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Budget 15-16 proposals: Amendments in sections 73, 76 and 78 (all related to penalty)Budget 15-16 proposals: Insertion of transition provision by way of section 78BBudget 15-16 proposals: Omitting section 80 (provided for waiver of penalty)Extending the scope of advance rulings to resident firms, with immediate effect (from 1.3.2015)Amendment in reverse charge mechanism, with immediate effect (from 1.4.2015)To prescribe full reverse charge on manpower supply and security service provided by individual, HUF, partnership firm to a body corporate, with immediate effect (from 1.4.2015)Prescribing reverse charge on service provided by a mutual fund agent, mutual fund distributor and agents of lottery distributor, with immediate effect (from 1.4.2015)Amendments in section 86 (remedy against the order passed by commissioner (Appeals) in a matter involving rebate of service tax shall lie in terms of section 35 EE of the Central Excise Act)Amendments in the provisions relating to Settlement CommissionShifting the liability of payment of service tax on aggregator of a service where service is provided under the brand name of the aggregator, with immediate effect (from 1.3.2015)Amendments in rules 4 (prescribing documentation, time limit and procedure for registration)Registration for single premises shall be granted within two days of filing the applicationProvisions for issuing digitally signed invoices and maintaining of records in electronic form added in rules 4A and 5 of the Service Tax Rules, 1994, with immediate effect (from 1.3.2015)The period for taking Cenvat Credit is being extended from six months from the date of invoice to one year from the date of invoice.Cenvat Credit allowed on input and capital goods received directly by job workers. ‘Export goods’ and ‘Exempt goods’ defined. New exemptions for,- (a) Precondition, pre-cooling, ripening, waxing, retail packing, labeling of fruits and vegetables (b) Service by a Common Effluent Treatment Plant operator (c) Varistha Bima Yojana (d) Ambulance services (e) Admission to a museum, zoo, national park, wild life sanctuary, and a tiger reserve (f) Service provided by exhibitor of movie to a distributor or an AOP consisting of exhibitor as one of its member (g)Transport of export goods by road from the place of removal to a laChange in abatement rates and conditions thereof for transport of passengers and goods by train; transport of goods by road by a GTA; transport of goods by vessels; executive/business class travel by air; and withdrawal of abatement on services provided in relation to chit, with immediate effect (from 1.4.2015) Amendment in reverse charge mechanism, with immediate effect (from 1.4.2015) To prescribe full reverse charge on manpower supply and security service provided by individual, HUF, partnership firm to a body corporate, with immediate effect (from 1.4.2015) Prescribing reverse charge on service provided by a mutual fund agent, mutual fund distributor and agents of lottery distributor, with immediate effect (from 1.4.2015)Amendment in rule 4(7) of the Cenvat Credit Rules to allow credit of service tax paid by recipient of service in partial reverse charge immediately on payment of tax ,with immediate effect (from 1.4.2015)Service Tax to be levied on service by way of access to amusement facility (amusement parks, water parks , theme parks etc)Service Tax rate is increased from 12.36% to 14%. New rate shall come into effect after the enactment of the Finance Bill, 2015. Notification No. 42/2012-ST is being rescindedSwachh Bharat Cess- Govt. to impose cess on all or any taxable service at the rate of 2% of the value of taxable serviceWe are committed to implementing a state of the art indirect tax system, the Goods and Services Tax, from April 1, 2016 - Finance MinisterNow issuing of Digital Invoices recognised in Service Tax.The term “government” defined Section 65B(26A)Section 80 providing waiver from penalty is proposed to be omitted.
Health Check-Up Service [Sec 65(105)(zzzzo)]
Effective upto 30th June, 2012
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INTRODUCED : With Effect From 1st July 2010


EXEMPTED W.E.F. 01.05.2011 (Notification No. 30/2011-ST Dated 25.04.2011)

 
Contents
Scope
Exemption
Relevant Notifications / Circulars
News
Accounting Code
Service Tax 00440598
Interest  00440599
Penalty 00441471
 
DEFINITION:

According to Section 65 (105) (zzzzo) taxable service means any service provided or to be provided to any person, by any hospital, nursing home or multi-specialty clinic,—

(i) to an employee of any business entity, in relation to health check-up or preventive care, where the payment for such check-up or preventive care is made by such business entity directly to such hospital, nursing home or multi-specialty clinic; or

(ii) to a person covered by health insurance scheme, for any health check-up or treatment, where the payment for such health check-up or treatment is made by the insurance company directly to such hospital, nursing home or multi-specialty clinic;

 
SCOPE:
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Health services are undertaken by hospitals or medical establishments for the employees of business organizations and health services provided under health insurance schemes offered by insurance companies are covered under the said service.

