Banking and financial services classification: postal money order and postal account services are not taxable under banking service levy.
Services provided by the Department of Posts are not similar to banks or financial institutions and therefore services such as transfer of money through money orders, operation of postal savings accounts and issue of postal orders do not fall within the banking and other financial services entry and are not liable to service tax under that classification.

Electronic payment of service tax enables taxpayers to register with authorized banks for round-the-clock online challan submission and secure settlement.
Electronic payment of service tax is an optional mode where registered taxpayers use authorized banks and the Electronic Accounting System (EASIEST) to complete secure online challans; mandatory on-line validation of Assessee Code, Location Code and Account Head is required, banks generate unique payment confirmation numbers and deliver cyber receipts and printed challans while assuming responsibility for fund transaction and settlement with the Government.

Audit frequency thresholds revised for central excise and service tax, altering audit intervals and selection criteria.
Audit frequency norms are revised to base selection on total duty payment (cash plus CENVAT credit) and to rebalance periodicity for Central Excise and Service Tax into four bands with annual, biennial, five year and proportionate-sample audit cycles. Selection within non-top bands uses unit-wise rupee risk calculations from DC (Audit) and local risk parameters; EOUs face a mandatory national sample prioritised by value of duty-free inputs and capital goods, with deviations allowed for local risk factors. The revisions take immediate effect, with first-quarter audits excepted.

Service tax on computerized data processing at customs EDI centre requires providers to collect and display tax on user charges.
Service charges for data entry and computerized processing at the Customs EDI Service Centre are subject to service tax and the applicable education cess under the statutory provision for computerised data processing and software maintenance. The EDI operator is instructed to collect tax on the total charge, denote the tax separately on coupons or receipts, and display its service tax registration number; revised processing charges for the EDI/EDT system take effect from the notified commencement date.

Service tax accounting codes: new codes and education cess notified for specified taxable services; commissioners to issue trade notices.
Accounting codes under Major Head "0044 - Service Tax" have been opened for fifteen newly taxable services and a separate code for Education Cess effective 1-5-2006; each service is assigned sub-heads for Tax collection, Other Receipts (interest/penalty), and Deduct Refunds (for departmental use only). Commissioners of Central Excise & Customs are to be informed and to issue Trade Notices to advise assessees; Education Cess is assigned code 00440298.

Service tax accounting: new heads of account opened for specified taxable services, with Other Receipts covering interest and penalties.
New Head of Account under Major Head 0044 - Service Tax establishes sub-heads for Tax Collection and Other Receipts with assigned revenue codes for specified services (registrar to an issue, share transfer agents, ATM operations, recovery agents, non-print advertising space/time, sponsorship services excluding sports-event sponsorship, certain international passenger transport, rail container goods transport by non-government railways, business support services, auctioneers excluding court/Central Government auctions, public relations, ship management, Internet telephony, cruise ship transport, and payment-card related services). "Other Receipts" covers interest and penalties on delayed service tax payment.

Service tax valuation rules require gross consideration, include non monetary consideration, and reverse charge applies to services received from abroad.
Service tax is levied at twelve percent plus education cess, with valuation under section 67 requiring gross amount charged or, for non monetary consideration, the money equivalent or value of similar services; declared values must not be below cost and may be verified by the department under prescribed safeguards. Reimbursable expenditure incurred as a pure agent may be excluded if rule 5(2) conditions are met. Section 66A and accompanying rules make recipients taxable under a reverse charge mechanism for services provided from outside India, with specified categories and export rules defining when services qualify as exports.

Abatement for goods transport agencies confirmed withdrawn where Notification 32/2004 and Notification 35/2004 conflict.
The Directorate confirms withdrawal of its earlier clarification that the benefit of Notification No. 32/2004-S.T. is not available where the provisions of Notification No. 35/2004-S.T. apply; the letter dated 30-3-2005 was withdrawn by Directorate letter dated 11-4-2005, and this withdrawal is reiterated for administrative guidance on goods transport agency abatement.

Taxability of software maintenance clarified as taxable under maintenance or repair services, with collection of unpaid tax directed.
Tax liability arises on maintenance or repair of computer software under the classification of maintenance or repair services. The circular clarifies that maintenance, repair or servicing of software is taxable, superseding prior clarifications, and directs authorities to assess and collect unpaid service tax for such services from the date the earlier exemption was rescinded.

Exemption for goods sold with documentary proof - consumed-only materials not excluded from taxable service value under notification.
Notification No. 12/2003-S.T. exempts the value of goods and materials sold by the service provider to the recipient during provision of service only where documentary evidence of such sale exists; goods consumed in providing the service and not available for sale are not entitled to that exemption and must be included in the taxable value of the service.

Valuation of taxable services: draft rules propose methods to determine value when consideration is non monetary or unknown.
Valuation of taxable services currently relies on gross monetary charges under section 67, leaving uncertainty where consideration is non monetary or not explicitly known. The Finance Bill, 2006 proposes replacing that provision and empowering rules prescribing methods to determine taxable value in such circumstances. Draft Service Tax (Determination of Value) Rules, 2006 are circulated and the Tax Research Unit invites comments with provided contact details and a submission deadline.

Taxation of cross border services: draft rules propose a dedicated levy and seek public comments on service categorisation.
Proposes the Taxation of Services (Provided from outside India and Received in India) Rules, 2006 to levy service tax on services provided from abroad and received in India, replacing reliance on the existing Explanation to sub-clause (105) and aligning with principles of the Export of Services Rules, 2005. The Ministry solicits comments on the draft, notably the categorisation of fifteen included services under Rule 3(2), and requests submissions to the Tax Research Unit at the given address and email by the stated deadline.

Service tax expansion: new specified services and reverse charge introduced, with valuation, registration and recordkeeping obligations imposed.
The Finance Act revisions expand the scope of service tax by specifying new taxable services and extending existing categories; introduce a reverse charge for services provided from outside India to recipients in India; substitute section 67 with new valuation provisions for non monetary or indeterminate consideration; adjust exemptions and abatements; and impose enhanced procedural obligations on registration, recordkeeping, inspection, provisional attachment, recovery, and penalty, with specified effective dates and transitional notifications.

Construction of complex service: builders, contractors subject to service tax when activities constitute works contracts, taxable on gross charges
Service tax applies to construction activities where statutory definitions and judicial pronouncements treat builder undertakings for prospective purchasers as works contract or taxable services rather than sale. For Construction of Complex Service, builders and contractors can both be liable as independent service providers. Taxable value is the gross amount charged by the service provider, inclusive of goods and materials, subject only to the prescribed abatement on the gross amount and no other deductions in composite contracts.

Cenvat credit of service tax admissible for transportation to depot regardless of valuation basis, clarifying eligibility.
Cenvat credit for service tax on transportation to a depot is allowable where goods are sold from that depot because the Credit Rules treat outward transportation up to the place of removal as an input service, and the statutory definition of place of removal applies to the Credit Rules. Eligibility for credit is independent of the method used to compute excise duty, so goods charged at specific rates or by valuation do not lose entitlement to credit for transportation to depot.

CENVAT credit eligibility affirmed for service tax on outward transportation to depot, regardless of duty valuation method.
CENVAT credit for service tax on outward transportation is available up to the depot for depot sales because 'place of removal' in the Credit Rules is to be read with definitions in the Central Excise Act; this applies regardless of whether duty is charged at specific rates or on an ad valorem valuation basis, and credit entitlement is independent of duty valuation methods.