NEW DELHI: With some of the service tax proposals that were announced in the Budget coming into effect from tomorrow, there are a lot of things that will see a difference in their price tags. While entry tickets to museums, zoo and tiger reserves would become cheaper, business class air travel, investment in MFs and chit funds on the other hand would become expensive.
Finance Minister Arun Jaitley had come out with a host of proposals last month to cut back on service tax, which is levied at an effective rate of 12.36 per cent.
These also include raising the rate to 14 per cent, but that will come into effect from a date to be notified later by the government after the Finance Bill is passed by Parliament.
However, the proposals which will come into effect from April 1, 2015 include tax exemption granted to services like admission to a museum, zoo, national park, wild life sanctuary and a tiger reserve.
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 per cent of the value of the ticket as against 40 per cent presently.
“At present, Service Tax is payable on 40 per cent 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 per cent 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.
(Latest News in English from Newsx)