Wednesday, May 20, 2015

New rate of Service Tax applicable w.e.f. 1st June, 2015

Today Central Government has issued most awaited notification for change in effective rate of Service Tax from 12.36% to 14%. New rates will be applicable from 1st June, 2015 (Notification No. 14/2015-ST  dated 19th May, 2015). Corresponding changes in Rules 6 of Service Tax Rules, 1994 for increase in rate of Service Tax for:
  1. 1. Air Travel Agent,
  2. 2. Life Insurance Business,
  3. 3. Foreign Exchange Brokers and
  4. 4. Distributor & Selling Agent of Lottery
will also be applicable w.e.f. 1st June, 2015 (Notification No. 15/2015-ST).




A. For Air Travel Agent under Rule 6 (7) of Service Tax Rules, 1994
On Basic Fare
New Rate wef 01.06.2015
Old Rate
For Domestic Booking
0.70%
0.60% 
For International Booking
1.4%.
1.2%. 
B. For Life Insurance under Rule 6(7A)(ii) of Service Tax Rules, 1994
Gross Amount of Premium Charged
New Rate wef 01.06.2015
Old Rate
1st year
3.50%
3%
Subsequent Years
1.75%
1.50%
For Money Changing under Rule 6(7B) of Service Tax Rules, 1994
Gross Amount of Currency Exchanged
New Rate wef 01.06.2015
Old Rate
Up to Rs. 1,00,000
0.14% subject to minimum of Rs. 35
0.12% subject to minimum of Rs. 30
For an amount exceeding Rs. 1,00,000 and up to Rs. 10,00,000
Rs. 140 and 0.07%
Rs. 120 and 0.06%
For an amount exceeding Rs. 10,00,000
Rs. 770 and 0.014% subject to maximum of Rs. 7,000
Rs. 660 and 0.012% subject to maximum of Rs. 6,000
D. For Distributor or Selling Agent of Lotteries under Rule 6(7C) of Service Tax Rules, 1994
Guaranteed Prize Payout
New Rate wef 01.06.2015
Old Rate
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
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


Chart Prepared by Simple Tax India Team

In addition following changes will be applicable w.e.f. 1st June, 2015:
  1. 1. Service Tax on amusement facilities and Entertainment Events however exemption is available in respect of following services by way of right to admission to,-

    • a. exhibition of cinematographic film, circus, dance, or theatrical performance including drama or ballet;

    • b. recognised sporting event;

    • c. award function, concert, pageant, musical performance or any sporting event other than a recognised sporting event, where the consideration for admission is not more than Rs. 500 per person.”

  2. 2. Service Tax on Liquor Job Work;
Date of applicability of following provisions is yet to be notified:
  1. 1. Expansion of scope of services provided by Government and Local Authority; and
  2. 2. Applicability of ‘Swachh Bharat Cess’.

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