Service tax

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Mandeep Singh

Mandeep Singh (Querist)
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21 May 2015 Dear sir,

can i apply new service tax rate 14%

CA AnKiT BoHrA (AB)

CA AnKiT BoHrA (AB) (Expert)
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21 May 2015 from 1st of june 2015.. not before that dear

Mandeep Singh

Mandeep Singh (Querist)
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23 May 2015 Dear sir,

not applicable from 1st april, 2015

Mandeep Singh

Mandeep Singh (Querist)
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23 May 2015 Dear Sir,

I have one query that if company purchase wall fan Rs. 1650 then should be treat capital expenditure ya Revenue expenditure.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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24 July 2025 Answer to Both Queries:
1. Applicability of 14% Service Tax Rate
The new service tax rate of 14% was not applicable from 1st April 2015.

It became effective from 1st June 2015, as per Notification No. 14/2015 - ST dated 19.05.2015.

👉 So yes, you can apply 14% rate from 1st June 2015 onwards. Not before.

2. Wall Fan – Capital or Revenue Expenditure?
To determine whether a wall fan purchase (₹1650) is capital or revenue expenditure:

✔ Treat as Revenue Expenditure if:
It is of low value (₹1650 is quite low).

It is treated as a consumable or small equipment in your organization.

It is not capitalized in books (as per your accounting policy or materiality threshold).

✔ Treat as Capital Expenditure if:
Your company has a policy to capitalize fixed assets above a certain threshold (e.g., ₹1000 or ₹5000).

The fan is to be used over several years and included in the asset register.

👉 Practical Approach: For items like wall fans (₹1650), most companies treat them as revenue expenditure, especially due to materiality and ease of accounting.

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