Effective today 01/06/2015, Service Tax has been increased from 12.36% (including cess) to 14% as per the implementation of the proposal given by Finance Minister Arun Jaitley in his Budget. The tax is levied on all services, except a small negative list.
Cess (Education + Secondary & Higher Education) will be subsumed in the new service tax rate. Although the Budget also proposed Swachh Bharat Cess of 2 % on selected services, but so far there has been no notification by the government in this regard.
Some of the key services that become costlier are : Advertising, Construction, Entertainment (Multiplexes, Theme Parks etc.), Finance (Banking, Credit Cards & Insurance), Hospitality (Restaurants & Hotels), Telecom Services, Transportation (Railways & Airways) with many more in that list.
Service providers in Banking, Credit Cards, Insurance & Telecom Services have already started sending informative messages/mails to their clients in this regard.
For further detailed information on this topic read the Circular.