The new rate of service tax of 14% has been specified in the Finance Act, 2015. But the effective date of applicability is not notified at that time. Now the finance ministry has notified the date of application to 1st June, 2015.
From 1st June, 2015 the service tax rate of 14% will be applicable. Although 2% Education Cess and Secondary & Higher Secondary Education cess of 1% will not be applicable.
Swachh Bharat Cess of 2% is not applicable from 1st June, 2015 and will be applicable only from the date yet to be notified.
As per section 67A of Finance Act, services where there is no confusion in time of provision of service, receipt of payment and raising on invoice, rate of service tax will be as applicable at the time when taxable service has been provided or agreed to be provided. However, in case of complex situations, where it is not possible to determine the time, when the taxable service has been provided or agreed to be provided, point of taxation would be determined as per Rule 4 of the Point of Taxation Rules, 2011.
Applicability of Rule 4