Finance Act 2008 enacted-Service Tax provisions to be in force

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other enterprises under slot chartering arrangement would be taxable only in the state of residence and consequently, such income would be exempt from taxation under the Indian Income-tax Law-AIT-2008-299-ITAT Special Bench of ITAT rules Interest u/s 234 D is chargeable from assessment year 2004-05 and it could not be charged for earlier years even though regular assessments for these years are framed after 1st June. 2003 or the refund was granted for those years after the said date-AIT-2008-297-ITAT SC rules for a hardship to be `undue' it must be shown that the particular burden to have to observe or perform the requirement is out of proportion to the nature of the requirement itself, and the benefit which the applicant would derive from compliance with it-AIT-2008-298-SC Bombay High Court sets aside ITAT Ruling and holds advertisement revenue received by the SET Satellite (Singapore) Pte Ltd are not taxable in India as long as the DTAA and the Circular No. 23 of 1969 stands-Merely because tax on income was paid for some assessment years would not estop the assesses from contending that its income is not liable to tax-AIT-2008-297-HC-Click on the link below for details Services rendered by Sports Persons, Umpires and Referees, Coaches and Trainers, Team Physicians and Physiotherapists, Event Managers, Commentators,Anchors, and Sports Columnists. in relation to the sports activities subjected to TDS at the rate of 10 per cent as "Professional Services" under Section 194J-Income Tax Notification No. 88 Deemed export benefits are available on supply of goods to Mega Power Projects if power procurement from such projects has been tied up through ICB procedure OR if ICB procedure has been followed by such projects at Engineering and procurement contract (EPC) stage-DGFT Circular No.29 SC rules Agricultural Market Committee is not entitled to exemption under Section 10(20) of the 1961 Act after insertion of the said Explanation vide Finance Act, 2002 w.e.f. 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Finance Act 2008 enacted-Service Tax provisions to be in force

AIT News Network

Hon'ble President of India Mrs. Pratibha Patil The Finance Bill, 2008 has received the assent of the President of India on the 10th May, 2008 and consequently the Finance Act, 2008 has been enacted as Act No.18 of 2008.

Certain provisions relating to the levy of service tax in the Finance Act, 2008 shall come into force from a date to be notified. For this purpose, notifications No.18/2008 to 24/2008-Service Tax, all dated 10th May, 2008 have been issued.

Transaction between associated enterprises:

In the Finance Act 2008, section 67 has been amended. As per this amendment, service tax is required to be paid by the person liable to pay service tax on the taxable services provided even if the consideration for the taxable services provided is not actually received. In such cases, service tax is required to be paid immediately after crediting/debiting of the amount in the books of accounts or receipt of payment, whichever is earlier. However, this provision is restricted to transaction between associated enterprises and shall come into force w.e.f. 10th May, 2008. Explanation to Rule 6(1) of the Service Tax Rules, 1994 has been added as removal of doubts stating that any payment received towards the value of taxable service shall include any amount credited or debited, as case may be, to any account, whether called ‘Suspense account’ or by any other name, in the books of account of a person liable to pay service tax [Refer notification No.19/2008-Service Tax, dated 10.05.08].

Following changes / amendments shall come into force w.e.f. 16.05.2008:

· Seven services which are specifically mentioned in the category of taxable services and amendments made relating to existing taxable services.

· Amendments made in section 65 (defines taxable services and specified terms used in relation to taxable services) and section 66 (charging section) vide the Finance Act, 2008.

· Amendments made in Export of Services Rules, 2005 and the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 so as to categorise the newly specified taxable services under Rule 3 [Refer Notification No. 20/2008-Service Tax dated 10.05.08 & Notification No. 21/2008-Service Tax, dated 10.05.08].

· Optional Scheme for payment of service tax on Purchase or Sale of foreign currency: Service tax is leviable on purchase or sale of foreign currency, including money changing, provided by an authorized dealer in foreign currency or an authorised money changer, or a foreign exchange broker. Where the consideration for the services provided in relation to purchase or sale of foreign currency is not explicitly indicated, the person liable to pay service tax has been given the option to pay service tax calculated at the rate of 0.25% of the gross amount of currency exchanged. The method is prescribed under rule 6(7B) of the Service Tax Rules, 1994. [Refer notification No.19/2008-Service Tax dated 10.05.08].

The Government has already notified, vide notifications No.41/2007-Service Tax, dated 06.10.07 and 43/2007-ST, dated 29.11.07, sixteen taxable services attributable to export goods, whether or not in the nature of input services, providing refund of service tax paid on the said sixteen taxable services. Consequent upon the enactment of the Finance Act, 2008, Government has notified 16.05.2008 as the effective date for the specifically included taxable services vide the Finance Act, 2008. Out of the said taxable services, refund of service tax paid by exporters has been extended to the following additional 3 services:

· Purchase or sale of foreign currency under banking and other financial service,

· Purchase or sale of foreign currency under foreign exchange broking service,

· Supply of tangible goods for use service [Refer notification No.24/2008-ST, dated 10.05.08]

(Click here for Service Tax Notification Nos 18 to 24)

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