Tag: service tax

When will new service tax rate 14% be applicable

After budget 2015 , the common question asked to me by various blog readers, when will new service tax rate 14% be applicable? That’s why I have written this post.The new rate will be applicable from 1st June, 2015. Applicability of new service tax rate 14% after budget 2015: I can understand worry of service tax payers about new service tax rate. Let me clear that new service tax rate will not be applicable from 1st April, 2015. When we read the amendment of section 66B, it reads as under, [su_quote]106. In section 66B of the 1994 Act, with...

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Service tax on health care services : Fully exempt

Medical expenses are day to day becoming more costly. Do you need to pay service tax on health care services? No. Thanks to Central Government that it gave mega exemption to medical and para medical services. Service tax on health care services: According to section 66B of mega exemption notification no. 25/2012, Health care services by a clinical establishment, an authorised medical practitioner or para – medics are included in mega exemption and this taxable service is exempt from whole of the service tax. You can see it on following link http://www.servicetax.gov.in/notifications/notfns-2012/st12-2012.htm Note that para medical service is also...

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Union budget 2015-16 highlights : Service tax

Union budget 2015-16 has been presented by honourable Finance minister Mr. Arun Jetley on 28th February, 2015. I have gathered details of key changes in service tax in union budget 2015-16. Let’s have a look. Union budget 2015-16 highlights: service tax: Change in service tax rate in budget 2015-16: Service tax rate has been increased from 12.36% to 14 %. Please note that there will be no levy of education cess and higher secondary cess on 14%. The new service tax rate will be applicable from 1st june, 2015.       Levy of swachh Bharat Cess 2% on service tax: Central Government is empower to charge 2%  Swachh Bharat cess on any or all taxable services. That will be notified. Entertainment events/ ammusement facilities are taxable now: Fully taxable services : Amusement facilities like means of rides, gaming devises, bowling alleys in amusement parks, theme parks etc. which were exempted earlier because of inclusion in negative list are now taxable fully. Partially taxable services : Admission / entry to concerts, non recognised sporting events, music concerts, award functions are exempted if admission or entry fees is up to Rs. 500. If entry fees is more than Rs. 500, service tax should be levied. Fully exemted services: Some services are still fully exempted after budget 2015-16. Those services are used by large people frequently. The services are exhibition of...

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service tax e payment easy steps

service tax e payment notification : As per notification number 9/2014 of service tax, with effect from 1st october, 2014, every assessee has to pay service tax electronically. So now it is mandatory to pay service tax online. The assessee can pay service tax by any other mode than internet banking with permission of assistant commissioner or deputy commissioner of Central Excise. (download notification no. 9/2014 from end of the post) Due date of service tax e payment: Last date of service tax e payment is 6th of following month when service is provided.For the month of march, last...

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Reverse charge mechanism in service tax ( RCM)

Reverse charge mechanism in service tax  ( RCM) (section 68 (2) ) has been introduced  with effect from 1/7/2012. With its introduction, service receiver is also liable to file return and pay service tax on the portion of service tax. Motive of this change is mainly more tax compliance and increase tax revenue but it is giving hardship to service receiver as if your liability for payment of service tax under reverse charge is small amount like Rs. 1000 or Rs. 100, you have to get registration under service tax act and pay service tax and file return.But rules are rules and we have to follow it. Applicability of reverse charge mechanism in service tax ( RCM): Not all service receiver  are liable to pay service tax under reverse charge. Only on receiving specific services , reverse charge mechanism is applicable. Is service receiver paying extra service tax due to reverse charge mechanism? No, amount of service tax payment is remained the same but liability to pay tax to government is apportioned between service receiver and service provider. Example OF RCM:   If work contractor has rendered services and charged bill of Rs. 100000. Service tax liability is Rs. 1,00,000*14%*70%  = 9800. (30% abatement) Suppose service receiver is liable to pay 50% of service tax under reverse charge mechanism. which is 4900 ( 9800/2). Service provider will charge bill...

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