Mumbai: Following weak growth in May, business activity in India’s services sector contracted in June. The seasonally adjusted Nikkei India Services Business Activity Index, published by IHS Markit, fell to a one-year low of 49.6 in June, from 50.2 in May. It looks like the increased compliance cost in the GST era coupled with the ongoing consumption slowdown is weighing on service providers. It should be noted that under GST, services are taxed at a rate of 18%, higher than the 15% levied earlier. No wonder then that unlike their counterparts in the manufacturing sector, service providers have raised selling prices in June to make up for increased operating costs.

Source: Mint July 03, 2019 06:33 UTC