Budgetary changes 2016

 S.Nagalingam IRS.,
 Assistant Commissioner, Service Tax II
Commissionerate

Service Tax exemption to canal, dam or other
irrigation works with retrospective effect- new
section Retrospective effect
“101. (1) Notwithstanding anything contained in
section 66B, no service tax shall be levied or
collected during the period commencing from the
1st day of July, 2012 and ending with the 29th
day of January, 2014 (both days inclusive) in
respect of taxable services provided to an
authority or a board or any other body––
BUDGET HIGHLIGHTS – SERVICE TAX

(i) set up by an Act of Parliament or a State
Legislature; or
(ii) established by the Government,with ninety
per cent. or more participation by way of equity
or control, to carry out any function entrusted to
a municipality under article 243W of the
Constitution, by way of construction, erection,
commissioning, installation, completion, fitting
out, repair, maintenance, renovation or alteration
of canal, dam or other irrigation works.

(2) Refund shall be made of all such service tax
which has been collected but which would not
have been so collected had sub-section (1) been
in force at all material times.
(3) Notwithstanding anything contained in this
Chapter, an application for the claim of refund
of service tax shall be made within a period of
six months from the date on which the Finance
Bill, 2016 receives the assent of the President.

Restoration of exemption on services
Provided to the Govt, a local authority or a govtl.
Authority Sec.102
To an airport, port Sec.103

102. (1) Notwithstanding anything contained in section
66B, no service tax shall be levied or
collected during the period commencing from the 1st
day of April, 2015 and ending with the 29th day of
February, 2016 (both days inclusive), in respect of
taxable services provided to the Government, a local
authority or a Governmental authority, by way of
construction, erection, commissioning, installation,
completion, fitting out, repair, maintenance, renovation
or alteration of––
Restoration of certain exemptions withdrawn last year for
projects, contracts in respect of which were entered into before
withdrawal of the exemption- new section inserted

(a) a civil structure or any other original works
meant predominantly for use other than for
commerce, industry or any other business or
profession;
(b) a structure meant predominantly for use as––
(i) an educational establishment;
(ii) a clinical establishment; or
(iii) an art or cultural establishment;.

(c) a residential complex predominantly meant for
self-use or for the use of their employees or
other persons specified in Explanation 1 to clause
(44) of section 65B of the said Act, under a
contract entered into before the 1st day of
March, 2015 and on which appropriate stamp
duty, where applicable, had been paid before
that date..

which has been collected but which would not
have been so collected had sub-section (1) been
in force at all the material times.
Chapter, an application for the claim of refund
of service tax shall be made within a period of
six months from the date on which the Finance
Bill, 2016 receives the assent of the President.

103. (1) Notwithstanding anything contained in
section 66B, no service tax shall be levied or
collected during the period commencing from the
1st day of April, 2015 and ending with the 29th
day of February, 2016 (both days inclusive), in
respect of services provided by way of
construction, erection, commissioning or installation
of original works pertaining to an airport or port,
under a contract which had been entered into
before the 1st day of March, 2015 …………

……………and on which appropriate stamp duty,
where applicable, had been paid before that date,
subject to the condition that Ministry of Civil
Aviation or, as the case may be, the Ministry of
Shipping in the Government of India certifies that
the contract had been entered into before the 1st
day of March, 2015.
which has been collected but which would not have
been so collected had sub-section (1) been in
force at all material times..”.

Chapter, an application for the claim of refund of
service tax shall be made within a period of six
months from the date on which the Finance Bill,
2016 receives the assent of the President.”.

Changes coming into effect immediately w.e.f. the
1st day of March, 2016

Exemption withdrawn
Sl. No(vi)A of
notification No.
9/2016-ST, dated 1st
March, 2016
Exemption to construction,
erection, commissioning or
installation of original works
pertaining to monorail or metro
(under S. No 14 of the notification
No. 25/12-ST) is being withdrawn,
in respect of contracts entered
into on or after 1st March 2016.
The other exemptions under S.
No. 14 of notification No. 25/12-ST
shall continue unchanged.
come into effect from
1st March, 2016.

