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Current service tax rate chart for year 2014-15

admin

October 6,
2014

Presenting current service tax rate chart for year 2014-15.

Service tax is indirect tax levied on service provided. Service tax is charged at various rates due to availability of exemptions
and abatements on various services. Use this chart to decide service tax rate applicable to you.

Service tax rate:

Current service tax rate is 12%. On it, 2% education cess and 1% higher education cess are added. So the effective service
tax rate is 12.36% (12% + 3%). This is standard rate and it can be reduced as per available abatement and exemptions.

Service tax rate chart:

Service
provided

Amount(column Abatement
1)
rate or
Exemption
rate(column
2)

Value after
abatement(Column
3=Column 1column 2)

Service
tax
payable
(column
3*12.36%)

Effective
rate*(Column
4) 12.36%abatement
rate

Conditions to
be followed to
claim
abatement or
exemption

Accommodation
booking

10,000

90%

1000

124

1.236%

No cenvat credit
for input, input
services or
capital
goods.Invoice
includes amount
of
accommodation.

A package tour

10,000

75%

2500

304

3.09%

No cenvat credit
for input, input
services or
capital goods.

Other tours

10,000

60%

4000

494

4.944%

As aboveThe bill
includes gross
amount charged
for tour.

Financial lease
service

10,000

90%

1000

124

1.236%

Nil

Transport of
goods by rail
service

10,000

70%

3000

371

3.708%

Nil

Transport of
passenger by
rail

10,000

70%

3000

371

3.708%

Nil

Transport of
passenger by
air

10,000

60%

4000

494

4.944%

Nil

Tour operator
service

Hotel service
(club, pundal,
shamiana)with
supply of food

10,000

30%

7000

865

8.652%

Cenvat credit of
goods ( goods 1
to 22 classified
under cenvat
credit act, 1985
has not been
taken)

Renting of
immovable
property (Hotel,
guest house or
residential
house)

10,000

40%

6000

742

7.416%

Cenvat credit for

input and capital
goods has not
been taken

Good transport
agency services

10,000

75%

2500

309

3.09%

Cenvat credit for

input, input
services and
capital goods
has not been
taken

Chit fund
services

10,000

30%

7000

865

8.652%

Same as above

Renting of
motor vehicle
designed to
carry
passengers

10,000

60%

4000

494

4.944%

Same as above

Transport of
goods in vessel

10,000

60%

4000

494

4.944%

Same as above

Carpet area of
unit is less than
2000 sq ft and
amount charged
is less than 1
crore

10,000

75%

2500

309

3.09%

Cenvat credit for

input used for
provision of
service has not
been taken and
value of land is
included in the
amount charged

In all other
cases

10,000

70%

3000

371

3.708%

Same as above

Consturction
service

How to use effective rate:

Please note that effective rate is for easy calculation. You can use effective rate direct on amount (column 1). So service tax
payable is column 1 * column 4.

Basic terms to understand more about rate of service tax:

Abatement in service tax:

Abatement is partial exemption from service tax. There are different rates of abatement for different services.

How abatement reduces amount of service tax payable?

Taking one example, suppose Mr. Ram provided taxable services worth Rs. 200000 to Mr. Rahim. Service tax rate is 12.36%
but abatement available is 70%.

So we will calculate service tax payable by following method:

Value of service provided = 2,00,000
Value after availing abatement = 2,00,000- 70% = 60000
Service tax payable = 60,000*12.36% = 7416

Exemption:
Under notification no. 26/2012, many services are fully exempt under exemption from mega notification and negative list of
services.
We will soon present list of exemption services. Enter your email address in sign up form so that we can mail you when we
publish the post.
Remember that no service tax is payable when service is fully exempt.

Availment of abatement is optional:

It is not compulsory to avail abatement. service provider can pay service tax on full amount. The rate will be 12.36% of value
that time.

Rate under reverse charge:

Under reverse charge mechanism, service tax is paid full or partially by service receiver. To know more about reverse charge
mechanism, read following post
Service tax under reverse charge mechanism
Service

Service receiver

Service provider

Insurance agent services

12.36%

0%

Sponsor ship services

12.36%

0%

Legal service

12.36%

0%

Directors service

12.36%

0%

Support services by government

12.36%

0%

Supply of manpower

9.27%

3.09%

Renting of motor vehicle (if service provider is not availed abatement)

6.18%

6.18%

Import of service

12.36%

0%

Renting of motor vehicle (If service provider is availed abatement)

Rate of service tax on work contract:

Service

Service receiver

Service provider

When there is no reverse charge and no composition scheme applicable

0%

12.36%

When there is reverse charge applicable and no composition scheme applicable

6.18%

6.18%

Original work (construction, erection, commissioning etc.)

0%

4.944%

Maintenance, restoration, repair of goods

0%

8.652%

When there is no reverse charge applicable and composition scheme applicable

Other work contract including repair, maintenance, plastering of immovable property 0%

8.652%

When there is reverse charge and composition scheme applicable

Original work

2.472%

2.472%

Maintenance work, restoration of goods

4.326%

4.326%

Other work contract

4.326%

4.326%

In taxation field, the important thing is to consider notifications and updates while following any rule. I always try to consider
changes in tax rules before writing article.still When you apply this rate, please consider necessary amendments and
notifications also.
Use this link to stay updated about service tax circulars and notification:
Service tax government site