Amidst of a range of brave decisions taken by NDA government during budget announcement, one that shook most was increased rate of service tax. The service tax rate has been revised from 12.36% to 14%, applicable from June 1, 2015.
It simply means that eating at restaurants, paying insurance premiums and phone bills among others will become expensive all over India from June 1 onwards. The extra financial burden that consumers have to bear can be understood with the help of a simple illustration i.e.-
A postpaid customer using 14GB plan on Reliance Pro 3 pays 700 + 12.36% (S.T) currently. The total bill amount comes up to Rs. 786.52 on monthly basis.
From now, the service tax rate will be charged at 14%, which means that the postpaid customer who is currently paying Rs. 786.52, will now end up paying Rs. 798 from June i.e. Rs. 11.48 more than the current bill amount.
Photo courtesy : DarshanMalu
Bhupendra holds a Post Graduate degree from Christ University. He is an investment banker & trader by profession and a writer by heart.