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Changes in the Provision of Service tax effected due to Notification and Circulars

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(1) Notification No 06/2014- ST amended the following provision of Mega Exemption Notification 25/2012  ( w.e.f.       11-07-2014)
(*) 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., now the word       carrying out any activity in relation to any function ordinarily entrusted to a municipality is omitted.

(2) Notification No 08/2014- ST amended the following provision of Abatement Notification 26/2012
(*) Transport of Goods by Vessel is now liable on 40% value of service, i.e. abatement is increased from 50% to 60% of value of service.

(3) Notification No 09/2014- ST amended the provision of Service Tax Rules, 1994
(*) Every assessee shall electronically pay the service tax payable by him, through internet banking irrespective of the amount of service tax paid during the preceding year (earlier it was Rs 1 lac ). (w.e.f. 1/10/2014)

(4) Notification No 10/2014 – ST amended the provision of provision of Notification No . 30/2012 related to Reverse Charge Mechanism (w.e.f. 11/07/2014)
(*) Service Provided or agreed to be provided by a recovery agent to a banking company, financial institution or NBFC, service tax to be payable by such service receiver.
(*) Service Provided or agreed to be provided by a director to company or body corporate. ( Body corporate has been inserted in earlier provision ).
(*) In case of Renting of Motor Vehicle designed to carry passengers on non abated value to any person who is not engaged in the similar line of business ratio is streamline to provide 50% for Service Provider and Receiver.

(5) Notification No 11/2014- ST provided in case of works contract for original works taxable portion is 40% of value and for remaining it is 70% of value of service. So now no bifurcation of 60% and 70% of value of service for B and C category.(w.e.f. 01/10/2014)

(6) Notification No 12/2014- ST amended the provision of Section 75 of the finance Act to provide the interest rate of following manner (w.e.f. 01/10/2014):-

S. No.

Period of delay

Rate of interest


Up to six months



More than six months and up to one year

18% for first six month of delay and 24% for beyond six month


More than one year

18% for first six month of delay, 24% for beyond six month and 30% for delay beyond one year

Note: A Concession of 3% on the above applicable rate of interest will be available to small service providers having turnover of less than Rs. 60 Lakhs

(7) Notification No. 13/2014- ST amended the provision of Rule 7 of Point of taxation Rules, 2011 to provide that point of taxation in case of reverse charge will be the Payment date of invoice or first day after 3 months from the date of invoice , whichever is earlier. ( w.e.f. 01/10/2014)

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