INCREASE IN SERVICE TAX OF INDIAN PORTS FROM 12.36 % TO 14 %

March 18, 2015 3:56 pm Published by

Please find below the excerpts from the Ministry of Finance Circular D.O.F. No. 334/5/2015-TRU New Delhi, dated February 28th, 2015 regarding increase in Service Tax rates.

 

This will have effect on all the Port Calls Disbursements to Indian ports, the effective date has not yet been confirmed and we shall keep you updated.

 

 

Service Tax Rate:

  • The rate of Service Tax is being increased from 12% plus Education Cesses to 14%. The ‘Education Cess’ and ‘Secondary and Higher Education Cess’ shall be subsumed in the revised rate of Service Tax. Thus, the effective increase in Service Tax rate will be from the existing rate of 36% (inclusive of cesses) to 14%, subsuming the cesses.
  • In this context, an amendment is being made in section 66B of the Finance Act, 1994. Further, it has been provided vide clauses 179 and 187 respectively of the Finance Bill, 2015 that sections 95 of the Finance Act, 2004 and 140 of the Finance Act, 2007, levying Education Cess and Secondary and Higher Education Cess on taxable services shall cease to have effect from a date to be notified by the Government.

3-3 The new Service Tax rate shall come into effect from a date to be notified by the Central Government after the enactment of the Finance Bill, 2015.

  • Till the time the revised rate comes into effect, the ‘Education Cess’ and ‘Secondary and Higher Education Cess’ will continue to be levied in Service Tax.

(Clause 106 of the Bill refers)

 

  1. Enabling provision for levy of “Swachh Bharat Cess”:
    • An enabling provision is being incorporated in the Finance Bill, 2014 (Chapter Vl/clause 117) to empower the Central Government to impose a Swachh Bharat Cess on all or any of the taxable services at a rate of 2% on the value of such taxable services. This cess shall be levied from such date as may be notified by the Central Government after the enactment of the Finance Bill, 2015. The details of coverage of this Cess would be notified in due course.

(Chapter Vi/Clause 117 of the Bill refers)

 

The amendments made in the Finance Act, 1994, including the change in service tax rate that will come into effect from a date to be notified by the Government in this regard after the enactment of the Finance Bill, 2015 ;

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