Dining out, banking, other services may cost more after GST rollout

  • PTI, New Delhi
  • Updated: Dec 07, 2015 01:47 IST
Services such as telephone calls, eating out and banking will become more expensive if the recommendations made by the GST panel are accepted. (HT Photo)

Services, including telephony, dining out and banking, will get dearer if the recommendations made by the GST panel are accepted, as the tax rate will increase to 17-18% from the current 14.5%, experts said.

A panel headed by chief economic adviser Arvind Subramanian has suggested a ‘standard rate’ of 17-18% on most goods and services.

“Services will see rise in prices as the tax rate will increase from 14% to 17-18% once GST is implemented,” said Saloni Roy, senior director, Deloitte (India).

The government plans to roll out Goods and Services Tax (GST) from April 1. A Constitution Amendment Bill on GST is currently stuck in the Rajya Sabha.

In the last budget, finance minister Arun Jaitley increased the service tax to 14% from 12.36%. Following the 0.5% Swachh Bharat cess, the service tax currently stands at 14.5%.

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.

BMR & Associates Partner Malini Mallikarjun said that some sectors such as real estate, may not get impacted as they are not included in GST.

In its report, the CEA-headed panel had suggested that alcohol, real estate, electricity and petroleum should come under the purview of GST at an “early stage” in future.

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