The service tax all over the country will be raised to 14% from 12.36% in line with the Union Budget 2015-2016 that was presented on February 28, 2015.
Railways, airline, banking, insurance, advertising, architecture, construction, credit cards, event management and tour operators are the key services which can, and will, implement the increase.
“Currently, 3.7% service tax is levied on train fares for AC class, first class and freight. This will go up to 4.2% from June which means the rise is only 0.5%,” a government official told Hindustan Times.
To facilitate a smooth transition to levy of tax on services by both the Centre and States, it is proposed to increase the present rate of services tax plus education cesses from 12.36% to a consolidated rate of 14%.
-Arun Jaitley, Finance Minister, Budget Speech
If you are planning to build or buy or a new house, go out for a vacation or even make a phone call, do take the precaution of checking the prices to see the difference for yourself.
Goods and Services Tax
This increase in service tax is planned to insure smooth implementation of Goods and Services Tax (GST), a new tax regime which is going to be a replacement for all the indirect taxes levied by the Centre and the State.
The tax will be, according to the Finance Minister, the single most important tax reform after 1947.
It is expected to un-complicate the taxes substantially.
Weather that happens in 2016 or not, remains to be seen. But, one relief to the tax payer is that the education cess, which is generally billed separately, will be a part of the increased service tax.
(Read the complete story here.)
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)