Clarity on service tax rate

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imran dafedar (Querist)
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14 March 2015 Dear sir, The Service Tax Rate has been increased from 12.36% to 14% WEF 01-04-2015. My doubt is Wheather 14% is inclusive of Primary and Secondary Cess or We have to charge 2% & 1% on 14%.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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14 March 2015 The rate is inclusive primary and secondary education cess. But the rate 14% not WEF 1-4-15 but from a date to be notified latter after passing finance bill.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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15 March 2015 Please refer D.O.F. No. 334/5/2015-TRU Dated 28.02.2015 from link given below:

http://www.cbec.gov.in/ub1516/do-ltr-jstru2.pdf

In Point No. 3.3 it is clearly mentioned that "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."

So you need to wait. Till new rates are notified the existing rate of 12.36% will continue.

The rate of Service Tax is being increased from 12% plus Education Cesses to 14%. The ‘Education Cess’ and ‘Secondary and Higher Education Cess’ shall be subsumed in the revised rate of Service Tax. Thus, the effective increase in Service Tax rate will be from the existing rate of 12.36% (inclusive of cesses) to 14%, subsuming the cesses.

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