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Issue No. 40/2024 | 26 November 2024
Service Tax (Amendment) (No.2) Regulations 2024
The Service Tax (Amendment) (No.2) Regulations 2024 were issued on 25 November 2024. We append below the summary of the important amendments and our comments for your attention:
(a) Intra-group maintenance or repair services
- Previously, maintenance or repair services provided within companies of a same group were not included as services that can qualify for service tax ‘group relief’ under paragraphs 3 and 3A of 1st Sch of STR 2018.
- Deemed effective from 1 May 2024, the maintenance or repair services provided within companies of a same group are included as part of the services that can qualify for service tax ‘group relief’ under paragraphs 3 and 3A of 1st Sch of STR 2018.
- With this amendment, companies which had already paid service tax on the qualifying intra-group maintenance or repair services provided from 1 May 2024 onwards should be able to claim back the service tax paid.
(b) Traditional and Complementary Medicine (“TCM”) practitioners
- Service Tax Policy No. 2/2024 (“STP 2/2024”) dated 28 February 2024 was issued to exempt the TCM services provided within the premises or healthcare facilities managed or operated by TCM practitioners who are registered under the Traditional and Complementary Medicine Act 2016 (“TCM Act 2016”).
- Effective from 27 November 2024, any premises or healthcare facility managed or operated by a registered practitioner under the TCM Act 2016 who practices traditional and complementary medicine in a recognized practice area will be excluded from being treated as a taxable person for service tax purposes.
- With the above amendment, the STP 2/2024 is no longer required as the 1st Sch of STR 2018 has been amended.
(c) Provision of food by operators of golf club or golf driving range
- Effective from 26 February 2024 to 26 November 2024, food provided by operators of golf club or golf driving range is treated as taxable service.
- Effective from 27 November 2024, food provided by operators of golf club or golf driving range will no longer be treated as taxable service.
- However, the provision of prepared or served food by operators of golf club or golf driving range should still be subject to service tax.
(d) Maintenance or repair services excluded from service tax scope
- Currently, the following maintenance or repair services are excluded from being treated as taxable services:
- maintenance management services related to land or building for the use of residential provided by any developer, joint management body, management corporation or residential association; and
- repair services on the residential building.
- Effective from 27 November 2024, the services in the Item (ii) above will be replaced with “maintenance or repair services for the goods and equipment fixed to the structure of a residential house and the maintenance or repairs services are provided directly to the owner or occupant of the residential house”.
- This would mean that the services excluded from the scope of service tax will no longer be the repair services on residential buildings. Instead, the maintenance or repair services for the goods and equipment fixed to the structure of a residential house will be the services excluded from the scope of service tax on the condition that the maintenance or repairs services are provided directly to the owner or occupant of the residential house.
If you think your business may be affected by the above amendments or if you need any clarification or assistance, please do not hesitate to contact us and we would be happy to assist you.
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