- Proposed service tax rate to increase from 6% to 8%
- Certain services will still be subject to service tax at 6%
- No guidelines or announcements on the transition from the old rate to the new rate
- Past guidelines from a similar rate change in 2011 may be used as a basis for the new regime
- Guiding principle in past guidelines was to apply the rate at the time of service or payment, whichever is earlier
- Exceptions were made for telecommunication services
- Debit notes are now mandatory for tax rate changes, which was not the case in the previous regime
- The current service tax return does not have a specific column for tax-only upward adjustments
- Changes to the law and transitional policies are expected by the end of 2023 or early 2024
- Early release of transitional policies by the RMCD would be beneficial for businesses to update compliance processes.
Source: www2.deloitte.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
