Normal Service tax rate with effect from 1st June 2015 is 14%. However applicable rate is different for many services which may be subject to fulfillment of some conditions. This is mainly due to material value or non-service element included in total value of these services.
Also Read- Service Tax Changes applicable from 01.06.2015
This Chart will provide the effective rates on such services.
| Sr No. | Taxable service | Taxable Value | Old Effective Rate up to 31.05.2015 | New Rate w.e.f. 01/06/2015 | Condition |
| 1 | Financial leasing including hire purchase | 10% | 1.236% | 1.4% | NIL |
| 2 | Transport of goods by rail | 30% | 3.708% | 4.2% | NIL |
| 3 | Transport of passengers with or without accompanied belonging by rail | 30% | 3.708% | 4.2% | NIL |
| 4 | 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 place specially arranged for organizing a function) together with renting of such premises | 70% | 8.652% | 9.8% | Note(i) |
| 5 | Transport of passengers by air, with or without accompanied belongings | 40% | 4.944% | 5.6% | Note(ii) |
| 6 | Renting of hotels , inns, guest houses, clubs, campsites, or other commercial places meant for residential or lodging purposes | 60% | 7.416% | 8.4% | Note(ii) |
| 7 | Services of goods transport agency | 30% | 3.708% | 4.2% | Note(iii) |
| 8 | Renting of any motor vehicle designed to carry passengers | 40% | 4.944% | 5.6% | Note(iii) |
| 9 | Transport of goods in vessel | 30% | 3.708% | 4.2% | Note(iii) |
| 10 | (i) Tour service –package tour | 25% | 3.09% | 3.5% | Note(iii)&(iv) |
| (ii) Tour service –service solely of arranging or booking accommodation for any person in relation to a tour | 10% | 1.236% | 1.4% | Note(iii), (v)&(vi) | |
| (iii) Tour service – simple tour services | 40% | 4.944% | 5.6% | Note(iii)&(iv) | |
| 11 | Construction of a complex , building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly | ||||
| (i) for a residential unit having carpet area upto 2000 square feet and the amount charged is less than rupees one crore | 25% | 3.09% | 3.5% | Note (vii)&(viii) | |
| (ii) for other than (i) above | 30% | 3.708% | 4.2% | Note (vii)&(viii) | |
Note:
(i) cenvat credit on any goods classifiable under chapters 1 to 22 of Central Excise Tariff Act,1985 used for providing the taxable service, has not been taken.
(ii) cenvat credit on inputs and capital goods, used for providing the taxable service , has not been taken .
(iii) cenvat credit on inputs, capital goods and input services , used for providing the taxable service, has not been taken .
(iv) The bill issued for this purpose indicates that it is inclusive of charges for such a tour.
(v) The invoice bill or challan issued indicates that it is towards the charges for such accommodation.
(vi) This exemption shall not apply in such cases where the invoice, bill or challan issued by the tour operator, in relation to a tour, only includes the service charges for arranging or booking accommodation for any person and does not include the cost of such accommodation.
(vii) Cenvat credits on inputs used for providing the taxable service has not been taken.
(viii) The value of land is included in the amount charged from the service receiver.
| Sr no | Taxable service | Taxable Portion of Total Value | Old Effective Rate up to 31.05.2015 | New Rate w.e.f. 01/06/2015 |
| 12 | Types of works contracts | |||
| (i) Execution of original works | 40% | 4.944% | 5.6% | |
| (ii) In cases not covered above including maintenance or repair or reconditioning or restoration or servicing or any goods | 70% | 8.652% | 9.8% | |
| (iii)Other works including maintenance, repair , completion and finishing services such as glazing , plastering, floor and wall tilling , installation of electrical fittings of an immovable property | 70% | 8.652% | 9.8% |
Notes:
(i) “total amount” means the sum total of the gross amount charged for the works contract and the fair market value of all goods and services supplied in or in relation to the execution of the works contract, whether or not supplied under the same contract , after deducting (i)the amount charged for such goods or services , if any and (ii)the value added tax or sales tax ,if any , levied thereon.
