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Saturday 19-Nov-2011

Non-AC rail travel to be kept out of service tax net

Services, which are provided by the government as well as the private sector, would attract 10 percent tax

By  Traveltechie Bureau | Mumbai

The government on Friday came out with a revised draft list which indicates that health facilities, non-AC train travel, education, metro and taxi would be kept out of the service tax net.
    
Services, which are provided by the government as well as the private sector, would attract 10 percent tax, Central Board of Excise and Customs (CBEC) Chairman S K Goel said while releasing the revised concept paper on 'Taxation of Service based on Negative List'.
 
The 10 services which are provided by the government and the private sector companies include insurance, security, port and airport.
 
As per the revised discussion paper, Goel said, 22 services will be under the negative list as against 27 proposed in the earlier draft.
 
On implementation of the proposal, Goel said, "The negative list of services should be implemented immediately or we should wait... it is a matter of debate."
 
The negative list will include services like funeral, burial and mortuary agencies, interest paid on deposits by bank, services provided by independent journalists, dividend on investments, and transport of passenger in public transport.
 
The other services which figure in the negative list are copyright, dramatic and artistic work, services provided by recognised political parties, advertisement other than those published in newspaper and broadcast by radio or TV or displayed in other electronic media.
 
Services account for nearly 63 percent of India's GDP and widening of the net could yield an additional 20 percent in service tax. The government proposes to collect Rs. 82,000 crore from service tax during 2011-12.

PTI