The Finance Bill, 2012 which was presented by the Hon’ble Finance Minister on 16th March, 2012 had proposed to introduce several new provisions / amend existing provisions of the law. The Bill, after discussion by the Parliament, has finally received the assent of the President of India and has now become an Act from 28th May, 2012 (hereinafter referred to as “the Act” or “Finance Act 2012”). After the bill has received assent of the President, the Central Board of Excise and Customs (CBEC) has issued Notifications stating the effective date of various amendments in the law.
The Finance Act, 2012 has revamped the provisions relating to
Service Tax (introduced by Chapter V of the Finance Act, 1994 and various amendments made thereto) and this alert throws light on some of the important amendments that may be applicable.
Key amendments under Chapter V of Finance Act, 1994:
- No reversal of credits in respect of services provided to Special Economic Zones under Rule 6(6A) of Cenvat Credit Rules, 2004 given effect from 10th February, 2006.
Provisions applicable from 1st April, 2012
- The effective rate of Service Tax increased from 10.30% to 12.36%.
- The effect of change in rate of tax is summarized as below: