Online services provided by foreign website to individuals in India are become taxable under service tax since 1 December 2016.

From 1 December 2016, service tax become applicable on online information and database access or retrieval (OIDAR) services provided online electronically from outside the taxable territory and received in India by Government, local authority, governmental authority or an individual for purposes other than business/profession.

CBEC withdraw service tax exemption on online information & database access or retrieval services by Notification No. 47/2016, Dated: November 09, 2016. The notification comes into effect from 1 December 2016.

By notification No. 46/2016, Dated: November  09,2016 (Place of provision of services (Amendment) Rules, 2016), CBEC amend the Place of Provision of services Rules,2012 related to place of provision of ‘online information and data base access or retrieval services’ with effect from 1 December 2016.

Service Tax (Fourth Amendment) Rules, 2016 (Notification No. 48/2016, Dated: November 9,2016), amends Service Tax rules, 1994 so as to prescribe that the person located in non-taxable territory  providing online information and database access or retrieval services to ‘non- assesse online recipient’ as defined therein, is liable to pay service tax and the procedure for payment of service Tax.

CBEC has issued 46 FAQ’s (Circular No.202/12/2016, Dated : 9^th November 2016)on Service tax on cross border, business to consumer online information and database access or retrieval services.

Online information services excludes from the definition of telecommunication services (CBEC, Notification No.51/2016, Dated – 30th November 2016).

CBEC notifies “Place of provision of services (Second Amendment) Rules, 2016”. It shall come into force on the 1^st day of December, 2016.

By “Place of provision of services (Second Amendment) Rules,2016” ,CBEC amends, clause (q), in rule 2 of the Place provision of services Rules,2012.

In Rule 2 , clause (q) (Definition of Telecommunication services) , after the word “include broadcasting”, the word “and online information and database access or retrieval” shall be inserted.

Now it is read as

"telecommunication service" means service of any description (including electronic mail, voice mail, data services, audio text services, video text services, radio paging and cellular mobile telephone services) which is made available to users by means of any transmission or reception of signs, signals, writing, images and sounds or intelligence of any nature, by wire, radio, visual or other electro-magnetic means but shall not include broadcasting and online information and database access or retrieval services .

Combined Annual Return Form for Central Excise and Service Tax for 2015-16 is not required to be filed (CBEC, Circular No. 1050/38/2016-CX, Dated : 8th November 2016)

CBEC has been decided that combined Annual return form for Central Excise and Service Tax for 2015-16 is not required to be filed, which was required to be filed by 30^th November 2016.

The CBEC has taken such decision in the view of impending implementation of Goods & Services Tax (GST).

It also specified that after implementation of GST, Annual Return for non-GST goods only may be required. A final view on the same would be taken after due consultation with the trade.

The relevant notifications regarding aforesaid annual return are as under.

Kind attention is invited to Notification No. 8/2016-CE(N.T.) (SI.NO.5) dated 01.03.2016 and Notification No.13/2016-CE(N.T.) (Sl.NO.9) dated 01.03.2016 vide which Rule 12 of Central Excise Rules, 2002 and Rule 9A of CENVAT Credit Rules, 2004, respectively, were amended to replace the existing Central Excise Forms ER-4 to ER-7 with an Annual Return form. On the service tax side, vide Notification No. 19/2016-ST dated 01/03/2016, Rule 7 of the Service Tax Rules, 1994 was amended to prescribe an annual return. In terms of Rule 12 of Central Excise Rules, 2002 and Rule 7 of the Service Tax Rules, 1994, the format of the Annual Return, which was required to be filed by 30th day of November, was to be specified by the Board by notification.

Guidelines for arrest in relation to offences punishable under the Finance Act, 1994 and Central Excise Act, 1944. (Service Tax, Circular No. 201/11/2016, Dated – 30th September 2016)

The Power of arrest in Service Tax is available only if a person collects any amount as service tax but fails to pay the amount so collected to the credit of the Central Government beyond the period of six months from the date on which such payment becomes due and the amount exceeds rupees two crore.

CBEC by circulars defines conditions precedent to carrying out arrest.

For detail circular, visit at

(Service Tax, Circular No.201/11/2016, Dated – 30th September 2016)

Transportations service by educational institution to students, faculty and staff of such institutions for the period 1 April 2013 to 11th July 2014 is exempt from service Tax. (Service Tax Notification No. 45/2016, Dated 30-09-2016)

Service Tax on transportation service by educational institutions to students, faculty and staff of such institutions is already exempted by Notification No. 06/2014, Dated 11 July 2014, w.e.f 11^th July 2014.

But for the period 1April 2013 to 10 July 2014, transportation service by educational institutions to students, faculty and staff of such institutions was liable to service Tax.

Vide notification no. 45/2016, Dated 30-09-2016, Central Government directs that service tax payable on the service of transportation, by educational institutions as defined in clause (1) of section 66 D of the Finance Act, 1994(32 of 1994) during the said period, to students, faculty and staff of such institutions, shall not be required to be paid.

As per the Notification No. 6/2014, Dated 11 July 2014.

