After 14 years of introducing service tax in India, for every financial budget new services are brought under service tax nest .in India major contribution for GDP is coming from service sector .service contribute 60% of GDP. But a few services are exempted from levying of this services tax. This list of services is called as negative list of services. the Central Board of Excise and Customs released a revised negative list concept paper in November last year.
In the union budget 2012-13 the rate of service tax is increase from 10% to 12% and the government if expected to rise Rs.95,000 cores from the service sector in the form of service .Please check the following circular for more details
Government of India
Ministry of Finance
Department of Revenue
Ministry of Finance
Department of Revenue
Notification No.12/2012-Service Tax
New Delhi, the 17th March 2012
G.S.R.
(E).- In exercise of the powers conferred by sub-section (1) of section 93 of
the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Finance
Act), the Central Government, 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 B of the said
Finance Act, namely:-
- Services provided to the United
Nations or a specified international organization;
- Health care services by a clinical
establishment, an authorized medical practitioner or para-medics;
- Services by a veterinary clinic in
relation to health care of animals or birds;
- Services by an entity registered
under section 12AA of the Income tax Act, 1961 (43 of 1961) by way of
charitable activities;
- Services by a person by way of-
- renting of precincts of a
religious place meant for general public; or
- conduct of any religious ceremony;
- Services provided to any person
other than a business entity by -
- an individual as an advocate; or
- a person represented on and as
arbitral tribunals;
- Services by way of technical
testing or analysis of newly developed drugs, including vaccines and
herbal remedies, on human participants by a clinical research organisation
approved to conduct clinical trials by the Drug Controller General of
India;
- Services by way of training or
coaching in recreational activities relating to arts, culture or sports;
- Services provided-
- to an educational institution by
way of catering under any centrally assisted mid – day meals scheme
sponsored by Government;
- to or by an institution in
relation to educational services, where the educational services are
exempt from the levy of service tax, by way of transportation of students
or staff;
- to or by an institution in
relation to educational services, where the educational services are
exempt from the levy of service tax, by way of services in relation to
admission to such education;
- Services provided to a recognised
sports body by-
- an individual as a player,
referee, umpire, coach or manager for participation in a tournament or
championship organized by a recognized sports body;
- another recognised sports body;
- Services by way of sponsorship of
tournaments or championships organised,-
- by a national sports federation,
or its affiliated federations, where the participating teams or
individuals represent any district, state or zone;
- by Association of Indian
Universities, Inter-University Sports Board, School Games Federation of
India, All India Sports Council for the Deaf, Paralympic Committee of
India, Special Olympics Bharat;
- by Central Civil Services Cultural
and Sports Board;
- as part of national games, by
Indian Olympic Association; or
- under Panchayat Yuva Kreeda Aur
Khel Abhiyaan (PYKKA) Scheme;
- Services provided to the
Government or local authority by way of erection, construction,
maintenance, repair, alteration, renovation or restoration of -
- a civil structure or any other
original works meant predominantly for a non-industrial or non-commercial
use;
- a historical monument,
archaeological site or remains of national importance, archaeological
excavation, or antiquity specified under Ancient Monuments and
Archaeological Sites and Remains Act, 1958 (24 of 1958);
- a structure meant predominantly
for use as (i) an educational, (ii) a clinical, or (iii) an art or
cultural establishment;
- canal, dam or other irrigation
works;
- pipeline, conduit or plant for (i)
drinking water supply (ii) water treatment (iii)sewerage treatment or
disposal; or
- 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 the
said Finance Act;
- Services provided by way of
erection, construction, maintenance, repair, alteration, renovation or
restoration of,-
- road, bridge, tunnel, or terminal
for road transportation for use by general public;
- building owned by an entity registered
under section 12 AA of the Income tax Act, 1961(43 of 1961) and meant
predominantly for religious use by general public;
- pollution control or effluent
treatment plant, except located as a part of a factory; or
- electric crematorium;
- Services by way of erection or
construction of original works pertaining to,-
- airport, port or railways;
- single residential unit otherwise
as a part of a residential complex;
- low- cost houses up to a carpet
area of 60 square metres per house in a housing project approved by
competent authority empowered under the ‘Scheme of Affordable Housing in
Partnership’ framed by the Ministry of Housing and Urban Poverty
Alleviation, Government of India;
- post- harvest storage
