News shortcuts: From the Courts | Top Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | Professional Updates | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Service Tax »
 As new income tax regime beckons, should you switch?
 Which is better for you? New income tax regime vs old
 More people need to come under tax net
 How India can fix its problem of not collecting enough taxes
 which is the best option to save taxes under Section 80C?
 Can these deductions make you tax free?
 Best mid cap mutual funds to invest in 2020
 Income tax calendar for the year 2020
 How to reduce your tax liability while changing job
 Best debt mutual fund strategy for investors in 2020
 December 31 is the last date for these financial tasks

Service tax will be 15% from tomorrow
May, 31st 2016

Come Wednesday, consumers will now have to dole out an additional 0.5 per cent cess for various services, taking the total service tax to 15 per cent.

In the last budget, the total service tax was raised to 14 per cent from 12.36 per cent.

With the addition of the Krishi Kalyan Cess of 0.5 per cent, Swacchh Bharat Cess at 0.5 per cent, the total service tax will go up to 15 per cent from June 1. This is in addition to the VAT and service charges that are paid by customers.

Budget announcement

Henceforth, services like your internet and phone connection, restaurant bills, train and air travel, insurance, will attract the Krishi Kalyan Cess that was announced in the Union budget this year. KKC is aimed at improving agriculture in the country and for financing schemes in the sector.

For bills that are generated and paid before June 1, the KKC will not apply. For bills generated before June 1, but paid from June 1, the cess will be included. There are subtle variations in the levy of KKC and SBC, with the percentage fixed at 0.2 if one dines in a restaurant, and at 0.3 if it is for food services provided outside the restaurant, that is, home delivery. Similarly, variations exist across services.

“The government is finding new ways of taxing people. Already the cost of many essentials has gone up and from now there is an additional service tax for almost every service. Last week, my insurance company sent an SMS saying a KCC cess of 0.625 per cent will be levied on premium renewals from now on. Add to that phone bills, internet bills, etc... almost all bills are going to become more expensive,” Mrs. Girija, a retired government official said.

Bipin Sapra, Partner at Ernst & Young, said, “Service tax is an indirect tax and hence, supposed to be passed on to the consumers. This one per cent increase should have been increased as part of service tax. This cess is not even creditable for companies. The government is just increasing the cost of maintaining separate accounts, increasing transaction costs,” Mr. Sapra said.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2020 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting