SERVICE TAX RATE ON HOTELS, RESTAURANTS & TRAVEL INDUSTRY : FROM 01/02/17 TO GST INACTMENT
There is no change in the base rate of Service Tax i.e. 14%, Swachh Bharat Cess (SBC) i.e. @ 0.5% and Krishi Kalyan Cess (KKC) i.e. @ 0.5%.
(a) Input CENVAT Credit of Swachh Bharat Cess cannot be availed; however
(b) Input CENVAT Credit of Krishi Kalyan Cess will be available for payment of Krishi Kalyan Cess only. (Notification No. 28/2016-CE (NT) dated 26.05.2016);
(c) Swachh Bharat Cess and Krishi Kalyan Cess has to be separately shown on the face of the Tax Invoice / Bill.
Service Tax Rate applicable from 01.02.2017 till GST is Notified
|S.No.||Name of Taxable Service||Date from Which Service Tax is Applicable||From 01-02-2017 till GST is Notified|
|Without Abatement||With Abatement|
|Service Tax||Swachh Bharat Cess||Krishi Kalyan Cess||Total||Service Tax||Swachh Bharat Cess||Krishi Kalyan Cess||Total|
|1.||Renting of Rooms||01-05-2011||14 %||0.5 %||0.5 %||15 %||8.4 %||0.3 %||0.3 %||9 %|
|2.||Serving Food & Beverages in Air Conditioned Restaurant : Pre-Condition of License to serve alcohol has been withdrawn w.e.f. 10-05-2013||01-05-2011||5.6 %||0.2 %||0.2 %||6 %||-||-||-||-|
|3.||Outdoor Catering Service||10-09-2004||8.4 %||0.3 %||0.3 %||9 %||-||-||-||-|
|4.||Renting of Immovable Property||01-06-2007||14 %||0.5 %||0.5 %||15 %||-||-||-||-|
|5.||Mandap Keeper Service :Bundled service by way of supply of food or any other article of human consumption or any drink, in a premises ( including hotel, convention centre, club, pandal,shamiana or any other place, specially arranged for organizing a function) together with renting of such premises||01-07-1997||14 %||0.5 %||0.5 %||15 %||9.8 %||0.35 %||0.35 %||10.5 %|
|6.||Beauty Parlour & Spa Services||16-08-2002||14 %||0.5 %||0.5 %||15 %||-||-||-||-|
|7.||Renting of Motor Vehicles||01-04-2000||14 %||0.5 %||0.5 %||15 %||5.6 %||0.2 %||0.2 %||6 %|
|8.||Tour Operator Service *||01-07-2000||14 %||0.5 %||0.5 %||15 %||8.4 %||0.3 %||0.3 %||9 %|
* The Rate of Service Tax on Tour Operator Service has been changed w.e.f. 22-01-2017 vide Notification No. 04/2017 as below:-
(1) Any booking solely for the purpose of accommodation by a tour operator has been removed from the category of Tour Operator which was previously taxed after 90% abatement – It is suggested that in such cases a tour operator should charge his commission separately from the customer and Service Tax to be charged only on the Commission earned by the tour operator and Service Tax at the Full Rate of 15%.
(2) A tour, other than 1 above : Rate of Service Tax changed to 9% [NEW RATE] from earlier 4.5% [OLD RATE] (Abatement reduced from 70% to 40%).
However, in order to facilitate the the Tour Operators, the Government has permitted the CENVAT Credit on Input Services used for providing the Taxable Services.
Further, it is prescribed that “The bill issued for this purpose indicates that it is inclusive of charges of accommodation and transportation required for such a tour and the amount charged in the bill is the gross amount charged for such a tour including the charges of accommodation and transportation required for such a tour“.
F.A.Q.s ON SERVICE TAX UNDER REVERSE CHARGE MECHANISM
We are noting below the Frequently Asked Questions (FAQs) related to Liability of Service Tax in India under the Reverse Charge Mechanism under Section 66B of the Finance Act, 1994:-
FAQ 1 : Who is Liable to charge Service Tax under Reverse Charge Mechanism?
