Service Tax Rate Increased from 12.36% to 14 % w.e.f. 01.06.2015

Published On - May 20, 2015

admin Finance Act, Service Tax

Post enactment of Finance Act’15, trade was waiting for the Finance Ministry to notify the date for enhancement of service tax. Finally, the same has been notified as 1st June’15. Following is the gist of changes applicable w.e.f. the said date:

1) Abolition of EC & SHEC and effective rate of service tax to be enhanced from 12.36% to 14% (date of levy of the swachh bharat cess yet to be notified); Notification No. 14/2015-ST dated 19th May, 2015

2) Rule 6(3) of CENVAT Credit Rules (i.e. non-maintenance of separate books of accounts) has been triggered with. Now, reversal of CENVAT under the said sub-rule shall be 6% of exempted goods plus 7% of exempted services. Earlier, it was 6% for both(exempted goods as well as exempted services);

3) Changes in rate of Air travel agent, tax by insurers, Money changer agent, lottery distributor, etc.Notification No. 15/2015-ST

A. For Air Travel Agent under Rule 6 (7) of Service Tax Rules, 1994
On Basic Fare New Rate w.e.f 01.06.2015 Old Rate
For Domestic Booking 0.70% 0.60%
For International Booking 1.4%. 1.2%.
B. For Life Insurance under Rule 6(7A)(ii) of Service Tax Rules, 1994
Gross Amount of Premium Charged New Rate w.e.f. 01.06.2015 Old Rate
1st year 3.50% 3%
Subsequent Years 1.75% 1.50%
C For Money Changing under Rule 6(7B) of Service Tax Rules, 1994
Gross Amount of Currency Exchanged New Rate w.e.f. 01.06.2015 Old Rate
Up to Rs. 1,00,000 0.14% subject to minimum of Rs. 35 0.12% subject to minimum of Rs. 30
For an amount exceeding Rs. 1,00,000 and up to Rs. 10,00,000 Rs. 140 and 0.07% Rs. 120 and 0.06%
For an amount exceeding Rs. 10,00,000 Rs. 770 and 0.014% subject to maximum of Rs. 7,000 Rs. 660 and 0.012% subject to maximum of Rs. 6,000
D. For Distributor or Selling Agent of Lotteries under Rule 6(7C) of Service Tax Rules, 1994
Guaranteed Prize Payout New Rate w.e.f. 01.06.2015 Old Rate
More than 80% Rs. 8,200/- on every Rs. 10 Lakh (or part of Rs. 10 Lakh) of aggregate face value of lottery tickets printed by the organising State for a   draw Rs. 7,000/- on every Rs. 10 Lakh (or part of Rs. 10 Lakh) of aggregate face value of lottery tickets printed by the organising State for a   draw
Less than 80% Rs. 12,800/- on every Rs. 10 Lakh (or part of Rs. 10 Lakh) of aggregate face value of lottery tickets printed by the organising State for a   draw Rs. 11,000/- on every Rs. 10 Lakh (or part of Rs. 10 Lakh) of aggregate face value of lottery tickets printed by the organising State for a   draw

4) Exemption of service tax on entry in recognized sporting event, circus, cinematographic film,award function (wherein entry fees is up to Rs. 500/person), etc.

5) Levy of service tax on job work processes for production of alcoholic liquor for human consumption;

It is pertinent to mention that no date has been notified for levying service tax on all services by govt. (as enacted in Finance Act’15). The same shall be notified in due course of time.Presently, only support services by govt. are in the ambit of service tax.

Read Notification

16/2015  15/2015 14/2015 13/2015

Dt.19-05-2015

SERVICE TAX RATE CHART FROM 01.07.1994 to Date
Period BASIC RATE % S.T. HEC Effective Rate
01/07/1994 to 13/05/2003 5 0 0 5.00%
14/05/2003 to 09/09/2004 8 0 0 8.00%
10/09/2004 to 17/04/2006 10 2 0 12.00%
18/04/2006 to 10/05/2007 12 2 0 12.24%
11/05/2007 to 23/02/2009 12 2 1 12.36%
24/02/2009 to 31/03/2012 10 2 1 10.30%
01/04/2012 to 31.05.2015 12 2 1 12.36%
01.06. 2015 14 0 0 14.00%