Composition scheme for works contract service permits alternative tax discharge with conditions on CENVAT and irrevocable election.
A composition scheme allows the person liable for service tax on a works contract to discharge liability by paying an amount equivalent to two per cent of the gross amount charged, with the gross amount excluding VAT or sales tax on transfer of property in goods; providers who opt in cannot take CENVAT credit on inputs for the works contract, and the irrevocable option must be exercised prior to payment and applies to the entire works contract until its completion.

Expansion of taxable service classifications broadens scope of services received from abroad under service tax rules.
Rule 3, clause (i) of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 is amended by substituting the brackets, letters and word "(zzzh) and (zzzr)" with "(zzzh), (zzzr), (zzzy), (zzzz) and (zzzza)", thereby adding three additional coded service entries to the scope of the import-of-services rules; the amendment is made under sections 93 and 94 read with section 66A and takes effect on the first day of June, 2007.

Export of Services amendment expands covered service entries and removes 'provided outside India' restriction, altering export eligibility.
Substitution in rule 3(1)(i) expands the list of clause identifiers to include additional service entries, and rule 3(2)(b) is amended by omitting the words "provided outside India," thereby altering the territorial wording applicable to that clause. The instrument, titled Export of Services (Second Amendment) Rules, 2007, is promulgated under sections 93 and 94 of the Finance Act, 1994 and comes into force on the first day of June, 2007.

Valuation of works contract services: gross contract value less value of goods transfer, with VAT-based valuation applied.
Rule 2A requires that the taxable value of works contract service be computed as the gross amount charged for the works contract less the value of transfer of property in goods involved in the contract, with gross amount excluding VAT or sales tax paid on such transfers. The rule specifies that works contract service value includes labour charges, subcontractor payments for labour and services, planning and design fees, charges for hired machinery and tools, consumables used in execution, establishment costs and related expenses, and profit attributable to supply of labour and services. If VAT or sales tax is paid on the actual value of goods transfer, that VAT valuation shall be adopted for this purpose.

Adjustment of service tax permitted where excess payments due to later property tax deduction may be adjusted within one year.
Where service tax paid on renting of immovable property exceeds the liability because property tax was not deducted from gross rent, the assessee may adjust such excess amount against service tax liability within one year from payment of the property tax; details of the adjustment must be intimated to the Superintendent of Central Excise within fifteen days of the adjustment.

Telecommunication service substitution clarifies which persons are liable for service tax under the amended notification.
Replaces, in paragraph (A) sub paragraph (i) of Notification No. 36/2004 regarding the person liable to pay service tax, the phrase "a telephone connection or pager or a communication through telegraph or telex or a facsimile communication or a leased circuit" with the single expression "telecommunication service," made under the powers conferred by sub section (2) of section 68 of the Finance Act, 1994, with the amendment to come into force on the stated commencement date.

Rescission of service tax exemption for port construction withdraws prior relief while preserving past acts and omissions.
The Central Government rescinds the notification that exempted construction of ports from service tax, subject to a saving for acts or omissions prior to rescission, and provides that the rescission shall come into force from the notified commencement date under exercise of powers conferred by the Finance Act.

Service tax exemption for port construction: construction and works-contract services excluded from tax, subject to specified exclusions.
Exempts commercial or industrial construction service and services in relation to execution of works contract supplied for construction of a port or other port from service tax under the Finance Act, excluding completion, finishing, repair, alteration, renovation, restoration, maintenance or repair of existing ports; defines "port" and "other port" by reference to section 65 and states the exemption's effective date, with the notification later rescinded by a subsequent notification.

Service tax exemption for renting of immovable property allows deduction of local property taxes from taxable value.
Exempts the taxable service of renting of immovable property by allowing deduction of property tax levied and collected by local bodies from the gross amount charged for renting when computing the value for service tax; interest or penalty paid to local authorities is not deductible, and property tax must be apportioned where tax periods differ.

Service tax effective date set for coming-into-force of Finance Act provisions governing new levy and amended services.
The Central Government, by Notification No. 23/2007-Service Tax, exercising powers under clause (A) and clause (B) of section 135 of the Finance Act, 2007, appoints 1st June 2007 as the date on which those clauses shall come into force, thereby bringing into effect the new levy and changes in existing services as provided by the Finance Act, 2007.

