Service tax will be levied at place where the service is provided. This will bring relief to those dealing in cross-border services. In short, service would be taxed where it is consumed. Services to about 23 international organisations have been exempted. Immovable property which is on rent gets exemption. Seven recognised systems of medicines and independent paramedics also are exempted.
No service tax liability on the installation of equipment for food processing units and operations related to agricultural produce. (Alcoholic beverages are not included in food processing.) Copyright relating to original work, such as song compositions, is exempt from service tax. An author, having copyright for a book written by him, would not be required to pay service tax on royalties received from the publisher; a person having copyright of a cinematographic film would not have to pay service tax on the amount received from the film exhibitors.
Artistes performing folk or classical art forms are exempted while artistes of Western music or dance, modern theatre, film and TV stars will be taxable. Painters and sculptors are taxable. Service tax will be levied at 12 per cent on the value of the service. On currency exchange from or to Indian rupees, the value of taxable service shall be equal to the difference in the buying or selling rate, as the case may be, and the RBI reference rate for that currency. In case the RBI reference rate for a currency is not available, the value shall be 1 per cent of the gross amount of Indian rupees provided or received by the person changing the money.