The correct answer is (b).
The Union Budget 2006-07 increased the service tax from 10% to 12%. This was done in order to increase the government’s revenue and to reduce the fiscal deficit. The service tax is a tax levied on the value of services provided by a person or a business. It is a indirect tax, which means that it is paid by the consumer of the service, but collected by the service provider. The service tax is levied on a wide range of services, including banking, insurance, telecom, transportation, and hotels.
The increase in the service tax has been met with some criticism, as it is seen as a burden on businesses and consumers. However, the government has defended the increase, saying that it is necessary to meet the fiscal deficit target.