With the implementation of Finance Bill 2012, the revised Service Tax on all services has increased from 10.3% to 12.36% w.e.f. 1st April 2012.
Suppose if you are charged Rs.100 for a service. Multiply 100 with 1.1236 to reach the amount 112.36
The standard rate of VAT is currently 12.5%.
India has a federal structure with both federal and state-specific indirect tax. Intra-state sale of goods is subject to VAT and sale of goods occasioning movement across states is subject to central sales tax (CST). In addition, there is another indirect tax on supply of services, service tax.
Prior to introduction of State-specific VAT regime in April 2005, the average state sales tax rate was 16%. Until March 2010, around 14 to 17 states have increased the basic slab rates of 4% (up to 5%) and 12.5% (up to 15%). There are reduced rates of 4%, 1%, and 0% which apply to, for example IT products, intangible goods (such as patents and copyrights), capital goods, chemical fertilizers, cotton, drugs and medicines, iron and steel, industrial inputs, sports goods, tractors (4%); gold, silver, precious stones (for example diamonds), articles or ornaments made of the aforementioned (1%); and exports of goods (zero rated). There are increased rates of 20% and above, applicable to petroleum products (such as diesel, petrol, lubricants, and aviation turbine fuel), natural and other gases used as fuel, liquor and beer.
Certain supplies of goods are exempt from VAT, for example books, periodicals and journals, electric energy, milk, fresh plants, flowers, vegetables and fruits, meat, fish, prawn, rice, and wheat. CST is charged at the rate of 2% or alternatively at the VAT rate applicable in the originating state.
The standard rate of service tax with effect from 1 April 2012 will be 12.36% (currently, the same is 10.3%). Currently, more than 100 notified categories of services are subject to Service tax, for example advertising services, financial and insurance services, business auxiliary and support services, telecommunication, cargo handling, intellectual property services, maintenance and repair services, certain IT services, management consultation, scientific and technical consultancy, renting of immovable property service, information technology software services, supply of tangible goods for use service, works contract services, etc. Having stated as above, it may be noted that the Government, vide Union Budget 2012, has proposed to completely revamp the Service tax law through the introduction of negative list regime (from a date to be notified later). Broadly, in a ‘Negative List' regime, all service transactions except 17 specified services would be liable to Service tax.