infrastructure for agricultural produce including a cold storages for such
purposes; or
- mechanised food grain handling
system, machinery or equipment for units processing agricultural produce
as food stuff excluding alcoholic beverages;
- Temporary transfer or permitting
the use or enjoyment of a copyright covered under clause (a) or (b) of
sub-section (1) of section 13 of the Indian Copyright Act, 1957 (14 of
1957), relating to original literary, dramatic, musical, artistic works or
cinematograph films;
- Services by a performing artist in
folk or classical art forms of (i) music, or (ii) dance, or (iii) theatre,
excluding services provided by such artist as a brand ambassador;
- Services by way of collecting or
providing news by an independent journalist, Press Trust of India or
United News of India;
- Services by way of renting of a
hotel, inn, guest house, club, campsite or other commercial places meant
for residential or lodging purposes, having declared tariff of a room
below rupees one thousand per day or equivalent;
- Services provided in relation to
serving of food or beverages by a restaurant, eating joint or a mess,
other than those having the facility of air-conditioning or central
air-heating in any part of the establishment, at any time during the year,
and which has a licence to serve alcoholic beverages;
- Services by way of transportation
by rail or a vessel from one port in India to another of the following
goods -
- petroleum and petroleum products
falling under Chapter heading 2710 and 2711 of the First Schedule to the
Central Excise Tariff Act, 1985 (5 of 1986);
- relief materials meant for victims
of natural or man-made disasters, calamities, accidents or mishap;
- defence or military equipments;
- postal mail, mail bags or
household effects;
- newspaper or magazines registered
with Registrar of Newspapers;
- railway equipments or materials;
- agricultural produce;
- foodstuff including flours, tea,
coffee, jaggery, sugar, milk products, salt and edible oil, excluding
alcoholic beverages; or
- chemical fertilizer and oilcakes;
- Services provided by a goods
transport agency by way of transportation of -
- fruits, vegetables, eggs, milk,
food grains or pulses in a goods carriage;
- goods where gross amount charged
on a consignment transported in a single goods carriage does not exceed
one thousand five hundred rupees; or
- goods, where gross amount charged
for transportation of all such goods for a single consignee in the goods
carriage does not exceed rupees seven hundred fifty;
- Services by way of giving on hire
-
- to a state transport undertaking,
a motor vehicle meant to carry more than twelve passengers; or
- to a goods transport agency, a
means of transportation of goods;
- Transport of passengers, with or
without accompanied belongings, by -
- air, embarking or terminating in
an airport located in the state of Arunachal Pradesh, Assam, Manipur,
Meghalaya, Mizoram, Nagaland, Sikkim, or Tripura or at Baghdogra located
in West Bengal; or
- a contract carriage for the
transportation of passengers, excluding tourism, conducted tour, charter
or hire;
- Services by way of motor vehicle
parking to general public excluding leasing of space to an entity for
providing such parking facility;
- Services provided to the
Government or a local authority by way of -
- repair of a ship, boat or vessel;
- effluents and sewerage treatment;
- waste collection or disposal;
- storage, treatment or testing of
water for drinking purposes; or
- transport of water by pipeline or
conduit for drinking purposes;
- Services of general insurance
business provided under following schemes -
- Hut Insurance Scheme;
- Cattle Insurance under Swarnajaynti
Gram Swarozgar Yojna (earlier known as Integrated Rural Development
Programme);
- Scheme for Insurance of Tribals;
- Janata Personal Accident Policy
and Gramin Accident Policy;
- Group Personal Accident Policy for
Self-Employed Women;
- Agricultural Pumpset and Failed
Well Insurance;
- premia collected on export credit
insurance;
- Weather Based Crop Insurance
Scheme or the Modified National Agricultural Insurance Scheme, approved by
the Government of India and implemented by the Ministry of Agriculture;
- Jan Arogya Bima Policy;
- National Agricultural Insurance
Scheme (Rashtriya Krishi Bima Yojana);
- Pilot Scheme on Seed Crop
Insurance;
- Central Sector Scheme on Cattle
Insurance;
- Universal Health Insurance Scheme;
- Rashtriya Swasthya Bima Yojana; or
- Coconut Palm Insurance Scheme;
- Services provided by an incubatee
up to a total business turnover of fifty lakh rupees in a financial year
subject to the following conditions, namely:-
- the total business turnover had
not exceeded fifty lakh rupees during the preceding financial year; and
- a period of three years has not
lapsed from the date of entering into an agreement as an incubatee;
- Service by an unincorporated body
or an entity registered as a society to own members by way of
reimbursement of charges or share of contribution -
- as a trade union;
- for the provision of exempt
services by the entity to third persons; or
- up to an amount of five thousand
rupees per month per member for sourcing of goods or services from a third
person for the common use of its members in a housing society or a
residential complex;
- Services by the following persons
in respective capacities -
- a sub-broker or an authorised
person to a stock broker;
