service tex

The tax on seven new services, brought under the net in this year’s budget, will be payable from June 1. Other service tax changes made through the Finance Act, 2007, will also be effective from that date.now in the case of renting out of commercial properties, the service tax is payable on the rental amount received less the property tax paid.In situations where property tax is paid after the payment of service tax on the rental (and the deduction of property tax paid from rental could not be availed of at the time of payment of service tax), Rule 4C of the Service Tax Rules, 1994, provide for self-adjustment of excess service tax paid without any limit.Commercial or industrial construction services provided in relation to the execution of work contracts in relation to construction of a port have been exempted from tax. Services such as completion and finishing, repair, alteration, renovation, restoration, maintenance or repair provided in relation to existing ports, however, will be leviable to service tax.For services provided in relation to the execution of a works contract, the service provider can avail of an optional scheme for paying the tax. As a trade facilitation measure and also for ease of administrative convenience, the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007, has been notified. Under this, the service provider has an option to pay service tax equivalent to 2% of the total value of the works contract instead of paying service tax at the rate specified in Section 66. Rule 2A of Service Tax (Determination of Value) Rules, 2006 provide for valuation of services provided in relation to the execution of a works contract.