The Service Tax Rate is being increased from 12.36%(including cess) to 14.00% .
The new rate is 14.00 % flat. No Education Cess and Secondary Cess will charge on it.
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.
SWACH BHARAT CESS
Clause 117 of the Finance Bill,2015 seeks to insert a new Chapter VI so as to levy a cess to be called the Swachh Bharat Cess, as service tax on all or any of the taxable services for the purposes of the Union for financing and promoting Swachh Bharat initiatives and any other purpose relating thereto.
An enabling provision is being made to empower the Central Government to impose a Swach Bharat Cess on all or any of the taxable service at the rate of 2% of the value of such taxable services with the objective of financing and promoting Swachh Bharat Initiatives.
The provisions of Chapter V of the finance Act, 1994 and rules made thereunder, including those relating to refunds and exemptions from tax, interest and imposition of penalty shall, as far as may be, apply in relation to the levy and collection of Swach Bharat Cess on taxable services, as they apply in relation to the levy and collection of tax on such taxable services under Chapter V of the finance act, 1994 or the rules made thereunder, as the case may be.
Swach Bharat Cess shall be levied from a date to be notified by the Central Government in this regard and will not have immediate effect.
IMPACT
The changes in rate will increase the cost of services. Services like telephone, cab, consultancy, beauty parlor, security services and lots more will become costlier after the new rate.
For example suppose your telephone bill inclusive service tax was Rs. 112.36 before new rate will now increase to Rs. 116.
Means there is an extra burden of Rs. 3.64 on each 100 rs services.
The new rate is 14.00 % flat. No Education Cess and Secondary Cess will charge on it.
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.
SWACH BHARAT CESS
Clause 117 of the Finance Bill,2015 seeks to insert a new Chapter VI so as to levy a cess to be called the Swachh Bharat Cess, as service tax on all or any of the taxable services for the purposes of the Union for financing and promoting Swachh Bharat initiatives and any other purpose relating thereto.
An enabling provision is being made to empower the Central Government to impose a Swach Bharat Cess on all or any of the taxable service at the rate of 2% of the value of such taxable services with the objective of financing and promoting Swachh Bharat Initiatives.
The provisions of Chapter V of the finance Act, 1994 and rules made thereunder, including those relating to refunds and exemptions from tax, interest and imposition of penalty shall, as far as may be, apply in relation to the levy and collection of Swach Bharat Cess on taxable services, as they apply in relation to the levy and collection of tax on such taxable services under Chapter V of the finance act, 1994 or the rules made thereunder, as the case may be.
Swach Bharat Cess shall be levied from a date to be notified by the Central Government in this regard and will not have immediate effect.
IMPACT
The changes in rate will increase the cost of services. Services like telephone, cab, consultancy, beauty parlor, security services and lots more will become costlier after the new rate.
For example suppose your telephone bill inclusive service tax was Rs. 112.36 before new rate will now increase to Rs. 116.
Means there is an extra burden of Rs. 3.64 on each 100 rs services.
