The Finance Minister Pranab Mukherjee releasing the Guidance Paper on Service Tax. Also seen are Finance Secretary Gujral and CBEC Chief Goel.
WHAT is the broad scheme of new taxation?
The key features of the new system of taxation are as follows:
1. 'service' has been defined in clause (44) of section 65B of the Act.
2. Section 66B specifies the charge of service tax which is essentially that service tax shall be levied on all services provided or agreed to be provided in a taxable territory, other than services specified in the negative list.
3. The negative list of services is contained in section 66D of the Act.
4. Since provision of service in the taxable territory is an important ingredient of taxability, section 66C empowers the Central Government to make rules for determination of place of provision of service. Under these provisions the Place of Provision of Services Rules, 2012 have been made.
5. To remove some ambiguities certain activities have been specifically defined by description as services and are referred as Declared Services (listed in section 66E).
6. In addition to the services specified in the negative list, certain exemptions have been given. Most of the exemptions have been consolidated in a single mega exemption for ease of reference.
7. Principles have been laid down in section 66F of the Act for interpretation wherever services have to be treated differentially for any reason and also for determining the taxability of bundled services.
8. The system of valuation of services for levy of service tax and of availment and utilization of CENVAT credits essentially remains the same with only incidental changes required for the new system of taxation.
(from the guidance paper)