Reply : Notification No. 30/2012 has provided the category of person who are liable to pay Service Tax under the Reverse Charge Mechanism based on the Nature of Service as noted as below:-
|S. No.||Nature of Service||Person Liable to Pay|
|1.||ü Taxable Service received from person located in Non Taxable Territory.ü GTA by Road||By Recipient being Any Person
By Specified Person for GTA
|2.||ü An Arbitral Tribunal;ü An individual advocate or a Firm of Advocates (other than representational services by Senior Advocate);
ü A Senior advocate providing services by way of representational services before any court, tribunal or authority, directly or indirectly;
ü Services provided or agreed to be provided by Government or Local Authority (1) Renting of immovable property and (2) services specified in sub-clause (i), (ii) and (iii) of clause (a) of section 66 D
|By Recipient being a Business Entity|
|3.||ü Sponsorship Service||By Recipient being a Body Corporate or Partnership Firm|
|4.||ü Renting of Motor Vehicle for carrying of passengers, to any person not engaged in similar line of business;ü Supply of Manpower;
ü Security Services;
ü Works Contract Service;
|By Recipient being a Body Corporate
Service Provider being an Individual, HUF, Partnership Firm, AOP located in taxable territory
|5.||ü By the Director of Company or a Body Corporate||By Recipient being a Body Corporate|
|6.||ü Insurance Agent;ü Recovery Agent of Bank/ NBFC;
ü S&M agent of Lottery Tickets
|By the Recipient of Service|
|7.||ü Aggregator Service||By Aggregator, or his representative or his agent|
FAQ 2 : What are the Rate of charging Service Tax under Reverse Charge Mechanism, payable by the Recipient of Service for F. Y. 2017-18?
Reply : The rate’s of Service Tax to be charged by the recipient of Service under the Reverse Charge Mechanism for F. Y. 2017-18 are as below:-
|Sl. No.||Description of a service||Rate of Tax|
|1||By an insurance agent to any person carrying on insurance business (100%)||15 %|
|1A||By a recovery agent to a banking company or a Financial Institution or a non-banking Financial Company (100%)||15 %|
|1C||By selling or marketing agent of Lottery Tickets in relation to lottery in any manner to a Lottery Distributor or Selling Agent of the State Government under the provisions of the Lottery (Regulations) Act, 1998 (w.e.f. 01-04-2015) (100%)||15 %|
|2||By a goods transport agency in respect of transportation of goods by road (100%)||15 %|
|3||By way of sponsorship (100%)||15 %|
|4||By an arbitral tribunal (100%)||15 %|
|5||By an individual advocate or firm of advocates by way of legal services, directly or indirectly (100%)||15 %|
|5A||By a Director of a Company or a body corporate to the said company or the body corporate (100%)||15 %|
|6||By Government or local authority by way of support services excluding,- (1) renting of immovable property, and (2) services specified in sub-clauses (i), (ii) and (iii) of clause (a) of section 66D of the Finance Act,1994– (100%)||15 %|
|7||By way of renting of a motor vehicle designed to carry passengers, to any person who is not engaged in the similar line of businessi) On Non-Abated Value (Partial Reverse Charge upto 50%)
ii) On Abated Value (100%)
|8||By way of supply of manpower including Security Service for any purpose (100%)||15 %|
|9||On Service portion in execution of works contract (Partial Reverse Charge upto 50%)- In case of Original Work – Value of Service is 40%
– In case of maintenance or repairs or reconditioning or restoration or servicing of any goods – Value of Service is 70%
– In case of Other Works Contract – Value of Service is 70%
|10||By any person who is located in a non-taxable territory and received by any person located in the taxable territory other than non-assesse online recipient (100%)||15 %|
|11||In respect of services provided or agreed to be provided by an Aggregator defined in Rule 2 (aa) of the Service Tax Rules (w.e.f. 01-03-2015)Liability of Reverse Tax on Aggregator of Service or his representative. (100%)||15 %|
|12||In respect of services provided or agreed to be provided by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India||15%|