The Finance Bill received the presidential assent on May 10, 2008. The bill, along with the amendments, has now become the Act. The following new services are liable to service tax from May 16, 2008.
1. Services provided in relation to information technology software for use in the course or furtherance of business or commerce.
(Information technology software means any representation of instructions, data, sound or image, including source code and object code, recorded in a machine readable form and capable of being manipulated or providing interactivity to the user by means of a computer or an automatic data processing machine or any other device or equipment. Any software developed for the use of business or commerce shall now from a date to be notified be liable to service tax.)
Services liable to be covered are
a. Development of IT software
b. Adaptation, updation, enhancement, implementation and other similar services related to IT software
c. Providing advice, consultancy and assistance on IT software matters
d. Acquiring right to use IT software for commercial exploitation
2. Services provided in relation to management of investment under unit-linked insurance business, known as ULIP scheme.
(Management of segregated fund of unit-linked insurance business by the insurer shall be deemed to be the service provided by the insurer to the policyholder in relation to management of investment under unit-linked insurance business. The gross amount liable to service tax shall be the difference between premium paid by the policyholder for ULIP policy and the sum of premium paid for or attributable to risk cover and the amount segregated for actual investment.
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Posted on Wed May 14, 2008 at 08:29:33 PM EST
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- Services provided by a recognised stock exchange in relation to securities, services provided by a processing and clearing house in relation to processing, clearing and settlement of transactions in securities, goods or forward contracts and services provided by a recognised association or a registered association (commodity exchange) in relation to sale or purchase of any goods or forward contract.
- Services provided in relation to supply of tangible goods without the transferring right of possession and effective control of the tangible goods.
n The scope of internet telephony service is extended and shall be renamed with Internet Telecommunication Services with effect from 16-05-2008.
n In case of 39 services, the requirement of providing service to a customer or to a client has been substituted by the words to any person.
The following services are also made liable to service tax from May 16, 2008.
- Foreign exchange broking and purchase or sale of foreign currency, including money changing provided by a foreign exchange broker or an authorised dealer or an authorised money changer in foreign exchange are liable to service tax now under banking and other financial service. The foreign exchange broker shall have the option to pay an amount calculated at the rate of 0.25% of the gross amount of currency exchanged towards discharge of his service tax liability instead of paying service tax at the rate specified in section 66 of Chapter V of the Act.
- Packing together with transportation of cargo or goods, with or without one or more other services like loading, unloading, unpacking, are now covered under cargo handling service.
- Service provided in relation to journey from one place to another in a contract carriage vehicle even if the vehicle does not meet the criteria specified for tourist vehicles are liable to service tax under tour operator service. However, such service provided for use by an educational body, other than a commercial training or coaching centre, i should be excluded.
- Service provided by a consulting engineer in relation to advice, consultancy or technical assistance in the disciplines of both computer hardware engineering and computer software engineering shall also be classifiable under consulting engineer service.
- Renting immovable property service includes allowing or permitting the use of space in an immovable property, irrespective of the transfer of possession or control of the immovable property. Now renting of space in malls for promotional purpose or setting up of kiosk, erection of communication towers on buildings would attract tax.
- Promotion or marketing of games of chance, organised, conducted or promoted by the client, whether or not conducted online, including lottery, lotto, bingo are liable to service tax.
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