Puneites rework their expenses as service tax hike rolls out in the city

While travel becomes costlier, city restaurants, auto services will not charge extra for now.

By: Express News Service | Pune | Published: June 2, 2015 12:54:02 am
tax hike, tax increase, tax raise, air travel price hike, air travel costlier, flights costlier, service tax, india service tax, new service tax, autowale, pune news, india news, Indian Express Air travel and goods at duty-free shops are set to become costlier. (Pune Airport – Express FIle Photo)

Starting Monday, when the hike in service taxes came in effect across the country, Neeta Pawar, who operates a tours and travel company in the city, has revised the rates for tourists wishing to avail of their services.

Pawar says customers who had already booked their services will not have to shell out anything more. “But new bookings after Monday will see a slight increase in base rates,” she says.

During his budget speech earlier this year, Union Finance Minister Arun Jaitley had announced an increase in the service tax from 12.36 per cent to 14 per cent. Barring a few items in the negative list, a majority of the services will now be costlier across the country and like the rest, Puneites too will start feeling the pinch.

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Other than tours and travels, mobile phone bills, banking charges, advertising, eating out, railway and air travel are also set to become costlier with the hike in service tax.

Imran Khan, who runs a duty-free shop at the Pune airport, says he has revised prices at his shop from Monday. “Now, things will be costlier by at least 5-6 per cent,” he says.

Banking operations, including use of ATMs, would also become costlier, but banks have adopted a wait-and-watch policy before passing the burden to the end customer. Senior officials of a public sector bank said that before taking any decision, they were waiting for on the RBI’s policy which will be announced on Tuesday.

However, the good news for Puneites is that there would not be any significant increase in costs of eating out or in real estate prices. Ganesh Shetty, president of Pune Hoteliers Association, said that since the hike was not significant, they would not pass the burden to their patrons. “We are not going to print new menu cards or raise prices,” he said.

Vinit Deo, CMD of Posiview Consulting, said that the service tax raise was too insignificant to be realised in the real-estate sector.

While taxi service providers have announced that there would be a hike in their rates, dial-an-auto service provider Autowale.in has decided not to revise rates. Mukesh Jha, CEO of the company, said they would not be raising rates as they operate on RTO rates.

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