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CGST Act IGST Act UTGST Act GST (Compensation to the States) Act Addendum to the GST Rate Schedule - 03.06.2017 101st Constitution Amendment Act, 2016 Addendum to the GST Rate Schedule - 18.05.2017 GST Compensation Cess Rates Decided in the GST Council Meeting held on 18.05.2017 Chapter Wise Rate wise GST Schedule - 03.06.2017 Chapter wise GST Rate Schedule for Goods Decided in the GST Council Meeting held on 18.05.2017 Revised Threshold for Composition Scheme - 11.06.2017 IGST Exemptions Approved by the GST Council - 11.06.2017 GST Rates Approved by the GST Council - 11.06.2017 Service Tax Exemptions in GST IGST Exemption, Concession List - 03.06.2017 Composition - Rules Valuation Rules ITC - Rules Invoice, Debit & Credit Notes - Rules Payment - Rules Refund - Rules Registration - Rules Return- Rules Transition Rules Proposed CTD Document Accounts and Record Rules GST rate Schedule for Services List of Services under Reverse Charge Classification Scheme for Services Under GST Decisions Taken by the GST Council in the 16th Meeting - 11.06.2017
Abatement - After 01.07.2012
Abatement - After 01.07.2012

Abatement means reduction or decrease from any amount or offering of discount. In service tax provisions, this term is used for amount allowed to be deducted from value of taxable service, expressed in percentage terms. It is a kind of discount given for arriving at the value of a taxable service provided on which tax is required to be calculated and paid.

All abatements available to services of specified categories have now been merged in one exemption Notification No. 26/2012-ST dated 20.06.2012. In terms of the said notification, exemption is granted from so much of the service tax leviable, as is in excess of the service tax calculated on a value which is equivalent to a percentage specified in the corresponding entry in column (3) of the following Table, of the amount charged (or in some cases of specified amount) by such service provider for providing the said taxable service, unless specified otherwise, subject to the relevant conditions specified in the corresponding entry in column (5) of the said Table:

The Notification No. 26/2012-ST dated 20.06.2012 has been amended vide Notification No. 2/2013 dated 01.03.2013 and it was again amended by Notification No. 9/2013-ST dated 08.05.2013.

Sr.No. Description of Taxable Service Taxable Portion
Exempted Portion Conditions
(1) (2) (3) (4) (5)
1 Services in relation to financial leasing including hire purchase 10 90 Nil.
2 Transport of goods by rail 30 70 Nil.
3 Transport of passengers, with or without accompanied belongings by rail 30 70 Nil.
4 Bundled service by way of supply of food or any other article of human consumption or any drink, in a premises ( including hotel, convention center, club, pandal, shamiana or any other place, specially arranged for organizing a function) together with renting of such premises 70 30 (i) CENVAT credit on any goods classifiable under Chapters 1 to 22 of the Central Excise Tariff Act, 1985 (5 of 1986) used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.
5 Transport of passengers by air, with or without accompanied belongings 40 60 CENVAT credit on inputs and capital goods, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.
6 Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes. 60 40 Same as above.
7 Services of goods transport agency in relation to transportation of goods. 25 75 CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.
8 Services provided in relation to chit 70 30 Same as above.
9 Renting of any motor vehicle designed to carry passengers 40 60 Same as above.
10 Transport of goods in a vessel 50 50 Same as above.
11

Services by a tour operator in relation to,-

(i) a package tour

25 75

(i) CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.

(ii) The bill issued for this purpose indicates that it is inclusive of charges for such a tour.

(ii) a tour, if the tour operator is providing services solely of arranging or booking accommodation for any person in relation to a tour 10

90

(i) CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.

(ii) The invoice, bill or challan issued indicates that it is towards the charges for such accommodation.

(iii) This exemption shall not apply in such cases where the invoice, bill or challan issued by the tour operator, in relation to a tour, only includes the service charges for arranging or booking accommodation for any person and does not include the cost of such accommodation.

(iii) any services other than specified at (i) and (ii) above. 40 60

(i) CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.

