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New service tax of 12% makes travel, holidays costlier

Jul 02 2012, 13:37   |   By IBNLive.com

Get ready to pay even more. The new 12% additional Service Tax comes into effect from Sunday. The new tax covers all services except 38 activities that are put on the negative list.

The switch-over to a negative list is aimed at unifying the tax and levies of the Centre and the States, but is also expected to increase the Centre's Service Tax collection up from Rs 97,000 crore last fiscal to Rs 1.24 lakh crore in 2012-13.

Among other things, you will now pay more for speed posts, express parcels as well as train travel by First Class and Air-Conditioned Class.

Tickets for travel and holidays bought from online portals too will get costlier.

Tests such as GMAT and GRE too will be costlier as companies conducting these examinations will now be subject to Service Tax.

Private tuition providers too will be subject to the tax if their annual turnover exceeds Rs 10 lakh.


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Recent Comments (15)

  •  JTJ |   Jul 05 2012,10:36

    Service tax can be there but reduce the rate to 5% (max.) There is no justification to collect 12% of what you spent on a service to Govt which do nothing for the service you take. There is shortages everywhere! electricity, water, roads, railway seats, education opportunities etc. Where is all te money going? Why spent 1.75 lac crores on defense when there is no war for the last 4 decades?

  •  agrawalknath |   Jul 02 2012,12:32

    O God when we will get rid of these dirty politician and blood sucker Congress Govt.

  •  firstchoiceipo |   Jul 02 2012,10:05

    Only those who have the resources go on holiday tour.

  •  agee |   Jul 02 2012,09:53

    Govt is finding desperate ways to fund \"itself\" . Their own expenses have gone out of control - a fallout of the Sixth Pay commission recommendations - taxation and more taxation is the easy way out. In any case those in power whether politicians or beauraucrats are least effected by this taxation , they are anyways on a free ride .

  •  U Vijay |   Jul 02 2012,06:45

    On your income Government collects 33% income tax, now service tax of 12.3 % professional tax by the state government, Take example of actors they earn, pay Income tax in crore are still subjected for service tax. No wonder the population remains poor and Government get richer.No control on Government Machinery public sectors and their perks Ministers Freebies and scams. I envy NRI they have taken wise decision to migrate from this stupid country which does not let honest ppl live in peace.

  •  nicknamechanged564 |   Jul 01 2012,12:23

    impact my clients

  •  Guest |   Jul 01 2012,12:11

    Yes oxygen-containing air (though polluted) is free, which in coming days will be charged so as to raise funds to purify the polluted air

  •  pnr312 |   Jul 01 2012,11:35

    Now India is one of the heavily taxed countries, thereby govt discourages honest tax payers and promoting black money. Is there anything left without tax?

  •  tejas20121975 |   Jul 01 2012,11:21

    Is there anything left to be taxed????Ms Sonia Gandhi and FM and PM try to get the black money and clean the congress out of so many scams(Adarsh/2G/CWG/mining/army scandal).Congress party is more concentrated on appointing president rather than concentrating on the important issues of our country.This days i pray to god that pls CONGRESS OUT.....

  •  shashikewal |   Jul 01 2012,11:21

    From public tax will be levied, but only 50% will be deposited by the service providers as it is happening for other taxes viz. Vat, sale tax, and existing service tax. Govt target of 1. 24 lac crore is too ambitious. Only organised sectors like banks, telco etc pay 100% of what is collected , but small hotliers, drycleaners, etc etc. Hardly deposit 100%. .

  •  MMB Messenger |   Jul 01 2012,10:45

    How will this new service tax impact you?

  •  shekharmundada |   Jul 01 2012,08:16

    dis is wrong i request our prime minister to remove service (scam) tax and try to recover all scam money otherwise our economic condition goes down every thing will be costly

  •  shekharmundada |   Jul 01 2012,08:12

    scam tax from 12% ( is any new scam has taken place ) i feel dat v hav 2 recover scam money and remove service( scam) tax .

  •  RAVINDRA JOSHI |   Jul 01 2012,06:03

    This will boost inflation in coming months.

  •  Guest |   Jul 01 2012,02:41

    Service tax is good but max upto 3%.