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Increase in service tax rate from12.36% TO 14%

SERVICE TAX RATE INCREASED FROM 12.36% TO 14% EFFECTIVE FROM 01.06.2015.

After the  President has make signature on the Finance Bill, 2015 on Thursday, May 14, 2015 as passed by the parliament in union budget 2015. ,

The Ministry of Finance Department of Revenue has issued a  Notification No. 14/2015- ST dated May 19, 2015 . this notification has notified increase in the rate of Service tax from 12.36% to flat 14% (including Education Cess and Secondary & Higher Secondary Education Cess) applicable  from June 1, 2015.

CHANGES IN CENVAT CREDIT RULES – REVERSAL OF CENVAT CREDIT ON EXEMPTED SERVICES.

In the light of increase in the rate of Service tax from 12.36% to flat 14% (including Education Cess and Secondary & Higher Secondary Education Cess) to be effective from June 1, 2015, the Rate of Reversal of CENVAT Credit under Rule 6(3) of the Cenvat Credit Rules, 2004 has also been increased from 6% to 7% in case of exempted services with effect from June 1, 2015.

SWACHH BHARAT CESS @0.5% on all services.

Please note that Swachh Bharat Cess @ .5% on value of taxable services on all the services applicable from 15th November 2015.

Effective service tax rate is 14.5% from 15th November 2015

After swachh bharat cess applicable rate of service tax is 14.5%. It is applicable on all the services except negative services and services covered under mega notification. Also SBC needs to charged separately on the invoice. Cenvat credit is also not available on SBC. For more details read  our blog – Implication of Swachh bharat cess on service tax.

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