New changes to the tax system on services in India: here are all the details that even Italian companies that export will have to consider starting from 1 June 2015.
The Indian Government has recently announced some important changes in relation to the Tax on Services: many of them came into force on June 1, 2015, while others will be considered effective only in the following months. These measures also concern all Italian companies that operate directly in the Subcontinent.
The main provisions envisaged by New Delhi which entered into force on 1 June 2015 are indicated below:
- the Service Tax rate increased to 14%, from the previous 12,36%;
- there Primary education cess and the secondary and higher secondary cess they do not exist anymore;
- in general, the services provided in relation to entertainment events/activities or access to amusement facilities are now subject to taxation, with the exception of some which will continue to be exempt;
- services relating to entertainment events/activities such as concerts, shows, musical performances, awarding of prizes and sporting events (other than recognized sporting events) are subject to tax, if the cost of the ticket exceeds 500 Rupees (7 Euro) per the admission rights of that event/activity;
- services related to work contracts/employment contracts regarding the production of alcoholic beverages are taxed;
- the “alternate rates” for the payment of the currency exchange fee, for the services provided by air travel agencies, for the insurance services and for the services provided by distributors and lottery sales agents have been amended accordingly, proportionately;
- the rate for the payment of the Service Tax under reverse charge is increased to 7% (from the previous 6%), in all cases where the producer of dutiable goods/services provides tax-free services.
All companies on the taxation of services in India who would like further information or clarifications are invited to contact us by email at the following address octagona@octagona.com or at our telephone number 059.9770184.
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