The new service tax rate of 14% will come into effect from 1 June, 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% including education cess. The new rate of 14% announced by finance minister Arun Jaitley in his budget for 2015-16 would come into effect from 1 June.
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.