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Service Tax Abatement Rate Chart from 01.04.2015

CA Sandeep Kanoi

CA Sandeep KanoiAbatement in Service Tax was First Introduced Vide Principal Notification No. 26/2012-Service Tax, dated 20th June 2012 and subsequently been amended vide Notification No. 2/2013 – Service Tax, dated the 1st March, 2013, Notification No. 9/2013 – Service Tax, Dated: May 8, 2013, Notification No. 08/2014 – Service Tax Dated-11th July, 2014 and Notification No. 8/2015-ST, Dated: March 01, 2015.

By Union Budget 2015 and Notification No. 8/2015-ST, Dated: March 01, 2015 following amendment been made to Abatement Provisions wef 01.04.2015-

Changes made in Service Tax Abatement Provisions with effect from 01/04/2015

1. Transport of goods/ passengers by rail – Hitherto, service tax was payable on 30% of the value of services of rail transport of goods and passengers (with or without accompanied belongings) without any condition. Now, the abatement shall be available subject to the condition that Cenvat credit on inputs, capital goods and input services, used for providing the taxable services has not been taken under CCR, 2004.

2. Goods Transport Agency- Abatement on “Transportation of goods by Goods Transport Agency” was 75% which has now been reduced to 70%.

3. Services provided in relation to chit- Abatement on “Services provided in relation to chit” has been withdrawn.

4. Transport of goods in a vessel– Abatement on “Transportation of goods in a vessel” was 60% which has now been increased to 70%.

5.  Transport of passengers by Air–  Hitherto, an abatement of 60% was provided on taxable services of transport of passengers by air (with or without accompanied belongings). The said abatement continues for economy class travel and in case of other than economy class the abatement has been reduced to 40%.

Service Tax Rate Abatement Chart as Applicable from 01.04.2015 updated with Changes Made Vide Budget 2015 and Notification No. 8/2015-ST, Dated: March 01, 2015.

Table

Sr.No. Description of taxable service Percentage Conditions
Taxable Value Abatement
(1) (2) (3) (4) (5)
1 Services in relation to financial leasing including hire purchase (Refer Note-1) 10 90 Nil.
2 Transport of goods by rail 30 70 CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004
3 Transport of passengers, with or without accompanied belongings by rail 30 70 Same as above
4 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 (Refer Note-2) 70 30 (i) CENVAT credit on any goods classifiable under Chapters 1 to 22 of the Central Excise Tariff Act, 1985 (5 of 1986) used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.
5 Transport of passengers by air, with or without accompanied belongings in CENVAT credit on inputs and capital goods, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.
(i) economy class 40 60
(ii) other than economy class 60 40
6 Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes. 60 40 Same as above.
7 Services of goods transport agency in relation to transportation of goods. 30 70 CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken by the service provider under the provisions of the CENVAT Credit Rules, 2004.
8 Services provided in relation to chit Omitted Vide Notification No. 8/2015-ST, Dated: March 01, 2015
9 Renting of motorcab 40 60

(i) CENVAT credit on inputs and capital goods, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004;

(ii) CENVAT credit on input service of renting of motorcab has been taken under the provisions of the CENVAT Credit Rules, 2004, in the following manner:

(a) Full CENVAT credit of such input service received from a person who is paying service tax on forty percent of the value; or

(b) Up to forty percent CENVAT credit of such input service received from a person who is paying service tax on full value;

(iii) CENVAT credit on input services other than those specified in (ii) above, has not been taken under the provisions of the CENVAT Credit Rules, 2004.
9A Transport of passengers, with or without accompanied belongings, by-a. a contract carriage other than motorcab.b. a radio taxi. 40 60 CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.
10 Transport of goods in a vessel  30 70 Same as above.
11 Services by a tour operator in relation to,-(i) a package tour (Refer Note-4) 25 75

(i) CENVAT credit on inputs, capital goods and input services other than the input service of a tour operator, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.

(ii) The bill issued for this purpose indicates that it is inclusive of charges for such a tour.
(ii) a tour, if the tour operator is providing services solely of arranging or booking accommodation for any person in relation to a tour (Refer Note-5) 10 90

(i) CENVAT credit on inputs, capital goods and input services other than the input service of a tour operator, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.

(ii) The invoice, bill or challan issued indicates that it is towards the charges for such accommodation.

(iii) 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.
(iii) any services other than specified at (i) and (ii) above. 40 60

(i) CENVAT credit on inputs, capital goods and input services other than the input service of a tour operator, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.

