Budget 2007 - Service Tax - New Exemptions "

Changed Effective from 1-3-2007 (Immediately) 

· Resident Welfare Associations (RWA) are exempt from service tax where the monthly contribution of a member does not exceed Rs. 3000/- per month [notification No. 8/2007-Service Tax dated 01.03.2007].  

· technical testing and analysis service provided in relation to testing and analysis of newly developed drugs on human participants by a CRO.   New drugs include vaccines and herbal remedies. [Notification No. 11/2007-Service Tax dated 01.03.2007]. 

· Exemption from service tax is being provided to services provided by the digital cinema service provider to the producer or distributor in relation to the delivery of content  of  cinema in digital  form after  encryption  electronically.  Exemption  is  not available if the content is delivered to the theatre for exhibition by any physical means. Transmission will be electronic either by wire or wireless means. Scope of the terms "cinematograph film" and "cinema theatre" are explained in the notification. [notification No. 12/2007-Service Tax dated 01.03.2007]. 

Changed Effective from 1-4-2007 (Financial Year 2007-08) 

· Any service provided by "Technology  Business Incubators (TBI) and Science and Technology Entrepreneurship Parks  (STEP)" from levy of service tax, subject to furnishing of information in the required format. [notification No. 9/2007-Service Tax dated 01.03.2007]. 

·  Service tax exemption is also provided within the premises of incubates shall also be exempt from service tax subject to certain conditions. [Notification No. 10/2007-Service Tax dated 01.03.2007].

Service tax exemptions for specified providers and deliveries, enabling conditional relief for RWAs, clinical testing, digital cinema and incubators. Service tax exemptions introduced in Budget 2007 exempt resident welfare association contributions below a prescribed monthly threshold, technical testing and analysis of newly developed drugs on human participants by contract research organisations, and digital cinema delivery services when content is electronically delivered after encryption; additionally, services by Technology Business Incubators and Science and Technology Entrepreneurship Parks, and certain services within incubatee premises, are exempt subject to prescribed information submission and qualifying conditions.