Swachh Bharat cess hikes prices of all services

New Delhi: Eating out, telephony and travel will become expensive from today with the Government imposing 0.5 per cent Swachh Bharat cess on taxable services which is expected to yield about Rs 3,800 crore to the exchequer in the remaining months of the fiscal.

With the imposition of the cess, service tax rate will go up from 14 per cent to 14.5 per cent on all taxable services. According to revenue secretary Hasmu-kh Adhia, the government expects to collect around Rs 10,000 crore from Swachh Bharat cess for full year.

The Swachh Bharat cess would be levied only on the portion of taxable services (after abatement) and will go towards funding of the cleanliness drive, a pet project of Prime Minister Narendra Modi. This means that service tax on restaurant bills will go up from 5.6 per cent to 5.8 per cent following the levy of 0.5 per cent Swachh Bharat cess.
 

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