- "Krishi Kalyan" cess of 0.50 % will be levied on all services from today
- "Luxury tax" of 1% will be levied on all cars priced over Rs 10 lakh
- Service tax is levied on all services except a small negative list
The finance minister had announced a "luxury tax" of 1 per cent to be levied on all cars priced over Rs 10 lakh from June 1.
This extra tax will be collected by the seller of the car and will be applicable on the ex-showroom price.
However, this extra payment could be set off against the total tax liability of the buyer.
Apart from this, services will become costlier from today which means you will have to shell out more for dinning out, travelling, making phones calls buying insurance and property. The "Krishi Kalyan" cess of 0.50 per cent will be levied on all services from today
Train tickets for air conditioner (AC) class will also become costlier as the "Krishi Kalyan" cess will also be levied on all AC class tickets issued from today.
Service tax is not applicable to non-AC and sleeper class travel, so the fares remain unchanged.
This 0.50 per cent increase will raise the service tax rate to 15 per cent from 14.5 per cent.
The finance minister had last year raised the service tax from 12.36 per cent (including education cess) to 14 per cent. It was again hiked by another 0.50 per cent on account of "Swatch Bharat" cess in November to 14.50 per cent.
Service tax is levied on all services except a small negative list.