India – Increase in Service Tax Rate
Effective from the 1 June 2015, the Service Tax will be applied at a rate of 14%, an increase from the current 12.36%. This will be a flat rate tax rather than the current consolidated approach (12% basic service tax rate ADD Education Cess ADD Higher Education Cess). The Service Tax applied to most services other than those detailed in the Negative List ( mainly services delivered to government departments) .
It should be noted that there may be further increases to come – namely an additional 2% to cover Swachh Bhrat (Clean India) Cess, which will increase the total tax applied to services to 16%.
We will keep you updated on developments.