[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II,
SECTION 3, SUB-SECTION (i)]
Government of India
Ministry of Finance
(Department of Revenue)
New Delhi, the 17th
March 2012
Notification No. 11/2012
- Service Tax
G.S.R.
(E).- In exercise of the powers conferred by clause (aa) of sub-section (2) of
section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby
makes the following rules further to amend the Service Tax
(Determination of Value) Rules, 2006,
namely :-
1. (1) These rules
may be called the Service Tax (Determination of Value) Amendment Rules, 2012.
(2) They shall come into
force from the date on which section 66B of the Finance Act, 1994 comes into
effect.
2. In the Service
Tax (Determination of Value) Rules, 2006 (hereinafter referred to as the said
rules), for rule 2A, the following rule shall be substituted, namely:-
“2A. Determination of value of taxable services involved in the execution
of a works contract.-
Subject to the provisions of section 67, the value of taxable service involved
in the execution of a works contract (hereinafter referred to as works contract
service), referred to in clause (8) of
section 66E of the Act, shall be determined by the service provider in the
following manner, namely:-
(i) Value of works contract service shall be
equivalent to the gross amount charged for the works contract less the value of
transfer of property in goods involved in the execution of the said works contract.
Explanation.- For the purposes of this clause,-
(a) gross
amount charged for the works contract shall not include value added tax or
sales tax, as the case may be, paid, if any, on transfer of property in goods
involved in the execution of the said works contract;
(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;
(c) Where value added tax has been paid on the
actual value of transfer of property in goods involved in the execution of the
works contract, then, such value adopted for the purposes of payment of value
added tax, shall be taken as the value of transfer of property in goods
involved in the execution of the said works contract for determining the value
of works contract service under this clause.
(ii) Where the value
has not been determined under clause (i), the person liable to pay tax on the
taxable service involved in the execution of the works contract shall determine
the service tax payable in the following manner, namely:-
(A) in case of
works contracts entered into for execution of original works, service
tax shall be payable on forty per cent. of the total amount charged for the
works contract:
Provided that where the gross amount
charged includes the value of the land, in respect of the service provided by
way of clause (8) of section 66E of the Act, service tax shall be payable on
twenty five per cent. of the total amount including such gross amount;
(B) in case of other
works contracts including completion and finishing services such as glazing,
plastering, floor and wall tiling, installation of electrical fittings not covered under sub-clause (A),
service tax shall be payable on sixty per cent. of the total amount charged for
the works contract;
Explanation
1.- For the purposes of this rule,-
(I) “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;
(II) “total amount”
means the sum total of gross amount and the value of all goods, excluding the
value added tax, if any, levied on goods and services supplied free of cost for
use in or in relation to the execution of works contract, under the same
contract or any other contract:
Provided
that where the value of goods or services supplied free of cost is not
ascertainable, the same shall be determined on the basis of the fair market
value of the goods or services that have closely available resemblance;
Explanation
2.--For
the removal of doubts, it is clarified that duty of excise paid on any goods,
property which is transferred (whether as goods or in some other form) in the
execution of works contract, shall not be availed as CENVAT credit.”.
3. In rule 2B of the
said rules, after rule 2B, the following rule shall be inserted, namely:-
“2C. Determination of value of taxable service involved in supply of food
and drinks in a restaurant or as outdoor catering.- Subject to the
provisions of section 67, the value of taxable service involved in the supply
of food or drinks for consumption either in a restaurant or as outdoor catering
service, either by itself or along with other services, shall be the percentage
of total amount, specified in column 3 against the respective description of
services mentioned in the following Table:-
Table
Sl. No. |
Description |
Percentage of total amount |
1 |
2 |
3 |
1. |
Service
involved in the supply of food or any other article of human consumption or
any drink at a restaurant |
40 |
2. |
Service
involved in the supply of food or any other article of human consumption or
any drink as outdoor catering service |
60 |
Explanation 1.-
For the purposes of this rule, “total amount” means the sum total of the gross
amount and the value of all goods, excluding the value added tax, if any,
levied on goods or services supplied free of cost for use in or in relation to
the supply
of food or any other article of human consumption or any drink, under the same contract or any other contract:
Provided
that where the value of goods or services supplied free of cost is not
ascertainable, the same shall be determined on the basis of the fair market
value of the goods or services that have closely available resemblance.
Explanation
2.- For the removal of doubts, it is clarified that any goods
classifiable under chapter 1 to 22 of the Central Excise Tariff Act, 1985 (5 of
1986) meant for human consumption shall not be considered as “inputs” for the
service portion in an activity wherein goods, being food or any other article
of human consumption or drink is supplied in any manner as part of the activity.”.
4. In the said rules, 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.
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 words “telecommunication service” shall be
substituted.
6. In the said rules, 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,-
(a) deposits;
and
(b) delayed
payment of any consideration for the provision of services or sale of goods;
(ii)
in
clause(v), for the words “to the passengers.”, the words “to the passengers;
and” shall be substituted;
(iii)
after clause (v), the following clause shall
be inserted, namely:-
“(vi) accidental damages due to unforeseen actions not
relatable to the provision of service.”.
7. In the said rules, rule 7, shall be omitted.
[F. No.334/1 /2012-TRU]
(Samar Nanda)
Under Secretary to the Government
of India
Note.- The principal rules were notified vide notification
no.12/2006-Service Tax, dated the 19th April, 2006, published in the
Gazette of India, Extraordinary vide number G.S.R.228(E), dated the 19th
April, 2006 and last amended vide notification No.2/2011-Service Tax, dated the
1st March, 2011, vide number G.S.R. 159 (E), dated the 1st
March, 2011.