Service Tax rate increased from 15.11.2015

Please find below notification for increase in Service Tax rate with introduction of Swatch Bharat cess of 0.5%. Effective new rate will be 14% + 0.5% = 14.50% wef 15.11.2015.

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)

New Delhi, the 6^th November, 2015

Notification No. 22/2015-Service Tax

G.S.R. —(E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) read with sub-section (5) of section 119 of the Finance Act, 2015 (20 of 2015), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all taxable services from payment of such amount of the Swachh Bharat Cess leviable under sub-section (2) of section 119 of the said Act, which is in excess of Swachh Bharat Cess calculated at the rate of 0.5 percent. of the value of taxable services:

Provided that Swachh Bharat Cess shall not be leviable on services which are exempt from service tax by a notification issued under sub-section (1) of section 93 of the Finance Act, 1994 or otherwise not leviable to service tax under section 66B of the Finance Act, 1994.

This notification shall come into force from the 15^th day of November, 2015.

Utilization of CESS against payment of excise duty: Whether industry has been fooled?

Utilization of CESS against payment of excise duty: Whether industry has been fooled?

 In a significant move towards Goods & Service Tax (GST), the Central Government had issued 

Notification No. 14/2015-CE and 15/2015-CE dated 01-03-2015 (as part of the Union Budget – 

2015 Notifications) whereby it exempted all goods falling under First Schedule of the Central 

Excise Tariff Act, 1985 (CETA) from the levy of Education Cess and Secondary and Higher 

Education Cess (SHE Cess) (collectively referred as CESS) respectively with immediate effect. 

The underlying objective of the exemption notification was indicated by the Hon’ble Finance 

Minister Shri Arun Jaitley during his Budget Speech in the Lok Sabha on 28-02-2015 as quoted 

“As part of the movement towards GST, I propose to subsume the Education Cess and the 

Secondary and Higher Education Cess in Central Excise duty. In effect, the general rate of 

Central Excise Duty of 12.36% including the cesses is being rounded off to 12.5%.”

The immediate, shocking but may be unintended fall out of the above notification was that the 

balance of cenvat credit lying in Ed. Cess and SHE Cess as on 28-02-2015 became un-utilizable 

and deadstock for all the manufacturers!! This is due to the restriction contained in Rule 3(7)(b) 

of the Cenvat Credit Rules, 2004 (hereinafter referred as CCR) which provide that cenvat 

credit availed on Ed. Cess/SHE Cess can be utilized only towards payment of Ed. Cess/SHE Cess 

respectively. 

The issue was raised by various members

Rates of Income Tax for various taxpayers

Individual, Hindu undivided family, association of persons, body of individuals, artificial juridical person
  

(i) The rates of income-tax in the case of every individual (other than those mentioned in (ii) and (iii) below) or Hindu undivided family or every association of persons or body of individuals, whether incorporated or not, or every artificial
juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Act (not being a case to which any other Paragraph of Part III applies) are as under:—

                                    Upto Rs.2,50,000                                  Nil.

                                    Rs. 2,50,001 to Rs. 5,00,000             10 per cent.
                                    Rs. 5,00,001 to Rs. 10,00,000           20 per cent.
                                    Above Rs. 10,00,000                        30 per cent.

(ii) In the case of every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years at any time during the previous year,—
                                    Upto Rs.3,00,000                                  Nil.
                                    Rs. 3,00,001 to Rs. 5,00,000             10 per cent.
                                    Rs. 5,00,001 to Rs.10,00,000            20 per cent.
                                    Above Rs. 10,00,000                        30 per cent.
 
(iii) in the case of every individual, being a resident in India, who is of the age of eighty years or more at anytime during the previous year,—

                                     Upto Rs. 5,00,000                                  Nil.
                                     Rs. 5,00,001 to Rs. 10,00,000            20 per cent.
                                     Above Rs. 10,00,000                         30 per cent.
 
The amount of income-tax computed in accordance with the preceding  provisions of this Paragraph shall be increased by a surcharge at the rate of ten percent. of such income-tax in case of a person having a total income exceeding one crore rupees. 

However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

B. Co-operative Societies
In the case of co-operative societies, the rates of income-tax have been specified in Paragraph B of Part III of the First Schedule to the Bill. These rates will continue to be the same as those specified for financial year 2013-14.
The amount of income-tax shall be increased by a surcharge at the rate of ten percent. of such income-tax in case of a cooperative society having a total income exceeding one crore rupees .
However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

C. Firms
In the case of firms, the rate of income-tax has been specified in Paragraph C of Part III of the First Schedule to the Bill. This rate will continue to be the same as that specified for financial year 2013-2014.
The amount of income-tax shall be increased by a surcharge at the rate of ten percent. of such income-tax in case of a firm having a total income exceeding one crore rupees .
However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.
 
D. Local authorities
The rate of income-tax in the case of every local authority is specified in Paragraph D of Part III of the First Schedule to the Bill. This rate will continue to be the same as that specified for the financial year 2013-2014.
The amount of income-tax shall be increased by a surcharge at the rate of ten percent. of such income-tax in case of a local authority having a total income exceeding one crore rupees .
However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

E. Companies
The rates of income-tax in the case of companies are specified in Paragraph E of Part III of the First Schedule to the Bill.
These rates are the same as those specified for the financial year 2013-2014.
The existing surcharge of five per cent in case of a domestic company shall continue to be levied if the total income of the domestic company exceeds one crore rupees but does not exceed ten crore rupees. The surcharge at the rate of ten percent shall continue to be levied if the total income of the domestic company exceeds ten crore rupees. In case of companies other than domestic companies, the existing surcharge of two per cent. shall continue to be levied if the total income exceeds one crore rupees but does not exceed ten crore rupees. The surcharge at the rate of five percent shall continue to be levied if the total income of the company other than domestic company exceeds ten crore rupees.
However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees but not exceeding ten crore rupees, shall not exceed the total amount payable as income-tax on a total income of one crore rupees, by more than the amount of income that exceeds one crore  rupees. The total amount payable as income-tax and surcharge on total income exceeding ten crore rupees, shall not exceed the total amount payable as  income-tax and surcharge on a total income of ten crore rupees, by more than the amount of income that exceeds ten crore rupees.

In other cases (including sections 115-O, 115QA, 115R or 115TA) the surcharge shall continue to be levied at the rate of ten percent.

For financial year 2014-2015, additional surcharge called the “Education Cess on income-tax” and “Secondary and Higher Education Cess on income-tax” shall continue to be levied at the rate of two per cent. and one per cent. respectively, on the amount of tax computed, inclusive of surcharge (wherever applicable), in all cases. No marginal relief shall be available in respect of such Cess.