Tuesday, March 15, 2011

SERVICE TAX


  • Introduction of The Point of Taxation Rules (effective 1 April 2011).
  • As a general rule, the time of provision of service will be the earliest of the following dates:
  • Date on which service is provided or to be provided.
  • Date of invoice.
  • Date of payment.
  • Rate effective on the date when these services are provided would be applicable.
  • Service tax rate remains unchanged at 10 percent as a pre-cursor to GST
  • New Services Added (effective from the date to be notified)
  • Services provided by air-conditioned restaurants with licensed to serve the Liquor.
  • Accommodation provided by the hotel etc. for duration of less than three months( in excess of Rs 1000/- per day).
  • Amendments ( Modification) in the Scope of Existing Services (effective from a date to be notified ):
  • Authorised Service Station Services\
  • Life Insurance Services
  • Commercial Training or Coaching Services
  • Legal Services
  • Health Services
  • The limits for the maximum amount/ rate at which service tax can be levied on air has been revised. (effective from 1 April 2011)
  • An abatement of 25% from the taxable value provided under 'Transport of goods through coastal and inland shipping service'.
  • Services rendered to exhibitors participating in an exhibition outside India have been exempted from service tax
  • Services related to transportation of goods by road, rail or air when both the original and the destination are located outside India exempted from service tax.
  • A new rule, 5B, has been introduced to provide that the applicable rate of tax shall be the rate prevailing at the time when the services are deemed to have been provided.
  • Limit of self adjustment of service tax has been raised from INR 1,00,000 to INR 2,00,000.
  • Maximum penalty for delay in filing of returns has been increased from INR 2,000 to INR 20,000.
  • Penalty for failure to pay service tax has been reduced.
  • Maximum penalty for contravention of any other provisions has been increased to Rs.10000.
  • Interest rate for delayed payment of service has been increased to 18%.
  • SEZ refund scheme has been changed.
  • Amendments have been made in the definition of "input services".

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