UPDATES- August 2012 [Leaf 32]

Date: 11/08/2012 Source: Finance Act Sub: Widening of Scope of services under Reverse Charge Act /Not/Ciircullar : 45/2012 & 46/2012 both dated 07-12-2012 C r cu a r A ct Contents The scope of services provided by Individual/Partnership firm/ HUF and AoP has been further widened by bringing services provided by security agency under its ambit. "security services" means services relating to the security of any property, whether movable or immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity;" The clarification as provided under the notification is tabulated so as to align with the principal notification no 30/2012.
Sl. Description of a service No Percentage of service tax payable by the person providing service Percentage of service tax payable by the person receiving the service

8 in respect of services provided or agreed to be provided by way of supply of manpower for any purpose or security services What the change means to us [GCL]

25%

75 %

We are liable to pay service tax under reverse charge on Security services Provided the services are provided by individual, HUF or partnership firm, AOP.

We have to discharge liability of service tax on 75% of taxable value @ 12.36%

UPDATES- August 2012 [Leaf 32]

Reference table for determining service tax liability for Security services covered w.e.f. 07-08-2012 under reverse charge: Sr. Situation No.
1

Applicability of Partial Reverse Charge Provision

Services provided upto 31st July12 , in- Reverse charge will not apply. voice received on or before 6th Aug 12 , Since the point of taxation of the service but payment on or after 7th Aug 2012 provider before 07-08-2012. Services provided upto 31st July 12, in- a. If invoice is raised on 6th Aug 2012: voice raised on or after 6th Aug 2012, Reply will be same as Sr. No. 1. payment on or after 6th Aug 2012 b.If invoice raised after 6th Aug 2012 : Reverse charge will apply. Since the point of taxation of the service provider is on or after 07-08-2012 as the case may be

lnvoice raised on or before 6th Aug 12, but service yet to be provided & payment yet to be made.

Reverse charge will not apply. Since the point of taxation of the service provider is before 07-08-2012.

2* the service recipients liability to make the payment is recognized on the date of invoice and hence the point of taxation shall be the date of such invoice. Also Invoice for services rendered in August 12 would mean service provided from 01st August 12 to 31st August 12 [there is no need to split up the liability into pre / post 7th August 2012.]

New service POs to be created for services to be received w.e.f. 01/08/2012 under continuous supply of services.

UPDATES- August 2012 [Leaf 32]

Notification No. 45/2012-Service Tax F.No.334/1 /2012-TRU Dated 7th August, 2012 Notification No. 46/2012-Service Tax F.No.334/1 /2012-TRU Dated 7th August, 2012

In exercise of the powers conferred by sub-section (2) of section 68 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 amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.30/2012-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. 472 (E), dated the 20th June, 2012, namely:In the said notification,(a) in para I, in clause (A),(i) after the sub-clause (iv), the following sub-clause shall be inserted, namely :"(iva) provided or agreed to be provided by a director of a company to the said company;"; (ii) in sub-clause (v), after the words "manpower for any purpose", the words " or security services" shall be inserted. (b) in para II, in the Table,(i) after Sl.No. 5, the following S.No. and entries shall be inserted, namely:Sl. No

Description of a service

Percentage of service tax payable by the person providing service Nil

Percentage of service tax payable by the person receiving the service 100%"

"5A

in respect of services provided or agreed to be provided by a director of a company to the said company

(Rajkumar Digvijay) Under Secretary to the Government of India Note.- The principal notification was published in the Gazette of India, Extraordinary, vide notification No. 30/2012 - Service Tax, dated 20th June, 2012, vide number G.S.R. 472 (E), dated the 20th June, 2012 and the same has not been amended so far.

UPDATES- August 2012 [Leaf 32]

In exercise of the powers conferred by sub-section (1) read with sub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Service Tax Rules, 1994, namely: 1. (1) These rules may be called the Service Tax (Third Amendment) Rules, 2012. (2) They shall come into force on the date of their publication in the Official Gazette. 2. In the Service Tax Rules, 1994, in rule 2, in sub-rule (1),(A) in clause (d), in sub-clause (i),(i) after the item (E), the following item shall be inserted, namely;"(EE) in relation to service provided or agreed to be provided by a director of a company to the said company, the recipient of such service;"; (ii) in the item (F), in the sub-item (b), after the words "manpower for any purpose", the words " or security services" shall be inserted. (B) after clause (f), the following clause shall be inserted, namely:"(fa) "security services" means services relating to the security of any property, whether movable or immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity;"

(Rajkumar Digvijay) Under Secretary to the Government of India Note.- The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide notification No. 2/94-ST, dated the 28th June, 1994 vide number G.S.R. 546(E), dated the 28th June, 1994 and was last amended by notification No. 36/2012-Service Tax, dated the 20th June, 2012 vide number G.S.R. 478 (E), dated the 20th June, 2012.