Just before the 1983 Budget
No Tax on Import of Services and no Exemption for Export of Services?
WE received this from a concerned Netizen.
Tax India On Line is publishing many pitfalls under the new regime of service tax discovered by its team as well as the Netizens. After going through each blunder, it feels like things cannot go worse than this. But to my disappointment, I came across one more notification, which can cause a difficulty for the babus.
Notification 28/2012 dated 20 June 2012 intends to implement Place of Provision of Service Rules, 2012 (‘POP Rules'). Rule 1(2) of the rules lays down the date of implementation of the rules as 1 July 2012.
However, while initiating the implementation of the rules, the first para of the notification is drafted to supersede Export of Service Rules, 2005 (Notification 9/2005 dated 3 March 2005) as well as Services (Provided from Outside India and Received in India) Rules, 2006 (Notification 11/2006 dated 19 April 2006).
The catch here is that while the POP Rules will come in to force w. e. f. 1 July 2012 vide Rule 1(2) of the said rules, the notification is dated 20 June 2012 and once published in the Gazzete of India, will be effective from the date of notification itself.
Further, the notification is issued in supersession of the earlier notifications of Export and Import of services rules. There is no mention that the said rules will be superseded once the POP Rules comes in to force.
Accordingly, is it that the export and import rules are already superseded with effect from 20 June while POP Rules will be implemented from 1 July?
If it is so, are we living in an era (though of 11 short days) where in there will be no exemption on export of services and no service tax levy on import of services?
Here is a simple notification, which supersedes two notifications and they have complicated matters to such an extent that vital limbs are chopped off. In this notification, they should have mentioned that the notification comes into force with effect from 1st July 2012. In fact, Notification No. 29/2012–S.T, clearly mentions at the end, "This notification shall come into force on the 1st day of July, 2012."
There seems to be no limit to the ingenuity of the Board in messing up the law. Perhaps they should postpone this adventure by at least three months and get their act together, rectify all the lapses, clarify the doubts and then maybe, we can go for this new regime from 1st October.