CA Bimal Jain
In this Article we have Compiled Service Tax Rate Charges from 01.06.2015 to 14.11.2015, 14.11.2015 to 31.05.2016 and Rates from 01.06.2016. We have considered Krishi Kalyan Cess as applicable from 01.06.2016 and also given a Snapshot of effective rates of Service tax under Abatement, Reverse Charge and Valuation Rules.
KKC @ 0.5% applicable on all taxable services w.e.f June 1, 2016 – Snapshot of effective rates of Service tax under Abatement, Reverse Charge and Valuation Rules
Pursuing with an objective to finance and promote initiatives to improve agriculture and farmer welfare, the Government has announced a new cess namely ‘Krishi Kalyan Cess’ (“KKC”), to be levied at 0.5% on the value of all taxable services w.e.f June 1, 2016.
In this regard, a new Chapter VI has been inserted in the Finance Bill, 2016, that contains the following provisions, which is applicable with an enactment of the Finance Bill, 2016. Thereby, effective rate of Service tax going to be increased from 14.5% to 15%:
- Provisions of Chapter VI shall come into force on the 1st day of June, 2016;
- KKC shall be levied and collected as Service tax on all the taxable services at the rate of 0.5% on the value of such services for the purposes of financing and promoting initiatives to improve agriculture or for any other purpose relating thereto;
- Levy of KKC shall be in addition to any cess or Service tax leviable on such taxable services under Chapter V of the Finance Act, 1994 (“the Finance Act”), or under any other law for the time being in force;
- The proceeds of KKC shall first be credited to the Consolidated Fund of India and the Central Government may, after due appropriation made by Parliament by law in this behalf, utilise such sums of money of the KKC for such purposes specified above, as it may consider necessary;
- The provisions of Chapter V of the Finance Act and the 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 KKC on taxable services, as they apply in relation to the levy and collection of tax on such taxable services under the said Chapter or the Rules made thereunder, as the case may be.
‘KKC’ though said to be Cenvatable in the hands of Service Provider only, but appropriate amendments also required in the Cenvat Credit Rules, 2004:
Unlike Swachh Bharat Cess (“SB Cess”) imposed w.e.f. November 15, 2015, which is not Cenvatable neither in the hands of service providers nor manufacturers, in terms of TRU F. No. 334/8/2016-TRU dated February 29, 2016 [Para 3.1], it is provided that Cenvat credit of KKC paid on input services shall be allowed to be used for payment of the proposed Cess on the service provided by a service provider. However, corresponding changes are yet to be incorporated in Rule 3 of the Cenvat Credit Rules, 2004 to provide requisite legal backing for availment of Cenvat credit.
Rate of Service tax would eventually increases to 15% w.e.f. June 1, 2016:
After levy of KKC, Service tax rate would increase from 14.5% to 15%, effective from June 1, 2016. An illustration showing levy of Service tax and SB Cess & KKC is given below assuming Rs. 1,000/- as value of a taxable service:
| Particulars | Tax/ Cess (Rs.) |
| Value of taxable service (a) | 1,000/- |
| Add: Service tax @ 14% on (a) | 140/- |
| Add: SB Cess @ 0.5% on (a) | 5/- |
| Add: KKC @ 0.5% on (a) | 5/- |
| Total: | 1,150/- |
Effective rates under the Abatement Notification No. 26/2012-ST dated June 20, 2012 as amended
We are summarizing herewith the effective rates of Service tax to be payable for services under Abatement Notification w.e.f June 1, 2016 after imposition of KKC, for easy digest:
Page Contents
Service Tax Rate Chart for services under Abatement
| Sl. No. | Description of taxable service | Taxable per cent (%) | Effective rate of ST: 01.06.2015 to 14.11.2015 (%) | Effective rate of ST: 15.11.2015 (after Introduction of SB Cess @ 0.5%) up to 31.05.2016 (%) | Effective rate of ST: 1.06.2016 (after Introduction of KKC @ 0.5%)(%) | |
