Zee Media Bureau
New Delhi: From today onwards, there will be a difference in the price tag of a lot of things as the new service tax will come into effect starting Wednesday.
Business-class air travel, investment in mutual funds and chit funds would become expensive with some of the service tax proposals announced in the Budget coming into effect from today.
While eating out will also become costlier, entry tickets to museums, zoo and tiger reserves would become cheaper.
Also, starting today, a railway platform ticket will cost Rs 10, double than at present, and rail freight rates of various commodities, including pulses and urea, will go up by up to 10 percent.
Finance Minister Arun Jaitley had came out with a host of proposals in February to rationalise service tax, which is levied at an effective rate of 12.36 percent.
These also include raising the rate to 14 percent, but that will come into effect from a date to be notified later by the government after the passage of the Finance Bill by Parliament.
Similarly, life insurance scheme Varishtha Pension Bima Yojna, ambulance service, retail packing of fruits and vegetables, too will not attract service tax levy.
On the other hand, air travel will become expensive as service tax will now be levied on 60 percent of the value of the ticket as against 40 percent presently.
"At present, Service Tax is payable on 40 percent of the value of air transport of passenger for economy as well as higher classes, e.g. business class.
"The abatement for classes other than economy is being reduced and service tax would be payable on 60 percent of the value of such higher classes", said the memorandum to the Finance Bill, adding that the proposal will come into effect from April 1, 2015.
With Agency Inputs
