NEW EXEMPTIONS IN SERVICE TAX

SERVICES BY AUTHORIZED PERSONS / SUB-BROKERS
Vide Notification No. 03/2014-ST dated 03.02.2014, a
retrospective exemption from service tax payable on the services provided by an
authorized person or sub-broker to the member of a recognized association or a
registered association has been granted, in relation to a forward contract
where such service tax was not being levied during the period from 10th
September, 2004 to 30th June, 2012 in accordance with the generally prevalent
practice during the said period.

SERVICES IN RELATION TO RICE
W.e.f. 17.02.2014, vide Notification No. 4/2014-ST benefits
available to agricultural produce in the negative list have been extended to rice
by way of exemptions under Notification No. 25/2012-ST. These are in relation
to the following services carried out on or for ‘rice’:
a). transportation of rice by a rail or a vessel [Entry No.
20(i)]
b). transportation of rice by a goods transport agency [Entry
No. 21(d)]
c). Loading, unloading, packing, storage and warehousing of
rice (Entry No. 40]
d). Milling of paddy into rice being an intermediate
production process in relation to agriculture [Entry No. 30(a)]
SERVICES PROVIDED BY CORD BLOOD BANKS BY WAY OF PRESERVATION
OF STEM CELLS OR ANY OTHER SERVICE IN RELATION TO SUCH PRESERVATION
Vide Notification No. 4/2014-ST, 17.02.2014, the services
provided by the cord bold banks by way of preservation of stem cells or any
other services in relation to such preservation are exempt from service tax.
Health care services by a clinical establishment, authorized medical
practitioner or para medics are already exempt from levy of Service Tax. Now
w.e.f. 17.2.2014, cord blood banks have also been added to this category of
exemptions. These services of cord blood bank were previously taxable and liable
to pay service tax as these services were not covered under the ‘health care
services’ defined in clause 2(t) of the Notification No. 25/2012-ST dated
20.06.2012.
All blood banks shall not be exempt. What has been
specifically exempted is specified services provided by cord blood banks. Such
services shall be –
a). by way of preservation of stem cells, or
b). any other service in relation to such preservation of
stem cells.
All other services of blood banks shall subject to tax.
Cord blood is a sample of blood taken from a new born baby’s
umbilical cord. It is a rich source of stem cells, which is used in the
treatment of diseases like leukemia, lymphoma, anemia etc.
By Finance Act, 2014 (w.e.f. 06.08.2014)
EXEMPTION IN RESPECT OF TAXABLE SERVICES PROVIDED BY THE
EMPLOYEES STATE INSURANCE CORPORATION
Finance Act, 2014 has inserted section 100 to provide for
retrospective exemption upto 30.06.2012 in relation to services provided by the
Employee’s State Insurance Corporation (ESIC) set up under the Employee’s State
Insurance Act, 1948. The text of this section is as follows-
“100 Notwithstanding anything contained in section 66 as it
stood prior to the 1st day of July, 2012, no service tax shall be levied or
collected in respect of taxable services provided by the Employees ‘ State
Insurance Corporation set up under the Employees’ State Insurance Act, 1948,
during the period prior to the is day of July , 2012″.
This section provides a retrospective exemption for the
period prior to the 1st day of July, 2012 to Employees State Corporation set up
under the Employee’s State Insurance Act, 1948. W.e.f. 1.7.2012, the services
of Employee’s State Insurance Corporation are already exempted in Entry No. 36
of the Notification No. 25/2012-ST dated 20.6.2012.
AMENDMENTS MADE BY NOTIFICATION No. 06/2014-ST DATED
11.07.2014 W.E.F. 11.07.2014
The following changes have been made w.e.f. 11.07.2014 by
Notification No. 06/2014-ST dated 11.07.2014. The para wise and entry wise
changes are as follows –
a). Entry 2B – services provided by operators of the common
bio-medical waste treatment facility to a clinical establishment by way of
treatment or disposal of bio-medical waste or the processes incidental thereto
exempted
b). Entry 7 – exemption to clinical testing, analysis of
drugs, vaccines etc by clinical research organizations omitted
c). Entry 9 – substituted to provide as follows:
   1)Educational institution clarified – divided in services to
educational institution and services by          
 educational institution
   2)Services by educational institution to faculty, staff and
students fully exempt
   3)Specified services to educational institutions exempt
   4)Concept of auxiliary education service withdrawn and hence no
longer applicable
   5)Exemption for renting of immovable
property services to educational institutions withdrawn
d). Entry 18 – amended so as to provide that services of
hotel, inn, guest house etc. need not be for ‘commercial purposes’. This may
cover now services provided by dharamshalas, ashrams, etc
e). Entry 20 and 21 – transportation of ginned or baled
cotton and organic manure by rail or vessel or by Goods Transport Agency
exempted.
f). Entry 23(b) – exemption in respect of transport of
passengers by air conditioned contract carriage including for point to point
travel withdrawn.
g). Entry 25 (a) – substituted to provide exemption to
services provided to Government, a Local Authority or a Governmental Authority
by way of water supply, public health, sanitation, conservancy, solid waste
management or slum improvement and up-gradation; exemption made more specific;
other services not directly connected with these will be taxable.
h) Entry 26A(c) – insurance scheme of life micro –insurance
products as approved having maximum amount of cover upto fifty thousand rupees
has been exempted.
i). Entry 40 – services by way of loading, unloading,
packing, storage or warehousing of cotton, whether ginned or baled, has been
exempted
j). Entry 41- services received by the Reserve Bank of India,
from outside India in relation to management of foreign exchange reserves has
been exempted

k). Entry 42 – Services provided by a
tour operator to a foreign tourist in relation to a tour conducted wholly
outside India has been exempted.
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