Indian Service Tax rise

The latest Indian Budget, issued on 29 February, contained a number of amendments to the VAT regime.

This included an new tax, Krishi Kalyan Cess, at 0.5% on all taxable services to contribute towards agriculture projects. This will increase Indian Service Tax to 15% from 1 June 2016.  It was last raised to 14.5% (including Swachh Bharat Cess) in November 2015.

The government is still confident that it can pass the Goods & Services Tax implementation legislation this year, however, opposition remains strong.  GST would replace Service Tax, CENVAT, VAT and a host of other indirect taxes.