(ii) The fair market value of goods and services so supplied may be determined in accordance with the generally accepted accounting principles.
(iii) cenvat credit of duty of excise paid on any inputs , used in or in relation to the said works contract is not allowable.
| Sr No | Taxable service | Taxable Portion of Total Value | Old Effective Rate up to 31.05.2015 | New Rate w.e.f. 01/06/2015 |
| 13 | Supply of food and drinks in restaurant or outdoor catering | |||
| (i) Service provided by Restaurants | 40% | 4.944% | 5.6% | |
| (ii) Services provided by outdoor caterer | 60% | 7.416% | 8.4% |
Notes:
(i) “Total amount” means the sum total of the gross amount charged and fair market value of all goods and services supplied in or in relation to the supply of food or any other article of human consumption or any other drink (whether or not in intoxicating), whether or not supplied under the same contract or any other contract, after deducting (i) the amount charged for such goods or services, if any and (ii) the value added tax or sales tax, if any, levied thereon.
(ii) The fair market value of goods and services so supplied may be determined in accordance with the generally accepted accounting principles.
(iii) cenvat credit of duties or cess paid on any goods classifiable under chapter 1 to 22 of the central excise tariff act, 1985 is not allowable.
| Sr. No. | Taxable service | Old Effective Rate up to 31.05.2015 | New Rate w.e.f. 01/06/2015 |
| 14 | Booking of air tickets by air travel agent | ||
| (i) Domestic booking | 0.60% Of Basic Fare | 0.70% Of Basic Fare | |
| (ii) International Booking | 1.20% of Basic Fare | 1.40% of Basic Fare | |
| 15 | Life insurance service | ||
| First year | 3% of Premium Charged | 3.5% of Premium Charged | |
| Subsequent year | 1.50% of Premium Charged | 1.75% of Premium Charged | |
| 16 | Money changing service | ||
| (i) Gross amount of currency exchanged for an amount upto Rs. 100,000 | 0.12% of gross amount of currency exchanged(min.Rs.30) – | 0.14% or Minimum Rs. 35/- | |
| (ii) Gross amount of currency exchanged for an amount of rupees exceeding Rs. 100,000 and up to Rs. 10,00,000 | Rs.120 + 0.06% of gross amount exceeding 1 lakh | Rs. 140 + 0.07% of gross amount exceeding 1 lakh | |
| (iii) Gross amount of currency exchanged for an amount of rupees exceeding Rs. 10,00,000 | Rs.660 + 0.012% of gross amount exceeding 10 lakhs (max. Rs.6000) | Rs. 770 + 0.014% of gross amount exceeding 10 lakhs (max. Rs.7000 | |
| 17 | Service provided by Lottery distributor and selling agent | ||
| a) If the lottery or lottery scheme is one where the guaranteed prize payout is more than 80% | Rs. 7,000 on every Rs. 10 Lakh or part of Rs. 10 Lakh of aggregate face value of lottery tickets printed by the organizing State for a draw. | Rs. 8,200 on every Rs. 10 Lakh or part of Rs. 10 Lakh of aggregate face value of lottery tickets printed by the organizing State for a draw. | |
| b) If the lottery or lottery scheme is one where the guaranteed prize payout is less than 80% | Rs. 11,000 on every Rs. 10 Lakh or part of Rs. 10 Lakh of aggregate face value of lottery tickets printed by the organizing State for a draw | Rs. 12,800 on every Rs. 10 Lakh or part of Rs. 10 Lakh of aggregate face value of lottery tickets printed by the organizing State for a draw |
(Author is a Past Chairman-Nagpur Branch of ICAI and is a Practicing Chartered Accountant)
Read Other Articles of CA Satish Sarda
(Article was first published on 27.05.2015 and republished with certain amendments to make it more useful for our readers.)
