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What is a service tax Meaning?
Definition: Service tax is a tax levied by the government on service providers on certain service transactions, but is actually borne by the customers. It is categorized under Indirect Tax and came into existence under the Finance Act, 1994.
How much is the service tax?
Calculation of Service Tax From the 1st of June 2016, service tax is levied at 15% of the value of taxable services under Section 66 of the Service Tax Act. The 15% includes 0.5% Krishi Kalyan Cess and 0.5% Swach Bharat Cess.
What is the use of service tax?
Service tax was paid to the government in exchange for different services received from service providers. Though the tax was paid by service providers, it was recovered from customers who bought or availed of the taxable services.
How is your service tax exempt?
When revenue is Rs 10lakhs or less – If the total Revenue you earn from freelancing work is Rs 10lakhs or less, Service Tax rules do not apply. You will be exempt from collecting and paying service tax on your services. Here Revenue means your total receipts from your clients.
Who is eligible for service tax?
Although Service Tax is required to be paid only when the aggregate value of services provided exceeds Rs. 10 Lakhs in a financial year, the service tax provider is required to apply for Registration for Service Tax within 30 days of his turnover exceeding Rs. 9 Lakhs.
When did service tax go up to 14.5%?
During the Budget 2015, the FM had increased the Service Tax Rate from 12.36% to 14%. This new rate 14% was applicable from 1st June 2015. Moreover from 15th Nov 2015, Swachh Bharat Cess @ 0.5% also got applicable. Therefore the effective rate of Service Tax is currently at 14.5% with effect from 15th Nov 2015.
What’s the new service tax rate in the UK?
With the addition of 0.5%, the service tax will go up from 14% to 14.50%. This means for every 100 paid for a service you will be taxed 14.50. The 0.5% cess is much lower than the rate mentioned in the Finance Bill this year.
What kind of tax is the service tax?
Service tax is a tax levied by the central government and you have to pay this for certain services. It is the end user who pays this tax
What’s the current rate of service tax in India?
Therefore the effective rate of Service Tax is currently at 14.5% with effect from 15th Nov 2015. It seems, the rate is slowly being increased to bring service tax closer to the expected goods and services tax (GST) rate of 17-18%. The Krishi Kalyan Cess @ 0.5 percent will be levied on all taxable services.