The Hon’ble President has given assent to the Finance Bill, 2015 on Thursday, May 14, 2015. Accordingly, the Finance Bill, 2015 now becomes Finance Act (No.20), 2015. However, it is to be noted here that increase in the rate of Service tax from 12.36% to flat 14% (Subsuming Education cess and Secondary & Higher Secondary Education cess) as was proposed in the Union Budget, 2015 will become effective only after the date to be notified and not effective from May 14, 2015.
Further pursuing with Mr. Narendra Modi’s Dream of Swachh Bharat, a new Chapter VI has been inserted in the Finance Bill, 2015 that contains a new levy of cess called the ‘Swachh Bharat Cess’ which may be levied on all or any of the taxable services at the rate of 2% of the value of such services. Hence, Service tax rate may increase from present 12.36% to 16% for specified services on which Swachh Bharat Cess is levied from a date notified later.
Therefore, it is to be noted that Higher rate of Service tax from 12.36% to 14% and Swachh Bharat Cess of 2% will become effective only from the date to be notified and not from May 14, 2015. Further, the changes in Negative List of services will also come into effect from the date notified later.
2 thoughts on “Service Tax – 14% will come into effect only from the date of notification”
What is this message released in budget
Service tax at the new rates are applicable only from the date of its notification. Not from 01-04-2015. The buyers of apartments who are registering their properties till the date of notification has to pay service tax at old rates only.
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