New service tax of 12% makes travel, holidays costlier

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.