Section 66 of Finance Act, 1994 (which is a charging section) states that there shall be levied a tax (hereinafter referred to as the service tax) at the rate of 12% of value of taxable services referred in section 65(105) of Finance Act, 1994. In addition, education cess and SAH education cess is payable. Thus, total service tax was 12.36% during. 11-5-2007 to 23-2-2009.
Service tax rate has been reduced to 10% w.e.f. 24-2-2009 vide Notification No. 8/2009-ST dated 24-2-2009. Thus, total service tax payable is 10.3% in respect of taxable services provided on or after 24-2-2009.
This tax was first time introduced with effect from 1-7-1994 on three services. The rate was 5%. It was subsequently increased to 8% w.e.f. 14-5-2003. It was enhanced to 10% w.e.f. 10-9-2004. Service tax rate was 12% plus education cess of 2% (total 12.24%) w.e.f. 18-4-2006 till 10-5-2007. It was 12.36% during 11-5-2007 to 23-2-2009.
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