Regarding Ed.Cess & SH Cess

[Samik Chaudhuri]

Sir

As per new budget Ed. Cess and SH Cess are withdrawn. Is there any tariff where Ed. Cess and SHCess are not withdrawn. Please confirm me.

With thanks and regards

Samik Chaudhuri.

[Rajagopalan Ranganathan]

Sir,

Notifications No. 14 and 15 of 2015-CE dated 28.2.2015 exempts payment of Education Cess and Secondary and Higher Education Cess on all excisable goods. Therefore no Edu.Cess and S and H Cess is payable on all excisable goods from 1.3.2015 onwards.

[Guest]

Sir, what is the status with regard to service tax about the levy of E. Cess till Finance Bill, 2015 gets assent from the President of India. thanks for ur reply.

[Rajagopalan Ranganathan]

Sir

According to para 3 of D.O.F. No. 334/5/2015- TRU dated 28.2.2015 of Joint Secretary to Government of India, TRU, 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.

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 that sections 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.

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 ‘Education Cess’ and ‘Secondary and Higher Education Cess’ will continue to be levied in Service Tax.

[Guest]

Thank you, Sir.

AI Summary

Education Cess Exemption on Excisable Goods from March 2015; Service Tax Rate to Increase to 14% per Finance Bill 2015. A query was raised regarding the withdrawal of Education Cess and Secondary and Higher Education Cess following the new budget. It was clarified that Notifications No. 14 and 15 of 2015 exempt these cesses on all excisable goods from March 1, 2015. For service tax, the rate is set to increase from 12% plus cesses to 14%, subsuming the cesses, as per the Finance Bill, 2015. Until the new rate is enacted, the cesses will continue to apply to service tax. The new rate will be effective from a date to be notified by the Central Government.