Presenting current service tax rate chart for year 2014-15. You can find service tax rate chart 2015-16 with amended rate 14% here.- LINK. The new rate is applicable from june 1, 2015.
Service tax is indirect tax levied on service provided. Service tax is charged at various rates due to availability of exemptions and abatements on various services. Use this chart to decide service tax rate applicable to you.
There is change in service tax rate from 12.36% to 14% in budget 2015-16. Read following posts,
Service tax rate:
Current service tax rate is 12%. On it, 2% education cess and 1% higher education cess are added. So the effective service tax rate is 12.36% (12% + 3%). This is standard rate and it can be reduced as per available abatement and exemption.
Service tax rate chart:
|Service provided||Amount(column 1)||Abatement rate or Exemption rate(column 2)||Value after abatement(Column 3=Column 1-column 2)||Service tax payable (column 3*12.36%)||Effective rate*(Column 4) 12.36%-abatement rate||Conditions to be followed to claim abatement or exemption|
|Tour operator service|
|Accommodation booking||10,000||90%||1000||124||1.236%||No cenvat credit for input, input services or capital goods.Invoice includes amount of accommodation.|
|A package tour||10,000||75%||2500||304||3.09%||No cenvat credit for input, input services or capital goods.|
|Other tours||10,000||60%||4000||494||4.944%||As aboveThe bill includes gross amount charged for tour.|
|Financial lease service||10,000||90%||1000||124||1.236%||Nil|
|Transport of goods by rail service||10,000||70%||3000||371||3.708%||Nil|
|Transport of passenger by rail||10,000||70%||3000||371||3.708%||Nil|
|Transport of passenger by air||10,000||60%||4000||494||4.944%||Nil|
|Hotel service (club, pundal, shamiana)with supply of food||10,000||30%||7000||865||8.652%||Cenvat credit of goods ( goods 1 to 22 classified under cenvat credit act, 1985 has not been taken)|
|Renting of immovable property (Hotel, guest house or residential house)||10,000||40%||6000||742||7.416%||Cenvat credit for input and capital goods has not been taken|
|Good transport agency services||10,000||75%||2500||309||3.09%||Cenvat credit for input, input services and capital goods has not been taken|
|Chit fund services||10,000||30%||7000||865||8.652%||Same as above|
|Renting of motor vehicle designed to carry passengers||10,000||60%||4000||494||4.944%||Same as above|
|Transport of goods in vessel||10,000||60%||4000||494||4.944%||Same as above|
|Carpet area of unit is less than 2000 sq ft and amount charged is less than 1 crore||10,000||75%||2500||309||3.09%||Cenvat credit for input used for provision of service has not been taken and value of land is included in the amount charged|
|In all other cases||10,000||70%||3000||371||3.708%||Same as above|
How to use effective rate:
Please note that effective rate is for easy calculation. You can use effective rate direct on amount (column 1). So service tax payable is column 1 * column 4.
Basic terms to understand more about rate of service tax:
Abatement in service tax:
Abatement is partial exemption from service tax. There are different rates of abatement for different services.
How abatement reduces amount of service tax payable?
Taking one example, suppose Mr. Ram provided taxable services worth Rs. 200000 to Mr. Rahim. Service tax rate is 12.36% but abatement available is 70%.
So we will calculate service tax payable by following method:
Value of service provided = 2,00,000
Value after availing abatement = 2,00,000- 70% = 60000
Service tax payable = 60,000*12.36% = 7416
Under notification no. 26/2012, many services are fully exempt under exemption from mega notification and negative list of services.
We will soon present list of exemption services. Enter your email address in sign up form so that we can mail you when we publish the post.
Remember that no service tax is payable when service is fully exempt.
Availment of abatement is optional:
It is not compulsory to avail abatement. service provider can pay service tax on full amount. The rate will be 12.36% of value that time.
Rate under reverse charge:
Under reverse charge mechanism, service tax is paid full or partially by service receiver. To know more about reverse charge mechanism, read following post
|Service||Service receiver||Service provider|
|Insurance agent services||12.36%||0%|
|Sponsor ship services||12.36%||0%|
|Support services by government||12.36%||0%|
|Supply of manpower||12.36%*||0%|
|Renting of motor vehicle (If service provider is availed abatement)|
|Renting of motor vehicle (if service provider is not availed abatement)||6.18%||6.18%|
|Import of service||12.36%||0%|
- from 1/4/2015 with regards to budget 2015 changes.
Rate of service tax on work contract:
|Service||Service receiver||Service provider|
|When there is no reverse charge and no composition scheme applicable||0%||12.36%|
|When there is reverse charge applicable and no composition scheme applicable||6.18%||6.18%|
|When there is no reverse charge applicable and composition scheme applicable|
|Original work (construction, erection, commissioning etc.)||0%||4.944%|
|Maintenance, restoration, repair of goods||0%||8.652%|
|Other work contract including repair, maintenance, plastering of immovable property||0%||8.652%|
|When there is reverse charge and composition scheme applicable|
|Maintenance work, restoration of goods||4.326%||4.326%|
|Other work contract||4.326%||4.326%|
Download the chart in high quality pdf
In taxation field, the important thing is to consider notifications and updates while following any rule. I always try to consider changes in tax rules before writing article.still When you apply this rate, please consider necessary amendments and notifications also.
Use this link to stay updated about service tax circulars and notification: