The new rate of 14 percent announced by finance minister Arun Jaitley in his Budget for 2015-16 would come into effect from June 1, informed government in a press release on Wednesday.

"In the Union Budget, 2015, an increase in the rate of Service Tax from 12 percent to 14 percent had been proposed from a date to be notified," it said.

The Finance Bill, 2015 has since been enacted and the Central Government has notified 1st June, 2015 as the date from which the rate of 14 percent would become applicable.

The provisions levying Education Cess and Secondary and Higher Education Cess would also cease to have effect from same date i.e. 1st June, 2015, as the same would be subsumed in the service tax rate of 14 percent. Certain other changes have also been notified with effect from 1st June, 2015.

The service tax is currently levied at the rate 12.36 per cent including education cess.

However, the date of giving effect to the provisions relating to imposition of a Swachh Bharat cess on all or any taxable service will be done in due course.

In his Budget speech, Jaitley had said that to facilitate a smooth transition to levy of tax on services by both the Centre and the States, "it is proposed to increase the present rate" of service tax plus education cess from 12.36 percent to a consolidated rate of 14 percent.

Service tax is levied on all services, expect a small negative list, reports media.