Union Finance Minister Arun Jaitley presented Union Budget 2016 in the Parliament. However Arun Jaitley didn’t increase the service tax but announced 0.5 per cent Krishi Kalyan Cess to be levied on all services. The decision to add 0.5 per cent Krishi Kalyan Cess on all services, increased service tax from 14.5 per cent to 15 per cent. The additional 0.5 per cent service tax, services providing food, entertainment, clothes, accommodation are going to be costlier.
The rate of Service Tax was increased from 12 per cent plus Education Cesses to 14 per cent. The ‘Education Cess’ and ‘Secondary and Higher Education Cess’ was subsumed in the revised rate of Service Tax. Thus, the effective increase in Service Tax rate was from then existing rate of 12.36 per cent (inclusive of cesses) to 14 per cent, subsuming the cesses.
The government also added Swachch Bharat cess, which made the service tax 14.5 per cent. And now the service tax has been increased from 14.5 per cent to 15 per cent. The increased service tax rate will make life more expensive.
Eating out and going to movies, concerts and comedy shows, buying cars and talking over phones will be costlier for the taxpayers.
Following is the list of services that will be costlier from next financial year:
1- Cigarettes and other tobacco products
2- Completely built imported commercial vehicles
3- Cement
4- Aerated, flavoured drinks and packaged water
5- Plastic bags and sacks
6- Business and executive class air travel
7- Visit to amusement and theme park
8- Music concerts
9- Liquor, chit fund and lottery
10- Eating out at restaurants
11- Staying in hotels
12- Cable and DTH services
13- Visiting beauty parlours
14- Courier service
15- Credit and debit card related services
16- Dry cleaning of clothes
17- Stock broking
18- Air travel
19- Radio cab
20- Life insurance
