1 Dear Student Since there has been so much confusion caused for service tax amendments I am trying to clarify

the confusion with the notes here. 1. Where the services are provided in the PY 2011-12, then the law will be as taught to you and there is NO CHANGE. The rate of service tax will remain 10.30% as the rate of 12.36% is applicable only from 01/04/2012 i.e for POT arising on or after 01/04/2012. NOTE: rule of law as it stands on the first day of the relevant AY is applicable for Income Tax and not for service tax 2. 8 services are NOT applicable for the Nov 2012 exams 3. Any amendment made in Service Tax by the Finance Act 2012 effective from 28th May 2012 are NOT applicable. 4. As per examination rules only law as applicable before 6 months from the date of the exams will come in the paper. Thus a question for the month of April 2012 can be asked, but as per past experience has never been asked but if they are then the changes applicable are given below. NOTE: If the question states that services are provided in the month of April 2012 ONLY THEN WILL THE FOLLOWING be applicable a. Rate will be 12.36% for service provided on or after 01/04/2012 Since rate of service tax has been changed from 10% to 12% with effect from 01.04.2012, In case where service has been provided before 01.04.2012 and the cheque / (i) demand draft etc. has been received upto March 31, 2012, - rate of service tax would be 10% provided that cheque / demand draft is credited in the bank account by April 4, 2012. Otherwise, the date of payment would be date of credit in the bank account [viz. after April 4, 2012] and consequently, new rate of 12% would be applicable. (ii) In case where date of issuance of invoice and receipt of payment by cheque / demand draft etc. is before 01.04.2012, - rate of service tax would be 10% provided cheque / demand draft etc. is credited in the bank account by April 4, 2012. Otherwise, the date of payment would be date of credit in the bank account [viz. after April 4, 2012] and consequently, new rate of 12% would be applicable.

b. Point of taxation i. Instead of 14 days take 30 days ii. Individuals/partnership firms with aggregate value of taxable services of ` 50 lakh or less in previous year allowed to pay service tax on payment basis in current year upto a total of ` 50 lakh . [similar to the law applicable for chartered accountants in 2011-12]

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The copyright of these notes is with CA. Arvind Tuli. No part of these notes may be reproduced in any manner without the prior permission in writing of CA. Arvind Tuli
Coaching at: SCO 269 Sector 32, Chandigarh. Ph.: 09915001199. E-mail arvind.tuli@gmail.com

2 However this amendment is only for theory purposes as the question cannot be asked for the full 2012-13 and this will be only applicable for 2012-13 and NOT for 2011-12 Examples: 1. For a chartered accountant and those others for whom the point of taxation is the date of receipt of payment Services provided on or before 31st March 2012 total amount is 50 lacs amount of 10,00,000 in received in April 2012 and the balance was received before 01/04/2012 In such a case service tax on 40 lacs received before 01/04/2012 will be @ 10.30% as the point of taxation (receipt) arises before 01/04/2012 And for the amount of 10 lacs the rate will be 12.36% as the point of taxation (receipt) arises on or after 01/04/2012 2. For others for whom the point of taxation is as per POTR rules a) If services are provided and payment is received and invoice is raised before 01/04/2012 the POTR rules remain the same and nothing changes
S NO Date of completion of service Date of payment Date of raising of the invoice (check 14 days) Date when service tax becomes due as per POTR , 2011 Rate 10.30% 1 2 3 3 15/02/2012 15/02/2012 15/02/2012 15/03/2012 01/02/2012 25/02/2012 18/03/2012 18/04/2012 12/02/2012 17/02/2012 27/03/2012 27/03/2012 01/02/2012 17/02/2012 15/02/2012 27/03/2012 Date when Service tax is payable to the Government assume monthly payment 6/03/2012 6/03/2012 06/03/2012 06/04/2012

b) If services are provided before 01/04/2012 and payment is received and invoice is raised after 01/04/2012 the POTR rules remain the same however now check 30days for raising of invoice rather than 14 days and if POT arises on or after 01/04/2012 then rate will be 12.36%
S NO Date of completion of service Date of payment Date of raising of the invoice (check 30 days) Date when service tax becomes due as per POTR , 2011 Date when Service tax is payable to the Government assume monthly payment 6/05/2012

15/03/2012

01/05/2012

12/04/2012

12/04/2012 Rate will be

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The copyright of these notes is with CA. Arvind Tuli. No part of these notes may be reproduced in any manner without the prior permission in writing of CA. Arvind Tuli
Coaching at: SCO 269 Sector 32, Chandigarh. Ph.: 09915001199. E-mail arvind.tuli@gmail.com

