New service tax effective from 1st June
Posted on: 01/Jun/2016 9:59:16 AM
During the recent budget presentation, the central government had increased the Service Tax from 12.36 percent to 14 percent.
It was also announced that 0.5 percent service tax for the health plan and 0,5 percent tax for agricultural development (Krishi Kalyan) will be collected.So, the net increase in service tax has made it 15 percent.
It was announced that the new service tax of the central government will be effective from 1st June. Hence, the day has arrived when we need to pay the additional service tax for some of the essential services.
Some services have service tax and VAT (Value added tax). In these cases, we have to pay the extra.
As an example, when we eat in a high-class hotel for Rs. 500/- we need to pay Rs. 30/- as service tax and Rs. 10/- as VAT for a total tax of Rs. 40/-. Some hotels charge extra separately for parcel items.
As per the new scheme, the customer has to bear the additional tax for each food item.
When IT employees go to a hotel as groups, they might have to pay a few hundred Rupees as service tax.
Apart from the hotel, service tax has been introduced for cell phone bills, internet bills,cinema ticket price,beauty parlour fare,DTH fare,debit & credit card charges,courier charges, air and train fares, insurance payment, rentals for deluxe hotels, tourism bills, and tourism package bills and buying properties.
So, if you recharge your cell phone for Rs. 1000/-, you need to pay Rs. 150/- as Service Tax.
If a monthly earning individual spends Rs. 5000/- per month on various services, he/she has to pay an additional Rs. 750/- as Service Tax.
