Service Tax moves up to 14%

Not much evidence of improvement in services from this new government has been found, but there comes a concrete evidence of effective increase in service tax, when on the past weekend (30th May), Modi government announced an increase of 14% in service tax . With the advent of increased service tax, some key services are going to be expensive that include rail, airlines, banking, insurance , advertising, architecture, construction, credit cards, event management and tour operators. So, if you are planning to dine out, then just increase the count of big notes in your wallet, as this is going to be a bit expensive now that the service tax has increased. And I’m sure your mobile operators have already sent you the blissful message intimating the customers about the increase in service tax which will be visible on the bills. Not just this, fares for the first class and AC classes in passenger train have increased by about 0.5%. Although, our Finance Minister has come up with the following explanation- “To facilitate a smooth transition to levy on tax on services by both the Centre and the States, it is proposed to increase the present rate of service tax plus education cesses from 12.36 % to a consolidated rate of 14%”. How far this statement will prove its validity, it is on time to decide. At present, people aren’t able to take this increase in tax rate. Drop down your views to express your sentiments towards this increased service tax rate.