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TMI BlogIssuance of notifications after enactment of the Finance Act, 2010X X X X Extracts X X X X X X X X Extracts X X X X ..... ices while the scopes of nine existing services were modified. As these changes become effective from 01.07.2010, activities that are covered under taxable service categories due to above additions or modifications, would start attract service tax from this date. It is however, possible that a part or full payment of the consideration for such services provided after the appointed date has already been received prior to that date, i.e. advance payments. The examples are: where a domestic air journey performed after 1st July 2010, but the ticket is issued on payment prior to such date or where a construction activity falls within the taxable service only after the said date but the payment (full or in part) has been made before this date. While legally tax is payable on such amounts received, it has been decided to specifically exempt service tax on that partial or full amount which is received by the service provider/ person liable to pay the tax (and not by an agent, who in turn transfers such amount to such person after this date) before 01.07.2010, pertain to a service which has become taxable on account of the provisions of the Finance Act, 2010 and is provided on or after 01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6/7/2007-ST dated 23.07.2007 has no application as the said circular did not cover situations of multiple embarkations in India. Similarly, in round trip tickets involving multiple journies/flights/sectors with one of the sector involving embarkation or disembarkation at North-Eastern States /Bagdogra, the journey/flight/sector that involves embarkation or disembarkation at North-Eastern States /Bagdogra would alone be covered under aforesaid exemption. 3.4 Since the scope of air transport of passenger service has been modified vide Finance Act, exemption, which were available earlier to crew of the aircraft operator, and international transit passengers by way of definition in the Act have been retained vide Notification (Refer Notification No.25/2010-Service Tax ). 3.5 The scheme of tax on passengers embarking in India for an international journey in higher classes (i.e. other than economy class) remains unchanged. 3.6 As per the provisions of Rule 4A of the Service Tax Rules, 1944, invoice/ bill/ challan is required to be issued by the provider of taxable service within 14 days of the provision of the taxable service or the receipt of the consideration. In case of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation No. 17/09-ST. Presently, the list of eligible services under the said notification includes port service but does not include 'airport service'. In order to correct the anomaly, the said notification has been amended to include 'airport service' in the list of eligible services under the said refund scheme (Refer Notification No. 37/2010-Service Tax, dated the 28th June 2010 ). (iii) Commercial and Industrial construction service in relation to airport is excluded from service tax, in the definition itself. As such services would now be classified as 'airport service' when provided wholly within the airport, exclusion has been now provided by way of an exemption notification (Refer notification No. 42/2010-Service tax, dated the 28th June, 2010 ) (iv) Construction of ports was not excluded under the erstwhile definition from exclusion similar to that was available for airports. To bring parity in this matter, commercial and industrial construction service provided within the port area, in relation to construction, repair, alteration, renovation of wharves, quays, docks, stages, jetties, piers and railways is exempt from the whole of service tax (Refer Notification No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e leviable on such transaction since the builder provides the construction service. Completion certificate issued by a Government authority was prescribed as demarcation by introducing an Explanation in the Finance Act. During the post budget discussions, it was pointed that practice regarding issuance of completion certificates varies from state to state. Considering the practical difficulties, the scope of the phrase 'authority competent' to issue completion certificate has been widened by issuing an order for removal of difficulty ( Refer M.F.(D.R) Order No.1/2010 dated 22nd June 2010 ). Completion certificate issued by an architect or chartered engineer or licensed surveyor can be now taken to determine the service tax liability. 6.2 After the Budget was introduced views were expressed that the tax liability on construction sector has been tightened at a time when the sector was recovering after recession. After considering the issue, abatement available for construction of industrial or commercial complex and also residential complex has been prescribed as seventy five per cent. This means now tax incidence will be the rate of service tax applied on twenty five per cent of g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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