Confused About Calculating Service Tax for Your Partnership Firm? Let's Break It Down Together

I just want to know how to calculate service tax and on which amount does a company calculate it?

To calculate service tax, you typically apply a certain percentage to the taxable value of the service provided. The percentage can vary based on the type of service and the tax laws in your country.

The taxable value is usually the amount charged by the company for the service, excluding any other taxes or fees. Once you determine the taxable value, you can multiply it by the applicable tax rate to find the service tax amount.

It's essential to consult with a tax professional or refer to the specific tax regulations in your jurisdiction for accurate information on calculating service tax for your company.

Hi Radimnight,

Service tax is similarly applicable on both firms and companies; however, the current service tax rate is 14.5% - comprising of 14% service tax and 0.5% Swachh Bharat cess. Starting from 1/6/2016, the Krishi Kalyan Cess (KKC) will come into effect, resulting in the service tax rate becoming 15%.

Do remember, if the service covers abatement, then the calculation would be as follows: For example, if you have eaten food in a restaurant, the restaurant will charge service tax on 40% of the value, i.e., 5.8%.

Regards,
Devesh