We are pleased to release a Tax Alert on Notification Nos. 6/2016-ST and 7/2016-ST dated 18 February 2016 issued by the Ministry of Finance through which following amendments have been made:
With effect from 1 April 2016, any service provided by the Government or local authority to a business entity, except the services that are specifically exempted, or covered by any other entry in the Negative list, shall be liable to Service tax.
Notification no. 25/2012-ST is amended, also exempting services provided by Government / local authority to a business entity with a turnover upto INR 10 lakhs in the preceding financial year with effect from 1 April 2016.
With the levy of Service tax on Government services effective from 1 April 2016, consequential amendments would be required for omission of definition of “support services” and necessary changes in the notification dealing with reverse charge mechanism.
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