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1 Jun 2016

Amendments vide Finance Act, 2016, applicable wef 1st June, 2016

Finance Bill, 2016 which get President’s assent dated 14th May, 2016, has proposed to amend various provisions under the Act. Changes made applicable wef. 1st June, 2016 are listed as follows:-

a. Levy of “Krishi Kalyan Cess”

Krishi Kalyan Cess (KKC) @0.5%, vide introduction of Chapter VI in the Act, would be levied on all taxable services, other than services which are fully exempt from Service Tax or services which are otherwise not liable to Service Tax under section 66B of the Finance Act, 1994.

Service providers would be allowed to avail CENVAT Credit of KKC, however, such CENVAT credit can be utilized only for payment of KKC. Further, CENVAT of other duties/tax cannot be utilized for payment of KKC.

b. Negative List entry that covers “service of transportation of passengers, with or without accompanied belongings, by a stage carriage” would be omitted (section 66D (o)(i))

W.e.f. 01.06.2016 the service of transportation of passengers with or without accompanied belongings by an Air-conditioned stage carrier would become taxable, except in case if such service is provided by non-air conditioned contract carriage, which would continue to remain exempt by way of new entry 23(bb) in Mega Exemption Notification, to be applicable wef 1st June, 2016 too.

c. Negative List that covers services by way of transportation of goods by an aircraft or a vessel from a place outside India up to the customs station of clearance is to be omitted (section 66D (p)(ii))

Services by way of transportation of goods by vessel from a place outside India up to the customs station of clearance would now become taxable, however, aforesaid service by an aircraft will continue to exempt by way of Exemption notification no. 09/2016-ST dated 1st March 2016, wef. 1st June, 2016, vide new entry no. 53 in the exemption notification.