(ii) The bill issued indicates that the amount charged in the bill is the gross amount charged for such a tour.

12.

Construction of a complex, building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly, except where entire consideration is received after issuance of completion certificate by the competent authority,-

(a) for a residential unit satisfying both the following conditions, namely:–

(i) the carpet area of the unit is less than 2000 square feet; and

(ii) the amount charged for the unit is less than rupees one crore;

 

 

 

25

 

 

 

 

 


 

 

75

 

 

 

 

 

(i) CENVAT credit on inputs used for providing the taxable service has not been taken under the provisions of the CENVAT Credit Rules, 2004.

(ii)The value of land is included in the amount charged from the service receiver.

 (b) for other than the (a) above. 30 70

Explanation. –

A. For the purposes of exemption at Serial number 1 -

(i) The amount charged shall be an amount, forming or representing as interest, i.e. the difference between the installments paid towards repayment of the lease amount and the principal amount contained in such installments;

(ii) the exemption shall not apply to an amount, other than an amount forming or representing as interest, charged by the service provider such as lease management fee, processing fee, documentation charges and administrative fee, which shall be added to the amount calculated in terms of (i) above.

B. For the purposes of exemption at Serial number 4 -

The amount charged shall be the sum total of the gross amount charged and the fair market value of all goods and services supplied in or in relation to the supply of food or any other article of human consumption or any drink (whether or not intoxicating) and whether or not supplied under the same contract or any other contract, after deducting-

(i) the amount charged for such goods or services supplied to the service provider, if any; and

(ii) the value added tax or sales tax, if any, levied thereon:

Provided that the fair market value of goods and services so supplied may be determined in accordance with the generally accepted accounting principles.

C. For the purposes of exemption at Serial number 12 –

The amount charged shall be the sum total of the amount charged for the service including the fair market value of all goods and services supplied by the recipient(s) in or in relation to the service, whether or not supplied under the same contract or any other contract, after deducting-

(i) the amount charged for such goods or services supplied to the service provider, if any; and

(ii) the value added tax or sales tax, if any, levied thereon:

Provided that the fair market value of goods and services so supplied may be determined in accordance with the generally accepted accounting principles.

2. For the purposes of this Notification No. 26/2012-ST dated 20.06.2012, unless the context otherwise requires,-

a. “chit” means a transaction whether called chit, chit fund, chitty, kuri, or by whatever name by or under which a person enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money (or a certain quantity of grain instead) by way of periodical installments over a definite period and that each subscriber shall, in his turn, as determined by lot or by auction or by tender or in such other manner as may be specified in the chit agreement, be entitled to a prize amount,

b. "package tour" means a tour wherein transportation, accommodation for stay, food, tourist guide, entry to monuments and other similar services in relation to tour are provided by the tour operator as part of the package tour to the person undertaking the tour,

c. “tour operator” means any person engaged in the business of planning, scheduling, organizing, arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours.

Case Laws Related

  • STO 2013 CESTAT 901
  • Abatement: Notification No. 12/2003- S.T: No dispute as to the fact that the appellant herein has been raising separate bills for the service rendered and for the materials supplied. The appellant has been claiming of the benefit of Notification No. 12/2003-S.T which clearly talks about the availment of benefit if the materials are billed separately: Prima facie case for total waiver of pre deposit found.

  • STO 2013 CESTAT 1028
  • Abatement: Demand: Stay: Notfn.No. 12/2003- S.T: Appellant has been able to show that the materials have been sold and have been assessed to VAT: Pre deposit waived.

  • STO 2013 CESTAT 1216
  • Cenvat Credit: Abatement: Appellant has taken the CENVAT credit of tax paid by sub-contractor as well as availed abatement: Directions issued for partial pre deposit.

  • STO 2013 CESTAT 669
  • Transportation of Goods by Road: Abatement: CBEC has issued instructions that consolidated declaration from the concerned transport operators would be sufficient for granting abatement under Notification No. 32/2004-ST.

