. 09/2015-ST, dated 01-03-2015 N/No. 04/2015-ST, dated 01-03-2015

52. Other Amendments 52 N/No. 05/2015-ST, dated 01-03-2015 N/No. 09/2015-ST, dated 01-03-2015 N/No. 04/2015-ST, dated 01-03-2015 N/No. 31/2012-ST, dated 20-06-2012 as amended by N/No. 04/2015-ST, dated 01-03-2015 Service of Transport of Goods by GTA to an Exporter Transport of goods for export by road from the factory/CFS/ICD to a LAND CUSTOMS STATION (LCS) is being exempted. Port Airport Land Custom Station NEW Place of Removal CFS (Container Freight Station) ICD (Inland Container Depot) (From here the goods are exported) W.E.F 01-04-2015 W.E.F 01-04-2015

53. 53 CA. Ankit Agarwal B.Com., LL.B., ACA + 91 92191 34346 caankitagarwalji@gmail.com [Disclaimer: This publication does not constitute professional advice The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Though utmost efforts have made to provide authentic information, it is suggested that to have better understanding and to avoid any doubt, the reader should cross-check all the relevant facts, law and contents of the document/publication with Government’s original publication or notifications. Every efforts has been made to avoid error or omission while preparing this document. In spite of this, error may creep in. Author/ Firm will not to be responsible for any damage or loss of action to any one, of any kind, in any manner, there-from.]