service tax after budget 2015

[Asked by Guest]

which date effect on new service tax rate after budget 2015

[PAWAN KUMAR]

Dear Sir,

The date of enactment of Finance Bill, 2015 is the date of effect of new service tax rate.

[Kadayam Ganapathy Subramanian]

As per clause 106 of Finance Bill 2015, the amendment proposed in Section 66 B of Finance Act, 1994 with regard to increase in service tax rate from 12% to 14% is effective from such date as the Central Government may, by Notification in the official gazette appoint. Hence it is very clear that after enactment of Finance Bill 2015, the central government will issue notification specifying the date of effect of above amendment which you please note.

Regards,

K.G Subramanian

[MUKUND THAKKAR]

central government will issue notification specifying the date of effect of above amendment.

[DR.MARIAPPAN GOVINDARAJAN]

The Finance Bill will become an Act once the President gives his assent. Mostly the service tax in revised will be implemented from the date of the Bill becoming an Act.

[Rajagopalan Ranganathan]

Sir,

As per para 3 of D.O.F. No. 334/5/2015-TRU dated28.2.2015,

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

3.2 In this context, an amendment is being made in section 66B of the Finance Act, 1994. Further, it has been provided vide clauses 179 and 187 respectively of the Finance Bill, 2015 thatsections 95 of the Finance Act, 2004 and 140 of the Finance Act, 2007, levying Education Cess and Secondary and Higher Education Cess on taxable services shall cease to have effect from a date to be notified by the Government.

3.3 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.

3.4 Till the time the revised rate comes into effect, the ‘Education Cess’ and ‘Secondary and Higher Education Cess’ will continue to be levied in Service Tax.

I feel this is self explanatory.

AI Summary

Service Tax rate increase takes effect from government notification after enactment, with education cesses subsumed upon notification.
An amendment raises the service tax rate and subsumes the Education Cess and Secondary and Higher Education Cess into the revised rate; the new rate operates from a date to be appointed by the Central Government by notification after the Finance Bill is enacted, and until that notification the existing cesses continue to be levied.