17 July 2007
The President of India has given his assent to the Finance Bill 2007 by putting his seal and signature on and it has now been enacted as the Finance Act 2007. Service Tax Rate has been hiked to 12.36 per cent as Secondary and Higher Education Cess of 1 per cent on service tax has come into force. Consequently, w.e.f. 11th May 2007 the rate of service tax shall be revised as follows:
Service Tax on taxable value 12.00%
Education Cess @ 2% of Service Tax 0.24% Secondary and Higher Secondary Cess 1% of taxable value 0.12% Hence effective service tax works out to 12.36%
Kindly note that all three heads of taxes shall have to be separately displayed on the Invoice. The new services are yet to be notified and are still not effective.
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