Change in Service Tax rate

[Admin TMI]

Question - Is there any change in rate of service tax proposed in Finance Bill 2015 ?

[Admin TMI]

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

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.

Till the time the revised rate comes into effect, the levy of ‘Education cess’ and ‘Secondary and Higher Education cess’ shall continued to be levied in Service Tax.

AI Summary

Service Tax Rate to Rise from 12.36% to 14% with Cesses Subsumed; Effective Date Pending Government Announcement. The discussion addresses a query about changes in the Service Tax rate proposed in the Finance Bill 2015. The response clarifies that the Service Tax rate will increase from 12% plus Education Cesses to 14%, with the cesses being subsumed into the new rate. This results in an effective rate change from 12.36% to 14%. The new rate will take effect on a date to be announced by the Central Government after the Finance Bill's enactment. Until then, the existing cesses will continue to be applied.