New Delhi: A CBEC panel wants the new service tax regime, which is scheduled for implementation from July 1, be deferred by 3-4 months as more time is needed to put in place the required framework.
Under the new regime, service tax will be levied on all but 17 services -- lottery, betting and gambling etc specified in the negative list.
"The group feels that it would be ideal if the new provisions (negative list approach) are made applicable after a gap of 3 to 4 months, i.E. By October, 2012," the group said in a presentation to top Central Board of Excise and Customs (CBEC) officials recently.
It said the necessary preparation to smoothly implement the new scheme of levy is "likely to take some time".
"The group strongly feels that the operation of the scheme should commence only after department is well prepared and also after the taxpayers have imbibed the full implication of changes that have been brought," it added.
The government has notified that the negative list-based taxation of services will become operational from July 1.
The government has widened the definition of 'services' to bring in more activities under the tax net. At present, 119 services that come under 'positive list' are levied.
The Group also pointed out that adoption of levy of service tax based on negative list would lead to a qualitative change as almost all activities of a service provider are likely to be covered under tax.
"The department should prepare itself to deal with this added responsibility and the workload both in terms of taxpayer facilitation and compliance verification. It requires adequate time to be in the state of preparedness," it said.
The negative list approach, a precursor to the proposed Goods and Services Tax (GST) regime, is aimed to wider coverage of taxation.
The panel also suggested that a list of services, on a illustrative basis, that would henceforth be under tax net should be circulated to bring in further clarity.
The government aims to garner Rs 1.24 lakh crore from Service Tax during 2012-13.
First Published: Tuesday, June 19, 2012, 20:53