1 The following telecommunication related services are presently specified as separate taxable services, namely:-

(i) telephone connection [sub-clause (b) of section 65(105)]

(ii) pager [sub-clause (c) of section 65(105)]

(iii) leased circuit [sub-clause (zd) of section 65(105)]

(iv) communication through telegraph[sub-clause (ze) of section 65(105)]

(v) communication through telex[sub-clause (zf) of section 65(105)]

(vi) facsimile communication[sub-clause (zg) of section 65(105)]

Since  the  proposed  telecommunication  service  includes  telecommunication  related taxable services separately defined at present, the above mentioned services are not required  to  be  defined  separately  any  more. Section 66 is being amended to omit reference to sub-clauses (b), (c), (zd), (ze), (zf) and (zg) of clause (105) of section 65. Till telecommunication service is separately notified as a taxable service under sub-clause (zzzx) of clause (105) of section 65 after enactment of the Finance Bill, 2007, the above mentioned services continue to be classifiable as per the existing classification of taxable services.

2 At present filing of a return after the due date is treated as a violation and is liable for penal action. It is proposed to prescribe a specified amount of late fee linked to period of delay for filing of return after the due date. The assessee is required to pay the amount prescribed depending upon the period of delay. For this purpose, section 70(1) is being amended. After the proposed amendment in section 70(1) comes into force, appropriate rules will be notified indicating the conditions and the amount to be paid for delayed filing of return.

3 Section 14AA of Central Excise Act, 1944 empowers the Commissioner of Central Excise to order for cost audit by a Cost Accountant to study the abnormal utilisation of CENVAT credit. Section 83 is being amended to extend the applicability of this section for service tax purposes also.

Section 38A of Central Excise Act, 1944 provides protection by way of savings for all pending actions under rules and notifications that are repealed, rescinded or amended. Section 83 is being amended to extend section 38A provisions for service tax matters also.

4  Section 86 is being amended to empower the Central Board of Excise & Customs to constitute a committee of-

(i)  two Chief Commissioners to review the adjudication order passed by a Commissioner of Central Excise

(ii)  two Commissioners  to  review  the  order  passed  by a Commissioner of  Central Excise (Appeals)

5 Section 95 is being amended to empower the Central Government to issue orders or removal of difficulty in case of implementing, classifying or assessing the value of any taxable service incorporated by the Finance Act, 2007 upto one year from the date of enactment of the Finance Bill, 2007.

6 Section 96A is being amended to insert an Explanation in clause (b) of section 96A relating to definition of 'applicant' so as to clarify that in the 'joint venture in India' at least one of the participants or partners or equity holders shall be a non-resident.

7 The changes mentioned above [except 1] will come into force from the date of enactment of the Finance Bill, 2007.

Telecommunication service definition consolidated; other amendments add late filing fees, cost audit extension and review committees. Telecommunication related services are consolidated under a single telecommunication service by omitting separate sub clauses for telephone, pager, leased circuits, telegraph, telex and facsimile; existing classifications remain until separate notification. Other amendments introduce a period linked late fee for delayed returns, extend cost audit and savings protections to service tax, authorize Board review committees for adjudication, permit one year removal of difficulty orders for implementing taxable services, and clarify that a joint venture applicant must include at least one non resident.