Increase in Service Tax Rate from 6 % to 8 %

Effective 1 March 2024, the service tax rate for all taxable services will be increased from 6 % to 8 %, except for the following services:

Food and beverages services;

Telecommunications services;

Parking operator services.

The following services will also be included as taxable services effective from 1 March 2024:

Taxable Service	Service Tax Rate
Karaoke Centre services	8 %
Maintenance and/or repair services	8 %
Brokerage and underwriting services other than relating to financial services	8 %
Logistics services	6 %

Taxable services provided

Generally, taxable services provided before 1 March 2024 are taxable at 6 %, while taxable services provided on or after 1 March 2024 will be taxable at 8 %. For taxable services that span before and after 1 March 2024, the applicable Service Tax rate should be apportioned based on the period in which the taxable services are provided.

Any payment received before 1 March 2024 (for taxable services to be provided on or after 1 March 2024), the 6 % Service Tax rate can still be applied. This is regardless of whether the taxpayer uses an invoice basis or payment basis of accounting.

Imported taxable services

For imported taxable services, the Service Tax rate applies according to when the imported taxable service is acquired. Imported taxable services acquired before 1 March 2024 are taxable at 6 %, while imported taxable service acquired on and after 1 March 2024 will be taxable at 8 %. Similarly, imported taxable services that span before and after 1 March 2024 should be apportioned based on the period the taxable services are acquired.

Where Service Tax on an imported taxable service falls due (payment made or invoice received, whichever is earlier) before 1 March 2024, but the service is only acquired on or after 1 March 2024, Service Tax shall apply at 6 %.

We summarised the service tax rates below for easy reference:

Description	Period in which services are provided/acquired
Description	Before 1 March 2024	On or after 1 March 2024
Taxable service provided	6 %	8 %
Payments received (regardless of when services are provided)	6 %	8 %
Imported taxable services acquired	6 %	8 %
Invoice received/payments made, whichever earlier (regardless of when services are acquired)	6 %	8 %

Increase in Service Tax rate from 6 % to 8 % on digital services provided by a Foreign Registered Person (FRP)

Similar to the transitional rules on local taxable services above, digital services provided by an FRP before 1 March 2024 are taxable at 6 %, while digital services provided by an FRP on or after 1 March 2024 will be taxable at 8 %. For taxable services that span before and after 1 March 2024, the applicable Service Tax rate should be apportioned based on the period the digital services are provided by the FRP.

Where Service Tax on digital services falls due (payment received or invoice issued by the FRP, whichever is earlier) before 1 March 2024 but the digital service is only provided on or after 1 March 2024, Service Tax shall apply at 6 %.