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TMI BlogChanges in the Finance Act, 1994 w.e.f. 14/05/2015X X X X Extracts X X X X X X X X Extracts X X X X ..... Changes in the Finance Act, 1994 w.e.f. 14/05/2015 - By: - Deepak Aggarwal - Service Tax - Dated:- 16-5-2015 - - Changes in the Finance Act, 1994 (Service Tax) w.e.f. enactment of the Finance Bill 2015 i.e. from 14th May, 2015 Insertion of new definition to specify the term government [ section 65 B (26A) ] after clause (26), the following clause shall be inserted, namely:- (26A) Government means the Departments of the Central Government, a State Government and its Departments and a Union territory and its Departments, but shall not include any entity, whether created by a statute or otherwise, the accounts of which are not required to be kept in accordance with article 150 of the Constitution or the rules ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de thereunder; ; Insertion of a new Explanation in the definition of service [ section 65 B(44) ] in 65B (44), for Explanation 2, the following Explanation shall be substituted, namely:- Explanation 2.-For the purposes of this clause, the expression transaction in money or actionable claim shall not include-- (i) any activity relating to use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged; (ii) any activity carried out, for a consideration, in relation to, or for facilitation of, a transaction in money or actionable claim, including the activity carried out-- (a) by a lottery dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tributor or selling agent in relation to promotion, marketing, organising, selling of lottery or facilitating in organising lottery of any kind, in any other manner; (b) by a foreman of chit fund for conducting or organising a chit in any manner. ; Insertion of an illustration in sub-section (1) of section 66F(1) to explain the scope of this subsection In section 66F of the 1994 Act, in sub-section (1), the following Illustration shall be inserted, namely:- Illustration The services by the Reserve Bank of India, being the main service within the meaning of clause (b) of section 66D, does not include any agency service provided or agreed to be provided by any bank to the Reserve Bank of India. Such agency service, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing input service, used by the Reserve Bank of India for providing the main service, for which the consideration by way of fee or commission or any other amount is received by the agent bank, does not get excluded from the levy of service tax by virtue of inclusion of the main service in clause (b) of the negative list in section 66D and hence, such service is leviable to service tax. . Amendment in the definition of the terms consideration in section 67 In section 67 of the 1994 Act , in the Explanation, for clause (a), the following clause shall be substituted, namely:- (a) consideration includes- (i) any amount that is payable for the taxable services provided or to be provided; (ii) any reimbursable expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service, except in such circumstances, and subject to such conditions, as may be prescribed; (iii) any amount retained by the lottery distributor or selling agent from gross sale amount of lottery ticket in addition to the fee or commission, if any, or, as the case may be, the discount received, that is to say, the difference in the face value of lottery ticket and the price at which the distributor or selling agent gets such ticket. . Amendments in sections 73 , 76 and 78 In section 73 of the 1994 Act ,- (i) after sub-section (1A), the following sub-section shall be inserted, namely:- (1B) N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otwithstanding anything contained in sub-section (1), in a case where the amount of service tax payable has been self-assessed in the return furnished under sub-section (1) of section 70 , but not paid either in full or in part, the same shall be recovered along with interest thereon in any of the modes specified in section 87 , without service of notice under sub-section (1). ; (ii) sub-section (4A) shall be omitted. For section 76 of the 1994 Act , the following section shall be substituted, namely:- Penalty for failure to pay service tax 76. (1) Where service tax has not been levied or paid, or has been short-levied or short-paid, or erroneously refunded, for any reason, other than the reason of fraud or collusion or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wilful mis-statement or suppression of facts or contravention of any of the provisions of this Chapter or of the rules made thereunder with the intent to evade payment of service tax, the person who has been served notice under sub-section (1) of section 73 shall, in addition to the service tax and interest specified in the notice, be also liable to pay a penalty not exceeding ten per cent. of the amount of such service tax: Provided that where service tax and interest is paid within a period of thirty days of-- (i) the date of service of notice under sub-section (1) of section 73 , no penalty shall be payable and proceedings in respect of such service tax and interest shall be deemed to have been concluded; (ii) the date of rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eipt of the order of the Central Excise Officer determining the amount of service tax under sub-section (2) of section 73 , the penalty payable shall be twenty-five per cent. of the penalty imposed in that order, only if such reduced penalty is also paid within such period. (2) Where the amount of penalty is increased by the Commissioner (Appeals), the Appellate Tribunal or the court, as the case may be, over the above the amount as determined under sub-section (2) of section 73 , the time within which the reduced penalty is payable under clause (ii) of the proviso to sub-section (1) in relation to such increased amount of penalty shall be counted from the date of the order of the Commissioner (Appeals), the Appellate Tribunal or the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt, as the case may be. . For section 78 of the 1994 Act, the following section shall be substituted, namely:- Penalty for failure to pay service tax for reasons of fraud, etc. 78. (1) Where any service tax has not been levied or paid, or has been shortlevied or short-paid, or erroneously refunded, by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of this Chapter or of the rules made thereunder with the intent to evade payment of service tax, the person who has been served notice under the proviso to sub-section (1) of section 73 shall, in addition to the service tax and interest specified in the notice, be also liable to pay a penalty which shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equal