CA Sandeep Kanoi

CA Sandeep KanoiIn respect of certain services like money changing service, service provided by air travel agent, insurance service and service provided by lottery distributor and selling agent, the service provider has been allowed to pay service tax at an alternative rate subject to the conditions as prescribed under rules 6(7), 6(7A), 6(7B) and 6(7C) of the Service Tax Rules, 1994. Consequent to the upward revision in Service Tax rate, the said alternative rates shall also be revised proportionately.

2.6.1 Amendments to this effect have been made in the Service Tax Rules which will also come into effect from 1st June, 2015, that is the date with effect from which the increase in the Service Tax rate is made effective. [Notification No. 05/2015-ST 1st March 2015 Entry at Sl. No. 2(a)(e)(ii)] (Notification No.15/2015-Service Tax, dated 19th May, 2015 refers)

A. Booking of tickets for travel by air by an air travel agent under Rule 6 (7) of Service Tax Rules, 1994
New Service Tax Rate wef 1st June 2015 Old Rate
1. Domestic Booking 0.70% of basic fare 0.60% of basic fare
2. International Booking 1.4% of basic fare 1.2%. of basic fare
basic fare” means that part of the air fare on which commission is normally paid to the air travel agent by the airline.

B. Insurer carrying life insurance business under Rule 6(7A)(ii) of Service Tax Rules, 1994

New Rate wef 01.06.2015 Old Rate
1. 1st year 3.50%   of Premium Charged 3%  of Premium Charged
2. Subsequent Years 1.75%   of Premium Charged 1.50%  of Premium Charged

Sale or purchase of Foreign Exchange, including money changing under Rule 6(7B) of Service Tax Rules, 1994

Gross Amount of Currency Exchanged New Service Tax Rate wef 1st June 2015 Old Rate
1. Up to Rs. 1,00,000 0.14% of gross amount of currency exchanged(min.Rs.35) 0.12% of gross amount of currency exchanged(min.Rs.30)
2. 1,00,000-10,00,000 Rs.140 + 0.07% of gross amount exceeding 1 lakh Rs.120 + 0.06% of gross amount exceeding 1 lakh
3. exceeding 10,00,000 Rs.770 + 0.014% of gross amount exceeding 10 lakhs(max. Rs.7000) Rs.660 + 0.012% of gross amount exceeding 10 lakhs(max. Rs.6000)

D. Taxable service of promotion, marketing, organising or in any other manner assisting in organising lottery under Rule 6(7C) of Service Tax Rules, 1994

Guaranteed Prize Payout New Service Tax Rate wef 1st June 2015 Old Rate
Prize payout More than 80% Rs. 8,200/- on every Rs. 10 Lakh (or part of Rs. 10 Lakh) of aggregate face value of lottery tickets printed by the organising State for a   draw Rs. 7,000/- on every Rs. 10 Lakh (or part of Rs. 10 Lakh) of aggregate face value of lottery tickets printed by the organising State for a   draw
Prize payout Less than 80% Rs. 12,800/- on every Rs. 10 Lakh (or part of Rs. 10 Lakh) of aggregate face value of lottery tickets printed by the organising State for a   draw Rs. 11,000/- on every Rs. 10 Lakh (or part of Rs. 10 Lakh) of aggregate face value of lottery tickets printed by the organising State for a   draw

Author Bio

Qualification: CA in Practice
Company: Taxguru / Sandeep Kanoi & Associates
Location: Mumbai, Maharashtra, IN
Member Since: 27 Feb 2017 | Total Posts: 646
A Blogger by Passion and a Chartered Accountant by Profession. View Full Profile

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15 responses to “Service Tax rate wef 01.06.2015 on Air Travel, Life Insurance, Money Changing & Lotteries Services”

  1. CHETAN JANGID says:

    hello sir, i want to open air ticket booking office as an proprietorship firm. please tell me following things ..
    1. service tax rate applicable on air ticket booking
    2. on which amount service tax will be levied.

  2. pooja gandhi says:

    i am working for new travel company wants to understand the process of service tax

  3. riya says:

    i m working in travel company and i want to know new rates and rules 2016-2017 on tour and hotel services and transport by air or rail

  4. riya says:

    hello what new service tax rate on flight tkt after new rate 14.50% and after 1.4.2016 15%

  5. Anjali Arora says:

    hello, i am working with an travel compny. i want to know that besides service tax @1.4% which tax is applicable to the invoice

  6. Sagar says:

    Hello Sir, Just wanted to know that bank has levied Govt service tax of Fx conversion but me being an manufacturer can i claim set off ya can i take cenvat credit for the same ?

  7. neha says:

    The rate of 0.7% on domestic bookings by air travel agent is arrived after what abatement or adjustment from 14%. Since service tax rate is fixed 14%.

  8. Anish Tamrakar says:

    Dear Sir

    could you please tell me on which components the airline will charge the service tax from air travel agents for booking the air tickets?

    Air Fare: 5000
    Taxes: 500
    Fuel: 500
    Total: 6000

  9. Umamahesh Koleti says:

    Sir Wheather provision discuseed about if prize payout ratio is equal to 80%

  10. SABK KC says:

    dear sir i will be purchased RS: 30 x 3500, kerala lottery daily how service tax will be
    charged in case

  11. vinod says:

    All persons has submitted a post on site after doing it copy paste from different websites.
    but there is no one i have seen who has given a complete detail about revision of service tax rate and reverse charge mechanism, Like!!!!!!

    what will be the new rate for Manpower Supply?
    what will be the new rate for Cab & Taxi operator?
    what will be the new rate for GTA?
    what will be the new rate for in case of WCT?
    If anyone have these details please share in complete detail.

  12. shivam agrawal says:

    Dear sir
    Kindly tell me logic of charging rate of st on foreign currency exchange.

  13. Vigneshwaran says:

    In Money Changing Service
    0.14% of tax for up to 100000 there they mentioned minimum Rs 35.
    So what is that 35rs.
    We have to give minimum 35 as tax or the minimum bill amount would be 35rs.
    please clear my doubt.

  14. Vigneshwaran says:

    C Sale or purchase of Foreign Exchange, including
    money changing under Rule 6(7B) of Service Tax Rules, 1994
    From
    0.14% of tax for up to 100000 there they mentioned min Rs 35.
    From that Minimum 35rs means tax amount or gross bill amount.

  15. Mansi says:

    Dear Sir, How service tax will be charged in case of sub agents who are not IATA agents?

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