Budget 2016 Glimpse of changes in Service Tax--

• Increase in rate of transportation services of household goods by GTA taxable to 5.8% (i.e. 14.5%*40%);
• Construction services now taxable @4.35% (i.e. 14.5% * 30%);
• Construction of low cost houses upto 60 sq mtrs. Under any housing scheme of state govt are exempt;
• Services by EPFO exempt;
• In Point of Taxation Rules, power have been given under specifically derived from 67A to end the on-going open issue regarding the constitutional validity of such rules;
• Interest on delayed payment reduced to 15% (with an upper cap of 24% in certain scenarios);
• All Services by govt. brought under reverse charge w.e.f. 1st Apr’16;
• Change in rate of tour operators services;
• Annual return mandatory for every notified person as may be specified from time to time (due date for submission shall be 30th November of succeeding FY);
• Changes in Rule 6 of CENVAT Credit Rules, 2004:
o Exempted services to include non-services too;
o In certain scenarios, the rate of CENVAT reversal shall get enhanced to 7%;
o Method for computation of CENVAT reversal under rule 6(3A) changed to a greater extent;
• CENVAT credit FIFO-basis deemed utilization, has been omitted;
• Services by air-conditioned stage carriage taxable @ 8.7% (i.e. 14.5%*60%);
• Krishi Kalyan Cess on all taxable services to be levied @0.5% w.e.f. 1st June’16