The Union Budget 2016 presented by Finance Minister Arun Jaitley today is largely being perceived as a pro-rural budget. However, there is still some bit left for the common man to accept and digest.
The service tax has been increased yet again. It is the similar trend of increasing it by small percentage points, which seems so negligible at present. But if we consider the 10.3% rate in 2012, and compare it with the 15% now, it will be a strong realization.
Take for example the dining out budget of a family of 4. The average bill in an average restaurant will be Rs 1500 for one evening. Add it the levy of service tax, service charge, VAT etc, it will go up by another 500. Every penny in the pocket matters and it pinches too.
One tip to be shared here is no tip in a restaurant-do you still? The service tax is levied by the Central government on the service provider, who in turn, has choice to pass it on to the consumers. Which they do! Add to it the service charge, your food bill become more difficult to digest.
The Service tax, as by the present government, has been increased from 14.5 to 15%, under the pretext of Krishi Kalyan cess. It is a cess levied on all taxable services from June 2016 for the purpose of promoting all initiatives in agriculture.
As a result, not just eating out, but other paid services will be more expensive including,
- Tobacco products (except beedis): Excise duty on all tobacco products, except beedis, has been raised by 10-15%.
- Cars: Pollution cess of 1 per cent imposed on small petrol, LPG and CNG cars; 2.5 per cent on diesel cars of certain specifications
- Gold and diamonds: 1 per cent excise duty imposed on jewellery excluding silver
- Ready-made clothes
- Insurance schemes
- Mobile bill
- Eating out
- Cable TV services
- Air and railway tickets
- Movies
