Finally the much awaited Notification is out! The service tax rate is increased to 14% with effect from 1st June 2015. This is the way it has to be done, sufficient time is given to the taxpayers to adopt new rates.
Education cess and Secondary Education Cess: The above rate of 14% subsumes the cess and hence one needn’t charge cess separately.
Swachh Bharat Cess @ 2% on value of taxable services and any Service provided by Government/ Local authority to Business entity to be notified at a later date. So, as of now, w.e.f., service tax to be charged at 14% only.
What happens to Eduction Cess standing as Cenvat Credit in the books as on 1st June 2015? As you are aware, Cess has to be adjusted against output cess only. Now that, cess is not going to be there from June, 2015, how will one adjust the credit? This point is not clarified yet by the department.
Service Tax shall be levied on the 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 and theme parks. This levy would come into effect from 1st June, 2015.
Service tax shall be levied on service by way of admission to entertainment event of concerts, pageants, musical performances concerts, award functions and sporting events other than the recognized sporting event, if the amount charged is more than Rs. 500 per person for the right to admission to such an event. This levy would come into effect from 1st June, 2015.
The department has also clarified the position of applicability of old/new rate with respect to advance received. The details are available in Page No 6 of circular/instruction No D.O.F.No.334/5/2015-TRU dt 19-5-2015. The document is attached for your information.