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.

current service tax rate chart for year 2014-15

There is change in service tax rate from 12.36% to 14% in budget 2015-16. Read following posts,

 budget highlights: service tax 

When will new service tax rate 14% be applicable?

Service tax rate chart for fy 2015-16 : Amended with new service tax rate 14%

 

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
Consturction service  
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

Exemption:

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 tax under reverse charge mechanism

Service Service receiver Service provider
Insurance agent services 12.36% 0%
Sponsor ship services 12.36% 0%
Legal service 12.36% 0%
Director’s service 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
Original work 2.472% 2.472%
Maintenance work, restoration of goods 4.326% 4.326%
Other work contract 4.326% 4.326%

 

Download the chart in high quality pdf

[sociallocker id=2163]https://www.dropbox.com/home?preview=Service+tax+rate+chart-taxmasalapdf+(1).pdf[/sociallocker]

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:

Service tax government site