Rate of ‘14 %’ announced to be Service tax for 2015- 2016

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New Delhi: The New Rate of service Tax as announced by the Government, will come into effect and will become operative from upcoming 1st day of June, 2015. In place of currently applicable rate of Service tax, i.e. 12.36 per cents (Educational cess inclusive), the Government has now decided to increase in the rate to reach to directly 14 per cents.

It was announced on behalf of the Government, by the Finance Minister, Mr. Arun Jaitley, on yesterday, 19th May, which will make Bills at Restaurants, Insurance and Phone Bills and other service expensive.

It was stated by the sources of Senior Official from the Government that, the said 14 per cents of newly increased service tax rate has been announced by the Finance Minister, Mr. Jaitley in his Budget for the year 2015- 16 and as such the new rate will come into effect from 1st day of upcoming June.

While supporting the said increased rate, Mr. Jaitley in his Budget Speech stated that the proposed increase in the rate of Service tax is for facilitating the smooth transition to impose service tax by both the Central as well as State Governments. And the new rate of 14 per cents as announced by the Finance Minster is inclusive of Educational Cess and Secondary & Higher Secondary Education Cess.

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In case of levy of the Service tax, the said is imposable on all kinds of Services, however, only a small negative list is provided as an exemption from such levy. Some of the Services in case of which the service tax is imposable are, Architecture services, Advertising services, Air travel services, Certain Constructions services, Credit card and Management service, Tour operator’s Services.

The present announcement was made by the Ministry of Finance, Department of Revenue by notifying the same in the Notification dated 19th May of this year. The action of publishing a notification by such Ministry was taken after the Finance Bill, 2015 was given assent by the honourable President of India on this month’s 14th day i.e. Thursday.

The Swachh Bharat Cess at the rate of 2 per cents on the value of Taxable services and also any Services provided by Government or Local Authority to the Business entities will be notified on later dates.

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by Faim Khalilkhan Pathan.