New Exemptions
New entry at S. No.
13 (ba) of
notification No.
25/2012-ST
Services by way of construction,
erection etc. of a civil structure or any
other original works pertaining to the
“In-situ Rehabilitation of existing slum
dwellers using land as a resource
through private participation”
component of Housing for All (HFA)
(Urban) Mission / Pradhan Mantri Awas
Yojana (PMAY), except in respect of
such dwelling units of the projects
which are not constructed for existing
slum dwellers
1st March, 2016.

New Exemptions
New entry at S. No.
13 (bb) of
notification No.
25/2012-ST
erection etc., of a civil structure
or any other original works
pertaining to the “Beneficiary-led
individual house construction /
enhancement” component of
Housing for All (HFA) (Urban)
Mission/ Pradhan Mantri Awas
Yojana (PMAY)
1st March, 2016.

New Exemptions
new entry at S. No.
14 (ca) of notification
No. 25/2012-ST
erection, etc., of original works
pertaining to low cost houses up to
a carpet area of 60 sq.m per
house in a housing project
approved by the competent
authority under the “Affordable
housing in partnership” component
of PMAY or any housing scheme of
a State Government
1st March, 2016.

New Exemptions
New entry at S. No.
9B of notification No.
25/2012-ST
Services provided by the Indian
Institutes of Management (IIM) by
way of 2 year full time Post
Graduate Programme in
Management(PGPM) (other than
executive development programme),
admissions to which are made
through Common Admission Test
conducted by IIMs, 5 year
Integrated Programme in
Management and Fellowship
Programme in Management
1st March, 2016.

 It has been informed by Secretary, Ministry of Human Resource
Development (MHRD) vide letter D. O. No.2-14/2009-TS.V dated 8th July,
2014 and 5th February, 2014 that MHRD is vested with the power to
recognise educational courses [DoPT O.M. dated 08.01.1975], for the
purpose of recruitment to posts under Government of India. It has been
further stated by MHRD in their above mentioned letters that IIMs have
been conducting Post Graduate Programmes in Management and Fellowship
Programmes which are equivalent to MBA and Ph.D degrees. It has been
reiterated by Secretary, MHRD vide letter D.O. 3/5/2013-TS.V dated
15.1.2016 that the IIMs have been conducting Post Graduate Programmes in
Management and Fellowship Programmes which are equivalent to MBA and
Ph.D degrees, respectively, (as also clarified by associations like Association
of Indian Universities, Inter –University Board of India etc.). In view of
this, the exemption being given to the above programmes of IIMs is
clarificatory in nature and in view of the same, liability to pay service tax in
respect of the said programmes for the past period will also become

1.Assessment of media with recorded Informational
Technology software when RSP is affixed(exempted from
Service Tax) ; or
2.Assessed when RSP is not required
(CVD/Central Excise duty levied only on the portion of value
representing the value of the medium on which the ITS
is recorded along with freight and insurance)
CVD/Central Excise duty/Service Tax is mutually exclusive

1.The Point of Taxation Rules, 2011 have been framed
under provisions of clause (a) and (hhh) of sub-section
(1) of section 94, now specific powers is also being
obtained under section 67A to make rules regarding point
in time of rate of service tax. Thus, any doubt about
the applicability of service tax rate or apparent
contradiction between section 67A and POTR would be
taken care of. Therefore, consequent modifications have
been done in POTR.
BUDGET HIGHLIGHTS – Point of Taxation Rules, 2011

Rule 5 old provision
(a)no tax shall be payable to the extent the invoice has
been issued and the payment received against such invoice
before such service became taxable;
(b)no tax shall be payable if the payment has been
received before the service becomes taxable and invoice
has been issued within fourteen days of the date when the
service is taxed for the first time.
Doubt- applicability in case of new levy

