Service Tax 12.36% (Financial Year Apr2014-Mar2015) & now it is 14% (FY Apr2015-Mar2016)?
As of now , all services are chargeable to service tax except those mentioned in negative list. **Few List of Services under Negative List as on 01.04.2015 on which no Service tax is payable:-** 1. Services provided to the United Nations or a specified international organization; 2. Health care services by a clinical establishment, an authorised medical practitioner or para-medics 3. Services provided by way of transportation of a patient in an ambulance 4. Services provided by cord blood banks by way of preservation of stem cells or any other service in relation to such preservation 5. Services provided by operators of the Common Bio-medical Waste Treatment Facility to a clinical establishment by way of treatment or disposal of bio-medical waste or the processes incidental thereto 6. Services by a veterinary clinic in relation to health care of animals or birds; 7. Services by an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) by way of charitable activities; 8. Services by a person by way of- (a) renting of precincts of a religious place meant for general public; or (b) conduct of any religious ceremony; 9. Services by a specified organisation in respect of a religious pilgrimage facilitated by the Ministry of External Affairs of the Government of India, under bilateral arrangement 10. Services provided by- (a) an arbitral tribunal to -(i) any person other than a business entity; or(ii) a business entity with a turnover up to rupees ten lakh in the preceding financial year; (b) an individual as an advocate or a partnership firm of advocates by way of legal services to,-(i) an advocate or partnership firm of advocates providing legal services ;(ii) any person other than a business entity; or(iii) a business entity with a turnover up to rupees ten lakh in the preceding financial year; or (c) a person represented on an arbitral tribunal to an arbitral tribunal; 11. Services by way of training or coaching in recreational activities relating to arts, culture or sports; 12. Services provided,- (a) by an educational institution to its students, faculty and staff , (b) to an educational institution, by way of,-(i) transportation of students, faculty and staff;(ii) catering, including any mid-day meals scheme sponsored by the Government;(iii) security or cleaning or house-keeping services performed in such educational institution;(iv) services relating to admission to, or conduct of examination by, such institution; **Note : Rate of service tax is 14% with effect from 1st june 2015**
A service for the purposes of service tax is defined as - any activity carried on by a person for another for consideration. As you can see its an incredibly wide definition and would cover within its scope pretty much any conceivable service. Now ever since we switched to a negative list based system of service tax determination -in 2012- india moved to a system wherein every service that fell within the scope of the above definition would by default be a taxable service. The only exceptions to this taxability would be a. The negative list -a list of services,despite being a "service" as defined for the purposes of the charge of service tax, would be expressly excluded from the scope of the levy e.g. medical services; and b. Exempt services - these are a list of services that would otherwise be chargeable to tax except they were earmarked by way of notification to be liable at 0% service tax. With the exception of these two categories of services there are a couple of other services that are excluded from the definition of the term service notably -immovable property conveyance,employee-employer relationships,servixes provided by courts and elected members of government.
Service tax is levied by 2 approaches: i) Selective Approach: where services liable to service tax are mentioned, and ii) Comprehensive Approach: which contemplates taxation of all services and a Negative List is issued in case some services are to be exempted from levy. Earlier service tax in India was levied under Selective Approach, but with effect from 1/7/2012, India has shifted from Selective Approach to Comprehensive approach. Hence, today, all services are liable to service tax except those mentioned in the: i) Negative List, and ii)Mega Exemption Notification No. 25/2012-Service Tax, dated 20/06/2012 issued by the Central Government. Your description to the question states 2 rates of service tax, but its not clear as to what you intend to ask. However, I have answered to your main question in connection with what services are liable to Service Tax. Any other query, please feel free to contact :) Regards,