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 effect from such date as the Central Government may, by notification in the Official Gazette, appoint, for the words “twelve per cent.”, the words “fourteen percent.” shall be substituted. [/su_quote]
To bring more clarity, CBEC issued instruction under F.No. 334/5/2015 – read here.
[su_quote]3.3 The new Service Tax rate shall come into effect from a date to be notified by the Central Government after the enactment of the Finance Bill, 2015. 3.4 Till the time the revised rate comes into effect, the ‘Education Cess’ and ‘Secondary and Higher Education Cess’ will continue to be levied in Service Tax. [/su_quote]
So the new service tax rate 14% shall be applicable from the date notified by Central Government, by way of notification in official gadget, after enactment of finance bill, 2015.
It is not notified yet.
12.36% shall be continue:
Until new service tax rate 14% shall not be notified, service tax rate 12.36% shall be continue as service tax rate.
Institute of Chartered Accountants of India has also issued clarification regarding it. Read it here
Swachh Bharat cess on service tax:
Central government can levy Swachh Bharat Cess on any or all services. The date shall be notified by central government regarding to it. Until that, no need to worry about it and confuse yourself.
How to calculate abatement / exemptions?
Calculate taking 12.36% as base rate. Consider changes applicable from 1/4/15 in abatements. There are few changes in abatement rate. The changes are in abatement rate for manpower service and security service and transportation business. Abatement rate for other services are the same as before budget 2015. So the service tax rate for other services are same as before budget.Once the new service tax rate 14% is notified, new article regarding new rate ( with and without abatement ) shall be published by us.
UPDATE- 19/5/15- SERVICE TAX RATE APPLICABILITY:
New rate applicability of service tax 14%: WILL BE APPLICABLE FROM June 1, 2015. The honorable president gave assent to bill 2015 on 14,2015. But the date is notified on 19/5/2015 via notification 14-2015-ST.New rate of service tax will become applicable and education cess shall be abolished. Charge service tax at 12.26% till May 31, 2015.
Read notification here.
Swachh Bharat cess provision:
The swachh Bharat cess shall be levied on all or any services. The effective date of charging swachh Bharat cess will be notified later. We will update article when there is new notification.
If you are availing benefits of abatement, continue it with changes made in abatement rate in financial bill, 2015. You can read about service tax rate and changes in service tax in budget through following links.
For current rate – read our article current service tax rate chart ( Updated with budget 2015 changes.)
Service tax changes effective from 1st Arpil, 2015:
- Introduction of new exemption.
- Withdrawal of exemption available.
- Changes in rate of reverse charge mechanism.
- Changes in abatement rate.
- Changes in cenvat credit definition.
You can get detailed guidelines of above from our post.
service tax rate chart 2015-16
Union budget 2015-16 highlights
If you have still query regarding new service tax rate 14%, please ask below through comments.If this post is helpful to you, say thanks by sharing it to social media via buttons on left side.
Good subject to Read and know about Service Tax Rate. Can the Notification to be issued by the Government be of retrospective effect. if so, how to get the differential service tax if we bill it at12.36%.
No, new service tax rate will not be effective retrospectively. The Central Government will issue the date to charge and pay service tax at 14%. From that date, you are required to charge service tax at 14%.
which date service tax rate 14% applicable
READ my post – https://taxmasala.in/when-will-new-service-tax-rate-14-be-applicable/
The date will be notified by government.
Please clarify from which date we have to charge service tax @14%
The rate will be applied when the date will be notified by government. Till that , charge 12.36% .
New abatement rate & receivable of s.tax.
Read my post to know abatement changes in service tax.
https://taxmasala.in/union-budget-2015-16-highlights-service-tax/
Mam what about the SBC of 2%
Swachh bharat cess will be applicable to some or all services. That will be notified by central government through notification. Till that no SBC of 2%.
Is Service Tax @ 14% applicable from 1st May 2015?
Not notified yet. Continue with 12.36%.
It will be applicable from june 1, 2015.
Read my post
https://taxmasala.in/new-service-tax-rate-14/
Once budget will notify by government than please let me know, i want to know when new service tax will be applicable.
I will update the post. Thanks
New rate of service tax 14% will be applicable from 1st june, 2015. Charge 14% from that date. Read my article.
https://taxmasala.in/new-service-tax-rate-14/
In previous the service tax rate was 12,then 2, then,1 and total 12.36% but now it willbe 14% .I want to know has 2 % and 1% now been ignored.
The rate is not implemented yet. THe education cess will be abolished in new rate and new rate will be 14%. Addionally swachh bharat cess will be levied on some or all service. Yet not notified.
Yes, ignore 3% cess while applying new rate 14%. Charge directly 14%. No education cess will be levied.
I want to know the abatement rate in service tax — provide service in diesel filling in tower sector for running tower when there is no electricity
Please clarify your service category. Are you selling diesel or providing any other additional service?
I want to file nil income taax return for FY 12-13, 11-13.Is there any chance tile for those years
You cannot file because the last date for filling tax return for 2012-13 is 31st March, 2015.
