Snapshot on Budget 2014-15 on Mega Exemp NT 25/2012 dt 20th June 2012

The new notification 06/2014 dated 11^th July 2014 have introduced the following changes in Mega Exemption Notification 25/2012 dated 20^th June 2012:-

1. Now services provided by operators of Common Bio-medical Waste Treatment facility to a clinical establishment by way of treatment or disposal of bio-medical waste or the process incidental thereto are exempted.

2. The earlier exemption given to services by way of technical testing or analysis of newly developed drugs, including vaccines and herbal remedies, on human participants by a clinical research organisation approved to conduct clinical trials by the Drug Controller General of India” has been omitted.

3. Services provided,-

(a) by an educational institution to its students, faculty and staff;

(b) to an educational institution, by way of,-

(i) transportation of students, faculty and staff;

(ii) catering, including any mid-day meals scheme sponsored by the Government;

(iii) security or cleaning or house-keeping services performed in such educational institution

(iv) services relating to admission to, or conduct of examination by, such institution;”;

Earlier :- Services provided to educational institution in respect of education exempted from service tax by way of auxiliary educational services and renting of immovable property were exempted

With the substitution of this exemption the definition of “auxiliary educational services” has been omitted. Thus it can also be inferred that the relevance of the Circular 172/7/2003 – ST dated 19^th September 2013 is also lost.

Further a new definition of “educational institution” is introduced. Educational institution means an institution providing services of pre-school education and education up to higher secondary school or equivalent; education as a part of curriculum for obtaining a qualification recognised by any law for the time being in force; education as a part of an approved vocational education course.

4. The change in relation to hotel industry exemption is marked as under :-

Services by way of renting of a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having declared tariff of a unit of accommodation below one thousand rupees per day or equivalent;”

5. Services by transportation by rail or vessel from one place in India to another and services by a goods transport agency by way of transport in a goods carriage of “organic manure, cotton, ginned or baled” has been exempted.

6. Transport of passengers by non air-conditioned contract carriage is exempted. Earlier there was no condition of contract carriage being air-conditioned or non air conditioned. Further services provided by radio-taxis are now made taxable.

“Radio taxi” means a taxi including a radio cab, by whatever name called, which is in two-way radio communication with a central control office and is enabled for tracking using Global Positioning System (GPS) or General Packet Radio Service (GPRS);

7. Service to Government, a local authority or a governmental authority by way of water supply, public health, sanitation conservancy, solid waste management or slum improvement and up-gradation has been exempted.

Earlier these services were exempted only if activity is carried out in relation to any function ordinarily entrusted to a municipality in relation to water supply, public health, sanitation conservancy, solid waste management or slum improvement and up-gradation.

8. One new scheme of Life Insurance business is also covered in the exemption list viz “life micro-insurance productas approved by the Insurance Regulatory and Development Authority, having maximum amount of cover of fifty thousand rupees.”;

9. Exemption of services by way of loading, unloading, packing, storage or warehousing of rice has been extended to cotton, ginned or baled”

10. Exemption has been provided to “services received by the Reserve Bank of India, from outside India in relation to management of foreign exchange reserves”

11. Exemption has also been provided to “services provided by a tour operator to a foreign tourist in relation to a tour conducted wholly outside India”.

CA Akash Phophalia

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