New Service Tax Abatement Rates w.e.f. 1st June 2016

Starting 01st June 2016, Service Tax Rates has been revised to 15% which includes newly introduced Krishi Kalyan Cess at 0.5%, Swach Bharath Cess 0.5.. The Service Tax Provider, Service Recipient in case of Reverse Charge Mechanism, has the option to charge service tax at a following abated rates provided he doesn’t utilize CENVAT credit and other conditions depending on type of service.

Following is table displaying the abatement rate, taxable rate and effective rate to be charged as service tax.

Sl No. TYPE OF SERVICE                                  % ABATEMENT % TAXABLE  EFFECTIVE TAX RATE (%)
1. FINANCIAL LEASE INCLUDING HIRE PURCHASE 90% 10% 1.5
2. TRANSPORT OF GOODS BY RAIL 70% 30% 4.5
3. TRANSPORT OF GOODS IN CONTAINER BY RAIL 60% 40% 6
4. TRANSPORT OF PASSENGERS  BY RAIL 70% 30% 4.5
5. FOOD SERVICES WITH RENTING OF PREMISES 30% 70% 10.5
6. AIR TRAVEL IN ECONOMY CLASS 60% 40% 6
7. AIR TRAVEL IN OTHER THAN ECONOMY CLASS 40% 60% 9
8. RENTING OF HOTELS, INNS, GUEST HOUSES ETC. 40% 60% 9
9. TRANSPORT OF GOODS BY ROAD (GTA) 70% 30% 4.5
10. TRANSPORT OF GOODS BY ROAD (HOUSE HOLD GOODS) 60% 40% 6
11. SERVICE BY A FOREMAN OF CHIT FUND 30% 70% 10.5
12. RENTING OF MOTOR CAB 60% 40% 6
13. CONTACT CARRIAGE/RADIO TAXI 60% 40% 6
14. TRANSPORT OF GOODS IN VESSEL 70% 30% 4.5
15. TOUR OPERATOR (BOOKING ACCOMMODATION ONLY) 90% 10% 1.5
16. TOUR OPERATOR (OTHER THAN 15 ABOVE) 70% 30% 4.5
17. CONSTRUCTION (COMPLEX, BUILDING, CIVIL STRUCTURE) 70% 30% 4.5

 

Last updated 2nd June 2016

Dilip Kumar

+Dilip Kumar (Author and Editor of The Tax Info) is a Chartered Accountant from Hyderabad, Loves Blogging on Tax related matter.

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