3
12.36% 2 24/03/2012 25/02/2012 17/04/2012 25/02/2012 Rate will be 10.30% Since payment is before completion dt of payment is POT 3 15/03/2012 18/03/2012 27/04/2012 15/03/2012 Rate will be 10.30% Since invoice is not raised within 30days thus POT is date of completion 4 15/04/2012 18/04/2012 27/04/2012 18/04//2012 Since invoice is raised within 30days and dt of payment is before invoice date 5 15/04/2012 18/05/2012 27/04/2012 27/04//2012 Rate will be 12.36% Since invoice is raised within 30days 6 15/04/2012 18/04/2012 27/05/2012 15/04//2012 Rate will be 12.36% Since invoice is not raised within 30days 06/05/2012 06/05/2012 06/05/2012 06/04/2012 6/03/2012

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The copyright of these notes is with CA. Arvind Tuli. No part of these notes may be reproduced in any manner without the prior permission in writing of CA. Arvind Tuli
Coaching at: SCO 269 Sector 32, Chandigarh. Ph.: 09915001199. E-mail arvind.tuli@gmail.com

4 OTHER PROVISIONS: c. Adjustment of excess service tax paid: the limit of 200,000 has been removed, but only for adjustments made on or after 01/04/2012 d. Partnership firm will include LLP i. For service between 01/04/2011 and 31/03/2012 LLP is covered in others (thus rules pplicable for deposit of service tax will be as applicable to company and HUF) ii. For service provided in the month of April 2012 LLP will be covered with the firm (quarterly deposit) e. Special Rates: In case of LIFE insurance business 2011-12: 1.545% of gross premium charged or 10.30% of commission April : 2012 New agent for 1st year 3.% of gross premium charged or 10.30% of commission For every subsequent year 1.545% of gross premium charged or 10.30% of commission

f.

Special Rates: In case of sale or purchase of foreign currency (Only on or after 01/04/2012 i.e for APRIL 2012) S. N o. 1. If the lottery / lottery scheme is one where Guaranteed prize payout > 80% Rate of service tax

Rs. 6000/- 7,000 on every Rs. 10 Lakh (or part of Rs. 10 Lakh) of aggregate face value of lottery tickets printed by the organising State for a draw Rs. 9000/- 11,000 on every Rs. 10 Lakh (or part of Rs. 10 Lakh) of aggregate face value of lottery tickets printed by the organising State for a draw

2.

Guaranteed prize payout < 80%

g.

Special Rates: In case of sale or purchase of foreign currency (Only on or after 01/04/2012 i.e for APRIL 2012) Person liable to pay service tax in relation to purchase or sale of foreign currency, including money changing, provided by a foreign exchange broker, including an authorised dealer in foreign exchange or an authorized money changer as amended has the option to pay an amount at the following rates instead of paying service tax @ 10%: S.No. 1. For an amount Upto Rs. 100,000 Service tax shall be calculated at the rate of 0.12 % of the gross amount of currency exchanged

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The copyright of these notes is with CA. Arvind Tuli. No part of these notes may be reproduced in any manner without the prior permission in writing of CA. Arvind Tuli
Coaching at: SCO 269 Sector 32, Chandigarh. Ph.: 09915001199. E-mail arvind.tuli@gmail.com

5 or ` 30 whichever is higher 2. Exceeding ` 1,00,000 and upto ` 120 + 0.06 % of the gross amount of currency exchanged ` 10,00,000 Exceeding ` 10,00,000 ` 660 + 0.012 % of the gross amount of currency exchanged or ` 6,000 whichever is lower

3.

h.

Simpler scheme for refund of service tax paid on specified services used for export of goods With effect from 03.01.2012, the old procedure for grant of refund prescribed vide Notification 17/2009-ST dated 07.07.2009 has been dispensed with and a new scheme for refund of the service tax paid on the services received by an exporter and used for export of goods has been prescribed. Under the latest simplified scheme, the exporters have been provided with an option to claim refund electronically through ICES scheme. Otherwise, they can claim refund on the basis of documents. Refund, however, continues to be restricted to specified 18 taxable services as before. Minimum service tax refund for an electronic shipping bill is ` 50. Time-limit for filing the refund claim shall be one year from the date of export of the said goods. No CENVAT credit of service tax paid on the specified services used for export of the said goods can be taken under the CENVAT Credit Rules, 2004. The said exemption cannot be claimed by a Unit or Developer of a Special Economic Zone. [Notification No. 52/2011 dated 30.12.2011]

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The copyright of these notes is with CA. Arvind Tuli. No part of these notes may be reproduced in any manner without the prior permission in writing of CA. Arvind Tuli
Coaching at: SCO 269 Sector 32, Chandigarh. Ph.: 09915001199. E-mail arvind.tuli@gmail.com

6 INCOME TAX

Please read all amendments given in module 5 at the end of the module specially 1. Sec 10(46), 2. 10(47), 3. Notification exemption from filing of ROI for individuals with total income 500,000

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The copyright of these notes is with CA. Arvind Tuli. No part of these notes may be reproduced in any manner without the prior permission in writing of CA. Arvind Tuli
Coaching at: SCO 269 Sector 32, Chandigarh. Ph.: 09915001199. E-mail arvind.tuli@gmail.com