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Govt plans to widen service tax net, introduces bill
New Delhi, Aug 08: The government has begun the process for introduction of a separate self-contained Service Tax Act with a view to tap this fast growing sector, though not to the extent of the US, UK and Japan, where 71%, 67% and 60% of the sectors respectively come under the service tax net.
New Delhi, Aug 08: The government has begun the process for introduction of a separate self-contained Service Tax Act with a view to tap this fast growing sector, though not to the extent of the US, UK and Japan, where 71%, 67% and 60% of the sectors respectively come under the service tax net.
Announcing this at a meeting organised by Assocham today, SK Misra, member, service tax, CBEC said so far 2.5 lakh assesses have been registered and there was scope for adding another 8 lakh assesses.
Misra categorically stated that the service tax was a voluntary tax and no policing will be done. He said, to enact a separate law, the action has already been initiated by placing a bill in the Parliament.
However, it has to be ratified by the state governments and after receiving their assent, a new bill will be placed before the Parliament with a negative list of the services. Only the services which are of national nature will be on the central list. All efforts will be made for categorisation of the services to avoid any litigation/confusion.
Misra further clarified that the potential revenue areas for the government were slowly narrowing down and therefore, the services sector which was a growing sector has to be brought into the tax net. In ’02-03 the government had collected Rs 4,025 crore as service tax against the target of Rs 6,000 crore. The target for ’03-04 is Rs 8,000 crore and CBEC is hopeful of achieving it.
Bureau Report
Misra categorically stated that the service tax was a voluntary tax and no policing will be done. He said, to enact a separate law, the action has already been initiated by placing a bill in the Parliament.
However, it has to be ratified by the state governments and after receiving their assent, a new bill will be placed before the Parliament with a negative list of the services. Only the services which are of national nature will be on the central list. All efforts will be made for categorisation of the services to avoid any litigation/confusion.
Misra further clarified that the potential revenue areas for the government were slowly narrowing down and therefore, the services sector which was a growing sector has to be brought into the tax net. In ’02-03 the government had collected Rs 4,025 crore as service tax against the target of Rs 6,000 crore. The target for ’03-04 is Rs 8,000 crore and CBEC is hopeful of achieving it.
Bureau Report