Update: No more Service Tax on Yoga Training

CBEC vide its Notification No. 20/2015-Service Tax dated 21-10-2015 amended Notification No. 25/2012-Service Tax, dated the 20th June, 2012 to provide following new exemptions from levy of service tax:

No More Service Tax on Yoga Training:

Now 'Yoga' gets place in Mega Exemption Notification w.e.f. 23-10-2015. Earlier the exemption was extended to only Services by an entity registered under section 12AA of the Income tax Act, 1961.

-- CA Kasliwal Ambar

Service tax levy on services provided by a Goods Transport Agency

Circular No.186/5/2015­ST

 F. No. 354 / 98 /2015­ - TRU

 Government of India

 Ministry of Finance

 Department of Revenue

 Central Board of Excise & Customs

 *****

 New Delhi, dated 5th October, 2015

To,
Principal Chief Commissioner / Chief Commissioner of Central Excise, Service Tax and Customs (All),
Director General of Service Tax
Director General of Audit
Director General of Central Excise Intelligence Principal Principal Commissioners of Service Tax (All)
Commissioners of Service Tax (All)
Commissioner (DPPR)
webmaster@cbec.gov.in

Sir/ Madam,

Subject: ­ Service tax levy on services provided by a Goods Transport Agency ­reg.

The All India Transport Welfare Association (AITWA) has represented regarding the difficulties being faced by the Goods Transport Agencies (GTAs) in respect of service tax levy on the services of goods transport. Doubts has been raised by the All India Motor Transport Congress (AIMTC) regarding treatment given to various services provided by GTAs in the course of transportation of goods by road.

2. The issue has been examined. Since July 1, 2012, service tax has shifted to a negative list regime, by which all the services except those covered in negative list as mentioned in section 66D of the Finance Act, 1994 or those exempted by notification are chargeable to service tax.

3. Goods Transport Agency (GTA) has been defined to mean any person who provides service to a person in relation to transport of goods by road and issues consignment note, by whatever name called. The service provided is a composite service which may include various ancillary services such as loading/ unloading, packing/unpacking, transshipment, temporary storage etc., which are provided in the course of transportation of goods by road. These ancillary services may be provided by GTA himself or may be sub-contracted by the GTA. In either case, for the service provided, GTA issues a consignment note and the invoice issued by the GTA for providing the said service includes the value of ancillary services provided in the course of transportation of goods by road. These services are not provided as independent activities but are the means for successful provision of the principal service, namely, the transportation of goods by road.

4. A single composite service need not be broken into its components and considered as constituting separate services, if it is provided as such in the ordinary course of business. Thus, a composite service, even if it consists of more than one service, should be treated as a single service based on the main or principal service. While taking a view, both the form and substance of the transaction are to be taken into account. The guiding principle is to identify the essential features of the transaction. The interpretation of specified descriptions of services in such cases shall be based on the principle of interpretation enumerated in section 66 F of the Finance Act, 1994. Thus, if ancillary services are provided in the course of transportation of goods by road and the charges for such services are included in the invoice issued by theGTA, and not by any other person, such services would form part of GTA service and, therefore, the abatement of 70%, presently applicable to GTA service, would be available on it.

5. It is also clarified that transportation of goods by road by a GTA, in cases where GTA undertakes to reach/deliver the goods at destination within a stipulated time, should be considered as services of goods transport agency in relation to transportation of goods for the purpose of notification No. 26/2012-ST dated 20.06.2012, serial number 7, so long as (a) the entire transportation of goods is by road; and (b) the GTA issues a consignment note, by whatever name called.

6. Pending disputes on the above issues may accordingly be decided expeditiously.

7. Trade & field formations may be informed suitably.

Yours faithfully,
(Dr. Ravindra Kumar)
Technical Officer, TRU-II

Service Tax on Home Delivery of Food not applicable

As per Govt norms, Service Tax is levied if the Food is served in an Air Conditioned Restaurant.

However, there has been a lot of confusion regarding levy of Service Tax on Home Delivery of Food as such food is not being eaten in a AC Restaurant.

A clarification in this regard was sought from the office of the Deputy Commissioner of Central Excise and Service Tax Division (Chandigarh) in this regard.