to hundred per cent. of the amount of such service tax: Provided that in respect of the cases where the details relating to such transactions are recorded in the specified record for the period beginning with the 8th April, 2011 upto the date on which the Finance Bill, 2015 receives the assent of the President (both Days inclusive), the penalty shall be fifty per cent of the service tax so determined. . Provided further that where service tax and interest is paid within a period of thirty days of -- (i) the date of service of notice under the proviso to sub-section (1) of section 73 , the penalty payable shall be fifteen per cent. of such service tax and proceedings in respect of such service tax, interest and penalty sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be deemed to be concluded; (ii) the date of receipt of the order of the Central Excise Officer determining the amount of service tax under sub-section (2) of section 73 , the penalty payable shall be twenty-five per cent. of the service tax so determined: Provided also that the benefit of reduced penalty under the second proviso shall be available. . Explanation.-For the purposes of this sub-section, specified records means records including computerised date as are required to be maintained by an assesse in accordance with any law for the time being in force or where there is no such requirement, the invoices recorded by the assessee in the books of accounts shall be considered as the specified records. . (2) Where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner (Appeals), the Appellate Tribunal or the court, as the case may be, modifies the amount of service tax determined under sub-section (2) to section 73 , then the amount of penalty payable under sub-section (1) and the interest payable thereon under section 75 shall stand modified accordingly, and after taking into account the amount of service tax so modified, the person who is liable to pay such amount of service tax, shall also be liable to pay the amount of penalty and interest so modified. (3) Where the amount of service tax or penalty is increased by the Commissioner (Appeals), the Appellate Tribunal or the court, as the case may be, over and above the amount as determined under sub-section (2) of section 73 , the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time within which the interest and the reduced penalty is payable under clause (ii) of the second provisio to sub-section (1) in relation to such increased amount of service tax shall be counted from the date of the order of the Commissioner (Appeals), the Appellate Tribunal or the court, as the case may be. . Insertion of transition provision by way of section 78B After section 78A of the 1994 Act , the following section shall be inserted, namely:- Transitory provisions 78B. (1) Where, in any case,-- (a) service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded and no notice has been served under sub-section (1) of section 73 or under the proviso thereto, before the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on which the Finance Bill, 2015 receives the assent of the President; or (b) service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded and a notice has been served under sub-section (1) of section 73 or under the proviso thereto, but no order has been passed under sub-section (2) of section 73 , before the date on which the Finance Bill, 2015 receives the assent of the President, then, in respect of such cases, the provisions of section 76 or section 78, as the case may be, as amended by the Finance Act, 2015 shall be applicable. (2) In cases where show cause notice has been issued under sub-section (1) of section 73 or under the proviso thereto, but no order has been passed unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sub-section (2) of section 73 before the date on which the Finance Bill, 2015 receives the assent of the President, the period of thirty days for the purpose of closure of proceedings on the payment of service tax and interest under clause (i) of the proviso to sub-section (1) of section 76 or on the payment of service tax, interest and penalty under clause (i) of the second proviso to sub-section (1) of section 78 , shall be counted from the date on which the Finance Bill, 2015 receives the assent of the President. Omitting section 80(viii) and Amendments in section 86 Section 80 of the 1994 (1 of 1994) Act shall be omitted. Penalty not to be imposed in certain cases. 80. (1) Notwithstanding anything ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contained in the provisions of section 76 , 4[or section 77 ], no penalty shall be imposable on the assessee for any failure referred to in the said provisions, if the assessee proves that there was reasonable cause for the said failure. 3 [(2) Notwithstanding anything contained in the provisions of section 76 or section 77 or section 78 , no penalty shall be imposable for failure to pay service tax payable, as on the 6th day of March, 2012, on the taxable service referred to in sub-clause (zzzz) of clause (105) of section 65 , subject to the condition that the amount of service tax along with interest is paid in full within a period of six months from the date on which the Finance Bill, 2012 receives the assent of the Presid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent.] In section 86 of the 1994 (1 of 1994) (1 of 1944)Act, in sub-section (1), -- (a) for the words Any assessee , the words Save as otherwise provided herein, an assessee shall be substituted; (b) the following provisos shall be inserted, namely:- Provided that where an order, relating to a service which is exported, has been passed under section 85 and the matter relates to grant of rebate of service tax on input services, or rebate of duty paid on inputs, used in providing such service, such order shall be dealt with in accordance with the provisions of section 35EE of the Central Excise Act, 1944 (1 of 1944): Provided further that all appeals filed before the Appellate Tribunal in respect of matters covered u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the first proviso, after the coming into force of the Finance Act, 2012 (23 of 2012) , and pending before it up to the date on which the Finance Bill, 2015 receives the assent of the President, shall be transferred and dealt with in accordance with the provisions of section 35EE of the Central Excise Act, 1944 . . Omitting of rule 6 (6A) of the Service Tax Rules Rule 6 (6A) which provided for recovery of service tax self-assessed and declared in the return under section 87 is being omitted consequent to the amendment in section 73 for enabling such recovery. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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