Service Tax Rules

[Admin TMI]

Question - What are proposed amendments in Service tax rules in Finance Bill 2015 ?

[Admin TMI]

• In respect of any service provided under aggregator model, the aggregator, or any of his representative office located in India, is being made liable to pay Service Tax if the service is so provided using the brand name of the aggregator in any manner. If an aggregator does not have any presence, including that by way of a representative, in such a case any agent appointed by the aggregator shall pay the tax on behalf of the aggregator. In this regard appropriate amendments have been made in rule 2 of the Service Tax Rules, 1994 and notification No. 30/2012-ST dated 20.6.2012 This change comes into effect immediately i.e., w.e.f. 1st March, 2015.
• Rule 4 is being amended to provide that the CBEC shall, by way of an order, specify the conditions, safeguards and procedure for registration in service tax. In this regard Order No. 1/15-ST, dated 28.2.2015, effective from 1.3.2015 has been issued, prescribing documentation, time limits and procedure for registration. It has also been prescribed that henceforth registration for single premises shall be granted within two days of filing the application.
• A provision for issuing digitally signed invoices is being added along with the option of maintaining of records in electronic form and their authentication by means of digital signatures. The conditions and procedure in this regard shall be specified by the CBEC (rule 4, 4A and 5).
• Rule 6 (6A) which provided for recovery of service tax self-assessed and declared in the return under section 87 is being omitted consequent to the amendment in section 73 for enabling such recovery. This change will come into effect from the date of enactment of the Finance Bill, 2015.
• In respect of certain services like money changing service, service provided by air travel agent, insurance service and service provided by lottery distributor and selling agent, the service provider has been allowed to pay service tax at an alternative rate subject to the conditions as prescribed under rule 6 (7), 6(7A), 6(7B) and 6(7C) of the Service Tax Rules, 1994. Consequent to the upward revision in Service Tax rate, the said alternative rates shall also be revised proportionately. Amendments to this effect have been proposed in the Service Tax Rules.The amendments shall come into effect as and when the revised Service Tax rate comes into effect.

AI Summary

Aggregator liability: brand-use makes the aggregator or its agent responsible for service tax and registration compliance. Amendments impose aggregator liability for service tax when services are provided using an aggregator's brand, making the aggregator or its Indian representative liable and, where no Indian presence exists, an appointed agent responsible. Rule 4 empowers CBEC to set registration conditions, safeguards and procedures, including expedited single-premises registration; rules allow digitally signed invoices and electronic records authenticated by digital signatures; removal of rule 6(6A) aligns recovery with section 73; certain services may use prescribed alternative tax rates adjusted with rate revisions.