Untitled Document

NEW DELHI, JULY 06, 2009: THE Finance Bill, 2009, has made an attempt to enter into the profession of doctors and lawyers. The Bill proposes to levy service tax on legal firms and plastic surgeons undertaking cosmetic surgery. These are the 2 new services on which service tax has been imposed out of 4 new services brought under service tax net. The other 2 new services are ‘Transport of goods by rail’ and ‘Inland transport of goods through water-ways’.

The other major changes made in the Finance Act, 1994, through Finance Bill, 2009, are :

Definition of ‘Manufacture’ given in Business Auxiliary Service has been amended. As per the amendment, it is only the manufacture of excisable goods alone is excluded from the purview of business auxiliary service. Which means, if the goods manufactured do not fall under the purview of the Central Excise Act, such manufacturing activity if undertaken on behalf of others, is liable for payment of Service Tax under BAS. All liquor manufacturers who are producing Alcohol Beverages on behalf of others are now liable for payment service tax. Will this put a full-stop to the dispute or will it open a new round of dispute on the issue

The words ‘sub-broker’ has been deleted from clause 101 of Finance Act, 1994, which defines ‘stock broker’. This was necessitated because as per the amended provisions of SEBI rules, the sub-broker has no independent role as he is not authorized to raise any bill on the clients.

Transport of goods by rail is now brought under Service Tax by substituting zzzp of Finance Act, 1994 with new wording. Earlier, this clause has specifically excluded services provided Indian Railways.

Items (v) & (vi) of clause zzzze Finance Act, 1994, which defines taxable services in relation to Information Technology Services by replacing the word ‘acquiring’ with word ‘providing’. This amendment will give more clarity to the services mentioned at (v) & (vi) of clause zzzze

Section 84 of Finance Act, 1994, which provides authority to Commissioners to review and pass orders against orders passed by the lower authorities. Now this Section has been amended so as to bring the procedure laid down under Central Excise in case of orders passed by officers subordinate to Commissioner. As per the amended provision, the Commissioners can now only direct lower authority to file an appeal before Commissioner (Appeals) against any order passed by them if any infirmity is observed during the review of such order.