| 1 | Financial leasing including hire purchase | 10 | 1.4 (14%*10%) | 1.45 (14.5%*10%) | 1.5 (15%*10%) | |
| 2 | Transport of goods by rail (other than service specified at Sl. No. 2A below) | 30 | 4.2 (14%*30%) | 4.35 (14.5%*30%) | 4.5 (15%*30%) | |
| 2A | Transport of goods in containers by rail by any person other than Indian Railways | 40 | NA | Entry inserted vide NN 8/2016-ST dated 01.03.2016 w.e.f 01.04.2016
Applicable rate of ST w.e.f 01.04.2016 to 31.05.2016: 5.8 (14.5%*40%) |
6
(15%*40%) |
|
| 3 | Transport of passengers, with or without accompanied belongings by rail | 30 | 4.2 (14%*30%) | 4.35 (14.5%*30%) | 4.5 (15%*30%) | |
| 4 | Bundled services by way of supply of food or any other article of human consumption or any drink, in a premises together with renting of such premises | 70 | 9.8 (14%*70%) | 10.15 (14.5%*70%) | 10.5 (15%*70%) | |
| 5 | Transport of passengers by air, with or without accompanied belongings in – |
|
||||
| (i) economy class | 40 | 5.6 (14%*40%) | 5.8 (14.5%*40%) | 6 (15%*40%) | ||
| (ii) other than economy class | 60 | 8.4 (14%*60%) | 8.7 (14.5%*60%) | 9 (15%*60%) | ||
| 6 | Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes. | 60 | 8.4 (14%*60%) | 8.7 (14.5%*60%) | 9 (15%*60%) | |
| 7 | Services of goods transport agency in relation to transportation of goods other than used household goods. | 30 | 4.2 (14%*30%) | 4.35 (14.5%*30%) | 4.5 (15%*30%) | |
| 7A | Services of goods transport agency in relation to transportation of used household goods. | 40 | NA | Entry inserted vide NN 8/2016-ST dated 01.03.2016 w.e.f 01.04.2016.
Applicable rate of ST w.e.f 01.04.2016 to 31.05.2016: 5.8 ( 14.5%*40%) |
6 (15%*40%) | |
| 8 | Services provided by a foreman of chit fund in relation to chit | 70 |
Entry inserted vide NN 8/2016-ST dated 01.03.2016 w.e.f. 01.04.2016, earlier omitted vide NN 08/2015-ST dated 01.03.2015. Applicable rate of ST w.e.f 01.04.2016 to 31.05.2016: 10.15 (14.5%*70%) |
10.5 (15%*70%) | ||
| 9 | Renting of motorcab | 40 | 5.6 (14%*40%) | 5.8 (14.5%*40%) | 6 (15%*40%) | |
| 9A |
Transport of passengers, with or without accompanied belongings, by- a) a contract carriage other than motorcab b) a radio taxi |
40 | 5.6 (14%*40%) | 5.8 (14.5%*40%) | 6 (15%*40%) | |
| Service tax is proposed to be levied on service of transportation of passengers by air conditioned stage carriage @ 40% after abatement of 60% without input tax credit, with effect from 01.06.2016 [Deletion of Section 66D(o)(i) of the Finance Act and insertion of Entry No. 23(bb) of the Mega Exemption Notification w.e.f 01.06.2016] | ||||||
| 10 | Transport of goods in a vessel | 30 | 4.2 (14%*30%) | 4.35 (14.5%*30%) | 4.5 (15%*30%) | |
| 11 | Services by a tour operator in relation to-
|
|||||
| (i) a tour, only for the purpose of arranging or booking accommodation for any person | 10 | 1.4 (14%*10%) | 1.45 (14.5%*10%) | 1.5 (15%*10%) | ||
| (ii) tours other than (i) above | 40/30 | 5.6 (14%*40%) | 15.11.2015 to 31.03.2016:
5.8 (14.5%*40%) 01.04.2016 to 31.05.2016: 4.35 (14.5%*30%) |
4.5 (15%*30%) | ||
| NN 8/2016-ST dated 01.03.2016 w.e.f. 01.04.2016: Abatement rates in respect of services by a tour operator in relation to a tour other than (i) has been rationalised from 75% (package tour) and 60% (others) to 70%. Consequently, the category of “package tour” stands deleted w.e.f. 01.04.2016 | ||||||
| 12 | 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: | 30 | 4.2 (14%*30%) | 4.35 (14.5%*30%) | 4.5 (15%*30%) | |
| Effective from 01.04.2016, a uniform abatement at the rate of 70% is prescribed for services of construction of complex, building, civil structure, or a part thereof, subject to fulfillment of the existing conditions. For the scenario till 31.03.2016: | ||||||
| (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 1crore; |
25 |