- an authorised person to a member
of a commodity exchange;
- a mutual fund agent or distributor
to mutual fund or asset management company for distribution or marketing
of mutual fund;
- a selling or marketing agent of
lottery tickets to a distributer or a selling agent;
- a selling agent or a distributer
of SIM cards or recharge coupon vouchers; or
- a business facilitator or a
business correspondent to a banking company or an insurance company in a
rural area;
- Carrying out an intermediate
production process as job work in relation to -
- agriculture, printing or textile
processing;
- cut and polished diamonds and gemstones;
or plain and studded jewellery of gold and other precious metals, falling
under Chapter 71 of the Central Excise Tariff Act ,1985 (5 of 1986);
- any goods on which appropriate
duty is payable by the principal manufacturer; or
- processes of electroplating, zinc
plating, anodizing, heat treatment, powder coating, painting including
spray painting or auto black, during the course of manufacture of parts of
cycles or sewing machines upto an aggregate value of taxable service of
the specified processes of one hundred and fifty lakh rupees in a
financial year subject to the condition that such aggregate value had not
exceeded one hundred and fifty lakh rupees during the preceding financial
year;
- Services by an organiser to any
person in respect of a business exhibition held outside India;
- Services by way of making
telephone calls from -
- departmentally run public
telephones;
- guaranteed public telephones
operating only for local calls; or
- free telephone at airport and
hospitals where no bills are being issued;
- Services by way of slaughtering of
bovine animals;
- Services received from a service
provider located in a non- taxable territory by -
- the Government, a local authority
or an individual in relation to any purpose other than industry, business
or commerce; or
- an entity registered under section
12AA of the Income tax Act, 1961 (43 of 1961) for the purposes of
providing charitable activities.
- Definitions. - for the purpose of
this notification, unless the context otherwise requires, –
- “advocate” has the meaning
assigned to it in clause (a) of sub-section (1) of section 2 of the
Advocates Act, 1961 ( 25 of 1961),
- “appropriate duty” means duty
payable on manufacture or production under a Central or a State Act, but
shall not include ‘Nil’ rate of duty or duty wholly exempt,
- “arbitral tribunal” has the
meaning assigned to it in clause (d) of section 2 of the Arbitration and
Conciliation Act, 1996 (26 of 1996),
- “authorised medical practitioner”
means any medical practitioner registered with any of the Councils of the
recognised system of medicine and includes medical professional having the
requisite qualification to practice in any recognised system of medicine
as per any law for the time being in force,
- "authorised person” means and
includes any person whether being an individual, partnership firm, limited
liability partnership or body corporate, who is appointed as such either
by a stock broker including trading member or by a member of commodity
exchange and who provides access to trading platform of a stock exchange
or a commodity exchange, as an agent of the stock broker or member of a
commodity exchange,
- “banking company” has the meaning
assigned to it in clause (a) of section 45A of the Reserve Bank of India
Act,1934(2 of 1934),
- “business facilitator or business
correspondent” means an intermediary appointed under business facilitator
model or business correspondent model by a banking company or an insurance
company under the guidelines issued by Reserve Bank of India,
- "clinical establishment"
means a hospital, nursing home, clinic, sanatorium or an institution by,
whatever name called, that offers services or facilities requiring
diagnosis or treatment or care for illness, injury, deformity, abnormality
or pregnancy in any recognised system of medicine, established and
administered or maintained by any person or a place established as an
independent entity or a part of an establishment to carry out diagnostic
or investigative services of diseases,
- “charitable activities” means
activities relating to -
- public health by way of -
- care or counseling of (i)
terminally ill persons or persons with severe physical or mental
disability, (ii) persons afflicted with HIV or AIDS, or (iii) persons
addicted to a dependence-forming substance such as narcotics drugs or
alcohol; or
- public awareness of preventive
health, family planning or prevention of HIV infection;
- advancement of religion;
- advancement of educational
programmes or skill development relating to,-
- abandoned, orphaned or homeless
children;
- physically or mentally abused and
traumatized persons;
- prisoners; or
- persons over the age of 65 years
residing in a rural area;
- preservation of environment
including watershed, forests and wildlife; or
- advancement of any other object of
general public utility up to a value of twenty five lakh rupees in a
financial year subject to the condition that total value of such
activities had not exceeded twenty five lakhs rupees during the preceding
financial year.
Explanation:
- For the purpose of this clause, ‘general public’ means the body of people at
large sufficiently defined by some common quality of public or impersonal
nature.
