some amendment regarding service tax as per new finance act

Service Tax

Rate

1.       Levy of existing rate of service tax 12% is being increased to 14% from such date that will be appointed by the Centrat Govt. by Notification. Thus, the net effect in the rate will be from 12.36% (inclusive Cesses) to 14%, subsuming the Cesses. The Cesses will continue to be levied in service tax till the time the revised rate comes into effect

2.       In addition, a new levy termed as “Swachh Bharat Cess” shall be introduced as “Service Tax” @2% on the taxable value from a date to be notified by the Ministry. Thus the net effect in the rate will be 16% on the value of taxable services

Valuation.

3.     Any reimbursable expenditure or cost incurred by the service provider and charged, except in some circumstances and subject to conditions, that may be prescribed – would form part of value of taxable service.

Penalties

3.       Various penal provisions are amended and will be effected on enactment of the Finance Bill. Waiver of penalties in cases   where                    assessee has been able to prove that there was reasonable clause in non-paid/short paid tax as provided under Section 80 of the Finance Act, 1994, shall be omitted.

4.       In respect to services provided by way of supply of man power for any purpose or security services, liability for paying service tax is vested on the service recipient to the extent of 100% on and from 01.04.2015 instead of existing liability of 25% and 75% on the   categorized service provider and recipient thereof.