This is to inform you that the Service Tax rate has been changed on June 1st 2016, as per Finance Act, which was approved by the Govt of India on May 14, 2016. As part of this legislation, the effective rate of Service Tax has been increased from 14.5% to 15% (Current Service Tax Rate in India) on account of levy of Krishi Kalyan Cess (KKC) of 0.5%. Due to this change, Service Tax @ 15% (including Swachh Bharat Cess and Krishi Kalyan Cess) will be applicable.
KCC to be levied on all taxable services is aimed at financing and promoting initiatives to improve agriculture. The Central Board of Excise and Customs (CBEC) has notified that the Cess will come into force from June 1. The service tax is levied on all services, expect a small negative list.
“The levy of KKC will add extra burden on the pockets of service recipient. The levy has already been raised from 12.36 % to 15 % within a span of one year only and will contribute to inflationary pressures,”
Important Link for service tax: