Effective New Service tax Rate From 1st Jun 2016

                                                

                                             Service tax 2016 1. Jun 
                          

Sl. No.	Description of taxable service	Taxable per cent (%)	Effective rate of ST: 01.06.2015 to 14.11.2015  (%)	Effective rate of ST: 15.11.2015 (after Introduction of SB Cess @ 0.5%) up to 31.05.2016  (%)		Effective rate of ST: 1.06.2016 (after Introduction of KKC @ 0.5%)(%)
1	Financial leasing including hire purchase	10	1.4 (14%*10%)	1.45 (14.5%*10%)		1.5 (15%*10%)
2	Transport of goods by rail (other than service specified at Sl. No. 2A below)	30		4.2 (14%*30%)		4.5 (15%*30%)
2A	Transport of goods in containers by rail by any person other than Indian Railways	40	NA	Entry inserted vide NN 8/2016-ST dated 01.03.2016w.e.f 01.04.2016 Applicable rate of ST w.e.f 01.04.2016 to 31.05.2016: 5.8 (14.5%*40%)		6 (15%*40%)
3	Transport of passengers, with or without accompanied belongings by rail	30	4.2 (14%*30%)	4.35 (14.5%*30%)		4.5 (15%*30%)
4	Bundled services by way of supply of food or any other article of human consumption or any drink, in a premises together with renting of such premises	70	9.8 (14%*70%)	10.15 (14.5%*70%)		10.5 (15%*70%)
5	Transport of passengers by air, with or without accompanied belongings in –
	(i) economy class	40	5.6 (14%*40%)	5.8 (14.5%*40%)		6 (15%*40%)
	(ii) other than economy class	60	8.4 (14%*60%)	8.7 (14.5%*60%)		9 (15%*60%)
6	Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes.	60	8.4 (14%*60%)	8.7 (14.5%*60%)		9 (15%*60%)
7	Services of goods transport agency in relation to transportation of goods other than used household goods.	30	4.2 (14%*30%)	4.35 (14.5%*30%)		4.5 (15%*30%)
7A	Services of goods transport agency in relation to transportation of used household goods.	40	NA	Entry inserted vide NN 8/2016-ST dated 01.03.2016 w.e.f 01.04.2016. Applicable rate of ST w.e.f 01.04.2016 to 31.05.2016: 5.8 ( 14.5%*40%)		6 (15%*40%)
8	Services provided by a foreman of chit fund in relation to chit	70	Entry inserted vide NN 8/2016-ST dated 01.03.2016 w.e.f. 01.04.2016, earlier omitted vide NN 08/2015-ST dated 01.03.2015. Applicable rate of ST w.e.f 01.04.2016 to 31.05.2016: 10.15 (14.5%*70%)			10.5 (15%*70%)
9	Renting of motorcab	40	5.6 (14%*40%)		5.8 (14.5%*40%)	6 (15%*40%)
9A	Transport of passengers, with or without accompanied belongings, by- a) a contract carriage other than motorcab b) a radio taxi	40	5.6 (14%*40%)		5.8 (14.5%*40%)	6 (15%*40%)
	Service tax is proposed to be levied on service of transportation of passengers by air conditioned stage carriage @ 40% after abatement of 60% without input tax credit, with effect from 01.06.2016 [Deletion of Section 66D(o)(i) of the Finance Act and insertion of Entry No. 23(bb) of the Mega Exemption Notification w.e.f 01.06.2016]
10	Transport of goods in a vessel	30	4.2 (14%*30%)		4.35 (14.5%*30%)	4.5 (15%*30%)
11	Services by a tour operator in relation to-
	(i) a tour, only for the purpose of arranging or booking accommodation for any person	10	1.4 (14%*10%)		1.45 (14.5%*10%)	1.5 (15%*10%)
	(ii) tours other than (i) above	40/30	5.6 (14%*40%)		15.11.2015 to 31.03.2016: 5.8 (14.5%*40%) 01.04.2016 to 31.05.2016: 4.35 (14.5%*30%)	4.5 (15%*30%)
	NN 8/2016-ST dated 01.03.2016 w.e.f. 01.04.2016: Abatement rates in respect of services by a tour operator in relation to a tour other than (i) has been rationalised from 75% (package tour) and 60% (others) to 70%. Consequently, the category of “package tour” stands deleted w.e.f. 01.04.2016
12	Construction of a complex, building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly except where entire consideration is received after issuance of completion certificate by the competent authority:	30	4.2 (14%*30%)		4.35 (14.5%*30%)	4.5 (15%*30%)
	Effective from 01.04.2016, a uniform abatement at the rate of 70% is prescribed for services of construction of complex, building, civil structure, or a part thereof, subject to fulfillment of the existing conditions. For the scenario till 31.03.2016:
	(a) for a residential unit satisfying both the following conditions, namely:- (i) the carpet area of the unit is less than 2000 square feet; and (ii) the amount charged for the unit is less than Rupees 1crore;	25	3.5 (14%*25%)		15.11.2015 to 31.03.2016: 3.625 (14.5%*25%)
	for other than the (a) above.	30	4.2 (14%*30%)		15.11.2015 to 31.03.2016: 4.35 (14.5%*30%)

