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Pune groans as service tax increases, eating out to become more expensive

Service tax in the country has increased to 15 per cent from June 1 onwards on all taxable services due to the Centre’s new Krishi Kalyan Cess tax, which is being imposed at 0.05 per cent.

Written by Mikhail Khan | Pune | Updated: June 5, 2016 4:31:41 am

The increase in service tax from June 1 has certainly made its pinch felt in the pocket of Puneites, especially when it comes to eating out. While small and medium restaurants have not seen a price rise in their menu card, high-end restaurants will be increasing their rates by 5-10 per cent. This increase in service tax will certainly make our lives a little more difficult, says Ganesh Shetty, President of the Pune Restaurant and Hoteliere Association. “As a result of this, restaurants with a turnover of three crore will be forced to increase their rates. However, medium-sized hotels and restaurants will not be increasing their rates for the time being as the government has assured us that this is only temporary.” Shetty said more than 100 restaurants in the city will be printing new menu cards in the next few weeks to reflect their new rates. Shetty did express solidarity with the farmers to assist whom this tax has been implemented. “While this additional service tax will cause a strain on our resources, we fully support the farmers and the agricultural sector as our industry depends heavily on it. The farmers are almost a silent partner and if there are no farmers then we will not survive.”

Service tax in the country has increased to 15 per cent from June 1 onwards on all taxable services due to the Centre’s new Krishi Kalyan Cess tax, which is being imposed at 0.05 per cent.

Shetty’s pragmatism was lacking in many Puneities talking about their mobile phone bills or internet use for ecommerce transactions. “I have not personally felt the increase in service tax,” said Ayan Srivastava, a design engineer by profession. “I think that this increase is for a good cause therefore I do not mind paying the extra tax. While I do feel a palpable increase when I go out to dinner with my friends or when I order something to eat I do not feel that the amount it is all that significant,” he said. Students on the other hand are certainly feeling the pinch more than others. Dhruv Joshi, a student from the Vishwakarma Creative-i College, says the increase will put an immense strain on his finances. “Eating out was already extremely expensive and to hear that it will now be even more is extremely disheartening,” said Joshi. “While I am happy that this initiative is targeted towards helping drought-stricken farmers, it remains to be seen whether these funds will even reach them. For example, I have not seen any visible improvements linked to the earlier implemented Swacch Bharat Cess,” he said. Ronak Patel, who goes to the Vishwakarma Institute of Management, also shares this view. “The cost of living will now naturally go up for students,” said Patel. “Students will now be forced to borrow even more money from their parents as a result of this increase,” he said.

On the other hand, Steffi Suarez from the Vishwakarma Institute of Management, is against the idea of service tax entirely. “I don’t really understand why we have service tax in the first place,” says an aghast Steffi. “While I do feel sorry for the farmers, I firmly believe that the government should help the farmers with the money that they already have instead of dipping into our pockets like this. Whatever your opinion on the increase in service tax, its polarizing effects are clear for all to see,” she said.

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