We are pleased to
release a Tax Alert which gives an update on various Notifications under
Service tax and Central Excise issued by the Central Government, prescribing a
specified date for certain provisions of the Finance Act 2015 (No.20 of 2015)
to take effect from.
Key amendments which will be effective from 1 June 2015 are as follows:
• Increase in Service tax rate from 12.36% to 14% (Education cess and Secondary & Higher Education cess to be subsumed in the rate).
• Service tax will be applicable on amusement facility, admission to entertainment events, jobwork undertaken for production of liquor.
• Consequent upon the upward revision in the rate of Service tax, the alternative rate of Service tax in respect of services like Air Travel, Life Insurance, Distribution and Sale of lottery tickets is also increased.
• Provider of output service, opting not to maintain separate accounts will now be required to pay an amount equal to 7% of the value of exempted services as against 6% earlier.
Taxability of services provided by Government / local authority to business entity and applicability of Swachh Bharat Cess at 2% or at a lower rate on value of taxable services will be notified at a later date.
Clarification by the TRU on the Point of Taxation Rules owing to the change in Service tax rate adequately addresses the transition issues of the services including continuous supply of services.
Key amendments which will be effective from 1 June 2015 are as follows:
• Increase in Service tax rate from 12.36% to 14% (Education cess and Secondary & Higher Education cess to be subsumed in the rate).
• Service tax will be applicable on amusement facility, admission to entertainment events, jobwork undertaken for production of liquor.
• Consequent upon the upward revision in the rate of Service tax, the alternative rate of Service tax in respect of services like Air Travel, Life Insurance, Distribution and Sale of lottery tickets is also increased.
• Provider of output service, opting not to maintain separate accounts will now be required to pay an amount equal to 7% of the value of exempted services as against 6% earlier.
Taxability of services provided by Government / local authority to business entity and applicability of Swachh Bharat Cess at 2% or at a lower rate on value of taxable services will be notified at a later date.
Clarification by the TRU on the Point of Taxation Rules owing to the change in Service tax rate adequately addresses the transition issues of the services including continuous supply of services.
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