Service Tax : Exemption of Certain Service and Withdrawal of Exemption w.e.f. 27-02-2010

 

Exemptions under Service Tax vide notifications dated 27-02-2010

1. Packaged software, containing the user license in the pack, to be exempted from Service Tax provided the Excise duty/Custom duty has been paid.
2. Specified Indian News Agencies providing ‘Online Information and Database Access or Retrieval Services’ and ‘Business Auxiliary Services’ to be exempted from Service Tax subject to a certain condition.
3. Services in relation to transmission of electricity to be exempted from Service Tax.
4. Exemption for ‘Erection, Commissioning or Installation Services’ provided in relation to: –Mechanised Food Grain Handling Systems,
                     –Equipment for setting up or substantial expansion of cold storage,
                     –Machinery or Equipment for initial setting up or substantial expansion of units for processing agricultural and other specified products.
5. Central or State Seed Testing Laboratory and Central or State Seed Certification Agency providing ‘Technical Testing and Analysis Services’ and ‘Technical Inspection and Certification Services’ to be exempted from Service Tax.
6. Transport of specified goods by rail to be exempted from Service Tax with effect from 1 April 2010
   

The above changes will be effective from 27 February 2010, except as mentioned above.

Withdrawal/Amendments to exemption notifications

1. The definition of vocational training institute for exemption under ‘Commercial Training or Coaching Services’ has been restricted to specified institutes.
2. Amendments regarding applicability of service tax provisions to continental shelf and exclusive economic zones are as under:

Service Tax Budget Proposal - New Services proposed to be taxed

 

The following categories of taxable services have been brought within the purview of Service Tax:

1. Services of promotion or marketing of a brand of goods, service, event or endorsement of name
2. Services of permitting commercial use or exploitation of any event organized by a person or an organization
3. Services in relation to temporary transfer or permitting the use of copyright in relation to cinematographic films and sound recording
4. Health services provided by hospitals or medical establishments to the employees of business organizations and health services provided under health insurance schemes offered by insurance companies
5. Services provided for maintenance of medical records of employees of a business entity
6. Services of promoting, marketing or organizing of games of chance, including lottery
7. Specified services provided by a builder of residential or commercial complex
8. Specified services provided by Electricity Exchanges.
   

The above categories will be taxable from a date to be notified after the enactment of Finance Bill 2010.