Service Tax is a tax imposed by Government of India on services provided in India. The service provider collects the tax and pays the same to the government. It is charged on all services except the services in the negative list of services.
The current rate is 14% on gross value of the service. The Service Tax Rate has been increased from 12.36% to flat 14%. This new rate of Service Tax @ 14% is applicable from 1st June 2015.
The Current Service Tax Rate in India is 14% and Swachh Bharat Cess is applicable @ 0.5%. Therefore, the effective rate of Service Tax is 14.5% from 15th Nov 2015
Service tax is only liable to be paid in case the total value of the service provided during the financial year is more than Rs. 10,00,000. If the value of services provided during a financial year is less than Rs 10,00,000, it is optional.
A Cess is a Tax that is collected by the government to be used for a specific purpose. The collections from levy of cess can be used only for the purpose for which it has been collected and not for any other purpose.
Just like Swachh Bharat Cess has been levied for cleanliness, similarly Krishi Kalyan Cess has been introduced for improving agricultural facilities.
This Cess won’t be levied on your Income but would be levied on all Services on which Service Tax levied. Therefore, from 1st June, 2016 the effective rate of service tax would be 15% i.e.
|Swachh Bharat Cess||0.50%|
|Krishi Kalyan Cess||0.50%|
(a) Services by Government or a local authority excluding the following services to the extent they are not covered elsewhere:
(b) Services by the Reserve bank of India.
(c) Services by a foreign diplomatic mission located in India.
(d) Services relating to agriculture or agricultural produce by way of –
(e) Trading of goods.
(f) Any process amounting to manufacture or production of goods.
(g) Selling of space or time slots for advertisements other than advertisements broadcast by radio or television.
(h) Service by way of access to a road or a bridge on payment of toll charges.
(i) Betting, gambling or lottery.
(j) Admission to entertainment events or access to amusement facilities.
(k) Transmission or distribution of electricity by an electricity transmission or distribution utility.
(l) Services by way of –
(m) Services by way of renting of residential dwelling for use as residence;
(n) Services by way of –
(o) Service of transportation of passengers, with or without accompanied belongings, by –
(p) Services by way of transportation of goods –
(q) Funeral, burial, crematorium or mortuary services including transportation of the deceased.