Air travel, mobile telephone services, bills, eating in restaurants and other services will become costlier from 15 November, as the government is set to impose a 0.5% cess on all "taxable services" to fund its Swachh Bharat mission.
The Swachh Bharat cess is additional tax levied over and above 14% service tax. The government is expected to generate nearly Rs 400 crore during the remaining months of the current fiscal from the cess.
"Swachh Bharat Cess is not another tax but a step towards involving each and every citizen in making contribution to Swachh Bharat," NDTV Profit reported, citing a statement by the finance ministry.
Union Finance Minister Arun Jaitley had proposed to impose a Swachh Bharat cess of up to 2% in the budget for the financial year 2015-16 "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 statement added.
In a recent report submitted to Prime Minister Narendra Modi, a high-level panel of 10 chief ministers, formed to ascertain the financial needs of the Swachh Bharat mission, had proposed the central government to bear 75% of the overall cost of the mission.
The high-level NITI Ayog chief ministers' panel on Swachh Bharat, headed by Andhra Pradesh chief minister N. Chandrababu Naidu, had suggested that the remaining cost would be borne by the states.
The finance ministry statement said that "there is a fair share of cleanliness concerns" in India, as the country is vast and has a population of over 120 crore.
