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NOV-2016 EXAM
SERVICE TAX
1. Rate of Service tax applicable shall be 14.50% (14% plus 0.5% for swachh
bharat cess). Tax credit shall not be allowed for swachh bharat cess i.e. tax
credit shall be allowed only for the remaining part of the Service tax.
2. Service tax for the following cases has also been changed.
A. In case of air travel agent [Rule 6(7)]
An air travel agent shall have the option to pay service tax on the amount of the
commission received by him or service tax can be paid as 0.725% of basic fare
in case of domestic booking and 1.45% of basic fare in case of international
bookings. Such option can be changed from the beginning of subsequent year.
B. Insurer carrying on life insurance business [Rule 6(7A)]
A person engaged in life insurance business shall have the option to pay service
tax @ 14.5% of risk premium or he has the option to pay service tax on the
amount of gross premium in the manner given below:
First year at the rate of 3.625% of gross premium.
Subsequent year at the rate of 1.8125% of the gross premium.
C. Sale/purchase of foreign currency including money changing [Rule 6
(7B)]
A foreign exchange broker has the option to pay service tax on the amount of
commission computed as per rule 2B of service tax (determination value) rules
2006 OR service tax can be paid on the exchange value in the manner given
below:
S. No. For an amount Service tax shall be calculated on the exchange value
at the rate of
1.
Upto Rs. 100,000
0.145%
2.
Next Rs. 9,00,000
0.0725%
3.
Balance amount
0.0145%
If the total amount of service tax collected from any person is less than Rs. 36.25
in that case service tax payable shall be Rs. 36.25 and if amount so computed is
more than Rs. 7,250 service tax payable shall be Rs. 7,250.
D. Service of promotion, marketing or organizing/assisting in organizing
lottery [Rule 6(7C)]
An optional mode of payment of service tax has been provided for the taxable
service of promotion, marketing or organizing/assisting in organizing lottery in
the following manner instead of paying service tax at the rate of 14.5%:Where the guaranteed lottery prize payout is > 80% - Rs. 8,493/- on every
Rs. 10 Lakh (or part of Rs.10 Lakh) of aggregate face value of lottery tickets
printed by the organizing State for a draw.
Where the guaranteed lottery prize payout is < 80% - Rs. 13,257/- on
every Rs. 10 Lakh (or part of Rs. 10 Lakh) of aggregate face value of lottery
tickets printed by the organizing State for a draw.
INCOME TAX
Changes in Section 139A- Permanent Account Number