Service tax to shoot up to 14 per cent from June 1

New Delhi: The finance ministry on Tuesday notified increasing service tax from current 12.36 per cent to 14 per cent from June 1. This will make a host of services including mobile bill, air fare, insurance premium, DTH bill, eating out, dry cleaning, services of chartered accountant, architect and courier services among others costlier.

The government is also proposing to impose another two per cent Swachh Bharat cess on the services. This will be notified at a later date. Also the proposal to impose service tax on government services provided to business will be notified in future.President Pranab Mukherjee has given his assent to the Finance Bill, 2015, which was notified on Tuesday. Some more services will be brought under the ambit of service tax from June 1. From next month, service tax will be levied on the service provided by way of access to amusement facility providing fun or recreation by means of rides, gaming devices or bowling alleys in amusement parks, amusement arcades, water parks and theme parks.

Also service tax will be levied on service by way of admission to entertainment event of concerts, pageants, musical performances concerts, award functions and sporting events other than the recognised sporting event, if the amount charged is more than '500 per person for the right to admission to such an event.

However, service tax will not be imposed on exhibition of cinematographic film, circus, recognised sporting event, dance, theatrical performance incl-uding drama and ballet. The finance minister in his budget speech had said that to facilitate a smooth transition to levy of tax on services by both the Centre and the States, “it is proposed to increase the present rate” of service tax plus education cess from 12.36 per cent to a consolidated rate of 14 per cent. However, the implementation of GST will see service tax being increased steeply further.