Secondary and Higher Education Cess on taxable services added via amendment, expanding cess chargeability under export-of-services rules.
Notification No.12/2005-Service Tax is amended by inserting a new paragraph in Explanation 1 to specify that the Secondary and Higher Education Cess on taxable services is levied in accordance with the Finance Act provisions cited in the amendment.

Secondary and Higher Education Cess inclusion added to export rebate notification for taxable services under Finance Act provisions.
The notification amends Notification No. 11/2005-Service Tax by inserting paragraph (c) in the Explanation to expressly include Secondary and Higher Education Cess on taxable services levied under section 136 read with section 140 of the Finance Act, 2007, thereby bringing that cess within the notification's rebate framework for service tax and cess on exported taxable services.

Delay in filing returns: fixed graded monetary penalties now payable, and payment closes pending proceedings under the Act.
Insertion of rule 7C prescribes graded amounts for delayed furnishing of the return under rule 7: five hundred rupees for delay up to fifteen days; one thousand rupees for delay beyond fifteen but not later than thirty days; and one thousand rupees plus one hundred rupees per day from the thirty first day for delays beyond thirty days, subject to the maximum specified in the Act. Payment of the prescribed amount deems proceedings in respect of the delayed submission concluded, and pending proceedings initiated before the Finance Bill, 2007 assent are similarly deemed concluded if payment is made within sixty days of assent.

Constitution of appellate committees under section 86 establishes two-commissioner panels to process Finance Act appeals.
The Board, under sub section (1A) of section 86 of the Finance Act, 1994, constitutes Committees of two named Commissioners of Central Excise for specified commissionerates, mapping each two member Committee to a corresponding Commissioner of Central Excise (Appeals) area so that appeals are processed under the procedural mechanism provided by sub section (2A); the notification lists the pairings by commissionerate and records subsequent substitutions and insertions by later notifications.

Constitution of appellate committees for service tax appeals establishes dual Chief Commissioner panels for specified commissionerate jurisdictions.
The Board constitutes Committees each comprising two Chief Commissioners (including Chief Commissioners of Customs and the Director General (Service Tax) where notified) to serve as appellate panels for appeals under the Finance Act; each Committee's jurisdiction is defined by the specified Commissionerates and service-tax divisions listed in the Table, and an explanation clarifies that references to Chief Commissioners of Central Excise include Customs and DG(Service Tax).

Appointment of Chief Commissioners of Customs to act as Chief Commissioners of Central Excise for committee constitution under service tax rules.
Chief Commissioners of Customs are appointed to act as Chief Commissioners of Central Excise solely for constituting the committee under section 86(1A) of the Finance Act, the appointment being made by the Central Board under powers from the Central Excise Act and rule 3 of the Service Tax Rules, as notified by the Department of Revenue.

Delegation of Authority: Commissioners authorized to exercise Central Excise powers nationwide for investigation and adjudication.
The Central Board of Excise and Customs appoints all Commissioners of Central Excise and Commissioners of Central Excise (Adjudication) and invests them with the powers of the Commissioner of Central Excise to be exercised throughout India for investigation and adjudication of cases as may be assigned by the Board.

Service tax exemption on tour operator transport services: excess tax over prescribed valuation not required to be paid.
The Central Government directed that for tour operator services relating to passenger transport (excluding package tours) operating under a contract carriage permit, for the period 1 April 2000 to 4 February 2004, any service tax in excess of that calculated on a value equal to forty per cent of the gross amount charged shall not be required to be paid where such services were not being taxed during that period in accordance with a generally prevalent practice.

Revised Service Tax ST-3 Form mandated for e-filing, substituting the prior return under amended Service Tax rules.
The notification substitutes the existing Form ST-3 in the Service Tax Rules, 1994 with a revised ST-3 and issues instructions to make the form suitable for e filing; the change is promulgated as the Service Tax (Second Amendment) Rules, 2007 and comes into force on publication in the Official Gazette.

Advance Ruling procedure updated: revised application form and Authority name require specified disclosures, documentation and fee.
Amendment substitutes the Authority's name to the Authority for Advance Rulings (Central Excise, Customs and Service Tax) and replaces the prescribed application with FORM-AAR (ST-I), prescribing applicant identification, status categories (including joint venture and wholly owned subsidiary particulars), supporting documents, registration and PAN disclosure, detailed statement of facts, the applicant's legal/factual interpretation, specified question categories (classification, valuation, applicability of notifications, admissibility of credit, liability), verification, annexures, and procedural filing requirements including quadruplicate copies and a prescribed fee by demand draft.