Friday, July 3, 2015

Service Tax Taxable Services: Abatement Value (%), Taxable Value (%), Effective Rate (%), New Service Tax in Special Cases. (By.Shyam Makwana)



The below mentioned table show the effective service tax rate wherein different types of abatements are available,



Sl No.
Descriptions of Taxable Services
Service Tax
Abatement Value %
Taxable Value %
Effective Rate
1
Mandap keeper service
14%
30%
70%
9.80%
2
Tour operator services




   Solely of arranging/booking accommodation
14%
90%
10%
1.40%
   Package tour
14%
75%
25%
3.50%
   Other than both above
14%
60%
40%
5.60%
3
Rent-a-cab scheme operator services
14%
60%
40%
5.60%
4
Transport of goods by road/goods transport agency service
14%
70%
30%
4.20%
5
Construction services other than residential complex,including commercial/industrial buildings or civil structures
14%
70%
30%
4.20%
6
Construction of residential complex service




   Carpet area is less than 2000 sq.ft. & Amt charged less  than 1 crore
14%
75%
25%
3.50%
   Others
14%
70%
30%
4.20%
7
Transport of passengers embarking on domestic/international journey by air




   Economy class
14%
60%
40%
5.60%
   Other than economy
14%
40%
60%
8.40%
8
Transport of goods by rail including transport of goods in containers by rail (for the present, transport of passengers by rail in air-conditioned class/first class also may be paid under this description/accounting code)
14%
70%
30%
4.20%
9
Works contract service




   Original works
14%
60%
40%
5.60%
   Maintenance or repair or reconditioning or restoration or servicing
14%
30%
70%
9.80%
10
Services in relation to financial leasing including hire purchase
14%
90%
10%
1.40%
11
Bundled service by way of supply of food or any other article of human consumption or any drink, in a premises (including hotel, convention center, club, pandal, shamiana or any other place, specially arranged for organizing a function) together with renting of such premises
14%
30%
70%
9.80%
12
Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes.
14%
40%
60%
8.40%
13
Transport of goods in a vessel
14%
70%
30%
4.20%
14
Other than above services (Full Rate on Full Value)
14%
0%
100%
14.00%

Service Tax has been increased to 14% (including all “Cesses”) from 12.36% earlier from 01.06.2015 , hence service tax is to be charged/collected and paid @ single rate. The payment code to be used will be basic code only and codes related to “Education Cess Code – 00440298” & “ Higher Education Cess Code – 00440426” is not to be used for all liabilities from June 1st 2015.


Service Tax Rate
Basic Rate
Edu. Cess
H.Edu.Cess
Codes
12.36% Till 31.05.2015
12%
2%
1%
Basic Code (Respective Services)
Edu. Cess   - 00440298
H. Edu. Cess - 00440426
14% w.e.f. 01.06.2015
14%
---
---
Only Basic Code
(Respective Services)
(Inclusive of all Cesses)

The below mentioned table show the effective service tax rate in special cases as per Service Tax Rules, 1994,


Sl No
Nature of Services
Old Rate
New Effective Rate
1
Domestic Air Booking
0.60%
0.70%
2
International Air Booking
1.20%
1.40%
3
Life Insurance


   First Year Premium
3%
3.50%
   Subsequent Premiums
1.50%
1.75%
4
Money Changing Services


Amount of currency exchanged upto INR 0.1 million
0.12% (minimum of INR 30)
0.14% (minimum of INR 35)
Amount of currency exchanged exceeding INR 0.1 million and upto INR1 million
Rs.120 and 0.06%
Rs.140 and 0.07%
Amount of currency exchanged exceeding INR1 million
Rs.660 and 0.012% (maximum of Rs.6,000)
Rs.770 and 0.014% (maximum of Rs.7,000)
5
Lottery


Where guaranteed prize payout is more than 80%
Rs.7,000
Rs.8,200
Where guaranteed prize payout is less than 80%
Rs.11,000
Rs.12,800

 As per the “Point of Taxation Rules”, “Rule 4” takes care of taxation when there is change in rate of taxation, the table below shows that effect on applicable rate from 01.06.2015, what would be the position before change in rate and after change in rate of service tax from 12.36% to 14%.



Sr.No
Rendering service
Invoice Issued
Payment Received
Rate %
1
Before Rate Changes
Before Rate Changes
After Rate Changes
12.36
2
Before Rate Changes
After Rate Changes
After Rate Changes
14
3
Before Rate Changes
After Rate Changes
Before Rate Changes
12.36
4
After Rate Changes
After Rate Changes
Before Rate Changes
14
5
After Rate Changes
Before Rate Changes
After Rate Changes
14
6
After Rate Changes
Before Rate Changes
Before Rate Changes
12.36


“Swachh Bharat Cess”, which is being proposed to be levied @2% from the date notified, is not yet notified so the same would not be applicable as of now.

Shyam Makwana
Service Tax Practitioner
M - 09033822400

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