explain for service tax ? current year rate?
- Sha مشع Riq شمسLv 51 decade agoFavorite Answer
Service tax is levied under Entry No. 97 of List I of Seventh Schedule to Constitution of India. The entry reads as follows – ‘Any other matter not included in List II, List III and any tax not mentioned in list II or list III’. (These are called ‘Residual Powers’.)
As per section 65(95) of Finance Act, 1994, ‘service tax’ means tax leviable under the provisions of this Chapter (i.e. Chapter V of Finance Act, 1994). Section 66 (charging section) provides that there shall be levied a tax (service tax) @ 12% of the value of taxable service referred to in various clauses of section 65(105). It will be collected in a manner as may be prescribed.
Taxable Service - As per section 66 of Finance Act, 1994, service tax is payable on ‘taxable service’. Various clauses of section 65(105) of Finance Act, 1994 define each type of ‘taxable service’. The definition is different for each class of services, e.g. as per section 65(105)(a), any service provided by stock broker to any person in connection with sale or purchase of securities listed on a recognised stock exchange will be ‘taxable service’.
Service tax is destination-based consumption tax - Service tax is a destination based consumption tax, as per CBE&C Circular No. 56/5/2003 dated 25-4-2003.
Service implies existence of two parties - Service tax is attracted when there are two parties. One cannot give service to himself.
Cenvat Credit – Assessee is entitled to avail Cenvat credit of excise duty and service tax paid on his inputs, input services and capital goods. This aspect has been discussed in another chapter.
Rate of Service Tax
This tax was first time introduced with effect from 1-7-1994 on three services. The rate was 5%. It was subsequently increased to 8% w.e.f. 14-5-2003. It was 10% plus education cess of 2% w.e.f. 10-9-2004 (total 10.2%) during 10-9-2004 to 17-4-2006. Service tax rate was 12% plus education cess of 2% (total 12.24%) during 18-4-2006 till 10-5-2007.
Presently (w.e.f. 11-5-2007), service tax is payable @ 12% of value of taxable services referred in section 65(105) of Finance Act, 1994. In addition, education cess of 2% and SAH education cess of 1% is payable. Thus, total service tax is 12.36%.
Service tax, education cess and SAH education cess to be shown separately in invoice - You have to show service tax, education cess and SAH education cess separately in invoice. You cannot just charge 12.36% as ‘service tax’.
for Services Under Service Tax read here
- 1 decade ago
to know the basics of service tax.
it is computed on most of the services and the rate is 12% with an additional cess of 2%+1%(higher edu cess).
if a company does any services then it can claim recovery on service tax paid against the service tax received and payable to dept.
- 5 years ago
Service tax is a tax levied by the government on service providers on certain service transactions, but is actually borne by the customers. Definition: Service tax is a tax levied by the government on service providers on certain service transactions, but is actually borne by the customers
- DianeLv 44 years ago
A flat tax rate is the Only fair solution for everyone who pays taxes. Make it 10% for everyone, no exceptions. That would solve the problem, common sense.
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- Anonymous1 decade ago
hey dude.................there are various service offered i mean ..courier company ....dry cleaners, banquet hall.....and many more ..........for which the company has to pay tax to central excise .......thats service tax .the rate is 12.36% uniform ....except for the Hotel industry ....they are given some concession for the food served in banquets .....40% abatement....hope this piece of information helps you