(ii) The bill issued indicates that the amount charged in the bill is the gross amount charged for such a tour.
12. (Refer Note-3) Construction of a complex, building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly, except where entire consideration is received after issuance of completion certificate by the competent authority,- (i) CENVAT credit on inputs used for providing the taxable service has not been taken under the provisions of the CENVAT Credit Rules, 2004;

(a) for a residential unit satisfying both the following conditions, namely:–

(i) the carpet area of the unit is less than 2000 square feet; and

(ii) the amount charged for the unit is less than rupees one crore;

25 75 (ii) The value of land is included in the amount charged from the service receiver.
(b) for other than the (a) above. 30 70

Note-1 For the purposes of exemption at Serial number 1 –

(i) The amount charged shall be an amount, forming or representing as interest, i.e. the difference between the installments paid towards repayment of the lease amount and the principal amount contained in such installments;

(ii) the exemption shall not apply to an amount, other than an amount forming or representing as interest, charged by the service provider such as lease management fee, processing fee, documentation charges and administrative fee, which shall be added to the amount calculated in terms of (i) above.

Note-2. For the purposes of exemption at Serial number 4 –

The amount charged shall be the sum total of the gross amount charged and the 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 drink (whether or not intoxicating) and whether or not supplied under the same contract or any other contract, after deducting-

(i) the amount charged for such goods or services supplied to the service provider, if any; and

(ii) the value added tax or sales tax, if any, levied thereon:

Provided that the fair market value of goods and services so supplied may be determined in accordance with the generally accepted accounting principles.

Note-3. For the purposes of exemption at Serial number 12 –

The amount charged shall be the sum total of the amount charged for the service including the fair market value of all goods and services supplied by the recipient(s) in or in relation to the service, whether or not supplied under the same contract or any other contract, after deducting-

(i) the amount charged for such goods or services supplied to the service provider, if any; and

(ii) the value added tax or sales tax, if any, levied thereon:

Provided that the fair market value of goods and services so supplied may be determined in accordance with the generally accepted accounting principles.

Note-4 “package tour” means a tour wherein transportation, accommodation for stay, food, tourist guide, entry to monuments and other similar services in relation to tour are provided by the tour operator as part of the package tour to the person undertaking the tour,

Note-5 “tour operator” means any person engaged in the business of planning, scheduling, organizing, arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours,

Also Read-

Reverse and Partial Reverse Mechanism Chart from 01.04.2015

Updated Negative List of Services under Service Tax

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Author Bio

Name: CA Sandeep Kanoi
Qualification: CA in Job / Business
Company: Taxguru Consultancy / Taxguru Edu
Location: Mumbai, Maharashtra, India
Member Since: 27 Feb 2017 | Total Posts: 2670
A Blogger by Passion and a Chartered Accountant by Profession. View Full Profile

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92 Comments

  1. RANJAN AGARWAL says:

    I am registered as goods transport operators 00440067 in 2 of my firms since 2009 & 2010 & regularly paying service tax under same category till now.one of my friends
    told me that I have to deposit it under GTA 00440262 as the above category 00440067 is omitted & clubbed with GTA.I checked in serv tax accounting chart online where 00440067 is still existing
    Pl guide on this serious issue on my id mentioned above.

    Thanks & Regards

    RANJAN AGARWAL

      Reply
  2. Arvind jha says:

    sir what is new rate of service tax of transporters

    old is : 5000*3% = 150
    : 150*2% = 3
    : 5000*1% = 50

    Pls Give New Rate

    Regards
    Arvind Jha

      Reply
  3. Vikesh Chetal says:

    The client is getting the advertisement from different parties and make advertisement and that advertisement is published in the T.V. Screen on the different sites. This advertisement is continuously running on the Screens. Agency is the owner of the screens. The bill of monthly advertisement is given to the different parties. My view is that Service tax is 14% on the bill and no abatement can be claimed. Pl confirm.

      Reply
  5. Ankit Gosaliya says:

    Hi
    Old example 1000×25%=250
    250×12%=30
    250×2%=5
    250×1%=2.5
    Total 37.5 tax pay.
    What is new..??
    1000×30%=3000
    Next is what??????

      Reply
  6. Ankit Gosaliya says:

    DEAR SIR, WE WANT TO KNOW THE PRESENT STAND ON SERVICES OF GOODS TRANSPORT AGENCY IN RELATION TO TRANSPORT OF GOODS.

