As declared in the budget of year 2015-16 by the finance minister Mr. Arun Jaitley, the service tax rates will hike from 12.36% (12% ST plus .36% educational cess) to 14% (all inclusive). The effect is entitled to practice from June 1, 2015. While it is an added expense to the common man’s never-ending list of bills, it is a primary source of tax revenues for the Indian Government.
Discussed here are some scenarios where an average person will have to consider his budget before deciding to spend-
- Dine in restaurants
Was the option of dining in restaurants every weekend topping your ‘to-do’ list? The increase of Service Tax from 4.94% to 5.6% for eating in restaurants will make you review the idea. Unless you are not the one with trailing liabilities of loans and credit card bills to pay off, you sure will have to catch hold of your budget.
- Telephone bill summaries
Your phone calls to friends and family will introduce you to more and more numbers summed up in the telephone bills, for the taxes you paid on the actual bill earlier has now increased by almost 1.5%. This means being social and connecting with your loved ones will now cost more.
- Planning your Travels
To book a seat in an air plane or avail an overnight journey in a bus, you will have to pay an extra tax that is approximately double of what you had been paying previously. Consider yourself paying ₹ 10 per 1000 ₹ (standard) earlier, and ₹ 20 per 1000 ₹ today (i.e. on and after June 1, 2015).
- Shopping over online platforms
Are you the one who would go shop online every month on your salary day (and of course on other random days too)? If yes, then you certainly would be sad about your favorite online shopping destinations like flipkart, olx etc. charge you (taxes) beyond limits.
- Swiping Credit/ Debit Cards
Watch out the next time you swipe your card to buy a product (groceries, apparels, stationery and more) or a service (haircut in a salon etc.). Not only you pay ST on the total billed value, you also pay it on the interest charged by the bank on your credit card.
- More spend on transportation
After ST hitting an increase in this year’s budget, you will be spending more for getting your petrol (or diesel) tanks full. If you choose to take public transport mediums, your conveyance will ask you to expend more on it (but unfortunately the travel allowance in your salary structure will more likely remain the same).
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