Rate of service tax at less than 12 %

Section 66 of the Finance Act is the charging section which states that service tax @ 12%.

Hence all services, other than those mentioned in Negative List and Mega exemption notification are liable to service tax @ 12%

However, certain specified services are taxed on an abated value, i.e. the value of such taxable service is reduced by certain percentage and service tax is charged at 12%. Consequently, the effective service tax rate is reduced on such services. These specified services are listed in abatement notification 26/2012 alongwith the percentage of abatement available on them.