With the change in the style of functioning of the business organizations, health check up is a routine facility provided by the employers to their employees. The main purpose is to ensure that the productivity of the organization is not adversely affected due to ill health of its employees. Such activities, commonly known as corporate health check up schemes, are undertaken by designated hospitals in order to detect any medical indicator or to ensure timely diagnosis of any disease so that prophylactic measures can be taken. In such cases, the hospital providing these services charge the employer i.e. the business organization and it constitutes expenditure for the latter. In certain cases (for example, in case of flight crew) pre-flight check ups are conducted not only to test the fitness levels but also to rule out the possibility of the flying crew being under intoxication. Such health checks up schemes are being brought within the ambit of Service Tax under the new service.

A large number of health insurance schemes are being offered by the insurance companies under which charges for hospitalization, surgery, post-surgical nursing etc. are generally paid by the insurance company. Such insurance policies, which fall under the category of general insurance service, are already taxable. Under general insurance service, an insurance company is a service provider to its clients. Under the proposed new service, tax is also being imposed on the medical charges paid by the insurance companies to the hospitals on behalf of a business entity for its employees. As such, the insurance company would be the service receiver and the tax paid by the hospital would be available to the insurance companies as credit.

The tax on the above mentioned health services would be payable only if and to the extent the payment for such medical check up or treatment etc. is made directly by the business entity or the insurance company to the hospital or medical establishment. Any additional amount paid by the individual (i.e. the employee or the insured, as the case may be) to the hospital would not be subjected to Service Tax. This is to ensure that an individual is not required to pay a tax for which he cannot take credit.

The tax on these health services would be payable only to the extent payment for such medical check up or preventive care or treatment etc. is made directly by the business entity or the insurance company to the hospital or medical establishment thus when the individual himself pays and then gets reimbursed from the insurance company would be spared from Service Tax.

 
SERVICE TAX EXEMPTIONS:
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(a)  Small service providers whose aggregate value of taxable services rendered in the previous year has not exceeded the limit of Rs. 10,00,000/-  (Service Tax Notification No. 08/2008-S.T., dated 01.03.2008)

(b)  Services provided to the United Nations or International Organisations

(c)  Services provided to Special Economic Zones (SEZ) units (including unit under construction) and SEZ developers

(d)  Services which are exported as per ‘Export of Services’ Rules

(e)  Services provided for official or personal use of foreign diplomatic missions and family members of diplomatic missions.

(f)  Services provided by Reserve Bank of India

(g)  Out of total value of service provided proportionate value of goods and material provided by the Service Provider

 
RELEVANT SERVICE TAX NOTIFICATIONS:
 
  Service Tax Notification No. 30/2011-S.T., dated 25-04-2011 (Effective from 01-05-2011) Exemption to all the services covered under the definition of health services
Service Tax Notification No. 29/2011-S.T., dated 25-04-2011 (Effective from 01-05-2011) 1st May, 2011 notified as the date of enforcement of amendment in existing scope of services
Service Tax Notification No. 36/2010-S.T., dated 28-06-2010 Exemption for value of service received in advance by service providers prior to 01-07-2010
RELEVANT SERVICE TAX CIRCULARS/INSTRUCTIONS/TRADE NOTICES:
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Service Tax CBEC Instruction Letter (D.O.F. No. 334/3/2011-TRU), dated 25-04-2011 Clarification regarding new services and amendment in existing services vide the Finance Act, 2011
Service Tax CBEC Instruction Letter F. No. 334/3/2011-TRU), dated 28-02-2011 Clarification regarding the changes made by the Finance Bill, 2011
Service Tax D.O. Letter (F.No. 334/03/2010-TRU), dated 01-07-2010 Clarification regarding exemption on advance received by medical Establishments
  Service Tax CBEC Instruction Letter D.O.F. No. 334/1/2010-TRU, dated 26/02/2010
SERVICE TAX NEWS, VIEWS AND STORIES:
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Taxing cashless insurance facility is discriminatory
Health sector feels unhealthy over Service Tax imposition
 
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News Related

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