3.5 (14%*25%) | 15.11.2015 to 31.03.2016: 3.625 (14.5%*25%)
|
|||
| for other than the (a) above. | 30 | 4.2 (14%*30%) | 15.11.2015 to 31.03.2016: 4.35 (14.5%*30%)
|
|||
Effective rates under the Reverse Charge Notification No. 30/2012-ST dated June 20, 2012 as amended
We are also summarizing herewith the effective rates of Service tax to be payable by Service Receiver (“SR”) under full Reverse Charge and by Service Provider (“SP”) & SR under the Partial/ Joint Reverse Charge, w.e.f June 1, 2016 after imposition of KKC, for easy digest:
Service Tax Rates for Services Under Reverse Charge Mechanism
| Sl. No | Description of a service | Rate of ST payable by the SP & SR: 01.06.2015 to 14.11.2015
(%) |
Effective rate of ST payable by the SP & SR: 15.11.2015 (after Introduction of SB Cess @ 0.5%) to 31.05.2016
(%) |
Effective rate of ST payable by the SP & SR: 01.06.2016 (after Introduction of KKC @ 0.5%)
(%) |
| 1 | Services provided or agreed to be provided by an insurance agent to any person carrying on insurance business | SP: Nil
SR: 14 (100%) |
SP: Nil
SR: 14.5 |
SP: Nil
SR: 15 |
| 1A | Services provided or agreed to be provided by a recovery agent to a banking company or a financial institution or a non-banking financial company | SP: Nil
SR: 14 (100%) |
SP: Nil
SR: 14.5 |
SP: Nil
SR: 15 |
| 1B | Services provided or agreed to be provided by a mutual fund agent or distributor, to a mutual fund or asset management company | SP: Nil
SR: 14 (100%) |
Omitted vide NN 18/2016-ST dated 01.03.2016 (w.e.f 01.04.2016
From 15.11.2015 to 31.03.2016: SP: Nil SR: 14.5 (100%) |
NA |
| 1C | Services provided or agreed to be provided by a selling or marketing agent of lottery tickets to a lottery distributor or selling agent of the State Government | SP: Nil
SR: 14 (100%) |
SP: Nil
SR: 14.5 |
SP: Nil
SR: 15 |
| 2 | Services of goods transport agency in relation to transportation of goods other than used household goods. | After availment of 70% abatement:
SP: Nil SR: 30% of 14% = 4.2 (i.e. 100%) |
After availment of 70% abatement:
SP: Nil SR: 4.35 (i.e. 14.5%*30%) |
After availment of 70% abatement: SP: Nil SR: 4.5 (i.e. 15%*30%) |
| 3 | Services provided or agreed to be provided by way of sponsorship to any body corporate or partnership firm located in the taxable territory | SP: Nil
SR: 14 (100%) |
SP: Nil
SR: 14.5 |
SP: Nil
SR: 15 |
| 4 | Services provided or agreed to be provided by an arbitral tribunal | SP: Nil
SR: 14 (100%) |
SP: Nil
SR: 14.5 |
SP: Nil
SR: 15 |
| 5 | Entry amended vide NN 18/2016-ST dated 01.03.2016, w.e.f 01.04.2016 to bring legal services provided by a senior advocate under forward charge | |||
| Prior to 01.04.2016: Services provided or agreed to be provided by individual advocate or a firm of advocates by way of legal services | SP: Nil
SR: 14 (100%) |
SP: Nil
SR: 14.5 |
SP: Nil
SR: 15 |
|
| Post 01.04.2016: Services provided or agreed to be provided by a firm of advocates or an individual advocate other than a senior advocate by way of legal services | SP: Nil
SR: 14 (100%) |
SP: Nil
SR: 14.5 |
SP: Nil
SR: 15 |
|
| 5A | Services provided or agreed to be provided by a director of a company or a body corporate to the said company or the body corporate | SP: Nil
SR: 14 (100%) |
SP: Nil
SR: 14.5 |
SP: Nil
SR: 15 |
| 6 | Any Services (w.e.f. 01.04.2016)/ Support services (till 31.03.2016) provided or agreed to be provided by Government or local authority excluding,- (1) renting of immovable property, and (2) services specified in sub-clauses (i), (ii) and (iii) of clause (a) of Section 66D of the Finance Act | SP: Nil
SR: 14 (100%) |
SP: Nil
SR: 14.5 |
SP: Nil
SR: 15 |
| 7 | (a) Services provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on abated value to any person who is not engaged in the similar line of business | After availment of 60% abatement: SP: NilSR: 14%*40% = 5.6 (100%) |
After availment of 60% abatement:
SP: Nil SR: 5.8 (14.5%*40%) |
