38 services will not attract tax from July 1
Advocates serving entities with turnover of up to Rs 10 lakh, libraries and entities providing public conveniences are among the 38 services which will not have to pay 12% tax under the new norms slated to come into effect from July 1.delhi Updated: Jun 21, 2012 00:48 IST
Advocates serving entities with turnover of up to Rs 10 lakh, libraries and entities providing public conveniences are among the 38 services which will not have to pay 12% tax under the new norms slated to come into effect from July 1.
As per the guidance note on implementation of the negative list of service tax released by Finance Minister Pranab Mukherjee, the entities providing merger and acquisition services, too, will be kept out of the ambit of the tax net.
With the inclusion of 14 more services in the negative list, the total number of exempt services would go up to 38.
"The new approach to taxation of services is intended to take the country and the economy a step closer towards the introduction of Goods and Service Tax (GST)", Mukherjee said while releasing the 107-page book 'Taxation of service: An Education Guide'.
With the introduction of the negative list, all services which services which do not figure in the list would be subejct to 12% tax.
Mukherjee said that with the expansion of the service tax base, it would be possible for "the Central Board of Excise and Customs (CBEC) to exceed the collection target of Rs 1.24 lakh crore in the current fiscal".
The government has collected Rs 97,000 crore on account of service tax in the last financial year. For the current year, the government has hiked the service tax rate by two% to 12%.
As per the service tax guide, the 14 services which will be exempted from payment of tax include lending of books, publications or any other knowledge enhancing content or material by public libraries.
According to chartered accountant and service tax expert Atul Gupta, under the proposed norms entities providing merger and acquisition services will not be subject to service tax.
First Published: Jun 21, 2012 00:46 IST