Service Tax Hike Affects Household Budgets

With hike in service tax, majority of women are struggling with their household budget and finding it difficult to cope with the increasing cost of living from 1st April 2012. Telephone calls, restaurant bills and other activities will cost more from 1st April, with the budgetary proposal of raising service tax rate from 10% to 12%.

The Industry body – ASSOCHAM chamber surveyed respondents in different cities including Delhi, Mumbai, Kolkata, Pune, etc. and noticed that about 70% of women in the country said that higher service-tax rate on essential services including phone connections, eating-out, becoming costlier and affecting their household budget.

Hike in excise duty is also impacting the day-to-day life of the common man, which would lead to high expenses than actual earnings. Majority of middle and lower income groups have told that they are finding ways to cut back spending with hike in prices of goods and services.

In order to earn an additional Rs.18,660 crore during 2012-13, Finance Minister of India, increased the service tax from 10% to 12%. There are over 120 services that come under service tax. These include air travel, beauty parlour, healthcare, advertisement, life insurance, dry cleaning, cable operator, credit card, credit rating among others.

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