Service Tax Rate will not be change from April 2015 till its Notified

Finan­cial year is going to end soon & Ser­vice tax rate is increased to 14% (Sub­sum­ing EC & SHEC). Now its a com­mon ques­tion among us that whether the increased Ser­vice Tax is applic­a­ble from 1st April 2015.

The answer is NO. The Ser­vice Tax rate will not be change from April, 2015, till its get noti­fied by Cen­tral Gov­ern­ment after Finance Bill 2015 receives the assent of President.

Ser­vice Tax Rate:

3.1 The rate of Ser­vice Tax is being increased from 12% plus Edu­ca­tion Cess­es to 14%. The ‘Edu­ca­tion Cess’ and ‘Sec­ondary and High­er Edu­ca­tion Cess’ shall be sub­sumed in the revised rate of Ser­vice Tax. Thus, the effec­tive increase in Ser­vice Tax rate will be from the exist­ing rate of 12.36% (inclu­sive of cess­es) to 14%, sub­sum­ing the cesses.

3.2 In this con­text, an amend­ment is being made in sec­tion 66B of the Finance Act, 1994. Fur­ther, it has been pro­vid­ed vide claus­es 179 and 187 respec­tive­ly of the Finance Bill, 2015 that sec­tions 95 of the Finance Act, 2004 and 140 of the Finance Act, 2007, levy­ing Edu­ca­tion Cess and Sec­ondary and High­er Edu­ca­tion Cess on tax­able ser­vices shall cease to have effect from a date to be noti­fied by the Government.

3.3 The new Ser­vice Tax rate shall come into effect from a date to be noti­fied by the Cen­tral Gov­ern­ment after the enact­ment of the Finance Bill, 2015.

3.4 Till the time the revised rate comes into effect, the ‘Edu­ca­tion Cess’ and ‘Sec­ondary and High­er Edu­ca­tion Cess’ will con­tin­ue to be levied in Ser­vice Tax.

(Clause 106 of the Bill refers)