Monday, February 29, 2016
Service tax raised by 0.5% for Krishi Kalyan Cess- Telecom, Hotel & Tourism to impact
The Finance Minister has announced a Krishi Kalyan cess of 0.5%, which will be levied on all services. As a result, the total service tax paid, including the new cess announced today, will rise to 15%.

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.

The last year's Budget had raised service tax rates from 12.36% (including education cess) to 14%; this was later bolstered by a 0.5% cess for Swachh Bharat. As of now, service tax rate stands at 14.5%.

Service tax is levied on all services except a small negative list.

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