Author Bio
whether an individual paying trans portion directly to driver is liable to pay service tax
I WANT TO KNOW THE EXISTING RATE OF SERVICE TAX ON ADVERTISING PRINT MEDIA
GOOD AFTER NOON EVERY ONE
Dear sir,i want to know what is break up 14% of service tax
what is the new rate of service tax on Chit Funds? and previously it has on taxable portion is 70% of amount in the new policy it has same or it changed? and i heard that if the foreman commission when exceeds 10 lakhs in year then service tax applicable is it right and their is any change please intimate
how much Service tax is required to pay to Developer on 1.1 crore amount paid before 01/06/2015?
If the cost of purchased flat in Mumbai is 1.6 crore and 1.1 crore is paid before 1/06/2015, How much service tax is required to be paid to Developer or construction company?
If the property agreement has happened in the month of May 2015 for property duly constructed however without OC/CC, then service tax will be due as per rate applicable in the month of May 2015 or actual payment date that is in June 2015.
Dear Sir,
I am working in goods transport and want to know present service tax rate w.e.f. from 1.6.2015
Thanking you
Yours faithfully
Anil Singh
sir,Renting of any motor vehicle designed to carry passengers – was 50% under reverse charge mechanism w.e.f. 01.10.14 now it is reduce from 50 to 40% ?
dear sir,
I have stayed on last month on lodge at Bangalore… on that day they will charged Rs.500 per day….
now tax will be increased w.e.f 1.6.2015 what price they will charge at present….
plz clarify me…
What is the breakup for 5.6% Service Tax
worrks contract service tax byffercation 5.60% Cess Amt & Secd. Edu. cess amt ??
Can you please guide me whether a registered public trust is liable to charge service tax for providing facility for lodging in their Dharamshala; and then pay in the govt treasury.
Could you please clarify whether the amendment to ST also on ‘Reimbursement of Expenses’ chargeable/claimed from clients has been given effect to or not. If so from when. Any notification has been issued by the Govt.of India in this regard ?
Dear sir,
Thank,s
The abatement on transport of goods by rail is also subject to condition (iii) cenvat credit on inputs, capital goods and input services , used for providing the taxable service, has not been taken.
Please reconfirm.
Dear sir
Thank you for updating on service tax this is very important and helpful for me –
Dear Sir
Thank you for updating on service tax this is very important and helpful for me.
Thanks sir , really very very good article .. it help lot of CAs in daily working .
Thanks sir , really very very good article ..
Sir/Madam,
Please let me know the Service tax rate for works contract services
Thanks
Savithri.
Good Article
Dear sir thank you for updating on service tax this is very important and helpful for me.
what is the service tax for salon & spa bill? either 5.6%
or 14%…
Hello,
What is effective service tax rate of Empty trailor transport in case of CNF agent which was charged previously @ 3.09% is it 3.5% or 4.2%?
Thanks & Regards
i have received bill of rent amt 131583 net amount is 115000 & service tax charged on it 16583 i.e14.42% i am not understanding why its charged 14.42
Now , service tax rate incremental is disastrous for aam public, it is anticipated but not good.
people hope for good days but it would be worse to aam aadmi,
how to expect elected government who shall do better for aam aadmi, all hope flow with water.
few implemented policies as pradhan mantri jan dhan yoajan, insurance security nothing to aam aadmi for living their below par standard live.
only one slogan for every “”do the present lives not dead “”
what meant of those policies if person not avail any benefit in living.
it means do the good and face the bad, totally shameful for any government who govern,
why we elect, it’s a question mark for every party.
they nothing do for aam public.
good bye dear all.
Please Give Per Consignment Abatement Exemption for Goods Transport Agency by Road
What is the breakup for 5.6% Service Tax
service tax leval very High all goods rate increseing what solustion
Is Service Tax applicable on cancellation income?
