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India Increases Service Tax Rate


 India's service tax rate has increased.

Effective June 1, 2015, the service tax rate in India increases from 12.36% to 14%.

The increase was anticipated, having been announced in the budget speech presented last February by Finance Minister Arun Jaitley. If all goes as planned, the higher rate of tax will “facilitate a smooth transition” to the imposition of a Goods and Services Tax (GST), which is expected to simplify India's tax system.  Once a GST is implemented, it will “subsume service tax, excise and other local levies.” Implementation is expected to occur in April 2016 (moneycontrol.com).

The service tax is imposed on most (but not all) services, including the following:

  • Advertising
  • Airlines and railways
  • Architecture
  • Banking
  • Construction
  • Credit cards
  • Event management
  • Tour operators

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.