Eating out, telephone calls and travel became expensive from Sunday with the imposition of 0.5 per cent Swachh Bharat cess on taxable services that is expected to yield about Rs 3,800 crore to the exchequer till March 31, 2016.
With the new cess coming in force, the service tax rate will go up from 14 per cent to 14.5 on all taxable services. Even getting a new PAN Card would now be costlier with the levying of a surcharge of 0.5 per cent on all taxable services.
The Swachh Bharat cess, which will go towards finding Prime Minister Narendra Modi’s pet project, Clean India, would be levied only on the portion of taxable services after abatement. It would be calculated on the abated value or value arrived at as per the Service Tax (Determination of Value) Rules, 2006.