    WHETHER THE RATE OF 3.70 IMPLEMENTED OR KEPT ON HOLD
    Old rate 100×25%=25
    25×12%=3
    25×2%=.5
    .0×1%=.25
    Plz give me new rate

      Reply
  7. BHUPINDER BHATIA says:

    Dear Sir,

    we required the service tax rate as per nature of service type to be charged or not and service tax claimable or not claimable

      Reply
  8. SANTOSH GAIKWAD says:

    Dear Sir,

    I am having a 4 truck which are engaged in transportation of Goods from which i gets monthly revenue of about 4.50 Lacs. Do i Liable to Registered under service Tax & Liable to Pay Service Tax?

    Regards
    Santosh Gaikwad.

      Reply
  9. MANOJ KUMAR says:

    Dear sir,
    please send this article to my mail id.

    taxi hire charges
    contractual wages
    freight out word & inword
    service tax amendment,revesre charges mecha.

      Reply
  10. Balasaheb says:

    tell me abatement of service tax in work contract act” under erection, Commissioning,& Installation(under which section)? – which rate of service tax is applicabe is 40% is correct?

      Reply
  12. Shivagangafoodoil extractions says:

    Dear sir,
    We are the manufacaturers of Edible Crude rice bran oil, we are purchasing rice bran from local and out of state, and selling oil and DORB. we paying lorry freight we are paying ST for 25% for the year 2013-14. whether we have to pay service tax are eligible to service tax as per notfn.no.06/2015 dt.01.03.2015, pleaseadvice

      Reply
  13. Narpat says:

    Respected Sir
    Previously we were charging 7.42% for room rent now what the new rate is.Please also tell if service tax is applicable on Non a/c restaurants
    Thanks

      Reply
  14. A.S.RAO says:

    sir,
    i am subscribing a chit with registered chit fund company, i have received a mail from chit fund organisation, saying that i suppose to pay the service tax as per finance bill 2015. please clarify doubt regarding, as i need to pay the tax or the foremen has to pay the tax. and on what amount and what was the percentage of tax.

      Reply
  15. PREM says:

    We are dealing in contract of Private companies to PICK up and DROP employees, &
    running of Tours & Travels
    presently we are charging at 4.944%
    Now Ist JUNE on wards 5.6% charging is it correct or Not
    please advise me

    Thanks

      Reply
  18. Mani says:

    Dear Sir,

    Please send me the details of Service Tax to be calculated for Manpower supply & Security. For a Corporate as well as for a proprietory / partnership firm.

    Thanks,

    MANI

      Reply
  19. Vinay Pal Singh says:

    We are a LLP firm. Can we liable to pay service tax under reverse charge on receive the manpower service from a proprietorship firm

      Reply
  20. k k Sarawagi says:

    Provisions of renting of motor cab is clumsy and needs further clarification. If the service provider is not required to register himself under the service tax because of turnover less than Rs. 9 Lacs and not claiming any cenvat credit,please inform whether abatement of 60% is still available to a body corporate under reverse charge mechanism.

      Reply
  25. DEVINDER says:

    pl. tell me abatement of service tax in pandal & shamina is 30 % , whether the abatement is applied of total receipt or on the tatal service tax received ?

    thanks

      Reply
  27. C.DHANUNJAY says:

    DEAR SIR, WE WANT TO KNOW THE PRESENT STAND ON SERVICES OF GOODS TRANSPORT AGENCY IN RELATION TO TRANSPORT OF GOODS.

    WHETHER THE RATE OF 3.70 IMPLEMENTED OR KEPT ON HOLD

      Reply
  28. Po mamma says:

    We are hiring manpower services through security agency. Can you please clarify the deduction. For example the total monthly bill including all charges like pf ESI management cost, salary and wages come to 2 lacs. Is the calculation based on Total monthly bill amount ?

      Reply
  29. Rajiv says:

    sir,
    what is accounting entry for “work contract act” under erection, Commissioning,& Installation(under which section)?

    Is this accounting entry is correct ? For Example :

    Supply products cost Rs. 50000
    Add: Vat @ Actual for Example 5% 2500

    Add: Labour Charge for Installation, Rs. 10000
    Erection & commissioning

    Add Service Tax (@ 12.36@ on Rs 10000) Rs. 1236

    So the total Cost Of System RS 63736

    can i make accounting entry for this bases ?

    Thanking You

    Rajiv

      Reply
  43. Atul says:

    Sir, shall we start to charge service tax on abetment value in case of GTA as in notification it is showing that notifiation to be published.

      Reply

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