EXPLANATORY NOTES - SERVICE TAX

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....enactment of the Finance Bill, 2009). (b) extend or modify the scope of certain services, namely:- (i) Business auxiliary service [Section 65 (19) ], so as to provide that only those processes which result in the manufacture of excisable goods (as defined in the Central Excise Act) are excluded from the purview of Business auxiliary service. (ii) Information technology service [Section 65 (105) (zzzze)], to replace the word, `acquiring', with the word, `providing' [appearing in serial number (iv) and (v) of the definition].The amendment is being given retrospective effect from 16.05.2008. (iii) Stock-broker service [Section 65 (101)], to exclude sub-broker from its ambit. As a result sub-brokers will be outside the ambit of service tax.....

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....nly for such works contracts, where the taxpayer declares the entire value of goods (whether supplied under any other contract for a consideration or otherwise) and services used in the execution of the works contract, as the `gross value' charged for the works contract. This restriction would not apply to the current works contracts where either the execution has commenced or any payment been made on or before 07.07.2009 [refer notification No.23/2009-ST dated 07.07.2009]. (III) Rule 6(3) of the Cenvat Credit Rules, 2004 is being amended, to reduce the amounts to be paid on clearances of exempted goods and on provision of exempted services, from 10% to 5% in case of Central Excise and from 8% to 6% in case of service tax respectively [ref....

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....dier grant of refunds, to the exporters. The salient features of the new scheme, being notified under two notifications, No.17/2009-ST and No.18/2009-ST, both dated 07.07.2009, are as follows: (a) Under notification No.18/2009-ST dated 07.07.2009, two taxable services, namely, `transport of goods by road' and `commission paid to foreign agents' have been exempted from the levy of service tax, if the exporter is liable to pay service tax on reverse charge basis. The present cap of 10% on commission agency charges has been retained, and the exporter will have to pay service tax on the amount of commission which is in excess of 10%. (b) Superseding notification No.41/2007-ST dated 06.10.2007, a revised refund scheme is being brought into eff....