April marks the beginning of a new financial year and also, new tax regime. As the Budget becomes effective, people will have to shell out more on air travel, investments, and dining outside. At the same time, there will be some relief to citizens, who are taking a tour to a museum, zoo, national park, and tiger reserve or wildlife sanctuary. The government has proposed service tax hike to 14% from 12.36%, but the implementation will come into effect once the Finance Bill is passed in the parliament. However, the new service tax rate has already become applicable on certain services, which are as follows:-
Things that will get costly
Business Class air travel
has become expensive as the Finance Bill proposal to hike service tax to 60% from 40% on the value of air ticket has come into effect. However, the service tax applicable on economy airfare will remain same.
Mutual Fund Investments
comes, with more price as agents of these funds will have to pay higher service tax. Similarly, a chit fund foremen has to pay service tax on full consideration received in the form of commission, fee or any related amount.
Eating out -
Buying meals outside has become expensive as 14% service tax has become applicable now.
Food items -
Most of the food items except rice, pulses, milk, flour and salt are set to become expensive due to the government's decision to limit service tax exemption on transportation of food products.
Things that will become cheaper
People will now pay less for a visit to Museum, Zoo or a Reserve as the government has exempted service tax on entry to these places.
Packaged Foods and vegetables should become cheaper as service tax on packaging, pre-cooling, labeling and ripening has been exempted.
Varishtha Pension Bima Yojna and ambulance service are now free of service tax and hence would be cheaper to avail.