After availment of 60% abatement:
SP: Nil SR: 6 (15%*40%)
|
| (b) Services provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on non-abated value to any person who is not engaged in the similar line of business | Without availment of 60% abatement:
SP: 7 (14%*50%) SR: 7 (14%*50%)
|
Without availment of 60% abatement:
SP:7.25(14.5%*50%) SR:7.25(14.5%*50%) |
Without availment of 60% abatement:
SP: 7.5(15%*50%) SR: 7.5(15%*50%) |
|
| SP: Any individual, Hindu Undivided Family or partnership firm, whether registered or not, including association of persons, located in the taxable territory
SR: Business entity registered as body corporate, located in the taxable territory |
||||
| 8 | Services provided or agreed to be provided by way of supply of manpower for any purpose or security services | SP: Nil
SR: 14 (100%) |
SP: Nil
SR: 14.5 |
SP: Nil
SR: 15 |
| SP: Any individual, Hindu Undivided Family or partnership firm, whether registered or not, including association of persons, located in the taxable territory
SR: Business entity registered as body corporate, located in the taxable territory |
||||
| 9 | Services provided or agreed to be provided in service portion in execution of works contract: | |||
| In case of Original work
|
SP: 2.8 {50% of (14%*40%)}
SR: 2.8 {50% of (14%*40%)}
|
SP: 2.9 {50% of (14.5%*40%)}
SR: 2.9 {50% of (14.5%*40%)}
|
SP: 3 {50% of (15%*40%)}
SR: 3 {50% of (15%*40%)}
|
|
| In all other cases | SP: 4.9 {50% of (14%*70%)}
SR: 4.9 {50% of (14%*70%)} |
SP: 5.075 {50% of (14.5%*70%)}
SR: 5.075 {50% of (14.5%*70%)} |
SP: 5.25 {50% of (15%*70%)}
SR: 5.25 {50% of (15%*70%)} |
|
| SP: Any individual, Hindu Undivided Family or partnership firm, whether registered or not, including association of persons, located in the taxable territory
SR: Business entity registered as body corporate, located in the taxable territory |
||||
| 10 | Any taxable services provided or agreed to be provided by any person who is located in a non-taxable territory and received by any person located in the taxable territory | SP: Nil
SR: 14 (100%) |
SP: Nil
SR: 14.5 |
SP: Nil
SR: 15 |
| 11 | Any service provided or agreed to be provided by a person involving an aggregator in any manner | SP: Nil
SR: 14 (100%) |
SP: Nil
SR: 14.5 |
SP: Nil
SR: 15 |
Effective rates under the Service Tax (Determination of Value) Rules, 2006 [“the Service Tax Valuation Rules”]
We are also summarizing herewith the effective rates of Service tax to be payable under Rule 2A and Rule 2C of the Service Tax Valuation Rules, for easy digest:
Services Tax Rates under Service Tax Valuation Rules
| Relevant Rule(s) of the Service Tax Valuation Rules | Taxable per cent (%) | Effective rate of ST: 01.06.2015 to 14.11.2015
(%) |
Effective rate of ST: 15.11.2015 (after Introduction of SB Cess @ 0.5%) to 31.05.2016
(%) |
Effective rate of ST: 1.06.2016 (after Introduction of KKC @ 0.5%)
(%) |
| Rule 2A – Determination of value of services involved in the execution of a Works contract | ||||
| In case of Works contracts entered into for execution of original works | 40 | 5.6
(14%*40%)
|
5.8
(14.5%*40%)
|
6
(15%*40%)
|
| In all other cases | 70 | 9.8
(14%*70%)
|
10.15 (14.5%*70%) | 10.5
(15%*70%) |
| Rule 2C: Determination of value of service portion involved in supply of food or any other article of human consumption or any drink in a restaurant or as outdoor catering |
||||
| Service portion in an activity wherein goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity, at a Restaurant | 40 | 5.6
(14%*40%) |
5.8
(14.5%*40%) |
6
(15%*40%) |
| Service portion in outdoor catering wherein goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of such outdoor catering | 60 | 8.4
(14%*60%) |
8.7
(14.5%*60%) |
9
(15%*60%) |
(Author can be reached at Email: [email protected])
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sir,
the Machinery rent receive f.y. 2026-17 where exempt service tax ?
