Mumbai: With the new service tax regime coming into effect from July 1, the government expects to collect a revenue of Rs 1.24 lakh crore this fiscal, the Central Board of Excise and Customs (CBEC) said on Friday.
"We expect to collect around Rs 1.24 lakh crore through service tax in this fiscal," CBEC chairman SK Goel told reporters on the sidelines of a seminar organised by industry body Assocham here.
The services sector now accounts for over 60 percent of GDP. During the three months to June, the service tax collection grew 14.6 percent over the same period last year.
Under the new tax regime, all services, except 38 activities put on the negative list, will come under the tax net at the increased rate of 12 percent, as announced in the Budget. So far, service tax was being levied on 119 services activities based on a positive list.
The switchover to the negative list-based approach is aimed at aligning the indirect taxation system to the proposed goods and services tax (GST) regime, which will unify the levies of the Centre and the states into a composite taxation regime.
"The objective of tax laws is not just restricted to generating revenues, but also to make businesses competitive," Goel said, adding "we are operating in the global environment. Therefore, we need to develop a structure to ensure we remain competitive and there is no unstability.
"Also, the taxation system should ensure that the growth is not impacted."
He said the introduction of the new scheme brings with it the issue of shortage of skilled manpower. "With the new scheme coming in place we know there will be a need for more manpower to implement it. We have already taken steps to augment manpower. A similar proposal is before the government for consideration to increase manpower," he added.
First Published: Friday, July 13, 2012, 20:17