Effective rates under the Reverse Charge Notification No. 30/2012-ST dated June 20, 2012 as amended

We are also summarizing herewith the effective rates of Service tax to be payable by Service Receiver (“SR”) under full Reverse Charge and by Service Provider (“SP”) & SR under the Partial/ Joint Reverse Charge, w.e.f June 1, 2016 after imposition of KKC, for easy digest:

Sl. No	Description of a service	Rate of ST payable by the SP & SR: 01.06.2015 to 14.11.2015 (%)	Effective rate of ST payable by the SP & SR:15.11.2015 (after Introduction of SB Cess @ 0.5%) to 31.05.2016 (%)	Effective rate of ST payable by the SP & SR: 01.06.2016 (after Introduction of KKC @ 0.5%) (%)
1	Services provided or agreed to be provided by an insurance agent to any person carrying on insurance business	SP: Nil SR: 14 (100%)	SP: Nil SR: 14.5	SP: Nil SR: 15
1A	Services provided or agreed to be provided by a recovery agent to a banking company or a financial institution or a non-banking financial company	SP: Nil SR: 14 (100%)	SP: Nil SR: 14.5	SP: Nil SR: 15
1B	Services provided or agreed to be provided by a mutual fund agent or distributor, to a mutual fund or asset management company	SP: Nil SR: 14 (100%)	Omitted vide NN 18/2016-ST dated 01.03.2016 (w.e.f 01.04.2016 From 15.11.2015 to 31.03.2016: SP: Nil SR: 14.5 (100%)	NA
1C	Services provided or agreed to be provided by a selling or marketing agent of lottery tickets to a lottery distributor or selling agent of the State Government	SP: Nil SR: 14 (100%)	SP: Nil SR: 14.5	SP: Nil SR: 15
2	Services of goods transport agency in relation to transportation of goods other than used household goods.	After availment of 70% abatement: SP: Nil SR: 30% of 14% = 4.2 (i.e. 100%)	After availment of 70% abatement: SP: Nil SR: 4.35 (i.e. 14.5%*30%)	After availment of 70% abatement: SP: Nil SR: 4.5 (i.e. 15%*30%)
3	Services provided or agreed to be provided by way of sponsorship to any body corporate or partnership firm located in the taxable territory	SP: Nil SR: 14 (100%)	SP: Nil SR: 14.5	SP: Nil SR: 15
4	Services provided or agreed to be provided by an arbitral tribunal	SP: Nil SR: 14 (100%)	SP: Nil SR: 14.5	SP: Nil SR: 15
5	Entry amended vide NN 18/2016-ST dated 01.03.2016, w.e.f 01.04.2016 to bring legal services provided by a senior advocate under forward charge
	Prior to 01.04.2016: Services provided or agreed to be provided by individual advocate or a firm of advocates by way of legal services	SP: Nil SR: 14 (100%)	SP: Nil SR: 14.5	SP: Nil SR: 15
	Post 01.04.2016: Services provided or agreed to be provided by a firm of advocates or an individual advocate other than a senior advocate by way of legal services	SP: Nil SR: 14 (100%)	SP: Nil SR: 14.5	SP: Nil SR: 15
5A	Services provided or agreed to be provided by a director of a company or a body corporate to the said company or the body corporate	SP: Nil SR: 14 (100%)	SP: Nil SR: 14.5	SP: Nil SR: 15
