July 12, 2014 1:28:23 am
Now, companies will be responsible for paying the service tax on the services of independent directors instead of the directors themselves.
In a move to plug the leakage of revenue, the Budget 2014-15 has said the service tax payable by independent directors for the services provided to the company will now be paid by “body corporates under the reverse charge mechanism”.
“It had been observed by the department that the independent directors were not paying service tax on the fee they were charging from the companies for their sittings. The argument was that they did not fall in the Rs 10 lakh threshold. However there was no mechanism for the department to verify their claims. The reverse charge mechanism solves that problem,” a source privy to the development told The Indian Express.
Similarly, services provided by recovery agents to banks, financial institutions and non-banking financial companies have also been be brought under the reverse charge mechanism so now the service receiver will be the person liable to pay service tax.
Besides rationalising norms for the special economic zones, the CBEC has also attempted at pruning the negative list in a bid to broaden the tax base.
Now apart from sale of space or time for advertisements in broadcast media has been extended to cover online and mobile advertising too. However, sale of space for advertisements in print media is exempt from the service tax.
“Print media is being defined in service tax law for the purpose. This change will come into effect from a date to be notified later,” the Budget said.
Also, services provided by radio taxis and radio cabs, both non-air conditioned and air conditioned, would also attract the levy though the abatement will be provided. Earlier these two items were a part of the negative list of services introduced in 2012 which were exempt from service tax.
“Exemption extended to clinical research on human participants and air-conditioned contract carriages like buses is being withdrawn,” according to the Budget proposals.
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