14th January 2017
To, All Members,
Sub: Service Tax Changes Effective from 22 January 2017
We understand that some changes have been made by the Department of Revenue, Ministry of Finance, Government of India in the service tax vide notification no. 4/2017 dated 12.01.2017. These changes will be effective from 22.01.2017.
As per the above said notification, service tax abatement to tour operators will now be 60% and the service tax on tour operators after abatement will be applicable @ 6% inclusive of 0.5% Swachh Bharat Cess and 0.5% Krishi Kalyan Cess on all billings instead of 1.5% (on hotel accommodation only) and 4.5% (on tour packages/transport services by tour operators). However, Cenvat Credit can be availed by tour operator on all input services.
We have sought clarification from our Service Tax Expert and further details will follow soon.