  • STO 2013 CESTAT 416
  • Construction Service: Abatement: Value of free supplies material not included: Prima facie abatement admissible: Appellants have paid major amount of Tax: Stay granted from balance amounts.

  • STO 2013 CESTAT 655
  • Transportation of Goods by Road: Abatement: Applicant had submitted declarations in respect of different transporters and raised the argument that each of them was individual and none of them was registered with service tax department to take Cenvat credit: General declaration given accepted in many cases instead of giving declaration on each consignment note: Applicants also paid some amount of service tax and interest: Pre deposit for balance amounts waived.

  • STO 2013 CESTAT 312
  • Completion and Finishing Service: Abatement under Notification No. 12/2003 S.T.: Exclusion of value of goods and materials sold by the assesses to the recipient of service for the purpose of computation of service tax liability. This notification applies to all the services including completion and finishing services: Condition which needs to be satisfied for availing the benefit is that no credit of duty paid on such goods and material sold has been taken under the provisions of Cenvat Credit Rules, 2004: Appellant produced copies of VAT returns, balance sheets, purchase invoices and sale invoices indicating that they have sold materials such as aluminum products and glass products for the completion and finishing services undertaken by them for their various clients: It is evident that the appellant has discharged VAT/CST liability: Matter remanded for verification.

  • STO 2013 CESTAT 578
  • Works Contract Service: Abatement: Department allowed abatement of 2/3rd of value, appellants claim it to be 85%: Matter remanded for verification.

  • STO 2013 CESTAT 656
  • Abatement: Notfn.No.1/2006 - S.T: Benefit under Notification No. 1/06-ST cannot be extended for the reason that assessee has not proved that they were eligible for any CENVAT credit. The question if at all to be examined was whether supply of material was involved or not. The adjudicating authority has not adopted such logic which would imply that there such logic would not have been adverse to the appellant: Matter remanded.

  • STO 2012 CESTAT 1042
  • Construction Service: Abetment: Value of cement & steel supplied by service receiver not included for paying service tax: However, immediately on being pointed out, the appellants paid service tax along with interest: Penalties set aside by invoking Section 80 provisions.

  • STO 2012 CESTAT 992
  • Goods Transport Agency: Abatement: Simultaneously availed Cenvat credit reversed: No evidence produced before lower authorities: Matter remanded.

  • STO 2012 CESTAT 1037
  • Abatement: Notification No. 15/2004-ST dated 10.9.2004: Value of materials supplied free of cost not to be included : Stay granted.

  • STO 2012 CESTAT 852
  • Abatement: cost of ‘free supply materials’ also would form part of “gross amount charged” with effect from 18.04.2006: Partial stay granted.

  • STO 2012 CESTAT 774
  • Abatement: Notification. No. 32/2004: In absence of any particular format prescribed under the respective notifications, the department insisting for declaration on each consignment note for allowing the abatement under the said Notifications is un-sustainable in law.

  • STO 2012 CESTAT 925
  • Abatement: Notification. No. 24/2007 dated 22.05.2007: Appellants paid property tax after 2012: Abatement not to e denied.

  • STO 2012 CESTAT 520
  • Abetment: Classification: There being no dispute regarding classification at adjudication stage, cannot be entertained as it would cause prejudice to the interest of justice: Abetment allowed by adjudicating authority legal and proper.

  • STO 2012 CESTAT 243
  • Commercial & Industrial Construction Service: Abatement: Value of free supply materials to be included in the value as per Service Tax Rules which came into effect from 18.4.2006: Directions issued to make pre deposit.

  • STO 2012 CESTAT 148
  • Abetment: Value of materials supplied for providing services: where the sales tax and VAT stands paid on the material it has to be held that the goods were sold by the assessee. In such a scenario, the value of the same, cannot be added in the value of taxable service: Stay granted.

  • STO 2012 CESTAT 150
  • Abatement: Stay Value of free supplied materials to be included as per Service Tax Rules effective from 14.5.2006: Partial pre deposit directed.

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