Change in effective rate of service tax from 12.36% to 14%


M.com,CS,CA F Tushar Sampat (M.com CS,CA F)     21 May 2015

M.com,CS,CA F Tushar Sampat
M.com CS CA F 
 5065 likes  85617 points

| My Other Post

Change in effective rate of Service tax from 12.36% to 14%
Dear Member,

Greetings!
Further to the enactment of the Finance Act, 2015, the CBEC has notified June 1, 2015 to be the effective date for implementation of the new rate of Service tax from existing 12.36% to 14% (due to increase in rate and subsumed cess). The rate of effective Service tax needs to be analysed in the light of Rule 4 of the Point of Taxation Rules, 2011. A summary of the applicable rate in different scenarios is provided below:
 
S.No. Service Provided Invoice w.r.t. rate change Payment w.r.t. rate change Point of Taxation Rule Rate of service Tax
1 Before rate change After rate change After rate change 4(a)(i)
 
14%
2 Before rate change Before rate change After rate change 4(a)(ii)
 
12.36%
3 Before rate change After rate change Before rate change 4(a)(iii)
 
12.36%
4 After rate change Before rate change After rate change 4(b)(i)
 
14%
5 After rate change Before rate change Before rate change 4(b)(ii)
 
12.36%
6 After rate change After rate change Before rate change 4(b)(iii)
 
14%
 
 
Other important changes to be made effective from 01 June 2015 are as follows:
a) Service provided by way of access to amusement facility providing fun or recreation by means of rides, gaming devices or bowling alleys in amusement parks, amusement arcades, water parks and theme parks made taxable

b) Service provided by way of admission to entertainment event of concerts s, pageants, musical performances concerts, award functions and sporting events other than the recognized sporting event, if the amount charged is more than Rs. 500 per person for the right to admission to such an event made taxable.

c) The existing exemption to service by way of admission to entertainment event, namely, exhibition of cinematographic film, circus, recognized sporting event, dance, theatrical performance including drama and ballet shall be continued, through the route of exemption

d) Service Tax shall be levied on contract manufacturing/job work for production of potable liquor for a consideration

e) Changes regarding lottery also made effective
 
However, the effective date for the following changes is yet to be notified:
a) Swachh Bharat Cess @ 2% or less on the value of taxable service; and
b) Increase in scope of the service provided by the Government to include all service under reverse charge mechanism.




Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  



Popular Discussion


view more »