Budget 2012-2013 - Amendments in Service Tax (Determination of Value) Rules, 2006
Service Tax (Determination of Value) Rules, 2006 – Nft 11/2012 ST
(To be effective from Date to be notified after enactment of Finance bill 2012)
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Sr. No.
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Particulars
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Old Provisions
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New Provisions
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1.
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Composition scheme in Works Contract
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Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007
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Merged into Rule 2A of Valuation Rules
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Rate of Composition Tax on all works contract
4% upto 31-3-2012
4.8% w.e.f. 1-4-2012
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Original work
Rate of tax 12% of 40%
Effective rate = 4.8%
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Works contract where value of land is included –
Rate of Tax = 12% of 25%
Effective rate = 3.0%
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Other works contracts including completion and finishing services –
Rate of Tax = 12% of 60%
Effective rate = 7.2%
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2
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Valuation method in works Contract
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Rule 2A – Gross value minus of value of goods sold
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No change
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3
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Supply of food and drinks in a restaurant or as outdoor catering
Determination of value of taxable - new Rule 2C
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Not existing
However, exemption was granted through Exemption Notification no. 1/2006 ST dated 1.3.2006
Effective Rate w.e.f. 1.4.2012
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New Valuation rule to determine the value of services involved.
Value of Service involved in the supply of food or any other article of human consumption or any drink:
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Restaurant
12% of 30% = 3.6%
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Restaurant
12% of 40% = 4.8%
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Outdoor catering
12% of 50% = 6%
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Outdoor catering
12% of 60% = 7.2%
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4.
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Manner of determination of Value – Rule 3- where value is not ascertainable
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“where the consideration received is not wholly or partly consisting of money”- substituted
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“where such value is not ascertainable” .
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5.
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Inclusion in or exclusion from value of certain expenditure or costs Rule 5- explanation to sub rule(1)
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“services specified in sub-clause (zzzx) of clause (105) of section 65 of the Finance Act, 1994”,- substituted
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“telecommunication service”
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6.
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Inclusion in Value - .Rule 6(1)
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Not existing
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new clause(x) inserted in Sub rule(1)
amount realised as demurrage or by any other name whatever called for the provision of a service beyond the period originally contracted or in any other manner relatable to the provision of service- included
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7
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Exclusion from value – Rule 6(2)
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“interest on loans” -
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interest on,-
(a) deposits; and
(b) delayed payment of any consideration for the provision of services or sale of goods;
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Not exisitng
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Accidental damages due to unforeseen actions not relatable to the provision of service.
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8
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Actual consideration to be the value of taxable service provided from outside India -Rule 7 omitted
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Omitted
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