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 change subsumes education cesses; new rate to take effect upon government notification.
Increase in Service Tax rate is proposed by the Finance Bill 2015, raising the statutory levy to a consolidated rate that subsumes the Education Cess and the Secondary and Higher Education Cess. The revised rate will take effect from a date to be notified by the Central Government after enactment; until that notification the Education Cess and the Secondary and Higher Education Cess continue to be levied in addition to the prevailing Service Tax.