Rule 5 New insertion
Explanation:
Applicable in case of new levy on services
In situations other than those specified where new
levy or tax is not payable, the new levy or tax
shall be payable

Shipping Industry - Taxability
Particulars Taxability Remarks
Transportation of
Goods by a vessel
by an Indian
Shipping Line from
the Customs
Station in India to
outside India.
This will be Zero
Rated with effect
from 1.3.2106
Amendment to Rule
2(e) of Cenvat
Credit Rules, 2004
Credit of input,
input services and
Capital Goods will
be allowed
This amendment will provide a level playing field for Indian Shipping Lines

CENVAT CREDIT RULES - AMENDMENTS
 Cenvat Credit Rule 6 has been amended and provides as under
 Input Tax Credit exclusively used in relation to exempted goods
or services still in place.
 Avail all Input Credits but pay an amount equivalent to 6% of
the value of exempted goods or 7% of the value of exempted
services.
 Maximum Limit has been prescribed to ensure that the amount
to be reversed does not exceed the amount availed.
 A new formula has been prescribed for proportionate reversal of

Cenvat Credit Rules – New Formula
No credit on input or input services exclusively
used for exempted goods or services.
Full credit on input or input services exclusively
used for taxable goods or services.
Common Credit used for taxable and exempted
goods or services will be based on turnover.
Refer Illustration

Cenvat Credit Rule 6 formula
Particulars Amount Remarks
Taxable Service Rs 2.00 crore
Exempted Service Rs 1.00 crore
Input Credit of Services –
exclusively used for taxable
services
Rs 10.00 Lacs
Input Credit of Services –
exclusively used for exempted
services
Rs 4.00 Lacs
Common Input Services Rs 6.00 Lacs
Amount to be reversed as per
new formula
Rs 4.00 Lacs + Rs( 6.00 Lacs
* 1/3 )
Total Amount to be reversed
is Rs 6.00 Lacs
Amount to be reversed as per
old formula
Rs 4.00 Lacs +Rs (16.00 Lacs
* 1/3)
Total Amount to be reversed
is Rs 9.33 Lacs

Refund of Cenvat Credit
Notification No. 27/2012 – C.E. (N.T.) is being amended
so as to provide that time limit for filing application for
refund of Cenvat Credit under Rule 5 of the Cenvat
Credit Rules, 2004, in case of export of services, shall
be 1 year from the date of –
(a) receipt of payment in convertible foreign exchange,
where provision of service has been completed prior to
receipt of such payment; or
(b) the date of issue of invoice, where payment for the
service has been received in advance prior to the date of
issue of the invoice.
[Notification No. 14/2016-CE(NT) dated 01.03.2016

Services provided by Container Train Operators (CTOs)
Notification No. 26/2012-ST is being amended to provide
that transport of goods by rail (other than transport of
goods in containers by any person other than Indian
Railway) shall be eligible for abatement at the rate of 70%
with credit of input services. Transport of goods in
containers by any person other than Indian Railway shall be
eligible for abatement at the rate of 60% with credit of
input services.

Services provided by Container Train Operators (CTOs)
It is hereby also clarified that service provided by the
Indian Railways to Container Train Operators (CTOs) of
haulage of their container train (rake of wagons with
containers) is a service of „Transport of Goods by Rail‟
and is, therefore, eligible for abatement and tax
treatment accordingly, that is, for abatement at the rate
of 70% with credit of input services.

Changes with effect from
01.04.2016

Exemption withdrawn
Sl. No. (i) of
Notification No.
March, 2016 refers
Services provided by a senior
advocate to an advocate or
partnership firm of advocates, and
A person represented on an arbitral
tribunal to an arbitral tribunal;
Service tax in the above instances
would be levied under forward charge.
However, the existing dispensation
regarding legal services provided by a
firm of advocates or an advocate
other than senior advocate is being
continued.
1st April, 2016.
Amendment in
Rule 2(1)(d)(i)
(D)(II) - Forward
charge

SPECIFIED SERVICES….
Sl. No (ix) B of
notification No.
March, 2016 refers
Exemption under Sl. No. 23
(c) of the notification
No.25/2012-ST on
transport of passengers,
with or without accompanied
belongings, by ropeway,
cable car or aerial tramway
is being withdrawn
1st April, 2016.

