epages News [Interior Decorators, March 2005] Services to be exempted from Service Tax Mar 04, 2005: The Government today notified the Export of Services Rules, 2005, exempting from service tax several services, including consultancy on real estate, architecture and interior decoration, dry cleaning and air transport of goods.
The new rules, framed after taking into account the international practices of treatment of service for the purpose of export of service and other material facts, would be effective from March 15, 2005.
At present, taxable services provided for which payments are received in convertible
foreign exchange are fully exempt from payment of service tax.
However, there is no separate provision defining 'export of services.' There has been a demand to define 'export of services' for the purpose of levy of service tax and extend all facilities and relief available to export of goods to export of services.
Taxable services provided to a recipient and used other than in industry or commerce shall be treated as export only if the recipient is outside India at the time when such services are received. Taxable services are allowed to be exported without payment of service tax. If services are exported, after payment of service tax, the rebate paid on such taxable services would be available. Provisions for rebate of service tax paid on input services and excise duty paid on input goods have also been made.
Exemption from service tax on taxable services for which payments are received in
convertible foreign exchange is rescinded. Consequential changes have also been made in the CENVAT Credit rules, 2004 and shall be effective from March 15, 2005.
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