Service Tax increased from 12.36% to 14% effective from 1 June

May 20,2015 / By Team Commonfloor Groups / No Comment

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As per the report (View article), the new Service Tax rate will be 14% effective from 1^st 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:

STax

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 1^st June.

Smart Residential Living

Know How Much Service Tax a Society Needs To Pay

Jun 26,2014 / By Nimesh / 4 Comments

As the name suggests, service tax is a certain tax imposed by the government on services provided.

In a society, if residents avail of the services provided by the Management Committee, service taxes come into the picture.

We hope to clear some of your basic service tax related doubts with this article.

Let’s draw different situations and understand how much service tax the Management Committee is obligated to pay in each case.

Case 1: If a resident pays more than Rs.5000 towards Management Committee provided services, service tax will be calculated on the whole amount and not just on the amount exceeding Rs.5000.

Case 2: If a resident pays up to Rs.5000 towards Management Committee provided services, no service tax is applicable.

Case 3: If in a financial year, the aggregate value of taxable services offered by the Management Committee does not exceed Rs.10 lakhs, no service tax is applicable. In case the aggregate value of services exceeds Rs.10 Lakhs, the Management Committee is liable to pay service tax only on the amount exceeding Rs.10 Lakhs.

Case 4: When a Management Committee merely acts as a ‘pure agent’, i.e. collects money from residents for various services used such as electricity, water (without adding any extra charge) and transfers the same to the respective authorities concerned, the service falls under the ‘non-taxable services’ category.

However, service tax is applicable on electricity utilized in society common areas.

Note: Management Committees are allowed a set off if they avail of CENVAT credit.

To take a look at the circular published by the Ministry of Finance in January 2014, click here bit.ly/V8IFac

If you still have concerns related to service taxes applicable to housing societies, please write to us at support@commonfloor.com

Tag Archives: Service tax to be paid

​Service Tax increased from 12.36% to 14%​ effective from 1 June

Know How Much Service Tax a Society Needs To Pay

Service Tax increased from 12.36% to 14% effective from 1 June