taxmasala.in http://taxmasala.in/current-service-tax-rate-chart-year-2014-15/

admin October 6,2014

Current service tax rate chart for year 2014-15

Presenting current service tax rate chart for year 2014-15.

Service tax is indirect tax levied on service provided. Service tax is charged at various rates due to availability of exemptionsand abatements on various services. Use this chart to decide service tax rate applicable to you.

Service tax rate:

Current service tax rate is 12%. On it, 2% education cess and 1% higher education cess are added. So the effective servicetax rate is 12.36% (12% + 3%). This is standard rate and it can be reduced as per available abatement and exemptions.

Service tax rate chart:

Serviceprovided

Amount(column1)

Abatementrate orExemptionrate(column2)

Value afterabatement(Column3=Column 1-column 2)

Servicetaxpayable(column3*12.36%)

Effectiverate*(Column4) 12.36%-abatementrate

Conditions tobe followed toclaimabatement orexemption

Tour operatorservice

Accommodationbooking

10,000 90% 1000 124 1.236% No cenvat creditfor input, inputservices orcapitalgoods.Invoiceincludes amountofaccommodation.

A package tour 10,000 75% 2500 304 3.09% No cenvat creditfor input, inputservices orcapital goods.

Other tours 10,000 60% 4000 494 4.944% As aboveThe billincludes grossamount chargedfor tour.

Financial leaseservice

10,000 90% 1000 124 1.236% Nil

Transport ofgoods by railservice

10,000 70% 3000 371 3.708% Nil

Transport ofpassenger byrail

10,000 70% 3000 371 3.708% Nil

Transport ofpassenger byair

10,000 60% 4000 494 4.944% Nil

Hotel service(club, pundal,shamiana)withsupply of food

10,000 30% 7000 865 8.652% Cenvat credit ofgoods ( goods 1to 22 classifiedunder cenvatcredit act, 1985has not beentaken)

Renting ofimmovableproperty (Hotel,guest house orresidentialhouse)

10,000 40% 6000 742 7.416% Cenvat credit forinput and capitalgoods has notbeen taken

Good transportagency services

10,000 75% 2500 309 3.09% Cenvat credit forinput, inputservices andcapital goodshas not beentaken

Chit fundservices

10,000 30% 7000 865 8.652% Same as above

Renting ofmotor vehicledesigned tocarrypassengers

10,000 60% 4000 494 4.944% Same as above

Transport ofgoods in vessel

10,000 60% 4000 494 4.944% Same as above

Consturctionservice

Carpet area ofunit is less than2000 sq ft andamount chargedis less than 1crore

10,000 75% 2500 309 3.09% Cenvat credit forinput used forprovision ofservice has notbeen taken andvalue of land isincluded in theamount charged

In all othercases

10,000 70% 3000 371 3.708% Same as above

How to use effective rate:

Please note that effective rate is for easy calculation. You can use effective rate direct on amount (column 1). So service taxpayable is column 1 * column 4.

Basic terms to understand more about rate of service tax:

Abatement in service tax:

Abatement is partial exemption from service tax. There are different rates of abatement for different services.

How abatement reduces amount of service tax payable?

Taking one example, suppose Mr. Ram provided taxable services worth Rs. 200000 to Mr. Rahim. Service tax rate is 12.36%but abatement available is 70%.

So we will calculate service tax payable by following method:

Value of service provided = 2,00,000

Value after availing abatement = 2,00,000- 70% = 60000

Service tax payable = 60,000*12.36% = 7416

Exemption:

Under notification no. 26/2012, many services are fully exempt under exemption from mega notification and negative list ofservices.

We will soon present list of exemption services. Enter your email address in sign up form so that we can mail you when wepublish the post.

Remember that no service tax is payable when service is fully exempt.

Availment of abatement is optional:

It is not compulsory to avail abatement. service provider can pay service tax on full amount. The rate will be 12.36% of valuethat time.

Rate under reverse charge:

Under reverse charge mechanism, service tax is paid full or partially by service receiver. To know more about reverse chargemechanism, read following post

Service tax under reverse charge mechanism

Service Service receiver Service provider

Insurance agent services 12.36% 0%

Sponsor ship services 12.36% 0%

Legal service 12.36% 0%

Director’s service 12.36% 0%

Support services by government 12.36% 0%

Supply of manpower 9.27% 3.09%

Renting of motor vehicle (If service provider is availed abatement)

Renting of motor vehicle (if service provider is not availed abatement) 6.18% 6.18%

Import of service 12.36% 0%

Rate of service tax on work contract:

Service Service receiver Service provider

When there is no reverse charge and no composition scheme applicable 0% 12.36%

When there is reverse charge applicable and no composition scheme applicable 6.18% 6.18%

When there is no reverse charge applicable and composition scheme applicable

Original work (construction, erection, commissioning etc.) 0% 4.944%

Maintenance, restoration, repair of goods 0% 8.652%

Other work contract including repair, maintenance, plastering of immovable property 0% 8.652%

When there is reverse charge and composition scheme applicable

Original work 2.472% 2.472%

Maintenance work, restoration of goods 4.326% 4.326%

Other work contract 4.326% 4.326%

In taxation field, the important thing is to consider notifications and updates while following any rule. I always try to considerchanges in tax rules before writing article.still When you apply this rate, please consider necessary amendments andnotifications also.

Use this link to stay updated about service tax circulars and notification:

Service tax government site