Services provided by government or local
authorities to business entities;
notification No.
15/2016-ST
Taxable from 01.04.2016
Consequently, 1st April,
2016
also being notified as the
date from which the
definition of support
services shall stand deleted
{Rule (2(1)(d)(i)(e)}from the
Finance Act, 1994come into effect from
1st April, 2016.

New exemptions
New entry at S. No.
26C of notification No.
25/2012-ST
The services of life
insurance business provided
by way of annuity under the
National Pension System
(NPS) regulated by Pension
Fund Regulatory and
Development Authority
(PFRDA) of Indiacome into effect from
1st April, 2016.

New exemptions
New entry at S. No.
51 of notification No.
25/2012-ST
Services provided by
Securities and Exchange
Board of India (SEBI) set up
under SEBI Act, 1992, by
way of protecting the
interests of investors in
securities and to promote the
development of,and to
regulate, the securities
market
1st April, 2016.

New exemptions
New entry at S. No.
25/2012-ST
Employees‟ Provident Fund
Organisation (EPFO) to
employees are being
exempted from service tax.
1st April, 2016.

New exemptions
Amendment in
notification No.
32/2012-ST
Biotechnology Industry
Research Assistance Council
(BIRAC) approved
biotechnology incubators to
the incubatees
1st April, 2016.

New exemptions
New entry at S. No.
25/2012-ST
National Centre for Cold
Chain Development under
Department of Agriculture,
Cooperation and Farmer‟s
Welfare, Government of
India, by way of knowledge
dissemination
1st April, 2016.

New exemptions
New entry at S. No.
25/2012-ST
Insurance Regulatory and
Development Authority
(IRDA) of India
1st April, 2016.

New exemptions
New entry at S. No.
26(q) of notification
No. 25/2012-ST
Services of general insurance
business provided under
„Niramaya‟ Health Insurance
scheme launched by National
Trust for the Welfare of
Persons with Autism, Cerebral
Palsy, Mental Retardation and
Multiple Disability in
collaboration with private/public
insurance companies
1st April, 2016.

New exemptions
Notification
No.09/2016-ST, dated
1st March 2016
The threshold exemption limit of
consideration charged for
services provided by a
performing artist in folk or
classical art forms of music,
dance or theatre, is being
increased from Rs 1 lakh to Rs
1.5 lakh per performance.come into effect from
1st April, 2016.

New exemptions
New entry at S. No. 9D of
notification No. 25/2012-
ST
Services provided by way of
skill/vocational training by Deen
Dayal Upadhyay Grameen
Kaushalya Yojana training
partners are being exempted
from service tax.
1st April, 2016.

New exemptions
New entry at S. No. 9C of
notification No. 25/2012-
ST
Services of assessing bodies
empanelled centrally by
Directorate General of Training,
Ministry of Skill Development &
Entrepreneurship are being
exempted from service tax.
1st April, 2016.

Changes in Abatement Notification
Service Type Earlier
Abatement
Revised
Abatement
Services provided by a Tour Operator in
relation to a package tour
75% 70%
Services provided by a Tour Operator
other than package tour or solely
arranging or booking accommodation
60% 70%
Services in respect of construction of a
complex / building structure or residential
complex unit having a carpet area less
than 2000 square feet
75% 70%

Service Type Earlier Abatement Revised Abatement
Transport of Goods by Rail 70% 70% (Input Credit on
Services is now allowed)
Transport of Goods by Container
on Rail by any person other than
Railways
70% 60% Input Credit of
Services is now
permitted)
Transport of passengers with or
without accompanied belongings
by rail
70% 70% (Input Credit of
Services is now
permitted)
Services provided by a GTA in
respect of used household goods
75% 60%

