As per various news agencies, the new Service Tax rate of 14 per cent will come into effect from June 1, top government sources said yesterday. The move will make eating out in restaurants, air travel, tour operator services, and insurance, among many other things, expensive.
The Service Tax is currently levied at the rate 12.36 per cent, including education cess.
In his Budget speech for 2015-16, Arun Jaitley, Minister for Finance, Corporate Affairs and Information and Broadcasting,
Government of India, had said that to facilitate a smooth transition to the levy of tax on services by both the Centre and the states, “it is proposed to increase the present rate” of Service Tax plus education cess from 12.36 per cent to a
consolidated rate of 14 per cent.
Service Tax is levied on all services, expect a small negative list.