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Indirect Taxes
Service Tax – Laws Update
The Government has
issued Notification No. 21/2006 dated 23.5.2006 to enable the
service provider to avail abatement of 67% on erection,
commissioning or installation of structures also along with plant,
machinery and equipments. Notification No. 1/2006 is sought to be
amended for this purpose.
The amendment to
Notification No.1/2006 is consequential to inclusion of the word
“structures” in the definition of “Erection, Commissioning and
Installation” u/s. 65(39a).
NOTIFICATION NO
21/2006-ST, Dated :
May 23, 2006
In exercise of the
powers conferred by sub-section (1) of section 93 of the Finance
Act, 1994 (32 of 1994), the Central Government, on being satisfied
that it is necessary in the public interest so to do, hereby makes
the following further amendment in the notification of the
Government of India in the Ministry of Finance (Department of
Revenue), No. 1/2006-Service Tax, dated the 1 st March, 2006, G.S.R.
115 (E), dated the 1 st March, 2006, namely:-
In the said
notification, in the Table, against S.No.5,— a
-
In column (3),
for the words “plant, machinery or equipment” wherever they occur,
the words “plant, machinery, equipment or structures” shall be
substituted;
-
In column (4),
for the words “plant, machinery, equipment”, the words “plant,
machinery, equipment, structures” shall be substituted.
(R. Sriram)
Deputy Secretary to the
Government of India
[F. No.
332/24/2006-TRU]
Note.- The
principal notification No. 1/2006-Service Tax, dated the 1 st March,
2006, was published vide number G.S.R. 115(E), dated the 1 st March,
2006 and was last amended by notification No. 20/2006-Service Tax,
dated the 25 th April, 2006, G.S.R. 250(E), dated the 25 th April,
2006.
The Government has
issued following Notification No. 22/2006 dated 31.5.2006 to exempt
any taxable service provided or to be provided to any person by the
Reserve Bank of India or provided or to be provided to the Reserve
Bank of India by any person. Similarly, the Reserve Bank of India is
exempted from paying service tax as a provider of service or a
recipient of service for any taxable service received in India from
outside India.
NOTIFICATION NO
22/2006-Service
Tax, Dated : May 31, 2006
In exercise of the
powers conferred by sub-section (1) of section 93 of the Finance
Act, 1994 (32 of 1994) and in supersession of the notification of
the Government of India in the Ministry of Finance, (Department of
Revenue) No. 7/2006-Service Tax dated the 1 st March, 2006, G.S.R.
121(E), dated the 1 st March, 2006, except as respects things done
or omitted to be done before such supersession, the Central
Government, on being satisfied that it is necessary in the public
interest so to do, hereby exempts the following taxable services
from the whole of the service tax leviable thereon under section 66
of the said Finance Act, namely:-
-
taxable services
provided or to be provided to any person, by the Reserve Bank of
India;
-
taxable services
provided or to be provided by any person, to the Reserve Bank of
India when the service tax for such services is liable to be paid
by the Reserve Bank of India under sub-section (2) of section 68
of the said Finance Act read with rule 2 of the Service Tax Rules,
1994;
-
taxable services
received in India from outside India by the Reserve Bank of India
under section 66A of the Finance Act, 1994.
(R. Sriram)
Deputy Secretary to the
Government of India
[F. No.
354/170/2005-TRU]
The Government has
issued following Notification No. 23/2006 dated 2.6.2006 to enable
the service provider to avail abatement of 70% on the service in
relation to production or processing of parts and accessories used
in the manufacture of cycles, cycle rickshaws and hand operated
sewing machines, for, on behalf of client.
NOTIFICATION NO
23/2006-Service
Tax, Dated : June 2, 2006
In exercise of the
powers conferred by sub-section (1) of section 93 of the Finance
Act, 1994 (32 of 1994), the Central Government, on being satisfied
that it is necessary in the public interest so to do, hereby makes
the following further amendment in the notification of the
Government of India in the Ministry of Finance (Department of
Revenue) No. 1/2006-Service Tax, dated the 1 st March, 2006, G.S.R.
115(E), dated the 1 st March, 2006, namely:-
In the said
notification, in the Table, after S.No. 4 and the entries relating
thereto, the following S.No. and entries shall be inserted, namely:
(1) (2) (3) (4) (5)
“ 4A. (zzb)
Business auxiliary service in relation to production or processing
of parts and accessories used in the manufacture of cycles, cycle
rickshaws and hand-operated sewing machines, for, or on behalf of,
the client. The gross amount charged from the client is inclusive of
the cost of inputs and input services, whether or not supplied by
the client. 70 “
F. No.
356/12/2005-TRU
(R. Sriram)
Deputy Secretary to
the Government of India
Note:- The
principal notification No. 1/2006-Service Tax, dated the 1st March,
2006, was published vide number G.S.R. 115(E), dated the 1st March,
2006 and was last amended vide notification No. 20/2006-Service Tax,
dated the 25th April, 2006, G.S.R. 250 (E) dated the 25th April,
2006.
The Commissioner of
service tax, Mumbai issued the following Trade Notice No.03/2006-ST
dated 20.4.2006 which clarify applicability of increased rate of
service tax @ 12% from @ 10% w.e.f. 18.04.2006 which is
self-explanatory.
TRADE NOTICE NO.
3/2006 ST DATED 20/04/2006
SUB : ENACTMENT OF
FINANCE BILL 2006 –REG.
The. Finance Bill
2006 has received the accent of the President of India, on 18th
April 2006. Consequently the applicable rate of levy of Service Tax
will be 12% instead of 10% w.e.f. 18.04.2006. There would, however;
not be any change in the rate of Education Cess which would continue
to be levied @ 2% of Service Tax.
In the case of a
contract where service is rendered on a continuous basis, the
service provider is required to pay Service Tax at the enhanced rate
only in respect of the payments received on or after 18.04.2006. The
payments received prior to 18.04.2006 would, however, be chargeable
to Service Tax @10%.
As regards the
cases where a service provider has received payment towards taxable
service prior to 18.04.2006, but has not rendered such service till
18.04.2006 but has or would render the same on or subsequent to
18.04.2006, the amounts towards taxable service received prior to
18.4.2006 would attract Service Tax @10%, while payments received on
or after 18.04.2006 would attract levy @12%.
All the Trade
Associations are required to bring the contents of this trade notice
to the attention of their members.
Sd/ 20.04.06
(S.J. SINGH)
COMMISSIONER
SERVICE TAX : MUMBAI
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