Service Tax Rates for F.Y.2012-13

Service Tax rate once again gone to highest point of 12 per cent after nearly a break of around two years. On 24.02.2009 service tax rate was reduced from 12% to 10% through Notification No. 08/2009 and now it was increased from 10% to 12%  through Notification no. 02/2012 on 17.03.2012.This rate will applicable from 01.04.2012.

Areas of Service Tax rates amended:

1. Change Applicable to All services: From the 1st April, 2012 service tax rate will be

12.36 %( including education cess and S. H. Cess) instead of present 10.3% for all services.

2. Purchase and Sale of foreign Currency including money changing (Banking or other financial services)

The Sub-rule (7B) of Rule 6 of Service Tax Rules, 1994 has been amended vide Notification No. 3/2012-ST dated 17th March, 2012, and according to the amended provision, the person liable to pay service tax in relation to purchase or sale of foreign currency, including money changing, provided by a foreign exchange broker, including an authorized dealer in foreign exchange broker, including an authorized dealer in foreign exchange or an authorized money changer, shall have the option to pay an amount at the rate towards discharge of his service tax liability instead of paying service tax at the rate specified in section 66 of the Finance Act 1994, which is 12.36% of the gross value, namely:

Gross Amount of
Currency Exchanged
 
Old Rate  New Rate 
Up to Rs. 1,00,000 (i) 0.10% of gross amount exchanged;or(ii) Rs. 25

Whichever is higher

(i) 0.12% of gross amount exchanged;or(ii) Rs. 30

Whichever is higher.

 

For an amount exceeding
Rs. 1,00,000 and up to
Rs. 10,00,000
Rs. 100Plus0.05% of gross amount exchanged. Rs. 120plus0.06% of gross amount exchanged.
For an amount exceeding
Rs. 10,00,000
(i) Rs. 550plus
0.01% of gross amount exchanged;
or
(ii)Rs.5,000
Whichever is lower.
(i) Rs. 660plus
0.01% of gross amount exchanged;
or
(ii)Rs.6,000
Whichever is lower.

 

 

 

 

 

 

 

 

 

 

3. Service of promotion, marketing, organizing or in any manner assisting in organizing lottery;

The Sub-rule (7C) of Rule 6 of Service Tax Rules, 1994 has been amended vide Notification No. 3/2012-ST dated 17th March, 2012, and according to the amended provision, the distributor or selling agent, liable to pay service tax for the taxable service of promotion, marketing, organizing or in any other manner assisting in organizing lottery, shall have pay an amount at the rate specified in column (2) of the Table given below, subject to the conditions specified in the corresponding entry in column (3) of the said Table, instead of paying service tax at 12.36% of the taxable value:

  Guaranteed
Prize Payout
Amount of Service Tax payable on every Rs. 10
Lakh (or part of Rs. 10 Lakh) of aggregate face value of lottery tickets printed by the organizing State for a draw.
Prior to 01.04.2012 (Old) W. e. f. 01.04.2012 (New) 
More than 80% Rs. 6,000/- Rs. 7,000/-
Less than 80% Rs. 9,000/-. Rs. 11,000/-.

 

4. Works contract service

Rule 3 (1) of the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 has been amended the Notification No. 10/2012-ST dated 17th March, 2012 and according to amended provision the person who opt to discharge his service tax liability on the works contract service provided or to be provided, instead of paying service tax at the rate 12.36% of the gross value,    will have to pay an amount equivalent 4.8 per cent (4 per cent before 1st April, 2012) of the gross amount charged for the works contract.

5.Rate of reversal of cenvat credit under rule 6(3)(i).

Rule 6(3)(i) of the CENVAT Credit Rules, 2004 has been amended vide the Notification No. Notification No. 18/2012 – Central Excise (N.T.) dated 17th March, 2012 and according to the amended provision, the manufacturer of goods or the provider of output service, opting not to maintain separate accounts, shall pay an amount equal to Six percent of (5 per cent before 1st April, 2012) value of the exempted goods and exempted services.

6. Life insurance service:

Where the entire premium is not towards risk cover, the first year’s premium shall be taxed at the rate of three per cent. while subsequent premium shall attract tax at the rate of 1.5 per cent.  Availment of full cenvat credit is being allowed.

On the gross premium charged from a policy holder reduced by the amount allocated for investment, or savings on behalf of policy holder, if such amount is intimated to the policy holder at the time of providing of service

 

Gross Amount of PremiumCharged  Old Rate  New Rate 
1st year 1.5% 3%
Subsequent Years 1.5% 1.5%

 

7. Air Passenger Transport Service:

Abatement has been provided under Notification No.6/2012 dated 17.03.2012 for the taxable category “Transportation of Passenger by Air Services”. Special concession of service tax for economy class is withdrawn.

Class of
Journey
Nature of
Journey
Service Tax specified Under Notification No. 26/2010 from 01.04.2011 to 31.03.2012 Abatement
available w. e. f.
01.04.2012
  Economy class Domestic
Journey
(A) 10% of the Gross
Value of the Ticket (B) Rs. 150/- Whichever is lower.
Abatement of 60% is
allowed on Gross Value of Ticket subject to condition that no CENVAT Credit shall be claimed in respect of capital goods and inputs by service provider (i.e. airlines).
However, CENVAT Credit in respect of input services shall be available.
International
Journey
(A)10% of the Gross
Value of the Ticket (B) Rs. 750/- Whichever is
Business
Class
Domestic as
well as
International
Journey

10% of the Gross
Value of the Ticket.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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  • bhavesh shah

    please send Service tax rate for various services with deduction

  • Could you guide me regarding how service tax is computed on Foreign Exchange conversion ???

    • As stipulated by the Government of India, any conversion from one currency to another, both incoming and outgoing will be charged a service tax on the gross amount of currency exchanged as per the following slabs.
      - 0.12 % of the gross amount of currency exchanged for an amount up to INR. 1,00,000 subject to the minimum amount of INR. 30
      - INR 120 and 0.06 % of the gross amount of currency exchanged for the amount of rupees exceeding INR 100,000 and up to INR 10,00,000
      - INR 660 and 0.012 % of the gross amount of currency exchanged for the amount of rupees exceeding INR 10,00,000 subject to maximum amount of INR 6,000

      In addition, an education cess of 3% will be levied on the service tax levied. This includes 2% education CESS and 1% higher Education CESS.

  • satish kumar

    what is the rate of service tax of Sale of Tender Forms? pls give me information

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