Changes In Service Tax By Union Budget 2016-17

  1. Changes in Service Tax Rates
  • Krishi Kalyan Cess at 0.5% on gross value of taxable services
  • Service tax rate increased from 14.5% to 15%
  • Service tax on transport of goods by rail by person other than?Indian?railway is 6%
  • Service Tax for the package tour increased from 3.625% to 4.35%
  • Service tax for sale of flats increased from 3.625% to 4.35%
  • Service tax for transport of goods by Rail in vessel other than by IR increased from 4.35% to 5.8%
  • Service tax on hotel services (club, pundal, shamiana) with supply of food is 10,15%

  1. Other Amendments
  • Interest rate on delayed payments reduced to 15% (if ST not collected) and 24% (if ST collected)
  • Due date for issue of Show Cause Notice has been extended from 18 months to 30 months

  1. Indirect Tax disputes

A scheme in respect of cases pending before Commissioner (Appeals), the assessee, after paying the duty, interest and penalty equivalent to 25% of duty, can file a declaration, is introduced. In such cases the proceedings against the assessee will be closed and he will also get immunity from prosecution. However, this scheme will not apply in cases:

  • where prosecution has already been launched
  • involving narcotics & psychotropic substances
  • involving detention under COFEPOSA.


  1. New AnnualReturn for Service Provider?

Annual returns to be filed by service provider by 30th Nov every year.

  1. One Person Company

Now they can pay tax quarterly and on receipt basis.   This is a summarization of an article from Tax India Updates. For more information visit