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TMI BlogPost Budget 2007-08 notifications to give effect to the provisions of the Finance Act, 2007 - regarding.X X X X Extracts X X X X X X X X Extracts X X X X ..... been issued. 3. Seven services which are specifically mentioned in the category of taxable services and amendments made relating to existing taxable services shall come into effect from the 1st June, 2007. In other words, changes made in the Budget 2007-08 relating to scope and coverage of taxable services will be effective from 01.06.07 [Notification No.23/2007-Service Tax dated 22.05.07]. 4. Section 65 defines taxable services and various terms used in relation to taxable services. Section 66 is the charging section and provides for levy of service tax on taxable services. These two sections have been amended in the Finance Act, 2007 and these amendments shall come into effect from 01.06.07 [Notification No.23/2007-Service Tax dated 22.05.07]. 5. Seven services which are specifically mentioned in the category of taxable services are: (i) Service provided by a telegraph authority in relation to telecommunication service [sub-clause (zzzx) of section 65(105)]; (ii) Service provided in relation to mining of mineral, oil or gas [sub-clause (zzzy) of section 65(105)]; (iii) Service provided in relation to renting of immovable property for use in the course or furtherance of bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services [section 65(105)(zm)] and also in the definition of banking and other financial services [section 65(12)], b. Inclusion of cash management services within the scope by deleting the specific exclusion [section 65(12)], and c. Insertion of explanation to explain the term "financial leasing" [section 65(12)]; (vii) Renaming of management consultant's service as management or business consultant's service [section 65(105)(r)], and inclusion of business consultancy in the definition itself [section 65(65)]; (viii) Inclusion of exclusion of computer hardware engineering consultancy under consulting engineer service by deleting the specific exclusion [section 65(105)(g)]; (ix) Clarification that "goods" for the purposes of this service includes computer software under management, maintenance or repair service [section 65(64)]. Amendment to Rules: 7. In view of the merger of various telecommunication related taxable services into "telecommunication service", notification no. 36/2004-Service Tax dated 31.12.04 and Rule 2(1)(d)(i) of the Service Tax Rules, 1994 have been amended so as to substitute the reference to various telecommunication related taxable services, namely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period shall be calculated and the amount so calculated shall be excluded from the rental amount received for the purpose of levy of service tax. 8.3 There may be a situation where property tax is paid after the payment of service tax on the rental. As a result, deduction of property tax paid from rental could not be availed of at the time of payment of service tax. In such cases, Rule 4C of the Service Tax Rules, 1994 provides self-adjustment of excess service tax paid without any limit [Notification No.24/2007-Service Tax, dated 22.05.07]. 8.4 Construction of ports is specifically exempted from levy of service tax under commercial or industrial construction service [section 65(25b)] vide notification No.16/2005-Service Tax, dated 07.06.05. Construction of ports under the newly introduced commercial or industrial construction service provided in relation to the execution of works contract under section 65(105)(zzzza) has also been exempted. Accordingly, notification No.16/2005-Service Tax, dated 07.06.05 has been rescinded and a combined notification No.25/2007-Service Tax dated 22.05.07 has been issued exempting commercial or industrial construction service, and services provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks contract is paid on actual value, the same value is also taken for the purpose of determining the value of works contract service. In other cases, value of works contract service shall be determined based on the actuals. It has also been explained that value of works contract service shall include: (i) labour charges for execution of the works; (ii) amount paid to a sub-contractor for labour and services; (iii) charges for planning, designing and architect's fees; (iv) charges for obtaining on hire or otherwise, machinery and tools used for the execution of the works contract; (v) cost of consumables such as water, electricity, fuel, used in the execution of the works contract, the property in which is not transferred in the course of execution of a works contract; (vi) cost of establishment of the contractor relatable to supply of labour and services; (vii) other similar expenses relatable to supply of labour and services; and (viii) profit earned by the service provider relatable to supply of labour and services; 9.4 If the gross amount charged for the works contract is inclusive of VAT or sales tax, the value for the purposes of service tax shall be computed as follo ..... 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