6	Any Services (w.e.f. 01.04.2016)/ Support services (till 31.03.2016) provided or agreed to be provided by Government or local authority excluding,- (1) renting of immovable property, and (2) services specified in sub-clauses (i), (ii) and (iii) of clause (a) of Section 66D of the Finance Act	SP: Nil SR: 14 (100%)	SP: Nil SR: 14.5	SP: Nil SR: 15
7	(a) Services provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on abated value to any person who is not engaged in the similar line of business	After availment of 60% abatement: SP: NilSR: 14%*40% = 5.6 (100%)	After availment of 60% abatement: SP: Nil SR: 5.8 (14.5%*40%)	After availment of 60% abatement: SP: Nil SR: 6 (15%*40%)
	(b) Services provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on non-abated value to any person who is not engaged in the similar line of business	Without availment of 60% abatement: SP: 7 (14%*50%) SR: 7 (14%*50%)	Without availment of 60% abatement: SP:7.25(14.5%*50%) SR:7.25(14.5%*50%)	Without availment of 60% abatement: SP: 7.5(15%*50%) SR: 7.5(15%*50%)
	SP: Any individual, Hindu Undivided Family or partnership firm, whether registered or not, including association of persons, located in the taxable territory SR: Business entity registered as body corporate, located in the taxable territory
8	Services provided or agreed to be provided by way of supply of manpower for any purpose or security services	SP: Nil SR: 14 (100%)	SP: Nil SR: 14.5	SP: Nil SR: 15
	SP: Any individual, Hindu Undivided Family or partnership firm, whether registered or not, including association of persons, located in the taxable territory SR: Business entity registered as body corporate, located in the taxable territory
9	Services provided or agreed to be provided in service portion in execution of works contract:
	In case of Original work	SP: 2.8 {50% of (14%*40%)} SR: 2.8 {50% of (14%*40%)}	SP: 2.9 {50% of (14.5%*40%)} SR: 2.9 {50% of (14.5%*40%)}	SP: 3 {50% of (15%*40%)} SR: 3 {50% of (15%*40%)}
	In all other cases	SP: 4.9 {50% of (14%*70%)} SR: 4.9 {50% of (14%*70%)}	SP: 5.075 {50% of (14.5%*70%)} SR: 5.075 {50% of (14.5%*70%)}	SP: 5.25 {50% of (15%*70%)} SR: 5.25 {50% of (15%*70%)}
	SP: Any individual, Hindu Undivided Family or partnership firm, whether registered or not, including association of persons, located in the taxable territory SR: Business entity registered as body corporate, located in the taxable territory
10	Any taxable services provided or agreed to be provided by any person who is located in a non-taxable territory and received by any person located in the taxable territory	SP: Nil SR: 14 (100%)	SP: Nil SR: 14.5	SP: Nil SR: 15
11	Any service provided or agreed to be provided by a person involving an aggregator in any manner	SP: Nil SR: 14 (100%)	SP: Nil SR: 14.5	SP: Nil SR: 15

Effective rates under the Service Tax (Determination of Value) Rules, 2006 [“the Service Tax Valuation Rules”]

We are also summarizing herewith the effective rates of Service tax to be payable under Rule 2A and Rule 2C of the Service Tax Valuation Rules, for easy digest:

