The Finance Minister of India, Mr. Arun Jaitley had proposed to raise service tax from 12.36% to 14% and the proposal takes effect from yesterday in the country. This is going to be cost high eating at restaurants and hotels.

Apart from this, the service tax also applicable on mobiles, travelling, education, debit cards, cable and DTH services, beauty parlour charges, courier services, laundry services, ordering stock broking, asset management and insurance.

While, the increase in service tax is not imposed on packaged fruits and vegetables. You will be noticed that on some of the key services, the service tax is higher, such as railways, airlines, banking, insurance, advertising, architecture, construction, credit cards, even management and tour operators are becoming more costly compare to other services.

The proposal to hike this service tax was a step to move forward nationwide and GST (goods and service tax), but the government was forced to delay this GST bill up to at least July. So, the Modi government has decided to implement this bill in the next year.