Service tax NOTIFICATION NO 8/2009-ST – Reduces Effective Rate of Service Tax from 12% to 10%
NOTIFICATION NO 8/2009-ST
Dated : February 24, 2009
In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts all the taxable services specified in sub-section 105 of section 65 of the Finance Act from so much of service tax leviable there on under section 66 of the Finance Act, as is in excess of the rate of ten per cent of the value of taxable services.
F. No. 354/210/2008-TRU(part)
(Unmesh Sharad Wagh)
Under Secretary to the Government of India
FAQ on reduction of service tax rate
Notification No 8/2009 – ST dated 24.02.2009 has been issued to exempt the service tax that is in excess of 10%. On the other hand this is reduction of service tax rate from the existing rate of 12% to 10%.
- What is the effective date for the new rate?
Ans. The new rate is effective from 24.02.2009 on all services.
- Whether all the receipts that is to be received after 24.02.2009 is taxable at 10%?
Ans. No, the receipts pertaining to service provided after 24.02.2009 is liable for service tax at 10% and not for the receipts pertaining to service provided prior to that rate.
- In case the service is provided on 10.02.2009 and the bill is also raised on the same day charging service tax at the rate of 12%, and amount is to be realized in March. At what rate service tax has to be paid to the department?
Ans. It is very important to note that in case of service tax, the point of levy is on the service provided and point of collection is on realization. Therefore the service tax has to be paid at the rate prevailing at the time of provision of service on the date of realization. Therefore the service tax has to be paid at 12%.
- In case consideration was received in advance and the service tax was paid on the same at 12% for the service to be provide in March 2009, whether service tax can be refunded?
Ans. Any service provided or to be provided is covered under the taxable service. Therefore when the consideration is received in advance for provision of certain service, it is deemed taxable service that is provided, therefore the same is not eligible for refund.
- In case the bill is to be raised on 25.02.2009 for the service provided on 10.02.2009, then the service tax has to be charged at what rate?
Ans. The date of billing is not the criteria for deciding the rate of service tax, but the rate prevailing on the date of provision of service ( completion of service) is rate to be adopted. In this case since the service was provided on 10/02/2009, when the rate of service tax was at 12%, therefore 12% has to be charged although billed and to be realized after 24.02.2009. However services provided from 10th till 25th Feb would be at 10%.
- X, a security agency has to Rs. 3000 for its client for proving the taxable service for the month of February 2009.How the service tax has to be charged?
Ans. In such case the consideration has to be bifurcated from 01.02.2009 to 24.02.2009 and has to charge service tax at 12% (Rs. 2379) and for the balance at 10%
- In case an ongoing turnkey or a composite contract. How the rate reduction is to be given effect?
Ans. In case of turnkey or a composite contract the works executed till 23.02.2007 has to be charged at 12% and the work done there after can be charged at 10%. Usually the time gap between the completion of work and raising of RA Bills (Running Bill) will be more than 30days, therefore the bill raised after 24.02.2009 can also have 12%. No changes if opted for composition.
- In the construction industry, usually the retention amount shall be with hold by the principle and shall be released only after the completion of the project. Now if the retention pertaining to RA Bills raised prior is 24.02.2009 is paid in March 2009, at what rate service tax has to be paid?
Ans. Since the service tax has to be paid on the rate applicable as on the date of provision of service for the retention amount paid in March 2009 service tax has to be paid at 12% itself.
- Whether there is any reduction in composition rate of service tax of 4% for the contractors and also the special rate of 0.6 and 1.2 in case of Air travel agent?
Ans. No, there is no any reduction in these special rates of service tax. However rates that arise out of the abatement under 1/2006-ST dated 01.03.2006 will change accordingly.
- Whether the rate reduction is applicable in case of Import of Service also?
Ans. Yes, this if for the reason that section 66A deems the service provided in case of import of service as taxable service in the hands of recipient and all the provision of the Chapter V is applicable for the same. Since the reduction is by way of exemption to section 66, reduction is applicable to import of service also.
| Case | Rate prevailing at the time of provision of service | Rate prevailing at the time of Billing/Invoicing | Rate prevailing at the time Realization of the consideration | Applicable rate of service tax |
| I | 12% | 12% | 10% | 12% |
| II | 12% | 10% | 10% | 12% |
| III | 10% | 10% | 10% | 10% |
| IV | 10% | 12% | 10% | 12% |
| V | 10% | 10% | 12% | 12% |
(9 votes, average: 4.33 out of 5)
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if anybody has a notification whereas mention the applicable date for redused service rate then pls send us
Thank & Regards
Pankaj Gaur
The rate is effective from 24th February’09.
I would like to know whether the same is applicable on all old contracts also whose Invoices are pending,i.e., whether we have to raise invoice @12.36% or 10.3%.
Kindly advice.
For all the services provided before 24th February, 2009 there will be service tax chargeable @ 12.36% even though invoices are raised thereafter.
For work in progress, ideally one should make prorata calculation and charge the service tax accordingly.
I would like to know whether the same is applicable on all old contracts also whose Invoices are pending,i.e., whether we have to raise invoice @12.36% or 10.3%.
Kindly advice
i would like to know the affective date of new Service tax rete ( when it will be affected )
The rate is effective from 24th February’09.
I WANT THE DETAILS TATES OF SERVICE TA
I want to know the Rate of Chart for Service Tax After deduction
SORRY, ITS , DETAILS RATES
It is 10%.
