Making a point – S Jai Kumar – keen listener is Joseph Prabhakar
The post lunch session was devoted to the various questions raised by the audience on a variety of issues on Central Excise and predominantly Service Tax. Gautam Battacharya , Commissioner, Service tax in the North Block and a sculptor of most of the provisions of Service tax braved all the darts shot by the intellectual gathering in his patient and pensive ways. Out of the variety of issues the major points raised and replied are:
++ The recent amendment to the definition of "input service" under the Cenvat Credit Rules, 2004 from the phrase "from the place of removal" to "upto the place of removal" will not affect the master Circular issued by the Board and even after the present amendment the Cenvat credit on the " GTA Service on outward transportation" would be available if the two conditions stipulated in the Master Circular are met.
++"Works Contract" levy is not an optional levy but a mandatory levy if the specified contracts are in the nature of "Works Contracts" after 1/6/2007 . In other words, the service provider has to classify his service ONLY under "Works Contracts" if his contracts are assessed as "Works Contracts" under the State levy. TIOL feels it as a contradiction to the Circular given by the Board on 4/1/2008 , wherein it has been clarified that, in case of ongoing contracts prior to 1/6/2007 , the service provider cannot classify the same under "Works contracts" service.
++ The term "turnkey projects" appearing in clause (e) of the "Works Contracts" levy would mean that ONLY if the entire contract is awarded and undertaken by a person. In other words, it would not cover any contract or project, which is only a portion of a contract.
++ Only those services provided within SEZ are exempted and not the services performed outside the SEZ premises, though ultimately consumed by the SEZ. TIOl feels the same is not correct as, for example, in case of a rent-a-cab operator, the service would be essentially performed from a place outside SEZ to within SEZ ad such a mean interpretation would defeat the purpose of the exemption to SEZ.
++ Any contract relating to roads including repairs, re-laying or re-tar topping of such roads are exempted from the purview of service tax, if the same are under "works contracts" as per the main definition.
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