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2015

Service Tax Updates – Apr-2015

Changes applicable in service tax as per Finance Bill 2015 :-

  1. The following changes will be applicable from the date of enactment of finance bill :-
    • Rate of service tax is being increased from 12.36% to 14%, The Education Cess and Secondary and Higher Education Cess shall be subsumed in the new service tax rate.
    • All service provided by Government to business entity liable for service tax ( earlier only support services were liable for service tax ).
    • Now service tax will be applicable for fees charges by amusement park, arcades, water park and theme parks.
    • Explanation to Sec. 67 ( Provision related to Valuation ) has been amended for removing the ambiguity to provide that consideration for a taxable service shall include reimbursement and out of pocket expenditure of service provider, except pure agent.
    • Amended the Provision related to Penalty :-
      Cases not involving extended period of limitation Cases involving extended period of limitation
      Maximum Penalty is 10% of Service Tax involved Maximum Penalty is 100% of Service Tax involved
      No Penalty is Service Tax and interest is paid within 30 days of issuance of show cause notice. Penalty is 15% of service tax if tax, interest and reduced penalty paid within 30 days of issuance of show cause notice.
      25% of Maximum penalty if Tax, interest and reduced penalty paid within 30 days of order. Penalty is 25% of Service Tax if Tax, interest and reduced penalty paid within 30 days of order
      Benefit of reduced penalty to be extended also to the tax demands modified in appeal if tax, interest and penalty paid within 30 days of order. Benefit of reduced penalty to be extended also to the tax demands modified in appeal if tax, interest and penalty paid within 30 days of order.

  2. Amendment related to Reverse Charge Mechanism ( Effective From 01/04/2015) :-
    ( Notification No 07/2015 )
    Service Earlier Rates New Rates
    Manpower Supply Service/
    Security Service
    Service Provider :- 25%
    Service Receiver :- 75%
    Service Provider :- N I L
    Service Receiver :- 100%
    In Case of Aggregator N. A. Service Provider :- N I L
    Service Receiver :- 100%

  3. Amendment related to Reverse Charge Mechanism ( Effective From 01/04/2015) :-
    ( Notification No 08/2015 )
    Service Earlier Provision New Provision
    Transport of Goods & Passenger by Rail No Restriction while availing abatement While availing abatement no CENVAT credit on inputs, input services and capital goods available.
    Transport of Goods by Road
    ( GTA Service )
    Taxable Portion :- 25%
    Abatement Portion :- 75%
    Taxable Portion :- 30%
    Abatement Portion :- 70%
    Transport of Passenger by Air Taxable Portion 40% in all class Taxable Portion bifurcated under two portion :-
    Economy lass :- 40%
    Other Class :- 60%
    Transport of Goods by Vessel Taxable Portion :- 40%
    Abatement Portion :- 60%
    Taxable Portion :- 30%
    Abatement Portion :- 70%

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