You will have to shell out more while using mobiles, eating out and travelling from Monday, June 1, as the service tax rate rises to 14 per cent.
Finance Minister Arun Jaitley in his Budget had proposed to raise service tax from 12.36 per cent (including education cess) to 14 per cent. The proposal takes effect from June 1.
The tax is levied on all services except a small negative list.
Some of the key services that will attract higher taxes and, hence, become costlier are railways, airlines, banking, insurance, advertising, architecture, construction, credit cards, event management and tour operators.
Mobile operators and credit card companies have already started sending messages to subscribers conveying the increase in service tax rate which will have a bearing on the bills.
According to Railway Ministry officials, fares for first class and AC classes in passenger trains, besides freight charges, will go up by 0.5 per cent from June 1.
“Currently, 3.7 per cent service tax is levied on train fares for AC Class, First Class and freight. This will go up to 4.2 per cent from June which means the rise is only 0.5 per cent,” the official said. Currently, there is abatement of 70 per cent on passenger services. (Read more)