SERVICE TAX RATE CHART FOR FY 2015-16 WITH NEW SERVICE TAX RATE 14%:
Note : from 15/11/2015 Govt has introduced 0.5 % Swachh Bharat Cess – The effect of same is not given in the below details/chart
For New Service Tax Chart New Service Tax Chart 14.5 %
| Service provided | Amount( 1) | Abatement rate or Exemption rate( 2) | Value after abatement( 3=1-2) | Service tax payable(3*14%) | Effective rate to be charged on bill*( 4) =14%-abatement rate | Conditions to be followed to claim abatement or exemption |
| Tour operator service | ||||||
| Accommodation booking | 10,000 | 90% | 1000 | 140 | 1.4% | No cenvat credit for input, input services or capital goods.Invoice includes amount of accommodation. |
| A package tour | 10,000 | 75% | 2500 | 350 | 3.5% | No cenvat credit for input, input services or capital goods. |
| Other tours | 10,000 | 60% | 4000 | 560 | 5.6% | As above The bill includes gross amount charged for tour. |
| Financial lease service | 10,000 | 90% | 1000 | 140 | 1.4% | Nil |
| Transport of goods by rail service | 10,000 | 70% | 3000 | 420 | 4.2% | Nil |
| Transport of passenger by rail | 10,000 | 70% | 3000 | 420 | 4.2% | Nil |
| Transport of passenger by air | 10,000 | 60% | 4000 | 560 | 5.6% | Nil |
| Hotel service (club, pundal, shamiana)with supply of food | 10,000 | 30% | 7000 | 980 | 9.8% | Cenvat credit of goods ( goods 1 to 22 classified under cenvat credit act, 1985 has not been taken) |
| Renting of immovable property (Hotel, guest house or residential house) | 10,000 | 40% | 6000 | 840 | 8.4% | Cenvat credit for input and capital goods has not been taken |
| Good transport agency services | 10,000 | 70% | 3000 | 420 | 4.2% | Cenvat credit for input, input services and capital goods has not been taken |
| Chit fund services | 10,000 | 30% | 7000 | 980 | 9.8% | Same as above |
| Renting of motor vehicle designed to carry passengers | 10,000 | 60% | 4000 | 560 | 5.6% | Same as above |
| Transport of goods in vessel | 10,000 | 60% | 4000 | 560 | 5.6% | Same as above |
| Consturction service | ||||||
| Carpet area of unit is less than 2000 sq ft and amount charged is less than 1 crore | 10,000 | 75% | 2500 | 350 | 3.5% | Cenvat credit for input used for provision of service has not been taken and value of land is included in the amount charged |
| In all other cases | 10,000 | 70% | 3000 | 420 | 4.2% | Same as above |
HOW TO USE EFFECTIVE RATE:
Please note that effective rate is for easy calculation. You can use effective rate direct on amount (column 1)- bill charged. So service tax payable is column 1 * column 4.
BASIC TERMS TO UNDERSTAND MORE ABOUT RATE OF SERVICE TAX:
ABATEMENT IN SERVICE TAX:
Abatement is partial exemption from service tax. There are different rates of abatement for different services.
HOW ABATEMENT REDUCES AMOUNT OF SERVICE TAX PAYABLE?
Taking one example, suppose Mr. X provided taxable services worth Rs. 400000 to Mr. Y . Service tax rate is 14% but abatement available is 70%.
So we will calculate service tax payable by following method:
Value of service provided = 4,00,000
Value after availing abatement = 4,00,000- 70% = 120000
Service tax payable = 120000*14% = 16800
Conditions: No cenvat credit has been availed.
EXEMPTION:
Under notification no. 26/2012, many services are fully exempt under exemption from mega notification and negative list of services.
We will soon present list of exemption services. Enter your email address in sign up form so that we can mail you when we publish the post.
Remember that no service tax is payable when service is fully exempt.
Availment of abatement is optional:
It is not compulsory to avail abatement. service provider can pay service tax on full amount. The rate will be 12.36% of value that time.
Small service provider exemption:
You can avail small service provider exemption if your yearly turnover of taxable service is less than Rs. 10 Lakhs. For more details.
REVERSE CHARGE MECHANISM CHART:
Under reverse charge mechanism, service tax is paid full or partially by service receiver.
| Service | Service receiver | Service provider |
| Insurance agent services | 14% | 0% |
| Sponsor ship services | 14% | 0% |
| Legal service | 14% | 0% |
| Director’s service | 14% | 0% |
| Support services by government | 14% | 0% |
| Supply of manpower | 14%* | 0% |
| Renting of motor vehicle (If service provider is availed abatement) | 5.6% | 0% |
| Renting of motor vehicle (if service provider is not availed abatement) | 7% | 7% |
| Import of service | 14% | 0% |
- from 1/4/2015 with regards to budget 2015 changes.
RATE OF SERVICE TAX ON WORK CONTRACT:
| Service | Service receiver | Service provider |
| When there is no reverse charge and no composition scheme applicable | 0% | 14% |
| When there is reverse charge applicable and no composition scheme applicable | 7% | 7% |
| When there is no reverse charge applicable and composition scheme applicable | ||
| Original work (construction, erection, commissioning etc.) | 0% | 5.6% |
| Maintenance, restoration, repair of goods | 0% | 9.8% |
| Other work contract including repair, maintenance, plastering of immovable property | 0% | 9.8% |
| When there is reverse charge and composition scheme applicable | ||
| Original work | 2.8% | 2.8% |
| Maintenance work, restoration of goods | 4.9% | 4.9% |
| Other work contract | 4.9% | 4.9% |
The service tax rate chart for 2015-16 is prepared on 1/6/2015.