Important Service Tax Amendments by Union Budget 2015

By | March 14, 2015
1. CHANGE IN RATE OF SERVICE TAX
The service tax rate is being increased from 12.36% to 14%. The ‘Education Cess’ and ‘Secondary and Higher Education Cess’ shall be subsumed in the new service tax rate. The revised rate shall come into effect from a date to be notified.

2. CHANGE IN RATE OF ABATEMENT [w.e.f. 01 -04-2015]
PARTICULARS PRE-BUDGET POST BUDGET
GTA Services Abatement 75% Abatement 70%
Service recipient have to pay service tax on 30% of transporting bill instead of 25%.

3. CHANGE IN REVERSE CHARGE MECHANISM [w.e.f. 01 -04-2015]
Manpower supply and security services when provided by an individual, HUF, or partnership firm to a body corporate.
Service Provider Liability         25%        –
Service Recipient Liability 75%      100%
Service Provider of Manpower supply and security services don’t have to pay any service tax and may be they don’t need any registration too.



4. CENVAT CREDIT RULES, 2004:
i) Rule 4(7) is being amended to allow credit of service tax paid under partial reverse charge by the service receiver without linking it to the payment to the service provider. This change will come into effect from 1.4.2015.
ii) Time limit for availing Cenvat credit against Invoice has been amended from 6 month to 1 Now assessee can avail Cenvat credit within 1 year from date of Invoice.

5. AMENDMENTS OF NEGATIVE LIST:
i) Earlier Service provided by way of access to amusement facility providing fun or recreation by means of rides, gaming devices or bowling alleys in amusement parks, amusement arcades, water parks, theme parks or such other places was covered in the Negative list. Budget 2015-16 has proposed to omit the clause (j) of Section 66D. Hence, the same will be taxable from the date to be notified by the Central Government.
ii) Earlier services provided by the Government or a local authority, excluding certain services specified under clause(a) of section 66D, are in the Negative List. Budget 2015- 16 has proposed provisions to tax all services provided by the Government or local authority to a business entity.

7. WITHDRAWAL OF EXEMPTION
Exemption to construction, erection, commissioning or installation of original works pertaining to an Airport or Port is being withdrawn.
(Author can be reached at ca.ameetagrawal@gmail.com)

Leave a Reply

Your email address will not be published. Required fields are marked *