- “commodity exchange” means an
association as defined in section 2 (j) and recognized under section 6 of
the Forward Contracts (Regulation) Act,1952 (74 of 1952),
- “contract carriage” has the
meaning assigned to it in clause (7) of section 2 of the Motor Vehicles
Act, 1988 (59 of 1988),
- “declared tariff” includes charges
for all amenities provided in the unit of accommodation (given on rent for
stay) like furniture, air-conditioner, refrigerators or any other
amenities, but does not include any discount offered on the published
charges for such unit,
- “distributor or selling agent” has
the meaning assigned to them in clause (c) of the rule 2 of the Lottery
(Regulation) Rules, 2010 notified by the Government of India in the
Ministry of Home Affairs published in the Gazette of India, Extraordinary,
Part-II, Section 3, Sub-section (i), vide number G.S.R. 278(E), dated the
1st April, 2010 and shall include distributor or selling agent authorised
by the lottery organising State,
- "general insurance
business" has the meaning assigned to it in clause (g) of section 3
of General Insurance Business (Nationalisation) Act, 1972 (57 of 1972),
- “goods carriage” has the meaning
assigned to it in clause (14) of section 2 of the Motor Vehicles Act, 1988
(59 of 1988),
- “health care services” means any
service by way of diagnosis or treatment or care for illness, injury,
deformity, abnormality or pregnancy in any recognised system of medicine
and includes services by way of supply of meals for the patient or
transportation of the patient to and from a clinical establishment, but
does not include hair transplant or cosmetic or plastic surgery, except
when undertaken to restore or to reconstruct anatomy or functions of body
affected due to congenital defects, developmental abnormalities, injury or
trauma,
- “incubatee” means an entrepreneur
located within the premises of a Technology Business Incubator (TBI) or
Science and Technology Entrepreneurship Park (STEP) recognised by the
National Science and Technology Entrepreneurship Development Board
(NSTEDB) of the Department of Science and Technology, Government of India
and who has entered into an agreement with the TBI or the STEP to enable
himself to develop and produce hi-tech and innovative products,
- “insurance company” means a
company carrying on life insurance business or general insurance business,
- “life insurance business” has the
meaning assigned to it in clause (11) of section 2 of the Insurance Act,
1938 (4 of 1938),
- “original works” means -
- all new constructions; or
- all types of additions and
alterations to abandoned or damaged structures on land that are required
to make them workable,
- “principal manufacturer” means any
person who gets goods manufactured or processed on his account from
another person,
- “recognized sports body” means (i)
the Indian Olympic Association, (ii) Sports Authority of India, (iii) a
national sports federation recognised by the Ministry of Sports and Youth
Affairs of the Central Government, and its affiliate federations, (iv)
national sports promotion organisations recognised by the Ministry of
Sports and Youth Affairs of the Central Government, (v) the International
Olympic Association or a federation recognised by the International
Olympic Association or (vi) a federation or a body which regulates a sport
at international level,
- “religious place” means a place
which is primarily meant for conduct of prayers or worship pertaining to a
religion,
- “residential complex” means any
complex comprising of a building or buildings, having more than one single
residential unit,
- “rural area” means the area
comprised in a village as defined in land revenue records, excluding,-
- the area under any municipal
committee, municipal corporation, town area committee, cantonment board or
notified area committee; or
- any area that may be notified as
an urban area by the Central Government or a State Government,
- “single residential unit” means an
independent residential unit with specific facilities for living, cooking
and sanitary requirements,
- "specified international
organisation" means an international organisation declared by the
Central Government in pursuance of section 3 of the United Nations
(Privileges and Immunities) Act, 1947 (46 of 1947), to which the
provisions of the Schedule to the said Act apply,
- "state transport
undertaking" has the meaning assigned to it in clause (42) of Section
2 of the Motor Vehicles Act, 1988 (59 of 1988),
- "sub-broker" has the
meaning assigned to it in sub-clause (gc) of clause 2 of the Securities
and Exchange Board of India (Stock Brokers and Sub-brokers) (Second
Amendment) Regulations, 2006,
- “trade union” has the meaning
assigned to it in clause (h) of section 2 of the Trade Unions Act,1926(16
of 1926).
- This notification shall come into
force from the date on which section 66B of the Finance Act, 1994 comes
into effect.
(Samar Nanda)
Under Secretary to the Government
[F. No. 334/1/2012-TRU]
Under Secretary to the Government
[F. No. 334/1/2012-TRU]
Very well compiled and presented accounting services
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