The government on Friday imposed two new levies — a 0.5 per cent Swachh Bharat Cess on all services, now liable to service tax, and a 2 per cent regional connectivity cess on international air travel and flights between metros and big cities.
The Swachh Bharat cess will be effective from November 15, said an official release. The proceeds from this cess will be exclusively used for Swachh Bharat initiatives. The decision will increase the service tax outgo on insurance premiums, air fares and cell phone bills. “This is not another tax but a step towards involving each and every citizen in making contribution to Swachh Bharat,” the government said.
The cess for the creation of the regional connectivity fund (RCF) corpus will be levied from January 1 to enable the regional connectivity scheme to start from April 1, Aviation Secretary R.N. Choubey told reporters on Friday. The scheme provides for viability gap funding (VGF) from the government for operating small aircraft to small towns with a fare cap of Rs. 2,500 per hour of flying.
