Service Tax — Budget changes for 2004-05 effective from 10th Sept., 2004

Service tax expansion brings multiple new and expanded services under levy, with uniform rate and education cess applicable.

The Finance (No. 2) Act, 2004 expands and adds numerous taxable services, extends several existing service categories, prescribes a uniform service tax rate and levies an Education Cess on taxable services calculated on net tax after permitted abatements. The circular clarifies scope and exclusions for key categories (airport services, transport of goods by air, survey and exploration, intellectual property transfers, construction for commercial/industrial use, TV/radio production, opinion polls), specifies abatements and exemptions subject to conditions on CENVAT credit and goods sold concessions, and directs issuance of implementing notifications and CENVAT rules with transitional relief and industry consultation for certain modalities.