Service tax net expanding, new target Rs.644.6 billionFebruary 29th, 2008 - 4:50 pm ICT by admin
Chennai, Feb 29 (IANS) The service tax net in India has been expanding steadily. From tax revenue of Rs.8 billion in 1996-97 out of select services like telecom, insurance and others, the revenue budgeted for 2008-09 is a whopping Rs.644.60 billion. The revised estimate for 2007-08 is Rs.506.03 billion.
The tax rate has also been going up at regular intervals while the number of services brought under the service tax net is also on the rise.
In his budget speech Friday, Finance Minister P. Chidambaram proposed to widen the service tax net.
He proposed inclusion of management service provided under the unit linked insurance policy (ULIP) on par with the asset management service provided under mutual funds, services provided by stock/commodity exchanges and clearing houses, right to use goods where value added tax (VAT) is not payable and customised software.
He categorically stated that money changers, persons running games of chance, and tour operators using contract carriage vehicles would come under the service tax net.
The good news is that the threshold limit of exemption for small service providers will be increased from Rs.800,000 to Rs.1 million per year thereby freeing 65,000 small service providers from the tax bracket.
Tags: budget speech, clearing houses, commodity exchanges, contract carriage, customised software, feb 29, finance minister, games of chance, insurance policy, management service, money changers, rs 8, rs 800, select services, target, tax bracket, tax net, threshold limit, ulip, whopping rs