Service tax new slab rate

Service Tax rate being increased to 14% and additional 2% Swachh Bharat Cess from the date to be notified so that effective tax rate would be 16% on the value of taxable services. Getting aligned towards 20%-24% GST model. Questions remain on the fate of existing balance in Primary Edu Cess and S&H Cess account.
All services by Government/Local Authority to a business entity would be subject to Service tax
CENVAT credit on inputs and input services can be taken within one year instead of six months from the date of invoice
Manpower supply/ Security services provided by an individual/HUF/Firm to a body corporate would be under full reverse charge mechanism w.e.f. 01.04.2015
Value of taxable services would now include all reimbursable expenses
Penalty not to exceed 10% of the Service Tax amount in bonafide cases. No penalty if paid within 30 days of receipt of Show Cause notice. In case of malafide cases, penalty would be 100% of the service tax amount
Uniform abatement of 30% for transport of goods by all means ( rail, road and vessel)

The new service tax rate shall come into effect from a date to be notified by the Central Government after the enactment of the Finance Bill, 2015.

Kindly read my article clarifying all the issues related to this.

/articles/union-budget-2015-clarifications-regarding-increase-in-st-rate-23232.asp

Thanks & Regards,

New service tax rate will be applied whenever notification come. the effective service tax rate is 16%. 14% for service tax (education cess will not apply) and 2% for swachh bharat abhiyaan. both rate will apply whenever notification come after enactment of Finance Act 2015.

so currently 12.36% rate will apply till notification for new rate.

Read below points taken from memorandum:-

1. Change in Service Tax rate:

• The Service Tax rate is being increased from 12% plus Education Cesses to 14%. The ‘Education Cess’ and ‘Secondary
and Higher Education Cess’ shall be subsumed in the revised rate of Service Tax. Thus, effective increase in Service Tax
rate will be from existing rate of 12.36% (inclusive of cesses) to 14%.
The new Service Tax rate shall come into effect from a date to be notified by the Central Government after the enactment
of the Finance Bill, 2015.
Till the time the revised rate comes into effect, the levy of ‘Education cess’ and ‘Secondary and Higher Education cess’ shall
continued to be levied in Service Tax.
2. Swachh Bharat Cess:
• An enabling provision is being made to empower the Central Government to impose a Swachh Bharat Cess on all or any
of the taxable services at a rate of 2% of the value of such taxable services with the objective of financing and promoting Swachh
Bharat initiatives.
This Cess shall be levied from a date to be notified by the Central Government in this regard and will not have immediate
effect.

so it is clear that 2% will be levied on value of taxable services. so effective rate will become 16%.