Finance Minister Arun Jaitley on Monday introduced Krishi Kalyan Cess of 0.5 per cent on all services, making eating out, travelling, buying insurance, hotel stay and telecom service, among others, more expensive.
The proceeds from the cess, which will come into effect from June 1, will be exclusively used for financing initiatives relating to improvement of agriculture and welfare of farmers, Mr Jaitley said.
Currently, the service tax stands at 14.5 per cent comprising of 14 per cent service tax and 0.5 per cent Swachh Bharat Cess. Including the Krishi Kalyan Cess, the service tax now stands at 15 per cent.
