Background
In India, service tax has been introduced to tax the service providers. The basic scheme of this taxation has been drafted to tax the service providers efficiently. Section 66 creates the charge on service providers. However, in the world of globalisation, charging only service provider was not enough.
India was facing a problem when anybody imports the services from outside India. Nonresidents were easily able to provide the services in India without any tax. So to level the field for both resident and nonresident and also to increase the tax revenue, Government introduced section 66A through Finance Act, 2006.
This section is also popularly known as reverse charge mechanism.
Applicability
This section was introduced by finance act, 2006 w.e.f 18 April 2006.
Bare Text of the Section
The bare text of this section is available in Annexure I. You may also download the PDF version of the section.
Basic soul of the section
Section 66A creates a charge on service recipient in some cases, basically in the cases of import.
Sunset Clause of this section
The provision of this section shall not apply on or after 1st July, 2012. Instead, section 66B of the Finance Act, 1994.