Service Tax Hiked To 14% wef 01 June 2015- Leading to Increase in Cost of Services in India

As proposed in the Union Budget for the year 2015-16, Service Tax(Including Educational Cess)  hike from 12.36% to 14% will be effective from 01st June 2015.

As an impact of the increase in the rate of Service Tax and inclusion of more services in the ‘Service Tax Net’, the following goods and services will become costlier:

  • Eating out at Restaurants,
  • Beauty Parlour/Spa Services,
  • Mobile Phone Charges,
  • Train Travel,
  • Air Travel and Other Airport Services, such as Entry Fee,
  • Banking Services, such as:

-Maintenace of Accounts,
-Money Transfer,
-ATM Services,
-Credit Card Services,
-Foreign Exchange Transactions,

  • Mutual Funds Services,
  • Insurance Premiums,
  • Online Shopping such as:

– Flipkart,
-Snapdeal and
-Amazon

  • Online Services Providers such as:

-Quikr,
– zomato,
-FoodPanda,
-Olx,
– Mydala,
-Cashkaro and
-Stayzilla

  • Entry Fees of more than Rs 500/- for Entertainment events such as:

– rides,
-bowling alleys,
-amusement arcades,
-water parks,

-non recognized sporting events,
-pageants,
-music concerts and
-Award functions.

However, the following services have been exempted from the Service Tax:

  • Certain Pre-cold Storage services related to fruits and vegetables,
  • Varishta Bima Yojana for Senior Citizens and
  • Common Affluent Treatment Plants.

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