Your telephone and restaurant bills, airline tickets are set to become costlier from tomorrow. As the Krishi Kalyan Cess (0.5 per cent) kicks in, all taxable services will now be effectively charged a service tax of 15 per cent.
According to experts, the indirect taxes will put an additional burden of Rs. 20,600 crore on consumers in the coming financial year. For bills that are generated and paid before June 1, the KKC will not apply. For bills generated before June 1, but paid from June 1, the cess will be included. This is in addition to the VAT and service charges that are paid by customers. The Krishi Kalyan Cess is not leviable on the component of service tax but the value of service, as in the case of the Swachh Bharat Cess.
The proceeds from the cess will be exclusively used for financing initiatives relating to improvement of agriculture and welfare of farmers, Finance Minister Arun Jaitley had said.
KKC will not be levied on services in the negative list and 47 exempted services.
No service fee for rail tickets booked using debit cards
There's some relief for the consumers though. For rail tickets booked on or after June 1, the service charge of Rs. 30 per ticket will not be levied on tickets purchased using debit/credit cards at computerised reservation counters.
According to sources, the move follows the waiver on service charge levied on online or card transactions by payment gateways. However, there was no instruction yet on the service charge/convenience fee charged for tickets purchased using cards or via net banking through the IRCTC.
Govt. rolls back decision to apply 1% TCS on cash purchase of gold
The government has also rolled back its Budget decision to levy one per cent tax collection at source for cash purchase of gold jewellery worth over Rs. 2 lakh.
