As per the report (View article), the new Service Tax rate will be 14% effective from 1st June. The current service tax is levied at the rate of 12.36% % including education cess.
“To facilitate a smooth transition to levy of tax on services by both the centre and the states… the service tax rate is being increased from 12 per cent plus education cesses to 14 per cent. The education cess and secondary and higher education cess shall be subsumed in the new service tax rate”,
Finance minister Arun Jaitley announced this while presenting the Budget 2015-16. This means eating out in restaurants, air travel, construction, insurance and phone bills will be a tad bit expensive.
How does it affect Housing Communities?
For Housing Communities which have monthly maintenance invoicing, any invoices raised post 31st May, 2015 must have the slab rate of 14% as service tax.
For Housing Communities which have Quarterly, Half yearly or Yearly maintenance billing, for invoices raised post June 1, 2015 will attract 14% service tax. Applicable service tax rate would depend on date of invoice and date of payment.
We highly advise you to consult a Chartered Accountant/Auditor before taking a final view.
How to update Service Tax values for your Group:
Under Settings> Module Settings> Money Manager> Calculations:
Update the value to 14% and click on Save and Update.
Note: If your Group had a service tax setting of 12.36% saved, we’ve updated the same to 14% effective 1st June.
