Legacy Tax — Abolished 1 July 2017
Service Tax in India — Rate, History & GST Replacement Guide
Updated: 3 June 2026 | Abolished: 1 July 2017 | Replaced by GST
Service tax was abolished on 1 July 2017 when GST replaced it. The last service tax rate was 15% (14% basic + 0.5% SBC + 0.5% KKC). Under GST, most services are taxed at 18% GST. For pending pre-July 2017 service tax dues, file on the ACES portal (aces.gov.in). New businesses must register under GST — service tax registration is no longer issued.
15% → 18%
Service tax (15%) replaced by GST (18% for most services) from 1 July 2017.
GST is broader — covers both goods and services. ITC now available across the supply chain.
GST is broader — covers both goods and services. ITC now available across the supply chain.
Service Tax Rate History
| Period | Basic Rate | Cess | Effective Rate |
|---|---|---|---|
| 1994–2003 | 5% | — | 5% |
| 2003–2006 | 8%–10% | — | 8–10% |
| 2009–2012 | 10% | — | 10% |
| 2012–2015 | 12% | Education Cess 3% | 12.36% |
| Jun 2015 – Feb 2016 | 14% | — | 14% |
| Nov 2015 – Jun 2016 | 14% | SBC 0.5% | 14.5% |
| Jun 2016 – Jun 2017 | 14% | SBC 0.5% + KKC 0.5% | 15% |
| From 1 Jul 2017 | Replaced by GST (no service tax) | ||
Service Tax vs GST — Key Differences
| Parameter | Service Tax (Old) | GST (Current) |
|---|---|---|
| Levy | Central government only | Centre + State (dual GST) |
| Coverage | Services only | Goods + Services |
| Rate | 15% (standard) | 5% / 12% / 18% / 28% |
| ITC | Limited (CENVAT credit) | Full ITC across supply chain |
| Threshold | ₹10 lakh turnover | ₹20–40 lakh turnover |
| Returns | Half-yearly ST-3 | Monthly GSTR-1, GSTR-3B |
| Exports | Zero-rated (with refund) | Zero-rated (with refund) |
GST Rates for Common Services (Replacing Service Tax)
| Service | Old Service Tax Rate | Current GST Rate |
|---|---|---|
| IT / Software / Professional services | 15% | 18% |
| Banking / Finance | 15% | 18% |
| Insurance (life, health) | 15% | 18% |
| Restaurants (AC) | 6% (abated) | 5% (no ITC) |
| Outdoor catering | 9% (abated) | 18% |
| Construction (residential) | ~4.5% (abated) | 5% (no ITC) |
| Goods Transport (GTA) | ~3.75% (abated) | 5% (RCM) or 12% |
| Education (private schools/coaching) | Exempt | Exempt (govt) / 18% (coaching) |
| Healthcare (hospitals) | Exempt | Exempt |
| Telecom | 15% | 18% |
Frequently Asked Questions
Is service tax still applicable in 2026?
No. Service tax was abolished on 1 July 2017 when GST (Goods and Services Tax) was introduced. Under GST, services are taxed at 5%, 12%, 18%, or 28% depending on the type. The standard rate for most services is 18% GST (9% CGST + 9% SGST/IGST). Service tax at 15% (14% + 0.5% SBC + 0.5% KKC) was the rate just before GST.
What was the last service tax rate before GST?
The last service tax rate (before GST on 1 July 2017) was 15%, comprising: Basic service tax 14% + Swachh Bharat Cess (SBC) 0.5% + Krishi Kalyan Cess (KKC) 0.5%. For most services it was effectively 15%. Some services had abatements (construction, restaurants, transport) — the effective rate was lower on the abated value.
How to pay pending service tax dues from before GST?
For pending service tax (pre-July 2017): File returns and pay dues on the ACES portal (aces.gov.in) under the old service tax registration. The CBIC's SVLDRS (Sabka Vishwas Legacy Dispute Resolution Scheme, 2019) allowed one-time settlement of pre-GST disputes. For ongoing legacy disputes, contact your jurisdictional Central Excise/Service Tax Commissionerate.
What is the GST equivalent of service tax?
GST replaced service tax. Most B2B services that attracted 12–15% service tax now attract 18% GST. Key GST service rates: IT/software/professional services: 18%, Construction (residential): 5% (no ITC), Restaurants (AC): 5%, Insurance: 18%, Banking: 18%, Transportation (GTA): 5% (RCM) or 12%, Education/healthcare: Exempt. GST is more comprehensive than service tax as it covers all goods and services.
How to get service tax registration certificate?
Service tax registration was replaced by GST registration from 1 July 2017. New businesses must register under GST (not service tax). For a copy of your old service tax registration certificate, login to the ACES portal (aces.gov.in) using your old service tax login credentials. GSTIN is not the same as service tax registration number.
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