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Service tax rate & accounting code

Jyothis (Article) (1127 Points)

25 October 2015  

1.How can i confirm the service tax rate & accounting code of a taxable serivce.

2.Say taxable service is INFORMATION TECHNOLOGY SOFTWARE SERVICES(As per service Tax registration form ST-1 ),

so i have searched the in google using keyword "Service tax rate of INFORMATION TECHNOLOGY SOFTWARE SERVICES & got a pdf from "cbec"site,showing an service tax rate of 10%+3%cess along with accounting code.

Again i searched in google to know if there is any abatment for IT sofware services & found that there is no such abatment.Then how can ST rate of software service come to 10.30%.

Pls see the pdf from cbec site.

"https://www.google.co.in/search?q=INFORMATION+TECHNOLOGY+SOFTWARE+SERVICES++service+tax+rate&ie=utf-8&oe=utf-8&gws_rd=cr&ei=7aAsVuX_F4W20gS8_qyoAQ"

Thank you in advance for any help you can provide.


 7 Replies

Miss Rinkal (Student) (1304 Points)
Replied 25 October 2015

First of all, current ST rate is flat 14%. The rate that you had mentioned is too old. And 10.3% was calculated as 10% + 3% on 10%. Therefore total to be 10.3%.

The service tax rate changes frequently. For fy 2015-16, up to 31 May 15, rate was 12.36%.I.e 12% +3% cess. However Wef from 01-06-2015, the rate is 14%

1 Like

Jyothis (Article) (1127 Points)
Replied 26 October 2015

Pdf showing details about Information technolgy software services was downloaded from CBEC site,so can i proceed with new rate 14%.Since there is no Abatement

My doubt was how can i confirm accounting code & Accounting rate since pdf available in cbec site is superceded.

Miss Rinkal (Student) (1304 Points)
Replied 26 October 2015

Yes you can proceed with 14% st rate. Since st rate wef 1st June 2015 have changed to 14%. Before that it was 12.36% I.e 12% + 3% (of 12%) cess

Miss Rinkal (Student) (1304 Points)
Replied 26 October 2015

Please find attached the circular for your reference.

Circular No. 183 / 02 / 2015-ST

F. No. B-1 /1/2015-TRU

Government of India

Ministry of Finance

Department of Revenue

(Tax Research Unit)

***

Room No. 153, North Block, New Delhi.

Dated 10th April, 2015.

To

Chief Commissioner of Customs and Central Excise(All)

Chief Commissioner of Central Excise & Service Tax (All)

Director General of Service Tax

Director General of Central Excise Intelligence

Director General of Audit Commissioner of Customs and Central Excise (All)

Commissioner of Central Excise and Service Tax (All)

Commissioner of Service Tax (All) Madam/Sir,

Dear Madam/Sir,

Subject: Clarification on rate of service tax - regarding.

Doubts have been expressed in various forums regarding the proposed increase in the rate of service tax from 12.36% (including education cesses) to 14% on the value of taxable service.  

2.         It may be noted that changes proposed in the Budget have/are coming into effect on various dates as already indicated in JS (TRU-II) D.O. letter dated 28th February, 2015. Certain amendments made in the Finance Act, 1994, including the change in service tax rate, will come into effect from a date to be notified by the Government after the enactment of the Finance Bill, 2015.

 3.        In this regard your attention is invited to clause 106 of the Finance Bill, 2015 and paragraph 3 of JS (TRU-II) D.O. letter, which  is reproduced below:-

"3. Service Tax Rate:

3.1       The rate of Service Tax 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, the effective increase in Service Tax rate will be from the existing rate of 12.36% (inclusive of cesses) to 14%, subsuming the cesses.

3.2       In this context, an amendment is being made in section 66B of the Finance Act, 1994. Further, it has been provided vide clauses 179 and 187 respectively of the Finance Bill, 2015 that sections 95 of the Finance Act, 2004 and 140 of the Finance Act, 2007, levying Education Cess and Secondary and Higher Education Cess on taxable services shall cease to have effect from a date to be notified by the Government.

3.3       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.

3.4       Till the time the revised rate comes into effect, the 'Education Cess' and 'Secondary and Higher Education Cess' will continue to be levied in Service Tax."

4.         The paragraph reproduced above is self-explanatory and it is clear that 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. The date will be notified in due course after the enactment.

5.       Similarly, certain doubts have been raised with regard to abatement on value of services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year. Valuation of services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess is determined as provided in rule 2C of the Service Tax (Determination of Value) Rules, 2006.

5.1       In the Union Budget, 2015, no change has been made in these rules; therefore, any confusion is unwarranted. Further, as explained above, the rate of service tax on the specified portion of the amount charged for such supply which is 40% continues to be 12.36% (including cesses) at present i.e. 4.944 %. The rate of Service tax, as discussed above, will continue unchanged till a date which will be notified in due course.

6.       Wide publicity may be given so that the assesses and public are aware of the above.  All the major Industry/Trade Associations may be informed accordingly. 

Yours sincerely,

(Dr. Abhishek Chandra Gupta)

Officer, TRU

Tel: 011-23095547

Hope you are clear with the doubt regarding rate of service tax.

1 Like

Miss Rinkal (Student) (1304 Points)
Replied 26 October 2015

The accounting code for it software services for 

Tax collection is 00440452

Interest / Other receipts is 00440450

Penalty is 00441461

Deduct refunds is 00440451

There is no abatement available in case of it software services

1 Like

Jyothis (Article) (1127 Points)
Replied 26 October 2015

How did you get the accounting code for Tax Collection,can we search Accounting code based on nature of service in CBEC site.

Miss Rinkal (Student) (1304 Points)
Replied 26 October 2015

Please find attached the link of codes for your ready reference

https://pccacbec.nic.in/indexa84b.H T M L

Apart from this two more new services are there. Their accounting codes are as follows

Sr.No Taxable Services Accounting Code
Tax Collection Other Receipts Deduct Refunds
1 2 3 4 5
124 Services of Air-conditioned restaurants having license to service alcoholic beverages in relation to service of food or beverages. 00441067 00441068 00441069
125 Services of providing of accommodation in hotels / inns/ cubs/ guest houses/ campsite for a continuous period of less than three months 00441070 00441071 00441072
 

 

Note :

  1. The sub-head "other receipts" is meant for interest, penalty, leviable on delayed payment of service tax
  2. The sub-head "deduct refunds" is not to be used by the assessees, as it is meant for the Revenue/Commissionerates while allowing refund of tax
  3. Primary education cess on all taxable services will be booked under 00440298 and Secondary Higher Education Cess will be booked under 00440426
  4. If NSDL have issued any dummy codes for revenue collection and interest / penalty for the above eight services, all these dummy codes should be treated as void and may replaced by the correct account codes as stated above
  5. Descripttion of taxable services provided at column (2) of the given table for ease of reference, does not limit the scope of the taxable service.

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