The document summarizes major amendments to India's service tax in the 2012-13 budget. Key points include the introduction of a negative list approach where all services are taxable unless specifically exempted, new place of provision and point of taxation rules to determine where a service is consumed, and impacts on the construction industry such as taxing construction for own use over a certain size.

1. SERVICE TAX- BUDGET 2012-13
TAXPERT PROFESSIONALS
4th August, 2012
TAXPERT PROFESSIONALS PRIVATE LIMITED
By : CA. Garima Agarwal
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2. Budget 2012-13 | Major Amendments in Service Tax
Contents
1 | Budget at a glance
2 | Negative list concept
4 | Rules of interpretation
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5 | Place of Provision Rules, 2012
8 | Point of Taxation
14 | Construction Industry
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3. Budget 2012-13 | Major Amendments in Service Tax
Budget at a glance…
Remaining Services
Place of Provision
Of Services Rules,
12. 2012
10.
36 Negative
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Remainin
3% % List of g services
Services
Mega
Exemption List
of Services
Alignment with
Central Excise..
Move towards GST ALL SERVICES Point of Taxation
Rules
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4. Budget 2012-13 | Major Amendments in Service Tax
Negative List Concept….
 W. e.f 1st July, 2012, all the services will be taxable except
for 17 services provided in Section 66D, popularly known
as Negative List of Services.
TAXPERT PROFESSIONALS
Notification No. 25/ 2012, has notified 39 specified
services which will be exempt from service tax. This list of
services are popularly known as Mega- Exemption List of
services. 4

5. • List II i.e. tolls, betting, gambling, entertainment
Legal & amusement, advertisement other than radio
Constraints and TV, specified transportation
• Services by diplomatic missions in India
• Manufacture or production: both centre & state
Taxed as goods law: may not amount to transfer of title
• Trading of goods: forward markets
TAXPERT PROFESSIONALS
Administrative • Margin-based financial services: interest
difficulties
• Services by Government or RBI
1.Education
Others 2.Agriculture 5
3. Renting of residential dwellings
4.Funeral

6. Budget 2012-13 | Major Amendments in Service Tax
Rules of interpretation…..
 Normally uniform rate
 When differential treatment
 Specific over general
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 Bundled services
 Natural bundle: Essential Character
 Unnatural bundle: Highest Liability
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7. Finance Act 2012-13 | Major Amendments in Service Tax
Taxable Territory (TT):
TT = India minus J &
K; India defined in
the Act to include
EEZ
TAXPERT PROFESSIONALS
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8. Budget 2012-13 | Major Amendments in Service Tax
Main Rule:-
Taxable Territory Non-Taxable Territory
Not
Taxable
ABC DEF
Service Provider Receiver
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Taxable (SP)
PQR Taxable
XYZ
Receiver (SR) Service Provider
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9. Budget 2012-13 | Major Amendments in Service Tax
Service Place of Provision of Service Objectives
Presence of
goods or receiver
• Location of Performance
To determine the
Property • Location of Property place closest to the
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point of consumption
Admission &
organization of • Location of Event Further if a service is
events covered under more
than one rule then
Specified Later rule will prevail
• Location of Provider over previous rule.
services
• Embarkation 9
Transportation
• Destination of Goods

10. Point of Taxation
Process – Service Tax
Provision
of Service
It may be through
the Contract/ Invoice
Agreement. It can
be provided or to
TAXPERT PROFESSIONALS
be provided Payment
Within 30 Days
from the Date of Receipt/
Completion of Advance
provision of Service
Service Service Tax
Consideration can Payment
be received after or
before the provision
of Service Within 5th of Next
Month & 31st
March
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11. Budget 2012-13 | Major Amendments in Service Tax
Point of Taxation Rules
Date of payment has been defined by inserting rule 2A to mean the
earlier of the date of entry in the books of accounts or credited to the
bank account of the person liable to pay tax.
However, in the following cases , the date of payment would always be
date of credit in bank:
1) In case of change in rate between such entry and payment.
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2) In case the credit in bank is beyond four days from the date of
change in rate.
3) Payment made by an instrument which is credited to a bank account.
Small Service Provider (less than Rs. 50 Lakhs per year) being
individuals/ partnership firms could discharge the tax on receipt basis
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12. Budget 2012-13 | Major Amendments in Service Tax
Point of Taxation
 Determination of point of taxation in case of change in Effective Rate of Tax:
In case Service has been provided BEFORE the change of effective rate of tax:
Event Condition Point of Taxation
Invoice Issued after the Change of Point of taxation shall be
Rate date of payment or issuing
Payment Received after the Change of invoice whichever is
earlier
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Event Condition Point of Taxation
Invoice Issued Prior to Change of Point of taxation shall be
Rate date of issuing of invoice
Payment Received after the Change of
rate
Event Condition Point of Taxation
Invoice Issued after the Change of Point of taxation shall be
Rate date of payment 12
Payment Received before the change

13. Budget 2012-13 | Major Amendments in Service Tax
Point of Taxation:
 Determination of point of taxation in case of change in Effective Rate of Tax:
In case Service has been provided AFTER the change of effective rate of tax:
Event Condition Point of Taxation
Invoice Issued prior to the Change of Point of taxation shall be
Rate date of payment.
Payment Received after the Change
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Event Condition Point of Taxation
Invoice Issued Prior to Change of Point of taxation shall be
Rate date of issuing of invoice
Payment Received prior the Change of or receipt of payment
rate whichever is earlier.
Event Condition Point of Taxation
Invoice Issued after the Change of Point of taxation shall be
Rate date of issue of invoice. 13
Payment Received before the change

14. Budget 2012-13 | Major Amendments in Service Tax
Impact on Construction Industry….
• Construction for own use is now taxable if > one residential dwelling unit unless
otherwise exempted (low-cost housing)
• Resale by individuals before payment of all installments: not taxable; for remaining
installments; new allottee liable
Main Rule:
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Service Tax Not Applicable when:
• Builder sells a ready flat/ shop/ industrial unit after Building Completion Certificate is
obtained from a competent authorities.
• Entire Consideration is obtained only after building completion certificate is obtained.
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15. Budget 2012-13 | Major Amendments in Service Tax
TRIPARTITE BUSINESS MODEL
REDEVELOPMNT EINCLUDING SLUM
REHABILITATION PROJECTS
I INVESTMENT MODEL
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• CONVERSION MODEL
Build -Operate – Transfer Model
• JOINT DEVELOPMENT AGREEMENT MODEL
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16. Thanks,
Garima Agarwal
info@taxpertpro.com : vinay@taxpertpro.com
TAXPERT PROFESSIONALS PRIVATE LIMITED
TAXPERT PROFESSIONALS
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