New Delhi, May 19 (PTI): The new service tax rate of 14 percent will come into effect from June 1, government today said, in a move that will make eating out in restaurants, insurance and phone bills expensive, among many other things.
The service tax is currently levied at the rate 12.36 percent including education cess.
Top official sources said that the new rate of 14 percent announced by Finance Minister Arun Jaitley in his Budget for 2015-16 would come into effect from June 1.
In his Budget speech, Jaitley had said that 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 cess from 12.36 percent to a consolidated rate of 14 percent.
Service tax is levied on all services, expect a small negative list.
Advertising, air travel, services of architect, certain type of constructions, credit card, even management, and tour operator are some of the important services which attract tax.