Budget 2015 announced hike in service tax from 12.36% to 14%. The increase which is effective from June 01, implies shelling out more for services like travelling, banking, insurance and even eating out.
Reportedly, the Modi Government had proposed to raise the service tax to 14% with the objective to facilitate a smooth transition to the Goods and Services Tax (GST) regime, which the government wants to roll out from April 2016. Once implemented, GST will subsume service tax, excise and other local levies.
The table below enlists the effective rate of service tax applicable of a few services: