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CHANGE IN ABATEMENT RATE of SERVICE TAX FROM 1/4/2016

  1. While claiming abatement 90% in relation to Services of solely booking accommodation  of tours, it is made necessary to include accommodation cost in invoice along with service charges.
  2. Now there is single abatement rate of 70%  for tour operator other than mentioned above.
  3. Services provided by foreman to chit fund are proposed to be taxed with 30% abatement availability.
  4. To avail abatement on renting of motor car services, cost of fuel should be included in the consideration charged.
  5. For composition scheme of residential construction activity,condition of  abatement as per carpet area is being removed and single abatement of 70% is now being prescribed subject to fulfillment of existing conditions.
  6. From 1/4/2016, service tax is leviable on 30% on amount charged for service of transport of passengers by rail , without availability of cenvat credit of inputs and capital goods. ( Cenvat credit of input services are now available).
  7. Transport service of goods in containers by rail by any other person other than Indian Railway is taxable under service tax with reduced abatement rate of 60%. So there are two categories ofabatement for transport of goods in rails. For Indian railways, it is 70% ( 30% value is taxable) and for others , it is 60% (40% value is taxable). Credit of input services are available to both of them while claiming abatement.
  8. For transport of goods by vessel, 70% abatement is available with cenvat credit of input services.
  9. For GTA, abatement on transport of used household goods is being rationalized with 60% abatementrate without availment of cenvat credit of inputs, input services and capital goods. For other goods, 70% abatement is available.

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