V/DGST/30-Misc-06/2000/8975 Dated:- 3-3-2000 Order-Instruction – Circulars – Service Tax – Service Tax Union Budget for the Financial Year 2000-2001 Changes in respect of Service Tax F.No. V/DGST/30-Misc-06/2000/8975, dated 3-3-2000 of the Directorate of Service Tax Please refer to the provisions made in the Finance Bill 2000 and the explanatory notes issued by the Ministry alongwith the d.o. letter F.No. 334/1/2000-TRU, dated 29-2-2000 of Joint Secretary (TRU), on the above subject. 2. The Hon'ble Finance Minister, while presenting the budget, indicated that no substantive changes are being made in respect of the administration of Service Tax, and the Government has decided to constitute an Experts Committee to go into the entire gamut of issues pertaining to this tax. Nevertheless, a few changes have been brought about which would require necessary action by all Commissionerates. 3.1. Notification No. 2/2000-S.T., dated 1-3-2000 has been issued providing full exempt
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have got such service providers registered with them. However, in the meantime, the definitions of Tour Operators and Rent-a-Cab Scheme Operators were amended by virtue of provisions made in the Finance (No. 2) Act, 1998. 3.2.2 The definition of term “Rent-a-Cab Scheme Operator” is contained in Section 65(38) of the Finance Act, 1994. Prior to the amendment, scope of said term was limited to a person who was holding a licence under the Rent-a-Cab Scheme, 1989, framed by the Central Government under the Motor Vehicle Act, 1988, as a Rent-a-Cab Scheme Operator. Under the said scheme, a licence is granted only in the case where a person has a minimum of 50 cabs. However, in the revised definition, the requirement of operators being registered under the Rent-a-Cab Scheme has been dispensed with. Consequently, any person who is engaged in the business of renting of cabs would be required to pay Service Tax, irrespective of number of vehicles engaged by him in providing this service. 3.2
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ors and Rent-a-Cab Scheme Operators may be forwarded to this Directorate by 15-5-2000 indicating separately the number of new assessees who have been registered as a consequence of the revised definitions. 3.3.1 Clauses 112 113 of the Finance Bill, 2000 relate to retrospective amendments in the Finance Act, 1994 with reference to the services rendered by the Goods Transport Operators and the Clearing Forwarding Agents. The intention of these amendments is to validate the Rule 2 (1) (d) (xii) (xvii) of the Service Tax Rules,1994 which shifted the burden of levy on the service receivers in the case of services rendered by GTOs and C F Agents. As you are aware, the Hon'ble Supreme Court in its judgement in the case of M/s. Laghu Udyog Bharati Others v. Union of India – 1999 (89) E.L.T. 247 held the above rules to be ultra vires the provisions of Finance Act, 1994. Accordingly, these rules were struck down. However, the Clause 112 seeks to incorporate new definitions for terms “A
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