“Services provided,-

(a) by an educational institution to its students, faculty and staff;

(b) to an educational institution, by way of,-

(i) transportation of students, faculty and staff;

(ii) catering, including any mid-day meals scheme sponsored by the Government;

(iii) security or cleaning or house-keeping services performed in such educational institution;

(iv) services relating to admission to, or conduct of examination by, such institution.”

“educational institution” means an institution providing services by way of:

(i) pre-school education and education up to higher secondary school or equivalent;

(ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force;

(iii) education as a part of an approved vocational education course;

“approved vocational education course” means, –

(i) a course run by an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training or State Council for Vocational Training offering courses in designated trades notified under the Apprentices Act, 1961 (52 of 1961); or

(ii) a Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person registered with the Directorate General of Training, Ministry of Skill Development and Entrepreneurship;‟

Amendment in the power of Central Excise Officer for the purposes of adjudging a penalty under Chapter V, Section 83A of the Finance Act 1994.

As per Section 83A (Power of adjudication), Where under this Chapter or the rules made there under any person is liable to a penalty, such penalty may be adjudged by the Central Excise Officer conferred with such power as the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963), may, by notification in the Official Gazette, specify.

Earlier the same powers of Central excise officer are notified by notification No.30/2005, Dated 10 August 2005.

By Notification No. 44/2016, dated 28^th September 2016, CBEC amend the earlier notification no.30/2015.

Now the powers of Central Excise officer under section 83A of the Finance Act 1994 are as under:

S.N	Rank of the Central Excise Officer	Amount of service tax or CENVAT credit specified in a notice issued under the Finance Act 1994.
(1)	Superintendent	Not exceeding rupees ten lakh (excluding the cases relating to taxability of services or valuation of services and cases involving extended period of limitation).
(2)	Assistant Commissioner Or Deputy Commissioner	Not exceeding rupees fifty lakh (except cases where Superintendents are empowered to adjudicate).
(3)	Joint Commissioner or Additional Commissioner	Rupees fifty lakh and above but not exceeding rupees two crore.
(5)	Commissioner	Without limit."

Earlier the same powers of central excise officer were as under:

S.N	Rank of the Central Excise Officer	Amount of service tax or CENVAT credit specified in a notice issued under the Finance Act 1994.
(1)	Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise	Not exceeding Rs. 5 lakhs
(2)	Joint Commissioner of Central Excise	Above Rs. 5 lakhs but not exceeding Rs. 20 lakhs
(3)	Additional Commissioner of Central Excise	Above Rs. 20 lakhs but not exceeding Rs. 50 lakhs
(4)	Commissioner	Without limit."

Service Tax (Third Amendment) Rules, 2016

The Service Tax (Third Amendment) Rules will amend Form ST-3 (Form for filing service Tax return).

Notification No. 43 /2016, Dated 28 September 2016.

Exemption of service related to granting of long term (thirty years, or more) lease of industrial plots by state Government industrial Development Corporations/ Undertakings to industrial units.

CBEC by Notification No.41/2016, Dated - 22 September 2016, exempt the taxable service provided by state government Industrial Development Corporations/ Undertakings to industrial units by way of granting long term (thirty years, or more) lease of industrial plots from service tax leviable on the one time upfront amount (called as premium, salami, cost, price, development charges or by any other name) payable for such lease.

Retrospective exemption of Service Tax on Services related to advancement of yoga.

                    

Service related advancement of yoga is already exempted by mega exemption notification w.e.f. 23-10-2015.

Now with Notification No. 42/2016, dated – 26^th September 2016, CBEC retrospectively exempt the service related to advancement of yoga for the period July 2012 to 20^th October 2015.

CBEC retrospectively exempt (for the period July 2012 to 20^th October 2015) the advancement of yoga services provided by the entities registered under section 12AA of Income tax Act, 1961.

As per the notification, the central government directs that the service tax payable under section 66B of the of the Finance Act, 1994, on the service by way of advancement of Yoga provided by entities registered under section 12AA of Income-tax Act, 1961 (43 of 1961) in the said period, but for the said practice, shall not be required to be paid.

90% abatement under service tax for service related to “Transport of passengers, with or without accompanied belongings, by air, embarking from or terminating in a Regional Connectivity Scheme Airport”

By Notification No. 38/2016, service tax, Dated 30^th August 2016, the department has amended notification No. 26/2012, service tax, Dated 20.06.2012.

In notification No. 26/2012, in the table, after entry 5, the entry no. 5A inserted.

Sl. No.	Description of taxable service	% of service tax	Conditions
5A	Transport of passengers, with or without accompanied belongings, by air, embarking from or terminating in a Regional Connectivity Scheme Airport.	10%	CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken by the service provider under the provisions of the CENVAT Credit Rules, 2004.”

In notification no. 26/2012, after paragraph 2, the following paragraph shall be inserted:

“2A. Nothing contained at Sl. No. 5A of the TABLE shall apply on or after the expiry of a period of one year from the date of commencement of operations of the Regional Connectivity Scheme Airport as notified by the Ministry of Civil Aviation.”.