No, the proposed service tax rate will not become effective from 01-04-2015.
Many service providers and receivers are having the misconception that any change in rate of service tax takes effect from 1st April of the year. It shall come into effect from a date to be appointed by the Central Government, by way of notification in the Official Gazette, after the enactment of the Finance Bill, 2015.
The proposed amendments vide Clause 106 of the Finance Bill, 2015 is quoted as below:-
“106. In section 66B of the 1994 Act, with effect from such date as the Central Government may, by notification in the Official Gazette, appoint, for the words “twelve per cent.”, the words “fourteen per cent.”shall be substituted.”
Further, the Tax Research Unit of CBEC has issued instructions vide F. No. 334/5/2015 TRU dated 28-02-2015 and clarified at para 3.3 as quoted below:- “3.3 The new Service Tax rate shall come into effect from a date to be notified by the Central Government after the enactment of the Finance Bill, 2015.”
It means, that the new service tax rate cannot come into force before the Finance Bill, 2015 get assent from the President of India, after which the government will notify the effective date. –
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