Video Presentation: ‘Any services’ provided by Government or Local authority to a Business Entity chargeable to ST under Reverse Charge w.e.f. April 1, 2016

By:
Categories: Articles
No Comments

picture

Dear Professional Colleague,

Video Presentation: ‘Any services’ provided by Government or Local authority to a Business Entity chargeable to ST under Reverse Charge w.e.f. April 1, 2016

Effective from April 1, 2016, under clause (iv) of Section 66D(a) of the Finance Act, 1994 (“the Finance Act”), the words ‘support services’ have been substituted by the words ‘any service’ thereby, the liability to pay Service tax on any service provided by Government or a Local Authority to Business Entities is on the service recipient under Reverse Charge except in case of (1) renting of immovable property, and (2) services specified in sub-clauses (i), (ii) and (iii) of clause (a) of Section 66D of the Finance Act.

However, owing to the wide ramifications entangling the extent/ type of Governmental services, there may be lot of queries for the stated applicability of Service tax.

In order to clear the mist, the Central Government/ Board on April 13, 2016, has issued the following important Notifications/ clarification to limit the scope of the Governmental services, which have been brought to Service tax under Reverse Charge w.e.f. April 1, 2016:

Notification/ Circular No. Particulars

Notification No. 22/2016-ST dated April 13, 2016

Amendment in the Mega Exemption Notification to exempt certain services provided by Government or a local authority to a Business entity

Notification No. 23/2016-ST dated April 13, 2016

Proviso inserted in Rule 6(2)(iv) of the Service Tax (Determination of Value) Rules, 2006,  to include in value of taxable services, payment of interest/ other consideration payable on Governmental services whose payment is allowed to be deferred on such payment of interest/ other consideration

Notification No. 24/2016-ST dated April 13, 2016

Rule 7 of the Point of Taxation Rules, 2011 amended to provide that in case of services provided by the Government or local authority to any business entity, the POT shall be the earlier of the dates on which, –

(a) Any payment, part or full, in respect of such service becomes due, as specified in the invoice, bill, challan or any other document issued by the Government or local authority, demanding such payment; or

(b) Payment for such services is made.

 

Notification No. 24/2016 CE (NT) dated April 13, 2016

Rule 4(7) of the Cenvat Credit Rules, 2004, amended to provide that the Cenvat credit of Service tax paid in a financial year, on the one-time charges payable in full upfront or in instalments, for the service of assignment of the right to use any natural resource by the Government, local authority or any other person, shall be spread evenly over a period of 3 years.

Further, time limit of 1 year for availment of Cenvat credit on Input services is not applicable in case of services provided by Government, local authority or any other person, by way of assignment of right to use any natural resource.

Circular No. 192/02/2016-ST dated April 13, 2016

Clarification on taxability of Governmental services & Illustration explaining how the Cenvat credit is to be availed on Service tax paid for assignment of right to use natural resources

Now, in order to provide complete understanding of the above discussed provisions and corresponding changes brought vide mentioned Notifications/ Circular, Mr. Bimal Jain has recorded a video presentation titled “Service tax on Any services provided by Government or Local Authority to Business Entity”, for easy digest. The video also captures the important changes with practical illustrations in PPT format, facilitating ease of understanding.

You may watch the video presentation by clicking on the link below:

https://www.youtube.com/watch?v=AB0LpVkuoUY

To access our earlier Newsletter on the captioned subject, please click on the link below:

‘Any services’ provided by Government or Local authority to a Business Entity chargeable to ST under Reverse Charge w.e.f. April 1, 2016: Related Changes/ Clarification

Hope the information will assist you in your Professional endeavours. In case of any query/ information, please do not hesitate to write back to us.

Thanks & Best Regards

Bimal Jain

FCA, FCS, LLB, B.Com (Hons)

Author of a book on Goods and Services Tax, titled, “GOODS AND SERVICES TAX – INTRODUCTION AND WAY FORWARD” (1st Edition)

A2Z TAXCORP LLP

Tax and Law Practitioners

Delhi:

Flat No. 34B, Ground Floor,

Pocket – 1, MayurVihar Phase-1

Delhi – 110091 (India)

Tel: +91 11 22757595/ 42427056

 

Allahabad:

B2-3/4-31 Sarojani Apartments

Sarojani Naidu Marg

Allahabad – 211001

Chandigarh:

H. No. 908, Sector 12-A,

Panchkula, Haryana – 134115

Email: bimaljain@hotmail.com

Web: www.a2ztaxcorp.com

LinkedIn: https://in.linkedin.com/pub/bimal-jain/14/601/4b4

Face book:facebook.com/bimal.jain.90

Twitter: https://twitter.com/JainTax

YouTube: https://www.youtube.com/channel/UCp0tT5ShjB4KHJRSlPc3t5w 

 

We can now also be contacted at below mentioned address:

Bengaluru Office:

Adarsh Residency, Block F, 4th Floor, (F404) 47th Cross, Jayngar 8th Block,

Bengaluru, Karnataka-560070

Email: bengaluru@a2ztaxcorp.com

Kolkata Office

10 Bow Street, 2nd Floor, Near Central Metro Station, Besides Calcutta Motor Dealers Association,

Kolkata, West Bengal-700012

Email: kolkata@a2ztaxcorp.com

Dhanbad Office:

2nd Floor, Shree Laxmi Complex,

Dhanbad, Jharkhand- 826001

Email: dhanbad@a2ztaxcorp.com

Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the authors nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon.

Readers are advised to consult the professional for understanding applicability of this newsletter in the respective scenarios. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without our written permission.

CLOSE
CLOSE