Service Type Proposed Abatement
By foreman to a Chit
fund
30% (Input Credit
on Services is not
allowed)

Amendment in ST Rules
Rule 6 of ST rules
amendment
The benefits of (a) quarterly
payment of service tax and (b)
payment of service tax on receipt
basis, which are available to
individual and partnership firms, are
being extended to One Person
Company (OPC) whose aggregate value
of services provided is up to Rs. 50
lakh in the previous financial year.
Further, the benefit of quarterly
payment of service tax is also being
extended to HUF.
1st April, 2016.

Amendment in ST Rules
Rule 7 of ST rules
amendment
The service tax liability on single
premium annuity (insurance) policies is
being rationalised and the effective
alternate service tax rate
(composition rate) is being prescribed
at 1.4% of the total premium
charged, in cases where the amount
allocated for investment or savings on
behalf of policy holder is not
intimated to the policy holder at the
time of providing of service
1st April, 2016.

Reverse Charge Mechanism
Reverse Charge Mechanism is no longer applicable for
services provided by Mutual fund agencies/ distributors
to an Asset Management company under Reverse Charge .
Service Tax on any service provided by Government or a
local authority to business entities will now be applicable
for a all services including support services.
Recipient of services availed from foreign shipping line by
a business entity located in India will get taxed under
reverse charge at the hands of the business entity.

 Equipment and Appliance used in an office located within a
factory are included in the definition of Capital Goods which
allows availment of Cenvat Credit
 Cenvat credit on inputs and capital goods used for pumping of
water , for captive use in the factory is being allowed even if
equipments are installed outside the factory.
 Capital Goods having a value of upto Rs 10,000/are including the
same in the definition of inputs.
 Direct transfer of tools, jigs and fixtures , moulds and dies can
now be sent directly to other manufacturer or job worker .

 The permission given by a AC or DC for sending inputs or
partially processed inputs outside his factory to a job worker
and clearance there from on payment of duty is valid now for
3 financial years.
 Cenvat Credit on Service Tax paid on amount charged for
assignment by Government or any other person of a natural
resource such as radio frequency spectrum , mines etc will be
spread over the period of time for which the rights have
been assigned.
 If the assignment is sold then the Cenvat Credit to the
extent of the service tax payable on the consideration is
allowed in the year of assignment.

Changes get incorporated on
enactment of bill

Lottery: Explanation 2 in section 65B(44) is proposed to
be amended to clarify that activity carried out by a
lottery distributor or selling agents of the State
Government under the provisions of the Lotteries
(Regulation) Act, 1998 (17 of 1998), is leviable to
service tax.‟ (Clauses 145 of the Bill refers)

66D(l) services by way of— (i) pre-school education and
education up to higher secondary school or equivalent; (ii)
education as a part of a curriculum for obtaining a
qualification recognised by any law for the time being in
force; (iii) education as a part of an approved vocational
education course;
Stands omitted. service tax exemption on them is
being continued by incorporating them in the
general exemption notification (Notification No.
25/2012-ST as amended by notification No. 09/2016-
ST, dated 1st March, 2016 refers)

Sec.65B(11) "approved vocational education course"
means,–– (i) a course run by an industrial training institute or an
industrial training centre affiliated to the National Council for
Vocational Training offering courses in designated trades notified
under the Apprentices Act, 1961; or
(ii) a Modular Employable Skill course, approved by the National Council of
Vocational Training, run by a person registered with the Directorate General of
Employment and Training. Union Ministry of Labour and employment
omitted - being incorporated in the general exemption notification
(Notification No. 25/2012-ST as amended by notification No 09/2016-
ST, dated 1st March, 2016 refers). come into effect from the date of
enactment of Finance Bill,

