Thursday, October 13, 2011

changes in service tax rules

E. Changes in Service Tax Rules, 1994, (will come into effect from 01.04.2011)
  • A new rule 5B has been introduced to provide that the applicable rate of tax shall be the rate prevailing at the time when the services are deemed to have been provided.

  • Rule 6(3) amended to claim credit of earlier tax paid in case of reversal of invoice or money.

  • Under Rule 6(4B) limit of adjustment for non-centralized registered assessee increase from INR 1 lakh to INR 2 lakh.

  • A new sub-rule 6A has been introduced in rule 6 to provide that if an amount of service tax has been self-assessed but not paid, the same shall be recoverable alongwith interest under section 87 of the Act.

  • The composition rate in sub-rule 7B of rule 6 applicable to in relation to purchase or sale of foreign currency, including money changing, has been reduced from 0.25% to 0.1% and the Proviso has been deleted.