Relevant Rule(s) of the Service Tax Valuation Rules	Taxable per cent (%)	Effective rate of ST: 01.06.2015 to 14.11.2015 (%)	Effective rate of ST: 15.11.2015 (after Introduction of SB Cess @ 0.5%) to 31.05.2016 (%)	Effective rate of ST: 1.06.2016 (after Introduction of KKC @ 0.5%) (%)
Rule 2A – Determination of value of services involved in the execution of a Works contract
In case of Works contracts entered into for execution of original works	40	5.6 (14%*40%)	5.8 (14.5%*40%)	6 (15%*40%)
In all other cases	70	9.8 (14%*70%)	10.15 (14.5%*70%)	10.5 (15%*70%)
Rule 2C: Determination of value of service portion involved in supply of food or any other article of human consumption or any drink in a restaurant or as outdoor catering
Service portion in an activity wherein goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity, at a Restaurant	40	5.6 (14%*40%)	5.8 (14.5%*40%)	6 (15%*40%)
Service portion in outdoor catering wherein goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of such outdoor catering	60	8.4 (14%*60%)	8.7 (14.5%*60%)	9 (15%*60%)

                                      Regards
                           Sachin Kumar Mishra 

LUXURY TAX 2016- 2017

                                              

                                              DELHI GOVERNMENT 

Delhi government has proposed something relaxing for travelers who are frequent to Delhi and have to pay heavy hotel room bills. Government proposed a limit on the Luxury Tax on hotel rooms from Rs. 750 to Rs. 1,500 where this tax will not be applied. Thus, visitors who book hotel room below 1500 will never have to pay Luxury Tax, as proposed in the current budget 2016-17 presented by Aam Admi Party’s government. The budget also proposes self-declaration of Luxury Tax by establishments and is expected to be an initiative while considering the promotion of tourism in the state. In the current budget, special consideration is provided for funds to promote branding campaign for promoting Delhi as tourist destination.

The budget also proposed skywalk connection to the heritage structure, Qutab Minar by connecting it to nearest metro. Moreover, there is a steep cut in the Value Added Tax VAT from 12.5% to 5% and the tax relief on various sectors is still in consideration. Further, to reduce the burden of taxes, government has announced various initiatives to avoid multiplicity of taxation that will promote trade and business in the state.

https://incometaxindiaefiling.gov.in/eFiling/Portal/StaticPDF/Notification_4_of_2015.pdf

SERVICE TAX Effective Service Tax Rates applicable from 01/06/2015 -

Sr No.	Taxable service	Taxable Value	New Rate w.e.f. 01/06/2015	Condition
1	Financial leasing including hire purchase	10%	1.4%	NIL
2	Transport of goods by rail	30%	4.2%	NIL
3	Transport of passengers with or without accompanied belonging by rail	30%	4.2%	NIL
4	Supply of food or any other article of human consumption or any drink, in a premises (including hotel, convention center, club, pandal, shamiana or any place specially arranged for organizing a function) together with renting of such premises	70%	9.8%	Note(i)
5	Transport of passengers by air, with or without   accompanied belongings	40%	5.6%	Note(ii)
6	Renting of hotels , inns, guest houses, clubs, campsites, or other commercial places meant for residential or lodging purposes	60%	8.4%	Note(ii)
7	Services of goods transport agency	30%	4.2%	Note(iii)
8	Renting of any motor vehicle designed to carry passengers	40%	5.6%	Note(iii)
9	Transport of goods in vessel	30%	4.2%	Note(iii)
10	(i)           Tour service –package tour	25%	3.5%	Note(iii)&(iv)
	(ii)         Tour service –service solely of arranging or booking accommodation for any person in relation to a tour	10%	1.4%	Note(iii), (v)&(vi)
	(iii)       Tour service – simple tour services	40%	5.6%	Note(iii)&(iv)
11	Construction of a complex , building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly
	(i)           for a residential unit having carpet area upto 2000 square feet and the amount charged is less than rupees one crore	25%	3.5%	Note (vii)&(viii)
	(ii)         for other than (i) above	30%	4.2%	Note (vii)&(viii)

Note:

(i) cenvat  credit on any goods classifiable under  chapters  1to22 of Central Excise Tariff  Act,1985 used for providing the taxable service, has not been taken.

(ii) cenvat credit on inputs and capital goods, used for providing the taxable service , has not been taken .

