Service tax rate change affects compound and effective rates after abatement, altering liabilities for specified services. Service tax headline rates and the removal of education cesses on 1 June 2015 increased the base levy and eliminated separately charged cesses, changing aggregate tax incidence. Compound rates for discrete services (air ticket booking, life insurance, currency exchange, lottery distribution, etc.) are updated with pre- and post-1 June 2015 percentages tied to defined taxable bases. Effective post-abatement rates for sectoral services (including GTA, works contracts, catering, transport, tour operators, room rent and motor cab renting) are provided to reflect the revised base rate inclusive of applicable abatements. (AI Summary)
Rates of service tax and compound rates since 1994
Sr. No. | Period | Rate of Service Tax | Rate of Education Cess | Rate of Secondary and Higher Secondary Education Cess |
1 | 1-7-1994 to 13-5-2003 | 5% | Nil | Nil |
2 | 14-5-2003 to 9-9-2004 | 8% | Nil | Nil |
3 | 10-9-2004 to 17-4-2006 | 10% | 2% of S.T. | Nil |
4 | 18-4-2006 to 31-5-2007 | 12% | 2% of S.T. | Nil |
5 | 1-6-2007 to 23-2-2009 | 12% | 2% of S.T. | 1% of S.T. |
6 | 24-2-2009 to 31-3-2012 | 10% | 2% of S.T. | 1% of S.T. |
7 | 1-4-2012 to 31-5-2015 | 12% | 2% of S.T. | 1% of S.T. |
8 | 1-6-2015 Onwards | 14% | Nil | Nil |
Compound rates of service tax
Nature of Service | Compound Rate Till 31-5-2015 | Compound Rates from 1-6-2015 Onwards |
Booking of tickets for Air Travel Provided by air travel agents | - 0.6% on the basic fare in case of domestic booking.
- 1.2% on the basic fare in case of international booking.
| - 0.7% on the basic fare in case of domestic booking.
- 1.4% on the basic fare in case of international booking.
|
Insurer carrying on life insurance business | - On the gross premium charged from the policyholder reduced by the amount allocated for investment ans savings on behalf of policyholder.
- In all other cases, 3% of the premium charged in the first year and 1.5% of premium charged in subsequent year.
| - On the gross premium charged from the policyholder reduced by the amount allocated for investment ans savings on behalf of policyholder.
- In all other cases, 3.5% of the premium charged in the first year and 1.75% of premium charged in subsequent year
|
Purchase or sale of foreign currency including money changing | - 0.12% of gross amount of currency exchanged for an amount up to ₹ 1 lac subject to minimum amount of ₹ 30.
- ₹ 120 and 0.06% of the gross amount of currency exchanged for an amount exceeding ₹ 1 lac and up to ₹ 10 lacs.
- ₹ 660 and 0.012% of gross amount of currency exchanged for an amount exceeding ₹ 10 lacs but subject to maximum amount of ₹ 6000.
| - 0.14% of gross amount of currency exchanged for an amount up to ₹ 1 lac subject to minimum amount of ₹ 35.
- ₹ 140 and 0.07% of the gross amount of currency exchanged for an amount exceeding ₹ 1 lac and up to ₹ 10 lacs.
- ₹ 770 and 0.014% of gross amount of currency exchanged for an amount exceeding ₹ 10 lacs but subject to maximum amount of ₹ 7000.
|
Distributors and selling agents or persons assisting in organizing lottery | - ₹ 7000 on every ₹ 10 lacs (or part of 10 lacs) of aggregate face value of lottery provided, where guaranteed price pay out is more than 80%
- ₹ 11000 on every ₹ 10 lacs (or part of ₹ 10 lacs) of lottery provided, where guaranteed price payout is less than 80%
| - ₹ 8200 on every ₹ 10 lacs (or part of 10 lacs) of aggregate face value of lottery provided, where guaranteed price pay out is more than 80%
- ₹ 12800 on every ₹ 10 lacs (or part of ₹ 10 lacs) of lottery provided, where guaranteed price payout is less than 80%
|
Education Cess and Secondary & Higher Secondary Education Cess | Charged separately | Cess has been abolished. |
Effective Rates after Abatement (Including Cess)
Nature of Service | Compound Rate Till 31-5-2015 | Compound Rates from 1-6-2015 Onwards |
Works Contract |
Option I Gross Amount – Value of goods | 12.36% | 14% |
Option II (a) 40% in case of Original Works | 4.944% | 5.60% |
b) 70% in remaining cases | 8.652% | 9.80% |
Restaurant Services | 4.944% | 5.60% |
Outdoor Catering | 7.416% | 8.40% |
Financial Leasing and Hire Purchase | 1.236% | 1.40% |
Transport of goods by rail | 3.708% | 4.20% |
Transport of passengers by rail | 3.708% | 4.20% |
GTA | 3.708% | 4.20% |
Bundled Services (Food + Rent, etc) | 8.652% | 9.80% |
Transport of passengers by air |
Economy class | 4.944% | 5.60% |
Other class | 7.416% | 8.40% |
Room Rent | 7.416% | 8.40% |
Renting of Motor Cab | 4.944% | 5.60% |
Transport of passengers by a contract carriage other than motor cab and by a radio taxi | 4.944% | 5.60% |
Transport of goods in a vessel | 3.708% | 4.20% |
Tour Operator Services | | |
(a) Package Tour | 3.09% | 3.50% |
(b) Booking Accomodation | 1.236% | 1.40% |
(c) Other than above | 4.944% | 5.60% |
Construction of complex |
(a) Residential complex of area less than 2000 sq ft and amount charged is less than ₹ 1 Crores. | 3.09% | 3.50% |
(b) Other complexes | 3.708% | 4.20% |
SWACHH BHARAT CESS – yet to be notified.
This is just for your reference. It does not constitute our professional advice or recommendation.
CA Akash Phophalia
9799569294
[email protected]
Office No 3, Second Floor
Amrit Kalash, Residency Road
Near Bombay Motor Circle
Jodhpur – 342001
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