CHANGES IN RATE OF SERVICE TAX
1.1 Change in main rate of service tax: Notification No. 08/2009 dated 24.02.2009 was issued to reduce rate of service tax from 12% to 10%. The said notification has been rescinded by Notification no. 02/2012 dated 17.03.2012 w. e. f. 01.04.2012. Thus, now, w. e. f. 01.04.2012, effective rate of service tax (including education cess and S. H. Cess) has been increased to 12.36%.Read How you can avoid 12.36 % Tax means cases where 10.30 % tax can be charged
1.2 Rate of service tax under composition scheme: Notification No. 10/2012 dated 17.03.2012 increases the rate of service tax w. e. f. 01.04.2012 from 4% to 4.8% under Works Contract (Composition
Scheme for Payment of Service Tax) Rules, 2007.
1.3 Optional rate of Service Tax on life insurance premium: Notification 6(7A)(ii) of Service Tax Rules, 1994 provides the special rate of service tax for in respect of life insurance premium consisting of investment portion also. Said special rate is applicable only where the entire premium paid by the policy holder is not only towards risk cover in life insurance. The change in rate provided in said rule has been amended by Notification No. 3/2012. The said change is summarised as under:
1.4 Optional Rate of Service Tax sale, purchase including Money Changing of Foreign currency: Rule 6(7B) of Service Tax Rules, 1994 has been amended by Notification no.3/2012 to change the rate of service tax in respect of foreign exchange:
1.5 Rate of Service Tax for Distributor or Selling Agent of Lotteries under Rule 6(7C) of Service Tax Rules, 1994 Rule 6(7B) of Service Tax Rules, 1994 has been amended by Notification no.3/2012 to change the rate of service tax in respect of foreign exchange:
1.6 Introduction of abatement for transportation of passenger by Air Services: 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 Special concession of service tax for economy class is withdrawn.
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