From costlier fuel to higher phone bills: How govt rang in 'acche din' over the weekend

From petrol to PAN card to hotel bills, all got costlier on Sunday. While the increase in the cost of most items has been attributed to the 0.5 percent Swachh Bharat Cess imposed by the government, the fuel price increase is in tandem with the international crude oil price movement.

The new cess was announced last week by the government and it levies a surcharge of 0.5 percent on all taxable services from 15 November.

Check out below how prices went up over the weekend and how the government will benefit:

Eating out, telephony and travel became expensive from Sunday due to the ‘Swachh Bharat’ cess imposed on taxable services which is expected to yield about Rs 3,800 crore to the exchequer in the remaining months of the fiscal year.

With the imposition of the cess, service tax rate will go up from 14 percent to 14.5 percent on all taxable services.

According to Revenue Secretary Hasmukh Adhia, the government expects to collect around Rs 10,000 crore from Swachh Barat cess for the full year.

Therefore, in the remaining months of this fiscal until 31 March 2016, the cess would yield about Rs 3,800 crore to the kitty.

The Swachh Bharat cess would be levied only on the portion of taxable services (after abatement) and will go towards funding of the cleanliness drive, a pet project of Prime Minister Narendra Modi.

This means that service tax on restaurant bills will go up from 5.6 percent to 5.8 percent following the levy of 0.5 percent Swachh Bharat cess.

The Finance Ministry has also clarified that the Swachh Bharat cess will not apply on those services for which payments have been received prior to November 15 and invoices raised before November 29.

The decision to impose 0.5 percent cess will translate into a tax of 50 paise only on every Rs 100 worth of taxable services.

Explaining the provisions for the levy of cess, the ministry said it would be calculated on the abated value or value arrived as per the Service Tax (Determination of Value) Rules, 2006.

For restaurants or eating joints having air-conditioning facility, the cess would be 0.5 percent of 40 percent of the billed amount i.e. 0.2 percent.

“The cumulative service tax and Swachh Bharat Cess liability would be 5.8 percent (14.5 percent of 40 percent) of the total amount charged,” it said.

Finance Minister Arun Jaitley had in Budget 2015-16 proposed to levy a Swachh Bharat cess of up to 2 percent “on all or certain services, if need arises”.

“Swachh Bharat cess is not another tax but a step towards involving each and every citizen in making contribution to Swachh Bharat. The proceeds from this cess will be exclusively used for Swachh Bharat initiatives,” the Finance Ministry had said while notifying the Swachh Bharat cess.

The government had in Budget 2015-16 estimated to collect over Rs 2.09 lakh crore from service tax. The Rs 3,800 crore collection from the cess would be over and above that.

The cess and the service tax levy have increased the cost of travel in railways’ upper class categories from Sunday.

According to a Rail Ministry circular, the levies make for a 4.35 percent hike for travel in first class and all AC classes from November 15.

The decision to increase passenger fares is in line with a government notification on November 6 for imposing a Swachh Bharat cess on all taxable services.

“Service tax of 14 percent and Swachh Bharat cess of 0.5 percent are chargeable on 30 per cent of total passenger fare equivalent to 4.35 per cent of the total fare on first class and all AC fares,” the circular said.

However, the service tax will not be applicable for tickets issued before November 15. Neither would the levy be applicable for general and sleeper-class travel.

With the hike, ‘AC-I’ fares on mail and express trains from New Delhi to Mumbai are up Rs 206 while a rise of Rs 102 is applicable on ‘AC-III’ fares from New Delhi to Howrah.

On the Delhi-Chennai route, the increased fare works out to about Rs 140 for the ‘AC-II’ segment.

According to an estimate, the service tax levy and the Swachh Bharat cess are expected to fetch about Rs 1,000 crore in a year.

Annual earnings for the railways from the passenger segment are estimated to be at about Rs 35,000 crore.

Getting a new PAN (Permanent Account Number) card for income tax purposes has become costlier by a rupee to Rs 107, due to the cess.

Under revised charges, a PAN card, issued by the Income Tax Department to individuals or entities to keep a track on all their financial activities, within the country will now be costing Rs 107 instead of Rs 106.

Similarly, getting a new PAN shipped outside India will cost an individual or entity a total of Rs 989, four rupees more than the existing price of Rs 985.

“The provisions of Swachh Bharat cess (SBC) @ 0.5 per cent under the Finance Act, 2015 are effective from November 15, 2015. Accordingly, service tax rate (for PAN) is increased from 14 percent to 14.50 percent,” an official notification issued in this regard said.

The PAN charges were revised by Rs 1 earlier this year in June when service tax charges were enhanced by the government.

Under the new rates for a PAN card to be obtained in India, the government will charge Rs 93 as the processing fee and the new service tax levied on it will be Rs 14 which makes the new cost of Rs 107.

In case of the PAN card to be sent abroad, the government will charge Rs 93 as processing fee, Rs 125 as service tax and Rs 771 as the courier charges, bringing the overall cost at Rs 989.

Above all these, the prices of petrol and diesel have also been increased from midnight yesterday in line with firming global crude oil rates.

Petrol price was hiked by 36 paisa a litre, while that of diesel by 87 paisa per litre.

This is the first hike in petrol price in five months and the third in diesel rates since October.

In Delhi, petrol price has been hiked to Rs 61.06 per litre from Rs 60.70 a litre and that of diesel to Rs 46.80 from Rs 45.93 per litre, said Indian Oil Corp, the nation’s largest fuel retailer.

“The current level of international product prices of petrol and diesel and Indian Rupee-US Dollar exchange rate warrant an increase in prices, the impact of which is being passed on to the consumers with this price revision,” IOC said in a statement here.

Last time the price of petrol was on July 16 when rates were increased by 32 paisa. Since then prices have been cut on four occasions - by Rs 2.43 on August 1.27 on August 1, by Rs 2 on September 1 and by 50 paisa on last price change on November 1.

Diesel rates were not changed on November 1 but had been hiked by 95 paise on October 16 and by 50 paise on October 1.

Rates of diesel were on September 1 reduced by 50 paise a litre.

State-owned fuel retailers – IOC, Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) – revise petrol and diesel prices on 1st and 16th of every month based on average imported cost and rupee-dollar exchange rate in the previous fortnight.

“The movement of prices in the international oil market and INR-USD exchange rate shall continue to be monitored closely and developing trends of the market will be reflected in future price changes,” the IOC statement added.

The petrol and diesel rates will experience a corresponding increase in other states, it said.

The oil marketer said the price of petrol per litre from Monday will be Rs 66.39 in Kolkata, Rs 68.13 in Mumbai and Rs 61.38 in Chennai.

Diesel will cost Rs 50.29 in Kolkata, Rs 54.04 in Mumbai and Rs 48.00 in Chennai.

The Indian basket of crude oil closed trading on Thursday at $42.41 a barrel. The figures for Friday will be available on Monday.

With input agencies