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Changes in Service Tax and Cenvat Credit Rules

28 August, 2014

Certain changes in service tax provisions announced in this year’s Union Budget will come into effect from 1st October, 2014. As per Finance (No. 2) Act, 2014, changes relating to negative list will come into effect from a date to be notified and this date has now been notified as 1-10-2014. The Central Board of Excise & Customs (CBEC) has issued Notification No. 18/2014-S.T., dated 25-8-2014 for this purpose. According to the communication issued by the CBEC, broadening of the tax base by extension of service tax levy to all forms of advertising except print media and on services provided by radio-taxis, will come into effect on 1st October, 2014.

Notification No. 19/2014-S.T., dated 25-8-2014 has been issued to insert Rule 11 in Service Tax Rules, 1994. This new rule comes into force from 1-10-2014 and it provides for reckoning the exchange rate based on generally accepted accounting principles for calculation of value of services in the case of services imported into India.

Another service tax related change made on 27-8-2014 by the CBEC provides for taking credit based on certificate issued by Railways supported by photocopies of railway receipts issued for transport of goods by rail. This amendment has been effected in Cenvat Credit Rules, 2004 by Notification No. 26/2014-C.E. (N.T.), dated 27-8-2014.
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