Finance bill, 2015 has proposed to increase effective rate of Service Tax from 12.36% to 14%. It is wrongly reported in some quarters that the effective date of change in rate of Service Tax is 1st April, 2015. It is hereby clarified that the change in the rate of Service Tax will be effective from the date to be notified after enactment of Finance Bill, 2015.

In this regard relevant portion of D.O.F. No.334/5/2015-TRU dated 28th February 2015 is produced below:

“3.3 The 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”.

Hence, it is worthwhile to mention that there is no change in the rate of Service Tax w.e.f. 1st April 2015.