29 February, 2016

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Service Tax Amendment in Abatement Notification – Budget 2016

Service Tax Amendment in Abatement Notification – Budget 2016 vide 8/2016 – ST dated 29th February, 2016
S.No Amendment Governing Provisions Applicability Date Remarks
1 Restriction for availing abatement on sl. No. 2 of Notification No. 26/2012 Notification 26/2012 as amended by Notification no. 8/2016 1st April’2016 CENVAT Credit on inputs and capital goods, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004
2 Additional abatement of 40% on Transport of goods in containers by Rail by any other person other than Indian Railways S.L No. 2A in Notification 26/2012 as amended by Notification No. 8/2016 1st April’2016 Insertion of entry after S.L No. 2
3 Restriction for availing abatement on SL No. 3 of Notification No. 26/2012 SL. No. 3 in Notification no. 26/2012 as amended by Notification No. 8/2016 1st April’2016 CENVAT Credit on inputs and capital goods, used for providing the taxable service, has not been taken under the provisions of CENVAT Credit Rules, 2004.
4 Substituted namely “Services of goods transport agency in relation to transportation of goods other than used household goods.” SL. No. 7 in Notification No. 26/2012 as amended by Notification No. 8/2016. 1st April’2016
5 Additional abatement of 15% on Services of goods transport agency in relation to transportation of used household goods. SL. No. 7A in Notification No. 26/2012 as amended by Notification No. 8/2016. 1st April,2016 Insertion of entry after S.L no. 7
6 Substitution of Name
“Services provided by a foreman of chit fund in relation to chit”


S.L. no. 8 in Notification no. 26/2012 as amended by Notification No. 8/2016. 1st April’2016 Insertion of words “by a foreman of chit fund’.
7 Abatement allowed on Transport of passengers by Stage Carriage S.L No. 9A in Notification No. 26/2012 as amended by Notification No. 8/2016 1st June,2016 Insertion of Stage Carriage
8 Restriction for availing abatement on S.L No. 10 of Notification No. 26/2012 S.L No. 10 in Notification No. 26/2012 as amended by Notification No. 8/2016 1st April,2016 CENVAT credit on inputs and capital goods, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.
9 Removal of abatement on Services by a tour operator in relation to a package tour S.L. No. 11(i) in Notification no. 26/2012 as amended by Notification No. 8/2016. 1st April,2016
10 Abatement reduced from 40% to 30% on tours other than listed in SL. No. 11(i) of Notification No. 2012 as amended by Notification No. 8/2016 S.L. No. 11(ii) in Notification No. 26/2012 as amended by Notification No. 8/2016. 1st April,2016
11 Inclusion of words
“It is inclusive of charges for such a tour” in restriction (ii) of SL. No. 11(ii) as amended.


S.L. No. 11(ii) in Notification No. 26/2012 as amended by Notification No. 8/2016. 1st April,2016
12 Blanket rate of Abatement of 30% on construction service in S.L. No. 12 of Notification No. 26/2012. S.L. No. 12 in Notification No. 26/2012 as amended by Notification No. 8/2016. 1st April,2016 Classification (a) and (b) removed and abatement of 30% on all types is available.
13 Insertion of paragraph “BA” in the explanation Explanation in Notification No. 26/2012 as amended by Notification No. 8/2016. 1st April, 2016 Insertion of paragraph “BA” after paragraph “B”.

For the purposes of exemption at Serial number 9, the amount charged shall be the sum total of the amount charged for the service including the fair market value of all goods (including fuel) and services supplied by the recipient(s) in or in relation to the service, whether or not supplied under the same contract or any other contract:
Provided that the fair market value of goods and services so supplied may be determined in accordance with the generally accepted accounting principles.”


14 In paragraph 2, the clause ‘b’ shall be omitted. Explanation in Notification No. 26/2012 as amended by Notification No. 8/2016


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About the Author:
 
CA Ankit Gulgulia (Jain)
Author is Practicing Chartered Accountant in New Delhi/NCR and specialising in Indirect Taxes, Corporate Laws and Transfer Pricing. He can be reached at ankitgulgulia@gmail.com or at +91-9811653975
 
Assisted by Ms. Deepali Jain
 
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