Service tax goes up to 14%, effective today


Finance Minister Arun Jaitley had proposed in his budget to raise service tax from 12.36 percent to 14 percent. The proposal would take effect from June 1, Monday. The tax would be levied on all services including, expect a small negative list, causing a costlier lifestyle.

People have started receiving messages from their service operators, conveying the increase in service tax rate which will have a resulting impact on the bills.

0.5 per cent hike will be brought in railways under effect from today in the AC and First Class fare and freight costs. At present, 3.7 per cent service tax is levied on the aforementioned services. From today onwards, this will go up to 4.2 per cent, as told a ministry official.

Jaitley had said in Budget speech, “To facilitate a smooth transition to levy of 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 per cent to a consolidated rate of 14 per cent.”


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