Service tax 14.28% or 16%?

Akshay Gandhi (Student CA IPC / IPCC) (25 Points)

10 March 2015  

Hey everyone,

As per clause 117 of finance bill 2015. 2% Clean india cess on value of services shall be applicable other than service tax i.e. 14%.

But according to the definitions CESS is a term which is fixed percentage applicable on tha tax amount. so what will be the effective rate of tax:

1. 14.28% i.e. 14 of service tax plus 2% of 14% that is 0.28%

or

2. 16 % i.e. 14(service tax) + 2(Clean india Cess)??????