New levy- Declared Services-Section 66E
(j)Assignment by the Government of the right to use
the radio-frequency spectrum and subsequent transfers
thereof
This is to make it clear that assignment by Government of the
right to use the spectrum as well as subsequent transfers of
assignment of such right to use is a service leviable to service
tax and not sale of intangible goods. (Clauses 147 of the Bill
refers)

Section 67A.
(1)The rate of service tax, value of a taxable service
and rate of exchange, if any, shall be the rate of
service tax or value of a taxable service or rate of
exchange, as the case may be, in force or as applicable
at the time when the taxable service has been provided
or agreed to be provided.
(2) The time or the point in time with respect to the
rate of service tax shall be such as may be
prescribed.”. with effect from the date of enactment of the
Finance Bill, 2016

section 73,––
(i) in sub-sections (1), (1A), (2A) and (3), for the
words “eighteen months”, wherever they occur,
the words “thirty months” instead of “eighteen months”
shall be substituted;
(ii) in sub-section (4B), in clause (a), for the words
“whose limitation is specified as eighteen
months in”, the words “falling under” shall be
substituted.

section 75, for the words ‘‘Provided that’’, the following
shall be substituted,
‘‘Provided that in the case of a person who collects any
amount as service tax but fails to pay the amount so
collected to the credit of the Central Government, on
or before the date on which such payment is due, the
Central Government may, by notification in the Official
Gazette, specify such other rate of interest, as it may
deem necessary:

Interest rates on delayed payment of duty/tax across
all indirect taxes is proposed to be made uniform at
15%, except in case of service tax collected but not
deposited with the Central Government, in which case
the rate of interest will be 24% from the date on
which the service tax payment became due. Notification
Nos. 13 and 14/2016-ST dated 1st March, 2016

section 78A, the following Explanation shall be inserted,
namely:––
“Explanation.–– For the removal of doubts, it is hereby clarified
that where any service tax has not been levied or paid or has
been short-levied or short-paid or erroneously refunded, and
the proceedings with respect to a notice issued under sub-
section (1) of section 73 or the proviso to sub-section (1) of
section 73 is concluded in accordance with the provisions of
clause (i) of the first proviso to section 76 or clause (i) of the
second proviso to section 78, as the case may be, the
proceedings pending against any person under this section shall
also be deemed to have been concluded.”.

clause (i) of the first
proviso to section 76
The date of service of notice
under sub-section(1) of Section
73, no penalty shall be
payable; and proceedings in
respect of such service tax and
interest shall be deemed to
have been concluded.

clause (i) of the
second proviso to
section 78
The date of service of notice
under the proviso to sub-
section(1) of section 73, the
penalty payable shall be fifteen
percent of such service tax;
and proceedings in respect of
such service tax, interest and
penalty shll be deemed to be
concluded

section 89, in sub-section (1), for the words
“fifty lakh rupees”, at both the places where
they occur, the words “two hundred lakh rupees”
shall be substituted.

section 90, sub-section (2) shall be omitted.
section 91,–– Only for amount collected but not paid
(a) in sub-section (1), the words, brackets and
letter “clause (i) or” shall be omitted;
(b) sub-section (3) shall be omitted
91. Power to arrest._ (1) If the Commissioner of Central Excise
has reason to believe that any person has committed an
offence specified in clause (i) or clause (ii) of sub-section
(1) of section 89, he may, by general or special order,
authorise any officer of Central Excise, not below the rank of
Superintendent of Central Excise, to arrest such person.

section 93A, for the word “prescribed”, the
words “prescribed or specified by notification in
the Official Gazette” shall be substituted.
Where any goods or services are exported, the Central
Government may grant rebate of service tax paid on taxable
services which are used as input services for the manufacturing
or processing 4“or removal or export of such goods” or for
providing any taxable services and such rebate shall be subject
to such extent and manner as may be prescribed or specified
by notification in the Official Gazette”

Notification No. 41/2012- ST, dated the 29th June, 2012
was amended vide notification No.1/2016-ST dated 3rd
February, 2016 so as to, inter alia, allow refund of service
tax on services used beyond the factory or any other place
or premises of production or manufacture of the said goods,
for export of the said goods. The said amendment is being
given retrospective effect from the date of application of
the parent notification, i.e., from 01.07.2012. Time period
of one month is proposed to be allowed to the exporters
whose claims of refund were earlier rejected in absence of
amendment carried out vide notification No.1/2016-ST
dated 3rd February, 2016.

