Monday, March 15, 2010

Service Tax

Introduction of eight new taxable services

  • Services for promoting, marketing, organizing / assisting in organizing games of chance
  • Health services provided by hospitals, nursing homes or multi-specialty clinics to Employees of  business entity in relation to health check-up or preventive care
  • Services in relation to storing, keeping or maintaining medical records of employees
  • Services of promoting or marketing of 'brand' of goods, services, events or endorsement of a name
  • Services of granting the right or permitting commercial use / exploitation of any event including events related to art, entertainment, business, sports or marriage.
  • Services provided by electricity exchanges in relation to electricity related contract
  • Services in relation to copyright of cinematographic film and sound recording.
  • Services of preferential location or development of complex provided by a builder
Scope of following existing services expanded:


  • Renting of immovable property shall be regarded as taxable service retrospectively w.e.f 1 June, 2007
  • Airport service, port service and other port service
  • Transport of passenger by air service
  • Commercial training or coaching service
  • Construction of Complex service

Specific exemptions under following categories given w.e.f 27-02-2010

  • Erection, commissioning or installation
  • IT software service
  • Online information and database access or retrieval service and Business auxiliary service
  • Technical testing and analysis service and Technical inspection and certification service
  • To exempt service of transmission of electricity
Withdrawal of existing exemptions


  • Withdrawal of exemption granted to the Government of Rajasthan in relation to the Group Personal Accident Scheme provided to its employees
  • Transport of goods by rail: Withdrawal of exemption granted to Government railways for transport of goods
Excise


  • Rate of excise duty increased from 8 percent to 10 percent on non-petroleum goods.
  • Removal of moulds, dies, jigs, fixtures to vendors permitted without reversal of Cenvat credit. This benefit was earlier available only to job workers.
  • Small scale industry allowed benefit of claiming full Cenvat credit on capital goods in the first year of its receipt and paying excise duty liability on a quarterly basis instead of a monthly basis w.e .f 1st April, 2010.
Customs duty


  • Customs duty rates remain unchanged. However, the effective rate should increase due to change in the excise (CVD) rates
  • Upfront exemption from ADC on imported pre- packaged goods and other specified goods intended for resale.
  • Project import benefit extended to the following specified projects:
  • Mono Rail Project for urban transport
  • Setting up of digital headend

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