It has in a written communication replied that in the case of Transaction involving Pick-up/ Home Delivery of food sold by a Restaurant, the dominant nature of the transaction is that of Sale and not service as the Food is not served at the Restaurant.

Moreover, no element of service is being offered at the Restaurant, be it ambience, live entertainment, air conditioning, personal hospitality etc. The Service Tax can only be levied if there is an element of "Service" involved which would typically be the case where the food is served in a Restaurant.

Therefore, the above transaction is not chargeable to Service Tax, being sale in nature, only if, no amount is charged for such free delivery of food.

- CA Kasliwal Ambar

IMPORTANT UPDATES FOR CHARTERED ACCOUNTANTS - 24 Aug 2015

➡ IMPORTANTS NEWS

1. Govt. enables online filing of form FC-TRS for transfer of shares between NRs and Residents via e-Biz portal

➡ INCOME TAX

1. Even if advance forfeited by supplier wasn't allowable as bad-debt, yet it could be considered as business loss. 60 taxmann.com 82 (Guwahati - Trib.)

2. 60 taxmann.com 206 (Bombay)Where assessee- joint venture company did not execute contract work on its own and same was done by one of its constituents, as there was no finding of receipt of any income by assessee on account of said contract, same would not be taxable in its hands.

➡ BANKING AND CORPORATES LAWS
1. SEBI proposes to allow Infra Investment Trusts to invest in two level SPVs and to reduce sponsor's commitment.

➡ CST AND VAT LAWS
1. August 22, 2015[2015] 60 taxmann.com 191 (Karnataka) CST & VAT: Karnataka VAT - Only condition for making further reassessment under section 39(2) in addition to earlier reassessment is when authority takes notice of further evidence

2. The purchaser need not to reversed input tax credit unless seller has claimed refund in case of incentive given or credit note issued ruled by Delhi high Court.

➡ SERVICE TAX AND EXCISE LAWS.

1. Service Tax could not be levied to indivisible works contract prior to 1-6-2007.

2. 59 taxmann.com 460 (Bombay) Excise & Customs : Tribunal does not have power to dismiss appeal for default or for want of prosecution, without adjudication on merits; and if appeal has been so dismissed, Tribunal must restore same subject to reasonable conditions.

- CA Kasliwal Ambar

Daily CA Updates - 21st August 2015

PROFESSIONAL UPDATES:
21st August, 2015

► Govt. has notified challan no ITNS 284 for depositing taxes under the black money Act.

► ITR E-Verification is possible through

i. authenticate your Aadhaar and link it with your PAN,

ii. Net-banking account and get redirected to the efiling,

iii. E-filing OTP (available only if the Returned Income is below Rs 5 Lakh and no refund is claimed).
► With effect from 1st SEP'15, all 2nd & 4th Saturdays, declared as Public Holiday for all Banks and 1st and 3rd Saturday full working days.
► FAST TRACK EXIT (FTE) FOR DEFUNCT COMPANIES U/s Sec 248 of 2013 Act if The Co have “Nil” Assets & Liabilities and not carrying any business activity except Listed Companies by application Form FTE with fees of Rs. 5,000/-.
► CBEC clarifies on Show Cause Notice issuance & proceedings conclusion as per amended penal provisions in Service Tax and Central Excise.
► Supreme Court on 20th Aug 2015 in the case of CCE Kerala vs Larsen & Toubro Ltd. held that Service Tax can not be levied on indivisible contracts prior to the introduction on 1st June 2007 which expressly makes such works contracts liable to service tax.

- CA Kasliwal Ambar

IMPORTANT NEWS & UPDATES FOR CHARTERED ACCOUNTANTS - 20th Aug 2015

➡ IMPORTANTS NEWS

1. Govt. notifies 'Challan No. ITNS 284' for depositing taxes under Black Money Act.

2. RBI grants approvals for 11 payment banks including Reliance, Airtel, Vodafone

➡ INCOME TAX

1. Compounding fee paid to Municipal Corporation is in nature of penalty disallowable.

2. 60 taxmann.com 287 (Chennai - Trib.) ITAT allows sec. 11 tax exemption to Tamil Nadu Cricket Association.

3. High Court has inherent power to review its own judgment, says Supreme Court.

4. 60 taxmann.com 135 (Bombay) No concealment penalty if sum treated as capital receipt was disclosed in notes to accounts and return.

