Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Friday, May 22, 2015

Service Tax Amendments Applicable w.e.f. 1st June 2015

The Central Board of Excise & Custom (CBEC) has notified that the following provisions will come into effect from 1st June 2015.

- Abolition of EC & SHEC, and effective rate of service tax to be enhanced from 12.36% to 14%.

- Rule 6(3) of the CENVAT Credit Rules deals with manufacturers of goods or providers of output service, opting not to maintain separate accounts. Now, reversal of CENVAT under the said sub-rule shall be 6% of exempted goods and 7% of exempted services.

- Exemption of service tax on entry in a recognized sporting event, circus, cinematographic film, dance or theatrical performance including drama or ballet, award function, concerts, pageants, musical performances or any sporting events other than recognized sporting event, wherein entry fees is up to Rs. 500/person.

- Levy of service tax on job work processes for production of alcoholic liquor for human consumption

- For services such as those provided by money changers, air travel agents, insurance providers, lottery distributor and selling agents, the service provider is allowed to pay Service Tax at an alternative rate subject to the conditions as prescribed under Rules 6(7), 6(7A), 6(7B) and 6(7C) of the Service Tax Rules, 1994. Consequent to the upward revision in Service Tax rate, the said alternative rates shall also be revised proportionately as follows.

Booking of tickets for travel by air by an air travel agent 
New Service Tax Rate from 1st June 2015
 Rates up to 31.05.2015
1. Domestic Booking
0.70% of basic fare
0.60% of basic fare
2. International Booking
1.4% of basic fare
1.2%. of basic fare
basic fare” means that part of the air fare on which commission is paid to the air travel agent by the airline.
Insurer carrying life insurance business
New Service Tax Rate from 1st June 2015
Rates up to 31.05.2015
1. 1st year
3.50%   of Premium Charged
3%  of Premium Charged
2. Subsequent Years
1.75%   of Premium Charged
1.50%  of Premium Charged
Sale or purchase of Foreign Exchange, including money changing 
Gross Amount of Currency Exchanged
New Service Tax Rate wef 1st June 2015
Old Rate
1. Up to Rs. 1,00,000
0.14% of gross amount of currency exchanged(min.Rs.35)
0.12% of gross amount of currency exchanged(min.Rs.30)
2. 1,00,000-10,00,000
Rs.140 + 0.07% of gross amount exceeding 1 lakh
Rs.120 + 0.06% of gross amount exceeding 1 lakh
3. exceeding 10,00,000
Rs.770 + 0.014% of gross amount exceeding 10 lakhs(max. Rs.7000)
Rs.660 + 0.012% of gross amount exceeding 10 lakhs(max. Rs.6000)
Taxable service of promotion, marketing, organising or in any other manner assisting in organising lottery 
Guaranteed Prize Payout
New Service Tax Rate wef 1st June 2015
 Service Tax till 31.05.15
Prize payout More than 80%
Rs. 8,200/- on every Rs. 10 Lacs or a part of Rs. 10 Lacs of aggregate face value of lottery tickets printed by the organising State for a   draw
Rs. 7,000/- on every Rs. 10 Lac or part of Rs. 10 Lac of aggregate face value of lottery tickets printed by the organising State for a   draw
Prize payout Less than 80%
Rs. 12,800/- on every Rs. 10 Lacs or part of Rs. 10 Lacs of aggregate face value of lottery tickets printed by the organising State for a   draw
Rs. 11,000/- on every Rs. 10 Lacs or part of Rs. 10 Lacs of aggregate face value of lottery tickets printed by the organising State for a   draw

- Effective Rate of Service Tax applicable from 01.06.2015 in different situations as per point of provision of service and payment of services rendered will be as under :

Service Provided
Date of Invoice
Date of Receipt of Payment
Point of Taxation rate
Rate of Service Tax
Before 31.05.15
After 01.06.2015
After 01.06.2015
4(a)(i)
14%
Before 31.05.15
Before 31.05.15
After
01.06.2015
4(a)(ii)
12.36%
Before 31.05.15
After 01.06.2015
Before 31.05.15
4(a)(iii)
12.36%
After 01.06.2015
Before 31.05.15
After 01.06.2015
4(b)(i)
14%
After 01.06.2015
Before 31.05.15
Before
31.05.15
4(b)(ii)
12.36%
After 01.06.2015
After
01.06.2015
Before 31.05.15
4(b)(iii)
14%

- Swachh Bharat Cess @ 2% on value of taxable services and any Service provided by Government/ Local authority to Business entity to be notified at a later date.


To read more on latest Service Tax amendments, visit the following links:

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