[polldaddy 1430671 http://answers.polldaddy.com/poll/1430671/ polldaddy]
The service tax has been reduced to 10 %. Kindly clarify the service tax for erection, Commissioning & Installation which was at 3.96% ie (12% on 33%). Now can i take it as 3.30% (10% on 33%) kindly advice
what is the new service tax rate for travelling company after 24th feb2009
How to caculate the service tax of a Cab Service compay
tell me the new service tax rates and extra rates like education cess and and when i have to submit the retuen and how and where
what is the rate of service tax on work contract ? How to calculate?
How to calculate the Service Tax in work contract
What is new Service Tax rate for Goods Transport
STILL CONFUSING WHETHER TRAVEL AGENT HAS TO PAY SERVICE TAX @ 12.36% ON SPECIAL RATE OF 5% OR 10.3% AFTER NOTIFICATION DTD 24.02.2009
what are the surcharges levied on prevailing service tax rate of 10%?
Sir/Madam, Please let me know the applicable Service Tax, right now. I understand, it has been reduced from 12.36 %. Right now, is it the Service Tax 10.30 or 10.36%. CS Reddy, Principal Scientist, Ministry of Agriculture, GOI.
Dear Sir,
It is 10.3% including surcharge
hello sir,
i want to know that for air travel agents the service tax is how much where it is
international:
1.236% or 1.03%
domestic :
we dont know
kindly send us the information on domestic and international bookings.
thank you
we have a branches of all over india banglore,kolkata,delhi,mumbai,indore,rajkot,ahmedabad,cochi, jaipur etc what is the service tax percentage, i got invoice in that indore branch dint mention any service tax,
may i know the exact percentage of each branch.
Dear Sir,
In our opinion, audit fees bill should be charged Service Tax @10.30% since audit service is provided after February, 2009 (though the period of audit is 2008-09)
Regards,
Eris
SIR/MADAM,
THANK YOU VERY MUCH FOR REPLY. I JUST WANTED KNOW THE FORMULA OF CALCULATION SERVICE TAX IF PAYMENT RECEIVED IN THREE PART.
REGARDS, K. SACHINDRA
Can someone tell me the rate chart for service tax since 1994
Under composit schem what is the % of service tax after 24.02.2009. earlier it was 4.12%.
pl advice : i am working in a manufacturing limited co. We get the raw material from mines thru road transportation (on contract). the contractor gives the bill at the end of every month which would be more than rs 1 lac. he clearly mention in the bill the no of trips. Is the same attracts service tax or not.
I want to know the service tax rate of domestic and international air tickets after 24.02.09
pls reply to me as soon as possible
what is the current rate of service tax after budget 2009-10 release on 6/07/2009
Manan after the amendment no rate of service tax has been amend, service tax rate is 10.3% w.e.f. february 24, 2009
now we are paying the service tax rate is 10.3%
What the recent changes in fiancne bill when budjet of 09-10 released, Is there any changes at the time of bill passing
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How can clame the input tax as Service Tax Rule
Which is the due date of half yearly return and what is the penality of deley in submitting return
Dear Sir.,
i want to know that the service tax percentage for International booking, 1.236% or 1.03%
Pls do the needful ASAP
Dear Sir,
This is with reference to your query for applicability of service tax rate on “International Booking”. Vide Service Tax Notification no. 8/2009 there was reduction in rate from 12% to 10%. The said reduction is applicable on where 12% was chargeable, service tax rate for international booking as well as domestic booking are special rates being chargeable on basic fare.
Hence, the rate reduction won’t be applicable to international booking or domestic booking and therefore, you would be required to charge @1.236% on International booking and 0.618% on domestic booking.
Regards,
Eris
What is the rate of service tax for receiving security guards payment? What is the rate of tds on such payment?
from, which date service tax 10.3% applicable for the service sector
Dear Sir,
We have started our Tour operator business with proprietary concern in March 2009. Kindly let us know what is the service tax % . We Book the domestic packages which include booking of hotels, transport , air booking, train ticket booking.
Which is the effective date, notification No., Tax rate of various service taxes till now
how many services tax charge on 1 st oct 2009
what will be present service tax to collect by a gym in this finacial year
Please let me know the applicable Service Tax on Composit Works Contract in the state of orissa.
Which is the effective date, notification No., Tax rate of various service taxes till now
10.3, 12.36
Hi,
What is the current service tax rate for providing IT Training Services to Corporate clients? I am new to all these and many numbers are confusing me(10% versus 10.x%).
Thanks for your help!
RB
1. X, a security agency has to Rs. 3000 for its client for proving the taxable service for the month of February 2009.How the service tax has to be charged?
Ans. In such case the consideration has to be bifurcated from 01.02.2009 to 24.02.2009 and has to charge service tax at 12% (Rs. 2379) and for the balance at 10%
tell me plz 2379 @12@ how did calculate???
how many tds Charged on Transport
Dear sir, service tax rate will changed, or still in 10.3%,
pls let us know ,
thanks
Is there any applicable service tax on rental income from commercial buildings? If so what is the tax applicable?
I wnat to know that If my professional fees is above 10 lacs of ruppes in f y 2008-09 and accordingly i have paid service tax on my prof. fees, but in f y 2009-10 my professional fees comres around rs 925000. I want to now even though my income is below service tax slab should i require to pay service for my 09-10 is income? Is there any notification about this
IN WHICH MONTH SERVICE TAX RATE CHANGE AND HOW TO COLCULATE?
I want to know current service tax rate including all
I am studying in WLC college & in end of our fourth semester we come to know that we have to pay service tax that is 10.3 %. Initially we were not paying any tax, we only paid our fees, but i also heard that this service tax should be payable by oraganisation, then why should we pay ?
can u tell me we should pay or not ? & if we should pay then why ?
Thanks & regards
Pupun sharma