No, you can’t file.
In the post-budget session completion there is no service tax changes effect till 13.05.2015 by the union govt. how to charge the S.Tax(rate of Tax) as a service Provider in respect of Manpower & goods transport by road etc in the reverse machanisam.
Charge 12.36% till 31st May, 2015. After that, new rate 14% will be applicable.
Go through following articles
https://taxmasala.in/service-tax-on-manpower-supply-service/
https://taxmasala.in/new-service-tax-rate-14/
new service tax has introduced as per the bill passed by the president on 14.05.2015
But it will be effective from the date notified by central government.
when will effect
service tax @14%
Date will be notified. May be in July. Charge 12.36% up to the date of notification.
When new service rate is applicable
From 1st June, 2015. Read my post. https://taxmasala.in/new-service-tax-rate-14/
what rate of service tax is applicable on insurance premium in first year and subsequent year from 1st june 2015 ?
Service tax on insurance premium on first year is 3.5% on gross amount charge.
Service tax rate on insurance premium on subsequent years is 1.75% on gross amount charge.
Rates are as per composition scheme.
Thanks for your valuable reply. i want to know that……..is new service tax really going to applicable from 1st june 2015 ?
Is new rate 14% is including all type of cess which ever is applicable
Yes, no requirement to add additional cess on service tax rate 14%.
will it be retrospective ??
No, it is not retrospective.The rate is applicable from 1st june, 2015. However, you need to read POT rules. Soon publishing article on it.
MAM PLZ TOLD ME THAT , IS THE ANY CESS APPLICABLE ON SERVICE TAX. I READ IN NEWS PAPER THAT SAME AS GREEN CLEAN CESS APPLICABLED ON SERVICE TAX AMOUNT 2%.
Swachh Bharat Cess will be applicable on any or all services. It is not notified yet. Till that date, charge 14%.
Could you give me an example, with Old & New tax rates, for a bill of 5k in a Restaurant, for comparison ? Thanks !
Suppose restaurant bill is Rs. 5000 without vat.
service tax will be 5000*14%*40% = Rs.280
Vat will be 5% ( VAT rate in gujarat) = 5000*5%= 250
Total bill = 5000+280+250=Rs. 5530
can you say entry for service tax for 14%
Customer a/c Dr
TO income a/c
To service tax payable.
mam, what is the service tax rate for hospitals
There is exemption for medical services under service tax.
Read my post
https://taxmasala.in/service-tax-on-health-care-services/
Thanks for the above wonderful post, Have a query on RCM applicable rate.
Can you pls clarify the applicable rate for the below situation –
manpower Service provided in the month of April, Invoice raised in the month of May, ST Remittance is being done in June
What rate is applicable – 12.36% or 14% ?
Read following post.
https://taxmasala.in/point-of-taxation-rules-2011/
What about services availed in May(1-31) and invoice generated in June 2015 ? Which tax rate will be applied?. Eg. Postpaid bills
Read my post
https://taxmasala.in/point-of-taxation-rules-2011/
hello, what is breakup of service tax rate 14%
service tax rate is basic 14% and no need to add cess on it.
what is rate of service tax on life insurance premium in first year and subsequent year from 1st june 2015. is service tax really increase on lic premium from 1st june 2015.
plz confirm new servicetaxrate is14% + Eductation cess ( 2% on service tax value) + Secondry education cess ( 1% on service tax) is it ok or anything
Service tax rate ( Effective) is 14%. No need to add education cess.
Pl.clarify whether the rent payable for May 2015 will attract service tax @ 14% or 12.36% as the new rate of
service tax is applicable from 1st June 2015
Service rendered in May 2015. If invoice is issued or rent is paid before 1st june, 2015, service tax rate will be 12.36%.
Read my post
https://taxmasala.in/?s=point+of+taxation
what will be the service tax for service rendered in April 2015 and invoiced in June 2015
Read my post.
https://taxmasala.in/point-of-taxation-rules-2011/
MAM, PLZ TOLD ME THAT WILL BE CANCELED THE SERVICE TAX COMING THE GST (GOODS SERVICE TAX). AND COMING THE GST WILL BE WHOSE TAX IN EFFECT. PLEASE CLARIFY THIS PROBLEMS.
Central Excise registration- for MSME Units- Turnover Limit for registration for the 2015-16 F.Y (2016-17 A.Y) pls. explain & give details
Dear Madam,
We received TCS 1% on scrap for the month of April 15 Rs. 290, June 15 Rs. 57 and on oct 15 Rs. 47.
But till now we didn’t paid the tax and not file the return also.
Kindly let me know the interest and penalty rate for the above TCS, if i file on feb 2016
hello mam i want to know service tax applicability on real estate
DRAFT GST IN INDIA WILL BENEFICIARY TO COMMON MAN OR BURDEN?
SPECULATIONS ON GST NOT SO CLEAR & IMPLICATIONS-COMMENT.