Finance Bill, 2015 has proposed to increase effective rate of Service Tax from 12.36% to 14%. Wide spread confusion has been created by some renowned TV Channels and Newspapers regarding effective date of change in rate of Service Tax. In this regard, we would like to clarify that change in rate of Service Tax will be effective from the date to be notified after enactment of Finance Bill, 2015.

Relevant portion of D.O.F. No. 334/5/2015-TRU dated 28th February, 2015 is produced below:

“3.3 The new Service Tax rate shall come into effect from a date to be notified by the Central Government after the enactment of the Finance Bill, 2015.”

It is worthwhile to mention that there is no change in rate of Service Tax w.e.f. 1st April, 2015. We will keep you updated on this issue as and when such notification is issued.