Check current service tax rate chart for the financial year 2016-17 here. The taxpayer can find new service tax rate chart for 2016-17 with amended rate of 15% here. The new service tax rate is applicable from June 1, 2016.
Service Tax Rate
Union Budget 2016 has proposed to impose a Cess, called the Krishi Kalyan Cess (KKC), at the rate of 0.5% on all taxable services. Service tax rate of 15% with KKC is applicable from 1st June 2016. Service tax rate chart for FY 2016-17 to describe rate on various services with abatement and reverse charge mechanism. Let us check the Service Tax Rate components in the following section.
|S.no||Description||Service Tax Rate|
|1.||Service Tax Basic||14%|
|2.||Swachh Bharat Cess with effect from 15th November 2015||0.5 %|
|3.||Krishi Kalyan Cess with effect from 1st June 2016.||0.5%|
|Total Service Tax Rate in FY 2016-17||15%|
Must Read: Service Tax Overview
Service Tax Rate Chart FY 2016-17
Service Tax Chart with current Service Tax Rate of 15% with effect from 1 June 2016. Service tax rate increased from 14.5% to 15% by levying Krishi Kalyan Cess-KKC at the rate 0.5%.
|Service tax payable
|Effective rate to be charged on bill*( 4) =15%-abatement rate||Conditions to be followed to claim abatement or exemption|
|1.||Tour operator service|
|2.||Accommodation booking||Rs. 10,000/-||90%||Rs. 1,000/-||Rs. 150/-||1.50%||No CENVAT credit for input, input services or capital goods. The invoice includes the amount of accommodation.|
|3.||Tour (other than above) *||Rs. 10,000/-||70%||Rs. 3,000/-||Rs. 450/-||4.50%||No CENVAT credit for input, input services or capital goods.|
|4.||Transport of goods by rail by the person other than Indian railway||Rs. 10,000/-||60%||Rs. 4,000/-||Rs. 600/-||6%||No CENVAT credit for input, capital goods. CENVAT credit on input services is available.|
|5.||Financial lease service||Rs. 10,000/-||90%||Rs. 1,000/-||Rs.150/-||1.5%||Nil|
|6.||Transport of goods by rail service by Indian railway||Rs. 10,000/-||70%||Rs.3,000/-||Rs.450/-||4.5%||Cenvat credit of input services are available|
|7.||Transport of passenger by rail||Rs. 10,000/-||70%||Rs.3,000/-||Rs.450/-||4.5%||Cenvat credit of input services are available|
|8.||Transport of passenger by air in economy class||Rs. 10,000/-||60%||Rs. 4,000/-||Rs. 600/-||6%||NIL|
|9.||Hotel service (club, pundal, shamiana)with the supply of food||Rs. 10,000/-||30%||Rs. 7,000/-||Rs. 1,050/-||10.50%||Cenvat credit of goods ( goods 1 to 22 classified under CENVAT Credit Act, 1985 has not been taken).|
|10.||Good transport agency services( Other than household goods)||Rs. 10,000/-||70%||Rs.3,000/-||Rs.450/-||4.5%||Cenvat credit for input, input services and capital goods has not been taken|
|11.||Chit fund services||Rs. 10,000/-||30%||Rs. 7,000/-||Rs. 1,050/-||10.50%||Cenvat credit for input, input service and capital goods are not available.|
|12.||Renting of the motor vehicle designed to carry passengers||Rs. 10,000/-||60%||Rs. 4,000/-||Rs. 600/-||6%||Same as above|
|13.||Transport of goods in vessel||Rs. 10,000/-||70%||Rs.3,000/-||Rs.3,000/-||4.5%||cenvat credit for input, capital goods are not available. Cenvat credit on input service is available.|
|14.||For all cases availing composition scheme||Rs. 10,000/-||70%||Rs.3,000/-||Rs.3,000/-||4.5%||Cenvat credit for input used for the provision of service has not been taken, and value of land is included in the amount charged.|
|15.||Transport of used household goods by GTA||Rs. 10,000/-||60%||Rs. 4,000/-||Rs. 600/-||6%||Cenvat credit on input, input services and capital goods are not available.|
Note: Service Tax Rate 14.5% is applicable for the period from 1st April 2016 to 31st May 2016.
How to Use Effective Rate
Please note that effective rate is for easy calculation. The taxpayer can use effective rate direct on amount (column 1)- bill charged. So service tax payable is column 1 * column 4.
Abatement in Service Tax
Abatement is the partial exemption from service tax. There are different rates of abatement for various services.
How abatement reduces the amount of Service Tax Payable?
Taking one example, suppose Mr. Lee Min Ho provided taxable services worth Rs. 4,00,000/- to Mr. Song Joon Ki. Service tax rate is 14% but abatement available is 70%.
So we will calculate service tax payable by the following method.
Value of service provided = Rs. 4,00,000/-.
Value after availing abatement = Rs. 4,00,000/- (minus) 70% = Rs. 1,20,000/-.
Service tax payable = Rs. 1,20,000*15% = Rs. 18,000/-.
Conditions: No CENVAT credit has been availed.
Service Tax Exemption
Under notification no. 26/2012, many services are fully exempt under an exemption from mega notification and negative list of services. We will soon present the list of the 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. The service provider can pay service tax on the full amount. The rate will be 12.36% of the value that time.
Small service provider exemption
You can avail small service provider exemption if your yearly turnover of taxable service is less than Rs. 10,00,000/-.
Reverse Charge Mechanism Chart
Under reverse charge mechanism, service tax is paid full or partially by service receiver. To know more about reverse charge mechanism, read the following post.
Service Tax under Reverse Charge Mechanism
|1.||Insurance agent services||15%||0%|
|5.||Any services by government||15%||0%|
|6.||Supply of manpower||15%||0%|
|7.||Renting of the motor vehicle (If a service provider is availed abatement).||6%||0%|
|8.||Renting of the motor vehicle (if a service provider is not availed abatement).||7.5%||7.5%|
|9.||Import of service.||15%||0%|
Rate of Service Tax on Work Contract
|1.||When there is no reverse charge and no composition scheme applicable.||15%||0%|
|2.||When there is reverse charge applicable and no composition scheme applicable.||7.5%||7.5%|
|3.||When there is no reverse charge applicable and composition scheme applicable.|
|4.||Original work (construction, erection, commissioning, etc.).||6%||0%|
|5.||Maintenance, restoration, repair of goods.||10.50%||0%|
|6.||Other work contracts including repair, maintenance, plastering of immovable property.||10.50%||0%|
|7.||When there are reverse charge and composition scheme applicable.|
|9.||Maintenance work, restoration of goods.||5.25%||5.25%|
|10.||Another work contract.||5.25%||5.25%|
The proceeds of Krishi Kalyan Cess KKC would be exclusively used for financing initiatives relating to improvement of agriculture and welfare of farmers. The Cess will come into force with effect from 1st June 2016.