The rate of service tax is being increased from 12 percent to 14 percent
There is no separate education or secondary higher education cess (submissing cess of 3%)
- Consequential amendments are as follows:
- Air travel agent – 0.6% / 1.2% increased to 0.7% / 1.4% respectively for domestic and international bookings.
- Life Insurance- 3% / 1.5% increased to 3.5%/1.75% respectively for first year premium and subsequent premium.
The effective date is yet to be notified for the following amendments:
- Levy of Swachh bharat cess on all or any of the taxable services at a rate of 2% or lower on value of such taxable services.
- Levy of service tax on all services provided by the government or local authority to a business entity.
| Point of taxation in case of change in effective rate of service tax | Invoice and payment receipt after change in effective rate | Invoice prior to change but payment receipt after change in effective rate | Payment receipt before change in effective rate but invoice issued later | Invoice and payment receipt both prior to change in rate |
|---|---|---|---|---|
| If service was provided before change of effective rate | POT will be date of receipt of payment or issue of invoice, whichever is earlier | POT will be date of issuance of invoice | POT will be date of receipt of payment | — |
| If service was provided after change of effective rate | — | POT will be date of payment | POT will be date of issue of invoice | POT will be date of receipt of payment or issue of invoice, whichever is earlier |
Rate Leviable is the rate applicable on POT.
POT- Point of taxation
