Joint Secretary – Tax Research Unit Circular 2

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Law digest


Government of India
Ministry of Finance

Department of Revenue

(Tax Research Unit)



Amita bh Kumar

Joint Secretary (Tax Resea rch Unit)

Tel: 011-23093027;

Fax: 011-23093037

D.O.F. No. 334/04/2018-TRU

New Delhi, dated February 1st, 2018


Dear Madam/Sir,

Subject: Union Budget 2018 – Changes in Service Tax – reg.

The Finance Minister has, while presenting the Union Budget 2018- 19, introduced the Finance Bill i n the Lok Sabha on the l51 of February, 2018. While Clause 99 of the Bi.LI relates to exemption from integrated tax levied under section  3(7)  of  the  Customs  Tariff  Act,   1975, Clauses I 03 to I 05 of the Bi ll cover the changes relating to service tax levied under the erstwhile Chapter V of the Finance Act, 1994, prior to 151 July 2017.

2. Jt may be noted that changes being made in the Budget shall come into effect on the date of the enactment of the Finance Bill, 2018 .

The salient features of the changes being made are discussed below.

3.Legislative provisions:

  • Notification No. 6512017-Customs dated 8th July 2017 amend ing notification No. 50/2017- Customs dated 301h June 2017 is proposed to be given retrospective effect so as to exempt integrated tax leviable under section 3(7) of the Customs Tariff Act, 1975 on aircrafts, aircraft engines and other aircraft parts imported under cross-border lease during the period from pt July, 2017 to 7th July, 2017 subject to the payment of Integrated tax J eviable under section 5(1) of the JOST Act, 2017 on the said suppl

(Clause 99 of the Bill refers) 

  • Services provided or agreed to be provided by the Naval Group Insurance Fund by way of life insu rance to personnel of Coast Guard, under the Group Insurance Schemes of the Central Government, are proposed to be exempted from service tax for the period commencing from 1Oth September, 2004 and ending with 301h June, 2017

(Clause 103 of the Bill refers)

  • Services provided or agreed to be provided by the Goods and Services  Tax Network (GSTN) to the Central Government or State Governments or U nion territories administration, are proposed to be exempted from service tax for the period commencing from 28th March, 2013 and ending with 30th June, 201

(Clause 104 of the Bill refers)


  • Consideration paid to the Government in the form of Government’s share of profit petroleum in respect of services provided or agreed to be provided by Government by way of grant of license or lease to explore or m ine petroleum crude or natural gas or both, is proposed to be exempted from service tax for the period commencing from l51April, 2016 and ending with 30th June, 20 1

(Clause 105 of the B;/l refers) 

4.  General 

  • Changes explained above are meant to draw attention to major The text of the statutory provisions should be read careful l y for interpreting the law. Any issues or doubts which may arise or any omission/ error observed may k ind ly be brought to the notice of the u ndersigned, Sh. Parmod Kumar, OSO (TRU) at parmodkumar.7 or Shri Pramod Kumar, OS (TRU) at pramodkumar.dor @gov. i n as soon as possi ble.
  • I would like to express my gratitude for the pre-budget suggestions and inputs which have been received from field I would be found wanting if I do not express my deep gratitude to my team in TRU fl comprising the OSO, OS and the three Technical Officers, Sh. Harsh Singh, Ms.  Rachna  and  Sh. Susanta  Ku mar  Mishra,  who  have worked  very d i l igently during the course of the year.

With regards,

Yours sincerely,

(Amitabh  Kumar)



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