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<h1>Service Tax Rate for Work Contracts Doubled to 4% for Payments Received After March 1, 2008, CBEC Clarifies.</h1> The work contract service tax rate was revised from 2% to 4% in the 2008 Budget, effective from March 1, 2008. Concerns arose regarding the applicability of this rate to ongoing contracts agreed upon before March 1, 2008, but executed after this date. The Central Board of Excise and Customs (CBEC) clarified that the 4% rate applies to payments received on or after March 1, 2008, regardless of when the contract was originally agreed upon.