Dayal R Kundani

The Finance Bill, 2015, has received the assent of the Honorable President and has been notified. 1st June, 2015 is being notified as the date on which the following provisions will come into effect.

1. The rate of Service Tax is being increased from 12% to 14% (including cesses). (Notification No.14/2015-Service Tax, dated 19th May, 2015 refers)

2. Education Cess and Secondary and Higher Education Cess, shall cease to have effect post 1st June 2015

3. Please refer the table below for determining the applicability of 14% post 1st June Service

Situation for a service provider and applicable to RCM as well Rate Applicability
Service Provision is complete till 31.05.2015 and Invoice raised till 31.05.2015 but Payment received on or after 01.06.2015 12.36%
Service Provision is complete and Invoice raised on or after 01.06.2015 but Payment is received till 31.05.2015 – 12.36% 12.36%
Service Provision completed till 31.05.2015 and Invoice raised on or after 01.06.2015 and Payment also received after 01.06.2015 14.00%
Invoice raised till 31.05.2015 in advance and some part of total consideration has been paid till 31.05.2015 but Service Provision is being done on or after 01.06.2015 -12.36% for such part payment, 12.36%
 for balance payment to be recd 14.00%
If entire service has been provided on or after 01.06.2015 but both payment as well as invoicing has been done till 31.05.2015 12.36%

Section 66B of the Finance Act, 1994, prescribes the service tax rate. It has been amended by Section 108 of the Finance Act, 2015. The rate of Service Tax is being increased from 12% to 14% (including cesses). The increase in Service Tax rate will come into effect from 1st June, 2015. (Notification No.14/2015-Service Tax, dated 19th May, 2015 refers)

To know whether a service has been provided or agreed to be provided for a consideration and its point of taxation, three main ingredients i.e. provision of taxable service, raising of invoice and receipt of payment are important. Service provided or agreed to be provided cannot be considered as taxable service if there is no consideration. Consideration is known only if invoice is raised or payment is made. In view of Section 67A of the Finance Act, services where there is no confusion in time of provision of service, receipt of payment and raising on invoice, rate of service tax will be as applicable at the time when taxable service has been provided or agreed to be provided. However, in case of complex situations, where it is not possible to determine the time, when the taxable service has been provided or agreed to be provided, point of taxation would be determined as per Rule 4 of the Point of Taxation Rules, 2011.

Therefore, rule 4 would be applicable as under:

Sr.No. Service Provided Invoice w.r.t. rate change Payment w.r.t. rate change

 

Point of Taxation Rule

 

Rate of service Tax

 

1 Before rate change After After 4(a)(i) 14%
2 -do- Before After 4(a)(ii) 12.36%
3 -do- After Before 4(a)(iii) 12.36%
4 After rate change Before After 4(b)(i) 14%
5 -do- Before Before 4(b)(ii) 12.36%
6 -do- After Before 4(b)(iii) 14%

More Under Service Tax

Posted Under

Category : Service Tax (3288)
Type : Articles (14816) Featured (4127)
Tags : Budget (1474) Budget 2015-16 (272) Dayal R Kundani (12) tax rates (84)

One response to “Service Tax Tax Rate 14% w.e.f. 01-06-2015 and related provisions”

  1. Puneet sharma says:

    In the concerned case, the status of service provider is Partnership Firm and that of receiver is Industrial Company. An Industrial Company is business entity registered as a Body Corporate under Companies Act, 1956 or Companies Act 2013 hence the manpower services are covered under Reverse Charge Mechanism.Going by the said facts and NN 30/2012 RCM, point no. (v) Industrial Company located in taxable territory will be liable to pay service tax at 14.5% including Swachh Bharat Cess.

  2. Dilip Patel says:

    Who will deposit the service tax in the case of manpower services provided by Partnership Firm and received Industrial Company , please also guide at what %, will there be charges
    Reply

  3. Amit K says:

    Builder has raised the invoice for balance payment before 31st May 2015 and cheque was issued by my bank dated 26th May 2015. Same was cleared on 2nd June. Builder has collected service tax for balance payment at the rate of 14%. Can I ask for refund? If yes can builder get refund from Govt if already deposited by him?
    Please assist

  4. faraz says:

    Hii
    how to calculate service tax and education cess and secondary education cess from service tax in new tax rate 14%
    Plz tell me now
    And tell me sales 1000 hai 12.5 exice and 5 vat 10% marrgen hai to purchase value kya hogi .

  5. RAJANSORNA says:

    HI,
    what is the service tax for GTA?
    service provider individual, recipient company factory
    service provider individual, recipient individual factory

  6. Kuldeep Khanna says:

    Who will deposit the service tax in the case of manpower services provided by individual and received by the individual, please also guide at what %, will there be any bifurcation of full 14%.

  7. dilip kumar dam says:

    Service provided for the period 01-04-2015 to 30-06-2015. But Invoice raised for the period mentioned above on 31-05-2015 to be paid after 30-06-2015. What will be the rate of Service Tax

  8. dilip kumar dam says:

    Service provided for the period 01-04-2015 to 30-06-2015 and invoice raised after 30-06-2015. What will be the rate of Service Tax ?

  9. dhruv says:

    what if invoice has to be revised .which is issued before change in the effective rate
    of service tax

Leave a Reply

Your email address will not be published. Required fields are marked *