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TRADE NOTICE NO 08/2015

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Sub:- Forwarding of

(i) Circular No.183/02/2015-ST dated 10.04.2015 – Regarding clarification on rate of service tax, reg.

(ii) Notification No.12/2015-ST dated 30.04.2015 – Seeks to amend notification No. 25/2012-ST dated the 20th June, 2012 so as to exempt certain specified services..

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Attention of all members of Trade is invited to the Circular No. 183/02/2015 - ST dated 10.04.2015 and Notification No. 12/2015 –ST dated 30.04.2015 issued by the C.B.E.C, New Delhi

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Copy of the aforesaid Circular and Notification are enclosed with this Trade Notice which are self explanatory.

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All Trade Associations/ Chambers of Commerce and the Members of the RAC/PGC are requested to give wide publicity to this notice among their members/ constituents.

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F.No. STC/04-78/T.N/13-14 Ahmedabad Date 05-05-2015

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Copy: 1. As per mailing list of Trade & Department.

2.AC (Systems): To upload on website

Circular No. 183 / 02 / 2015-ST

F. No. B-1 /1/2015-TRU

Government of India

Ministry of Finance

Department of Revenue

(Tax Research Unit)

***

Room No. 153, North Block, New Delhi.

Dated 10th April, 2015.

To

Chief Commissioner of Customs and Central Excise(All)

Chief Commissioner of Central Excise & Service Tax (All)

Director General of Service Tax

Director General of Central Excise Intelligence

Director General of Audit Commissioner of Customs and Central Excise (All)

Commissioner of Central Excise and Service Tax (All)

Commissioner of Service Tax (All) Madam/Sir,

Dear Madam/Sir,

Subject: Clarification on rate of service tax - regarding.

Doubts have been expressed in various forums regarding the proposed increase in the rate of service tax from 12.36% (including education cesses) to 14% on the value of taxable service.

2. It may be noted that changes proposed in the Budget have/are coming into effect on various dates as already indicated in JS (TRU-II) D.O. letter dated 28th February, 2015. Certain amendments made in the Finance Act, 1994, including the change in service tax rate, will come into effect from a date to be notified by the Government after the enactment of the Finance Bill, 2015.

3. In this regard your attention is invited to clause 106 of the Finance Bill, 2015 and paragraph 3 of JS (TRU-II) D.O. letter, which is reproduced below:-

“3. Service Tax Rate:

3.1 The rate of Service Tax is being increased from 12% plus Education Cesses to 14%. The ‘Education Cess’ and ‘Secondary and Higher Education Cess’ shall be subsumed in the revised rate of Service Tax. Thus, the effective increase in Service Tax rate will be from the existing rate of 12.36% (inclusive of cesses) to 14%, subsuming the cesses.

3.2 In this context, an amendment is being made in section 66B of the Finance Act, 1994. Further, it has been provided vide clauses 179 and 187 respectively of the Finance Bill, 2015 that sections 95 of the Finance Act, 2004 and 140 of the Finance Act, 2007, levying Education Cess and Secondary and Higher Education Cess on taxable services shall cease to have effect from a date to be notified by the Government.

3.3 The new Service Tax rate shall come into effect from a date to be notified by the Central Government after the enactment of the Finance Bill, 2015.

3.4 Till the time the revised rate comes into effect, the ‘Education Cess’ and ‘Secondary and Higher Education Cess’ will continue to be levied in Service Tax.”

4. The paragraph reproduced above is self-explanatory and it is clear that the new Service Tax rate shall come into effect from a date to be notified by the Central Government after the enactment of the Finance Bill, 2015. The date will be notified in due course after the enactment.

5. Similarly, certain doubts have been raised with regard to abatement on value of services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year. Valuation of services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess is determined as provided in rule 2C of the Service Tax (Determination of Value) Rules, 2006.

5.1 In the Union Budget, 2015, no change has been made in these rules; therefore, any confusion is unwarranted. Further, as explained above, the rate of service tax on the specified portion of the amount charged for such supply which is 40% continues to be 12.36% (includingcesses) at present i.e. 4.944 %. The rate of Service tax, as discussed above, will continue unchanged till a date which will be notified in due course.

6. Wide publicity may be given so that the assesses and public are aware of the above. All the major Industry/Trade Associations may be informed accordingly.

Yours sincerely,

(Dr. Abhishek Chandra Gupta)

Technical Officer, TRU

Tel: 011-23095547

NOTICIFICATION

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUBSECTION (i)]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

NOTIFICATION

New Delhi, the 30th April, 2015

No. 12/2015-Service Tax,

G.S.R.….(E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance

Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest

so to do, hereby makes the following further amendments in the notification of the Government of India in

the Ministry of Finance (Department of Revenue) No.25/2012-Service Tax, dated the 20th June, 2012,

published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.

467 (E), dated the 20th June, 2012, namely:-

1. In the said notification,-

(i) in entry 26, after item (o), the following items shall be inserted, namely:-

“(p) Pradhan Mantri Suraksha Bima Yojna;”

(ii) in entry 26A, after item (d), the following items shall be inserted, namely:-

“(e) Pradhan Mantri Jeevan Jyoti Bima Yojana;

(f) Pradhan Mantri Jan Dhan Yogana;”;

(iii) after entry 26A, the following entry shall be inserted, namely:-

“26B Services by way of collection of contribution under Atal Pension Yojana (APY).”

[F. No.334/5/2015 -TRU]

(Akshay Joshi)

Under Secretary to the Government of India

Note:- The principal notification was published in the Gazette of India, Extraordinary, by notification No.

25/2012 - Service Tax, dated the 20th June, 2012, vide number G.S.R. 467 (E), dated the 20th June, 2012

and last amended vide notification No. 06/2015 - Service Tax, dated the 1st March, 2015 vide number

G.S.R. 160(E), dated the 1st March, 2015.