Dining out and banking may get costlier on GST rollout: Experts
December 06, 2015 12:14
Services like telephony, dining out and banking will get dearer if the recommendations made by the GST panel on the proposed nationwide uniform taxation are accepted as the tax rate will increase to 17-18 per cent from 14.5 per cent at present, experts said.
A finance ministry panel headed by CEA Arvind Subramanian has suggested a 'standard rate' of 17-18 per cent on bulk of the goods and services for the entire country.
According to Deloitte (India) Senior Director Saloni Roy: "Services will see rise in prices as the tax rate will suddenly increase from 14 per cent to 17-18 per cent when the GST is implemented."
The government plans to roll out Goods and Services Tax from April 1. A Constitution Amendment Bill is currently stuck in Rajya Sabha.
The Service Tax was introduced at 5 per cent in 1994 on limited number of services, she said, adding the tax rate has gradually increased to 14 per cent and now covers almost of all services with few exceptions.
In the last Budget, Finance Minister Arun Jaitley increased the Service Tax to 14 per cent from 12.36 per cent. Presently the incidence of Service Tax is 14.5 per cent after including Swachh Bharat cess of 0.5 per cent.
There is no clarity whether the Swachh Bharat cess would be subsumed in the GST or it would be levied over and above the standard rate.
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