As a result, the total service tax paid, including the new cess announced today, will rise to 15 per cent. Eating out in restaurants, buying property and insurance, and making mobile phone calls will therefore become more expensive from June 1, 2016.
Advertising, air travel, services of architects, certain type of constructions, credit cards and event management are some of the services which attract this cess. The "Krishi Kalyan" cess will also be negative for the telecom and services industries, which includes hotels and real estate.
Mr Jaitley had last year raised service tax rates from 12.36 per cent (including education cess) to 14 per cent; this was later bolstered by a 0.5 per cent cess for "Swachh Bharat". As of now, service tax rate stands at 14.5 per cent.
Service tax is levied on all services except a small negative list.
Follow NDTV for latest election news and live coverage of assembly elections 2019 in Maharashtra and Haryana.
Subscribe to our YouTube channel, like us on Facebook or follow us on Twitter and Instagram for latest news and live news updates.