Service
Tax (Determination of Value) Second Amendment Rules, 2012. W.E.F 1st day of July, 2012.
2. For
rule 2A, the following rule shall be substituted, namely:-
“2A. Determination of value
of service portion in the execution of a works contract.-
Subject to the provisions of section 67, the value of service
portion in the execution of a works contract U/s 66E (h) of the Act, shall be determined
in the following manner
(i)
Value of service portion in the execution of
a works contract
a.
Shall be equivalent to the gross amount charged for the works
contract less: the value of property
in goods transferred in the execution of the said works contract.
Explanation.
(a)
gross amount charged for the works contract shall not include
value added tax or sales tax,(on transfer of property in goods involved in the
execution )
(b) Value of works contract service shall include, -
(i) Labour charges for execution of the works;
(ii) amount paid to a
sub-contractor for labour and services;
(iii) Charges for planning, designing and architect’s fees;
(iv) Charges for obtaining on hire or otherwise, machinery and tools
used for the execution of the works contract;
(v) cost of consumables such as water, electricity, fuel used in the
execution of the works contract;
(vi) cost of establishment of the
contractor relatable to supply of labour
and services;
(vii) Other similar expenses relatable to supply of labour and services; and
(viii) profit
earned by the service provider relatable to supply of labour and services;
(b)
Value assessed for value added tax or sales tax shall be taken as
the value of property in goods transferred, for determination of the value of service portion in the execution of
works contract under this clause.
(ii) Where the value has not been determined
under clause (i), the person liable to pay tax on the service portion involved in the execution of
the works contract shall determine the service tax payable in the following
manner, namely:-
Sl No
|
Particulars
|
The total
amount charged
for the works contract;
|
A
|
Works contracts entered into for execution of original works,
|
40%
|
B
|
Contract entered into for
maintenance or repair or reconditioning or restoration or servicing of any
goods
|
70%
|
C
|
Not covered under A and B
above including maintenance, repair, completion and finishing services such
as glazing, plastering, floor and wall tiling, installation of
electrical fittings of an immovable property
|
60%
|
;
Explanation 1.-
(a) “original works” means-
(i) all new constructions;
(ii) all types of additions and alterations to abandoned or
damaged structures on land that are required to make them workable;
(iii) erection,
commissioning or installation of plant, machinery or equipment or structures,
whether pre-fabricated or otherwise;
(c)
“total amount” means
the sum total of the gross amount charged for the works contract
and the fair market value of all goods and services supplied (determined
in accordance with the generally accepted accounting principles) in or
in relation to the execution of the works contract.
after deducting-
(i) the amount charged for such goods or services,
if any; and
(ii) the value added tax or sales tax, if
any, levied thereon:
Explanation 2.- Provider of taxable service shall not take
CENVAT credit of duties or cess paid on any inputs, used in or in relation to
the said works contract,
3. For rule 2B, following are omitted
:-
the words, brackets, letters and figures
“referred to in sub-clause (zm) and (zzk) of clause (105) of section 65 of the
Act,” shall be omitted.
4. Insertion
of Rule 2C
“2C. Determination of value
of service portion involved in supply of
food or any other article of human consumption or any drink in a restaurant or
as outdoor catering.-
Subject to the provisions of section 67, the value of service portion, in an activity wherein goods being
food or any other article of human consumption or any drink (whether or
not intoxicating) is supplied in any manner as a part of the activity at a
restaurant or as outdoor catering, shall be the specified percentage of
the total amount charged for such supply, in terms of the following Table,
namely:-
Sl.
No.
|
Description
|
Percentage
of the total amount
|
(1)
|
(2)
|
(3)
|
1.
|
Service portion in
an activity
wherein goods, being food or any other article of human consumption or any
drink(whether or not intoxicating)
is supplied in any manner as a part of the activity, at a restaurant
|
40
|
2.
|
Service portion in
outdoor catering
wherein goods, being food or any other article of human consumption or any
drink(whether or not intoxicating)
is supplied in any manner as a part of such outdoor catering
|
60
|
Explanation 1.-
“total
amount” means
the sum
total of the gross amount charged and the fair market value (determined in
accordance with the generally accepted accounting principles) of
all goods and services supplied in or in relation to the supply of food or any other article of human
consumption or any drink(whether or not intoxicating), whether or not
supplied under the same contract or any other contract,
after
deducting-
(i) the
amount charged for such goods or services,
if any; and
(ii) the
value added tax or sales tax, if any, levied thereon:
.
Explanation
2.-
Provider
of taxable service shall not take CENVAT credit of duties or cess paid on any
goods classifiable under Chapters 1 to 22 of the Central Excise Tariff Act,
1985 (5 of 1986).”.
5. Amendment in rule 3,
for the
words “where the consideration received is not wholly or partly consisting of
money”, the words “where such value is not ascertainable” shall be
substituted.
6. Amendment in rule 5,
In the said rules, in rule 5, in sub-rule(1),
in the Explanation, for the words, brackets, letters and
figures “services specified in sub-clause (zzzx) of clause (105) of
section 65 of the Finance Act, 1994,
the value of taxable service shall be the
gross amount paid by the person to whom telecom service is provided by the
telegraph authority”, the words
“the
value of the telecommunication service shall be the gross amount paid by the
person to whom telecommunication service is actually provided.” shall be
substituted.
7. Amendment in Rule 6,
(a) in
sub-rule (1),-
(i)
in clause (viii), for the words “in any manner; and” the words “in any manner;”
shall be substituted;
(ii) in
clause (ix), for the words “insurance agent”, the words “insurance agent; and”
shall be substituted;
(iii)
after clause (ix), the following clause shall be inserted, namely:-
“(x)
the amount realised as demurrage or by any other name whatever called for the
provision of a service beyond the period originally contracted or in any other
manner relatable to the provision of service.”;
(b) in
sub-rule (2),-
(i)
for clause (iv), the following clause shall be substituted, namely:-
“(iv) interest on delayed
payment of any consideration for the provision of services or sale of property, whether moveable or immoveable;”
(ii) after clause (v),
the following clause shall be inserted, namely:-
“(vi) accidental damages due to unforeseen actions
not relatable to the provision of service; and
(vii)
subsidies and grants disbursed by the Government, not directly affecting the
value of service.”.
8. Rule 7 omitted.
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