very effectiveinformation, thank you sir
We would like to clarify service tax rate between jan2016 -june 2017 for below . We are in business of travel agency registered also as tour operator
1. Cruise booking , was it on commission earned or was it on actual cruise cost.
2. International rail reservation also on commission earned or on ticket value
3.Hotel booked from foreign vendors on commission basis. Do we need to pay on commission earned or room rate.
4 Hotel booked from indian vendors on commission basis. Do we need to pay on commission earned or room rate.
SIR,
I AM ELECTRICAL CONTRACTOR
HOW IT IS CALCULATED AS PER THE ACT.
TOTAL AMOUNT RS.356504 AND SERVICE TAX 2.8% RS.9982 (FOR CIVIL WORK)
Sir,
I had purchased a flat in October 2014 and registered the flat in April 2017 by paying stamp duty. I have not paid the service tax till date.What will be the tax rate since GST has been introduced w.e.f 01-07-2017 Any penal;ty I have to pay or I have to Pay the service tax at old rate.
any abatment on outdoor catering service in gst?
Sir
I have bill of XYZ pvt. ltd.towards transport charges for 18000/- (shifting of goods from Goa to Mumbai) will I have to pay service tax under GTA??
Very helpful & thankyou.
service tax rates on advertisement in newspapers.
who is liable to pay
advertising agency is charging @ of 2.25 %
=15*15
please explain
building is under construction work upto plinth level
service tax rate on a consideration amount 1600000/- area 661sqft. from 01-04-2016 what is the rate of service tax should apply? i am confused that the abatement is 70% or 75%.
Dear sir,
Our firm M/s Srivastava Associates are a propritership concern, i have signe a civil work contract for Replecement of roofing sheet in plant of NTPC ltd. in this work 100% sheet will we replaced by new sheeting. pl tell us what are the rate of services tax will be emposed, where total contract value 3000000.
Thanks
R P SRIVASTAVA
how much amout tax free for labour contractor or subcontractor pay for job work..
what is the service tax rate on labour supply
We have hired a caterer to supply food and tiffin to our guests in a kalyan mandapam in Chennai on three occassions over a two day period ,for a family marriage function to be celebrated in Feb 2017. The invoice quoted by the caterer shows an amount of about 7 lakhs plus “admissible service tax”.What will be our liability to pay to him in the final settlement ,as a percentatge of the final bill amount arrived at, @ the fixed rates agreed for each occassion-on per head basis.Pl advise thro mail
I am doing catering business from last month.if I issue catering service bill rs 200000 how much service tax I need to pay service tax department.
What is vat rate of flat purchasers owner s and service tax rate and what calculate method
If, we are hiring machinery on rent then what will be the service tax liability for service provider & service receiver ?
I am a Service Provider for manpower supply, my service receiver insists that they will pay service Tax; but they have not paid yet. Will the liability come on me. What should by my further action. Regards
No comments
sir,
Service tax is 15% but my Question is service tax input credit % is 14% or 15% .pls clarify
Sir, do we have any service taxes on the refundable deposit amount received. Please clarify and provide details
Thanks
Thanks of u for This Presentation and It,s very help full for my knowledge.Thanks.
Respected Bimal Jain ji my name is also Bimal Jain. We are into AMC of telecom products one of our customer has paid us 35% Service tax under Reverse Charge mechanism i.e. 4.90 % instead of 14% is he right in doing so and if yes under which notification no.
how many service tax charge for labour charges
Priyanka Prakash
Bimal Sir its very helpful and good presentation. thanks a lot……….
Very good presentation sir…
Thank you very much mr. Bimal jain excellent and exhaustive
Thanks, brilliant
The wonderful article CA sir… Thank u very much…
It’s very helpful for my IPCC
Sir,
Is service tax applicable on food supplied at non AC restaurant also, now ?
How much % we can take for cenvat credit 14 or 14.5 or 15 where there is no abatement
Can you please clarify?
BIMAL JEE , thank for your exercise and good chart prepared for others easy to understand. keep going on .
Helpful !!