(iii)  cenvat credit on inputs, capital goods and input services , used for providing the taxable service, has not been taken .

(iv)  The bill issued for this purpose indicates that it is inclusive of charges for such a tour.

(v) The invoice bill or challan issued indicates that it is towards the charges for such accommodation.

(vi) This exemption shall not apply in such cases where the invoice, bill or challan issued by the tour operator, in relation to a tour, only includes the service charges for arranging or booking accommodation for any person and does not include the cost of such accommodation.

(vii) Cenvat credits on inputs used for providing the taxable service has not been taken.

(viii) The value of land is included in the amount charged from the service receiver.

Sr no	Taxable service	Taxable Portion of Total Value	Effective Rate
12	Types of works contracts
	(i) Execution of original works	40%	5.6%
	(ii) In cases not covered above including maintenance or repair or reconditioning or restoration or servicing or any goods	70%	9.8%
	(iii)Other works including maintenance, repair , completion and finishing services such as glazing , plastering, floor and wall tilling , installation of electrical fittings of an immovable property	70%	9.8%

 Notes:

(i) “total amount” means the sum total of the gross amount charged for the works contract and the fair market value of all goods and services supplied in or in relation to the execution of the works contract, whether or not supplied under the same contract , after deducting (i)the amount charged for such goods or services , if any and (ii)the value added tax or sales tax ,if any , levied thereon.

(ii) The fair market value of goods and services so supplied may be determined in accordance with the generally accepted accounting principles.

(iii) cenvat credit of duty of excise paid on any inputs , used in or in relation to the said works contract is not allowable.

Sr No	Taxable service	Taxable Portion of Total Value	Effective Rate
13	Supply of food and drinks in restaurant or outdoor catering
	(i)                 Service provided by Restaurants	40%	5.6%
	(ii)               Services provided by outdoor caterer	60%	8.4%

 Notes:

(i) “Total amount” means the sum total of the gross amount charged and fair market value of all goods and services supplied in or in relation to the supply of food or any other article of human consumption or any other drink (whether or not in intoxicating), whether or not supplied under the same contract or any other contract, after deducting (i) the amount charged for such goods or services, if any and (ii) the value added tax or sales tax, if any, levied thereon.

(ii) The fair market value of goods and services so supplied may be determined in accordance with the generally accepted accounting principles.

(iii)    cenvat credit of duties or cess paid on any goods classifiable under chapter 1 to 22 of the central excise tariff act, 1985 is not allowable.

Sr. No.	Taxable service	Revised rates of service tax
14	Booking of air tickets by air travel agent	Domestic booking 0.7% International booking -1.4%
15	Life insurance service	First year -3.5% Subsequent year – 1.75%
16	Money changing service
	(i) Gross amount of currency exchanged for an amount upto Rs. 100,000	0.14% or Minimum Rs. 35/-
	(ii) Gross amount of currency exchanged for an amount of rupees exceeding Rs. 100,000 and up to Rs. 10,00,000	Rs. 140 and 0.07%
	(iii)  Gross amount of currency exchanged for an amount of rupees exceeding Rs. 10,00,000	Rs. 770 and 0.014% or maximum of Rs. 7,000/-
17	Service provided by Lottery distributor and selling agent a)      If the lottery or lottery scheme is one where the guaranteed prize payout is more than 80% b)      If the lottery or lottery scheme is one where the guaranteed prize payout is less than 80%	Rs. 8,200 on every Rs. 10 Lakh or part of Rs. 10 Lakh of aggregate face value of lottery tickets printed by the organizing State for a draw. Rs. 12,800 on every Rs. 10 Lakh or part of Rs. 10 Lakh of aggregate face value of lottery tickets printed by the organizing State for a draw

 Normal Service tax rate with effect from 1st June 2015 is 14%. However applicable rate is different for many services which may be subject to fulfillment of some conditions. This is mainly due to material value or non-service element included in total value of these services. This Chart will provide the effective rates on such services. 

                                                                                              

                                                  sachincpr@blogspot.com

                                      Sachin Kumar Mishra

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