[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 6th June, 2012
Notification No. 24/2012 - 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) and in supersession of the notification of the Government of India in the
Ministry of Finance (Department of Revenue) number 11/2012 – Service Tax, dated
the 17th March, 2012, published in the Gazette of India,
Extraordinary, vide number G.S.R. 209 (E), dated the 17th March,
2012, 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) Second Amendment Rules, 2012.
(2) They
shall come into force from the 1st day of July, 2012.
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 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 , referred to in clause (h) of
section 66E of the Act, shall be determined
in the following manner, namely:-
(i) Value
of service portion in the execution of a works contract 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.- 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 or payable, 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 or sales tax has been paid or payable on the actual value of
property in goods transferred in the execution of the works contract, then,
such value adopted for the purposes of payment of value added tax or sales tax,
shall be taken as the value of property in goods transferred in the execution
of the said works contract 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:-
(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;
(B) in case of works
contract entered into for maintenance or repair or reconditioning or
restoration or servicing of any goods, service
tax shall be payable on seventy percent. of the total amount charged for the
works contract;
(C) in case of other
works contracts, not covered under sub-clauses (A) and (B), including maintenance,
repair, completion and finishing services such as glazing, plastering, floor
and wall tiling, installation of electrical fittings of an immovable
property , 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,-
(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;
(d) “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
in or in relation to the execution of the works contract, 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:
Provided that the fair market value of
goods and services so supplied may be determined in accordance with the
generally accepted accounting principles.
Explanation 2.--For
the removal of doubts, it is clarified that the 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, under the provisions of CENVAT Credit
Rules, 2004.”.
3. In the said rules, in rule 2B, 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. In the said
rules, after rule 2B, the following rule shall be inserted, namely:-
“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:-
Table
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.- For the purposes of this rule, “total
amount” means the sum total of the gross amount charged and the fair market value
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:
Provided that the fair market value of
goods and services so supplied may be determined in accordance with the
generally accepted accounting principles.
Explanation 2.- For the removal of doubts, it is clarified that the
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. 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.
6. 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. 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 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. In the said rules, rule 7 shall be
omitted.
[F. No. 334/1
/2012-TRU]
(Rajkumar Digvijay)
Under Secretary to
the Government of India