The Hindu Business Line : 7 new services coming under tax net from June 1

The Finance Ministry has also come up with the valuation norms for works contract and the details of the composition scheme Overall number of taxable services moves up to 97

New Delhi May 22 Asset management and portfolio management services provided by an individual, renting of immovable property for commercial purposes, services in works contract are among the seven services that would attract service tax from June 1.

The Finance Ministry on Tuesday specified June 1 as the date from which service tax would be applicable on the seven additional services that were brought under the service tax net in this year's budget.

The seven services include telecommunication services, services outsourced for mining of mineral, oil or gas; design services and development and supply of content for use in telecom and advertising agency services

The Government had in Budget 2007-08 merged six existing telecommunication related services under `telecommunication service' and brought seven additional services under the service tax net, taking the overall number of taxable services in the country to 97.

Meanwhile, the Finance Ministry has also come up with the valuation norms for works contract and the details of the composition scheme for services involved in the execution of works contract, an assessee could opt for a composition scheme.

Under the composition scheme, the assessee is required to pay 2 per cent of the total value of the works contract as service tax. An assessee opting for the composition scheme is not entitled to avail himself of Cenvat credit of capital goods, inputs and input services required for use in the works contract.

The Ministry has also specified June 1 as the date from which the changes made in the scope of certain existing taxable services would come into effect.

Accordingly, the sale of space in business directories, yellow pages and trade catalogues that are meant for commercial purposes; renting of motor vehicles capable of carrying more than 12 passengers; service provided in relation to marriage functions and computer hardware engineering consultancy would attract service tax from June 1.