Tax Alert on key Service tax and Cenvat Credit amendments

The Central Government on 31 March 2011 issued several notifications effecting changes in the Service tax and Cenvat credit provisions, which are effective 1 April 2011. The attached Tax Alert captures certain key amendments such as:

 

• Option to adopt Point of Taxation Rules upto 30 June 2011
• Clarity on point of taxation in several situations
• Relaxation to specified services / persons to continue to pay service tax on cash basis
• Cenvat credit to be available on receipt of invoice (accrual basis) subject to conditions
• Relief and clarity on levy of service tax on forex trading transactions
• Facility of self-adjusting of service tax extended to cover additional business situations