CA Ameet Agrawal

1. CHANGE IN RATE OF SERVICE TAX

The service tax rate is being increased from 12.36% to 14%. The ‘Education Cess’ and ‘Secondary and Higher Education Cess’ shall be subsumed in the new service tax rate. The revised rate shall come into effect from a date to be notified.

2. CHANGE IN RATE OF ABATEMENT [w.e.f. 01 -04-2015]

PARTICULARS PRE-BUDGET POST BUDGET
GTA Services Abatement 75% Abatement 70%

Service recipient have to pay service tax on 30% of transporting bill instead of 25%.

3. CHANGE IN REVERSE CHARGE MECHANISM [w.e.f. 01 -04-2015]

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Manpower supply and security services when provided by an individual, HUF, or partnership firm to a body corporate.

Service Provider Liability 25%
Service Recipient Liability 75% 100%

Service Provider of Manpower supply and security services don’t have to pay any service tax and may be they don’t need any registration too.

4. CENVAT CREDIT RULES, 2004:

i) Rule 4(7) is being amended to allow credit of service tax paid under partial reverse charge by the service receiver without linking it to the payment to the service provider. This change will come into effect from 1.4.2015.

ii) Time limit for availing Cenvat credit against Invoice has been amended from 6 month to 1 Now assessee can avail Cenvat credit within 1 year from date of Invoice.

5. AMENDMENTS OF NEGATIVE LIST:

i) Earlier Service provided by way of access to amusement facility providing fun or recreation by means of rides, gaming devices or bowling alleys in amusement parks, amusement arcades, water parks, theme parks or such other places was covered in the Negative list. Budget 2015-16 has proposed to omit the clause (j) of Section 66D. Hence, the same will be taxable from the date to be notified by the Central Government.

ii) Earlier services provided by the Government or a local authority, excluding certain services specified under clause(a) of section 66D, are in the Negative List. Budget 2015- 16 has proposed provisions to tax all services provided by the Government or local authority to a business entity.

7. WITHDRAWAL OF EXEMPTION

Exemption to construction, erection, commissioning or installation of original works pertaining to an Airport or Port is being withdrawn.

(Author can be reached at ca.ameetagrawal@gmail.com)

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Tags : Budget (1473) Budget 2015-16 (272)

0 responses to “Important Service Tax Amendments by Union Budget 2015”

  1. s.ravikumar says:

    Being a partnership concern in chennai providing manpower supply and security services we have clients like individuals,partnership firm , pvt ltd company and ltd company, society & trust and association. In this connection we like to know what is our rate of service tax liable to charge and remit to the dept in each clientswise as above ? . we look forward your advise in this matter early.

  2. MM ARORA says:

    IN CASE OF PLACEMENT SERVICE WHO SHOULD PAY SERVICE TAX FROM 01/04/2015 AND WHAT IS THE RATIO BETWEEN SERVICE TAX PROVIDER & SERVICE RECEIVER.

  3. RAJENDRA says:

    on manpower supply service 100% liability of service tax on Service Recipient . According to this what will be the service tax paid only Service Recipient and service tax return submit liability only Recipient ya service provider ya both ?

  4. Dilip says:

    on security services 100% liability of service tax on service provider. According to this what will be the service tax liability i.e. 12.36% or 14% from 01.04.2015 ???
    regards

    Dilip

  5. Joy Gupta says:

    Dear manish, security services fall under category of manpower supply service and liability is cast upon service recipient and rate will be 14% including 2% of SB cess and 12% of S. tax

  6. Joy Gupta says:

    Dear Debmalya…concept of education cess and SHEC has been ommitted and in that place swachh bharat cess has been brought into. so you need not bifurcate the total tax into service tax and cess. Now it is a matter of fact that whether GAR 7 challan will be updated to mention service tax and swachh bharat cess only.

  7. DEBMALYA BASAK says:

    Service Tax Rate 14% from 01.04.2015 is consolidated or its Service Tax 13.59% Edu Cess 0.2718% Higher Edu Cess 0.1359%?

    Regards
    Debmalya Basak

  8. Manish Kr. Agrawal says:

    Dear sir,

    on security services 100% liability of service tax on service provider. According to this what will be the service tax liability i.e. 12.36% or 14% from 01.04.2015 ???

    regards
    MANISH

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