In Union Budget 2014-15, certain amendments were proposed in the negative list and Service Tax Rules. These amendments were to come into force on when the Finance Act was enacted. Let us look at these amendments.
1. Services provided by radio taxis :
As per Section 66D(o)(vi) of Finance Act, 1994, “metered cabs, radio taxis & auto rickshaws” were included in the Negative List i.e. they were not covered under service tax. However, the Finance (No.2) Act, 2014, services provided by radio-taxis have become taxable with effect from 1st October 2014. In respect of services provided by radio-taxis, taxable portion will be 40% of the amount charged. Therefore, on the services provided by radio taxis, service tax payable will be 4.944% of the amount charged.
2. Advertisement Services :
As Section 66D(g) of Finance Act, 1994, selling of space or time slots for advertisements other than advertisements broadcast by radio or television were included in the Negative List. Now service tax has been extended to all forms of advertising except print media as defined in section 65B (39a) of the Finance Act, 1994. Print media” means,—
(i) “book” as defined in sub-section (1) of section 1 of the Press and Registration of Books Act, 1867, but does not include business directories, yellow pages and trade catalogues which are primarily meant for commercial purposes;
(ii) “newspaper” as defined in sub-section (1) of section 1 of the Press and Registration of Books Act, 1867
3. Rate of Exchange for valuation of Export or Import of Services :
Section 67 of Finance Act, 1994 provides for valuation of taxable services for charging service tax. Whenever, services are imported or exported, the applicable exchange rate is required to be applied to arrive at the value of service rendered. Earlier, such rate was construed to be the rates notified by CBEC from time to time, in accordance with section 14 of Customs Act,1962. This provision has been amended with effect from 1st October 2014. The rate of exchange for determination of value of taxable service shall be the applicable rate of exchange as per the generally accepted accounting principles on the date when point of taxation arises in terms of the Point of Taxation Rules, 2011.
