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Rate of service tax

Krishanu Majumder (Accountant) (174 Points)

25 May 2015

I am confused at which rate service tax to be charged. Is it 14% or 14.42%? If it is 14%, then is it including cess @ 3%? If not, how to charge cess @ 3%? Or is the new service tax is exempted from cess charge. Pls help.

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8 Replies

saranraj thangaraj (articled assistent) (121 Points)
Replied 25 May 2015

14% itself includes cess... no need to charge separately.

Naman Sidharth (student) (31 Points)
Replied 26 May 2015

The rate will be flat 14% with effect 1st June Education cess 3% have been subsumed and is not

Naman Sidharth (student) (31 Points)
Replied 26 May 2015

The rate will be flat 14% with effect 1st June... Education cess 3% have been subsumed and is not applicable anymore... Further Swach Bharat abhiyan cess of 2 % will be applicable at a date to be notified latter... So as of now from 1st June,2015 charge flat 14% service tax

parthu (student) (22 Points)
Replied 26 May 2015

The rate will be 14% inclusive of all the cesses...

Arif Ali (Apt Co Advisory) (1230 Points)
Replied 26 May 2015

flat rate of 14%, no other cess applicable here. this rate inclusive of all cess

CA Suhas Prabhu (Chartered Accountant) (159 Points)
Replied 26 May 2015

The subsumed rate of ST @ 14% is effective from 01-06-2015. There is no cess to be charged from the date notified. Please refer the table below which provides clarity in applying the revised rate based on Rule 4 of Point of Taxation Rules, 2011.

Case1: When service is rendered before the change in rate:

Before rate change	After rate change	Rate to be applied as per Rule
Invoice issued (at 12.36%)	Payment received	12.36% - (a)(ii)
Payment received (at 12.36%)	Invoice issued	12.36% (a)(iii)
	Invoice issued, Payment received	14% (a)(i)

Case 2: When service is rendered after change in rate

Before rate change	After rate change	Rate to be applied as per Rule
Invoice issued (at 12.36%)	Payment received	14% - (b)(i)
Payment received (at 12.36%)	Invoice issued	14% (b)(iii)
Invoice issued, Payment received		12.36% (b)(ii)