In the said notification, in the Explanation,–
(a) in clause (A), for sub-clause (i), the following
sub-clause shall be substituted and shall be
deemed to have been substituted, namely:––
“(i) in the case of excisable goods, taxable
services that have been used beyond factory or
any other place or premises of production or
manufacture of the said goods, for their export;”;
(b) clause (B) shall be omitted.
1st day of July, 2012 to 2nd February, 2016 (both days inclusive)

In the said notification, in the Explanation,–
(a) in clause (A), for sub-clause (i), in the case of
excisable goods, taxable services that have been
used beyond the place of removal, for the export
of said goods;
(b) clause (B) “place of removal” shall have the
meaning assigned to it in Section 4 of the Central
Excise Act,1944

Indirect tax Dispute Resolution Scheme, 2016,
in respect of cases pending before Commissioner
(Appeals), the assessee, after paying the duty,
interest and penalty equivalent to 25% of duty, can
file a declaration, is being introduced.
In such cases the proceedings against the assessee
will be closed and he will also get immunity from
prosecution. However, this scheme will not apply in
certain specified type of cases.
Indirect tax Dispute Resolution Scheme, 2016

Service tax assessees above a certain threshold
will also be required to file an annual return. This
change shall come into effect from 1st April,
2016.
Returns

Changes get incorporated on 1st
June,2016 after enactment of bill

Krishi Kalyan Cess is proposed to be levied with
effect from 1st June, 2016 on any or all the
taxable services at the rate of 0.5% on the value
of such taxable services. Credit of Krishi Kalyan
Cess paid on input services shall be allowed to be
used for payment of the proposed Cess on the
service provided by a service provider.
(Chapter VI/Clause 158 of the Bill refers)

section 66D (o)(i) service of transportation of
passengers, with or without accompanied belongings,
by— (i) a stage carriage;
proposed to be omitted with effect from 1.06.2016.
become taxable with effect from 1.06.2016. However,
such services by a non-air-conditioned contract
carriage will continue to be exempted by way of
exemption notification [Notification No. 25/2012-ST,
as amended by notification No. 09/2016-ST, dated 1st
March, 2016 refers].

The service of transportation of passengers by air-
conditioned stage carriage is being taxed at the same
level of abatement (60%) as applicable to the
transportation of passengers by a contract carriage,
with same conditions of non-availment of Cenvat credit.
[notification No. 08/2016-St dated 29th February,
2016 refers]

section 66D (p)(ii)] transportation of goods by an
aircraft or a vessel from a place outside India up to
the customs station of clearance in India; or -proposed
to be omitted with effect from 1.06.2016. However
such services by an aircraft will continue to be
exempted by way of exemption notification [Not. No.
25/2012-ST, as amended by notification No. 09/2016-
ST dated 1st March, 2016 refers].

Shipping Industry - Taxability
Particulars Taxability Remarks
Transportation of
Goods by a vessel by
an Indian Shipping Line
from outside India up
to the Customs station
in India
This will be taxable
with effect from
1.6.2016- Indian
vessel – Forward
charge
Foreign - RCM
The Cenvat Credit
chain gets completed.
This amendment will provide a level playing field for Indian Shipping Lines

Disclaimer: This presentation is provided purely for your information and
knowledge. Information provided in this presentation do not purport or should
not be treated as legal opinion in the fact specific situations that may effect you
and your business.

Budgetary changes 2016

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