If Hotel is collecting cancellation charges from customer towards cancellation of advance Room Booking.
please share notification / Circular for the same.
regards
KRISHNARAO
THANKS FOR UP DATE OF SERVICE TAX RATE
krishnarao
Hi D K
Security services & Man power supply is now changed to reverse charge mechanism if the service is provided by individual / huf / partnership to a body corporate
Dear Mr. Satish Dardanelles.
Thanks for your efforts in bringing out this articles to help us. It is very helpful for every one I am Very great full to you sir.
Respected Sir
help me out from rate of Service Tax from 01-06-2015
we are running of Labour contract presently charging of Rate 12.36%
01.06.2015 what is rate of Tax ?
Thanks
Regards
D K
thanks for such a useful article,help me out from rate of Service Tax from 01-06-2015
we are running of Security Manpower suppliers to organisation.
what will be the service tax on manpower services provider?
I am contractor in cpwd (central public work department) i am applicable
for service tax
Thanks for very useful information sharing.
Thank you verymuch.
Pl. highlite on Reverse mechanisum point also
Regards,
Sir tell me room in hotel how much service tax applicable ,restrorent
what will be the service tax on cargo handling and supply of tangible goods w.e.f. 01/06/2015. Is applicable on service rendered from 01/06/2015 or bill issued from 01/06/2015?
Sir,
Any Changes in Manpower Supply ie. security services
Greeting
Thank you for publishing the new service tax rates. This is will help people
to know the rates for there day today business activities.
Regards
–
useful article
what will be Service tax on renting for office / commercial use. Swatch Bharat tax is extra or included ? Please clarify
Sir
help me out from rate of Service Tax from 01-06-2015
we are running of Tours & Travels and contract carriage of Private employees pick up & Drop presently charging of Rate 4.944%
01.06.2015 what is rate of Tax ?
thanks
Prem
Dear sir thank you for updating on service tax this is very important and helpful for me.
Regards
The abatement on transport of goods by rail is also subject to condition (iii) cenvat credit on inputs, capital goods and input services , used for providing the taxable service, has not been taken.
Please reconfirm.
Thanks
Sir,
thanks for such a useful article. just one doubt in first chart in notes what does: (ii) cenvat credit on inputs and capital goods, used for providing the taxable service, [has not been taken] means. does it means CENVAT credit is not allowed in this condition.
Good Article
Dear CA Satish Sarda Ji,
I have a question (May be it is not important), but it affects a very large economic player segment i.e. Reality Sector specifically Residential Construction Complex Sector.
Although, this segment has not been categorized as an industry or infrastructure sector and has been deprived due respect from the Government, but the Revenue Authorities are milking Service Tax from this segment like anything.
Units are booked at the launch stage of any project and amounts started flowing to the developer.
As soon as money comes, Service Tax liability get arisen, therefore, developer also resort to collect Service Tax (ST) separately as trusty for the government.
Services are in fact “to be provided mode” only, there is no delivery of services, but ST are made due and collected.
Is this not an :Unjust enrichment” case of Revenue?
Till the proposed unit are get completed, every money paid by a buyer are in nature of Advance towards the funding of construction service. Yes, a buyer becomes bound to pay as per terms of agreement towards the funding of incremental construction, but till the completion of the unit (not the project), all constructions are in developers’ account only and not in the buyers’ account.
Then, how the Revenue Authority may ask a developer to pay service tax on due basis as per the date or event stipulated in an agreement to sale contract?
Isn’t it a case of double deeming of an action?
First, Construction has been deemed a service.
Then, delivery of service is also being deemed as there arises a right to demand funds from buyers for construction?
Is such lynching activity is legal and constitutional?
Please, do correction if found error in appropriate wording.
In case of renting of motor vehicle designed to carry passengers, I hope abatement has been reduced to 50% and hence taxable value to be considered as 50%. Thereby effective rate works out to 7%. Please confirm.