NEW DELHI: In a double blow, eating out, phone bills, internet, movies, healthcare and banking transactions will cost more from today after a new tax came into force even as a steep hike in price of petrol, diesel, ATF and non-subsidised LPG was also effected today.
Finance Minister Arun Jaitley had in his Budget for 2016-17 proposed a 0.5 per cent Krishi Kalyan Cess on all taxable services, which came into effect from today.
With this, effective rate of service tax, which is leviable on movie tickets, restaurant bills, credit card and banking transactions, phone bills and healthcare among others, now is 15 per cent.
Jaitley had in his last Budget increased the Service Tax rate from 12.36 per cent to 14 per cent, effective June 1, 2015. From November 15, 2015, a 0.5 per cent Swachh Bharat Cess to fund Prime Minister Narendra Modi’s cleanliness drive, was imposed on all services, taking the effective rate to 14.5 per cent.
Experts says, the service rate is being in phases increased to bring it closer to the expected goods and services tax (GST) rate of 17-18 per cent.
Also from today, petrol price was hiked by a steep Rs 2.58 per litre and diesel by Rs 2.26 a litre, the third increase in rates in five weeks. (AGENCIES)
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