Members of the Council
Sub: Enhancement of Service Tax rate from 12% to 14%
As members are aware, the following announcement was made in the Union Budget 2015-16
To facilitate a smooth transition to levy of tax on services by both the Centre and the States, the present rate of service tax plus education cesses to be increased from 12.36% to a consolidated rate of 14%. 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. 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.
As the Finance Bill 2015 has now been passed, the Central Board of Excise and Customs has issued a Service Tax Notification No. 14/2015 dated 19th May 2015 (copy enclosed), enhancing the Service Tax from 12% to 14% with effect from June 1, 2015.
Members may be aware that Section 66 B of the Finance Act 1994 mentions about rate of Service Tax. Section 108 of the Finance Bill 2015 has made an amendment to the said Section 66 B of the Finance Act 1994 to the effect that the rate of Service Tax is being raised from 12% to 14%. The said Service Tax Notification No. 14/2015 dated 19th May 2015 mentions that the amendments made vide Section 108 of the Finance Act 2015 will come into effect from June 1, 2015. Thus, the enhanced Service Tax rate of 14% will come into effect from June 1 2015
Members may note the above
R. Ramesh Kumar
COUNCIL FOR LEATHER EXPORTS