Post announcement of change in Service Tax (ST) rate during budget 2015 there were lot of confusion wrt the date of applicability of the said change as there were no clarity. Now all confusions are over as the Finance Ministry has notified June 1, 2015 as the date from which the increased service tax rate of 14 per cent will be applicable (Notification No. 14/2015-ST dated 19th May, 2015).
Section 66B of the Finance Act, 1994, prescribes the service tax rate. It has been amended by Section 108 of the Finance Act, 2015. The rate of Service Tax is being increased from 12% to 14% (including cesses). The increase in Service Tax rate will come into effect from 1st June, 2015.
Further abolition of EC & SHEC and effective rate of service tax to be enhanced from 12.36% to 14% (date of levy of the swachh bharat cess yet to be notified).
The new service tax applicable on the various services w.e.f. June 1, 2015 is as follows:
Restaurant – 5.6%
Hotel Lodging – 8.4%
Vehicle Rent – 5.6%
Hall with Catering – 9.8%
Catering – 8.4%
Building Repairing – 9.8%
Civil Contract with Material – 5.6%
Building Residential – 3.5%
Building Commercial – 4.2%
GTA Transports – 4.2%
All other Services – 14%