➡ BANKING AND CORPORATES LAWS
1. 60 taxmann.com 285 (SAT - Mumbai) Where in guise of running real estate business, PACL was running sham Collective Investment Schemes (CIS) which were detrimental to interest of investors, decision of SEBI directing PACL to wind up existing CIS and refund money collected from investors with promised return could not faulted.

➡ CST AND VAT LAWS
1. 60 taxmann.com 123 (Gujarat) Gujarat VAT - Where Assessing Authority cancelled registration certificates of assessee on ground that alleged purchases made by it from two dealers were bogus and not genuine and even assessee had indulged into billing activities only, registration certificates had been rightly cancelled.

➡ SERVICE TAX AND EXCISE LAWS.
1. 60 taxmann.com 122 (SC): Wharfage charges and lease rent recovered by port authorities cannot be regarded as 'service' in relation to 'a vessel or goods' and cannot be said to be a service provided by 'port or person authorised by it'; hence, same is not liable to service tax under port services.

2. Excise :No personal penalty on directors where issue relates to interpretation of law and situation is revenue neutral.

- CA Kasliwal Ambar

PROFESSIONAL UPDATES & CA NEWS by CA Kasliwal Ambar- 20th August 2015

# IT: Interest u/s 234B - no direction had actually been given in the assessment order for payment of interest - Form I.T.N.S.150 contained a calculation of interest payable on the tax assessed - this Form must be treated as part of the assessment order in the wider sense - levy of interest confirmed (Supreme Court)

# ST: Franchise service - Nature of Receipt of course fees - Only because all the fees are provided in one Agreement does not necessarily lead to a conclusion that the different components of fees are only for the purpose of grant of franchise (CESTAT Mumbai)

# IT: Finance ministry mulls 1% Income Tax rebate for credit/debit card payments.

# IT: CBDT amends IT Rules to notify that computation of Period of Stay in India of an Indian Citizen being Member of Crew of a Ship shall be as per Voyage Discharge Certificate (VDC).

# IT: CBDT to clarify on the period for which foreign bank account details disclosures required under black money law through second set of FAQs on the black money.

# GST: Government pushing ahead with GST; Two verticals created for implementation.

# Vacancies: HDFC bank needs Credit Manager in Punjab, Haryana & Rajasthan. Contact: Mr. Raghav Mahajan (+917307211397) / Email: raghav.mahajan1@hdfcbank.com

- CA Kasliwal Ambar

Daily CA Updates - Wednesday - August 19

IMPORTANTS NEWS 

1. Last date for filing Dvat return for Q1 again extended to August 25,2015

➡INCOME TAX

1. CBDT notifies rules to determine period of stay of crew members of foreign bound ships in India. notification no 70/2015 dt Aug 17
2. 60 taxmann.com 246 (Uttarakhand).The amount of interest received on the refund of Income Tax is not includible in the amount on which the assessee is liable taxed under Section 44BB of the Act. B J SERVICES COMPANY vs ACIT
3. 60 taxmann.com 55 (Bombay) Where motive of assessee is not generation of profit but to provide training to needy women in order to equip or train them and make them self-confident and self-reliant and occasional sales or trust's own fund generation was for furthering objects of trust, proviso to section 2(15) would not apply.

Dit vs women's India trust

➡ BANKING AND CORPORATES LAWS

1. Investment by Category I and II AIFs in shares of start-ups shall be deemed to be investment in unlisted shares.
2. Takeover code not applicable to startups that are listed without making a public issue.
3. Delisting norms not applicable to securities listed by start-ups without making a public issue

➡CST AND VAT LAWS

1. Govt. tweaks Rules relating to reduction of tax credit under Delhi VAT in case sale at discount or incentive through credit note is recd . Notification dt Aug 12 no 650.
2. Officer-in-charge has no power to seize goods-in-transit with valid documents.Reckitt Benckiser india ltd vs state of tripura.

➡ SERVICE TAX AND EXCISE LAWS.

1. Delhi High Court asks dept. to respond to challenge made against amended provisions of Service Tax Audit in section 94(2)(k)and rule 5A(2). Mega cabs p ltd vs union of india.
2. Cement/steel used in construction of storage facility is eligible for Cenvat credit. Grasim Industries Ltd Vs Comm Excise Jaipur

- CA Kasliwal Ambar