June 1 marks the start of a new service tax rate

The new service tax rate of 14% will come into effect from June 1, top government sources said, in a move that will make eating out in restaurants, insurance and phone bills expensive, among many other things. 


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% to a consolidated rate of 14%. 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. 

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