What is the new service tax rate? By Athulya - April 14, 2016 Last Updated at: Jul 06, 2021 851 What is the new service tax rate? In her budget speech for the FY 2020-21, the Honourable Finance Minister of India announced the introduction of a simplified GST return format with effect from 1st April, 2020. It will help SMEs and Service Tax holders to transit smoothly through the taxation system. Service Tax is levied by the State Government to the service providers or business owners. Service tax is usually paid by customers. There are changes in the service tax rates announced by the Government. Your auditor might help you in this regard in the payment of the service tax. Browse the articles below for more free information and guidance on government registrations, tax, compliance, patent filing process and more. Register a Company PF Registration MSME Registration Income Tax Return FSSAI registration Trademark Registration ESI Registration ISO certification Patent Filing in india Register your service tax With the Budget 2016 proposal to impose the Krishi Kalyan Cess, the service tax rate in India was raisied to 15% starting June 1, from 14.5% previously. In the previous budget, the finance minister had increased the Service Tax Rate from 12.36% to 14%. This new rate of 14% was further increased on November 15 to 14.5% through the Swach Bharat Cess. It appears that the rate is slowly being increased to bring service tax closer to the expected goods and services tax (GST) rate of 17 to 18%. Service tax is a tax levied by the government on service providers on certain service transactions, but is actually borne by the customers. It is categorized under Indirect Tax and came into existence under the Finance Act, 1994. Make sure that you calculate the service tax for your products or services based on the recent service tax rates. There are several online sites that help in calculating the service tax based on service tax rates and the type of business you run.