Budget 2008: Government plans to levy service tax on amusement parks
December, 28th 2007
Your trip to amusement parks could cost you more from next year. The government is examining a proposal to levy service tax on amusement parks and coin-operated amusement machines in the Budget 2008-09.
This was among the 44 new services which were offered to states as a part of a compensation package to phase out of central sales tax. The empowered committee of state finance ministers has recommended imposition of service tax on three out of the 44 new services, including healthcare, education and amusement parks and coin-operated amusement machines.
Since it may be politically difficult to impose service tax on education and healthcare services, the government is looking at amusement park service on which a levy of 12%(plus cess) may not be seen as an anti-people move, a source said. Since films are already charged with entertainment tax, which is quite high in some states, a 12.36% service tax on amusement parks or machines would not be considered very drastic.
Moreover, since small service provider with an annual turnover of up to Rs 8 lakh are exempt from service tax, small service provider offering these services would not get impacted.
The state governments had given their recommendation in favour of these services in June this year. The implementation was, however, left to be carried out as a part of the budget exercise.
The Centre will transfer service tax collection from 33 already taxed services to the state governments as a part of the compensation package in the Budget 08-09. Empowered committee chairman Asim Das Gupta had said the state governments were not in favour of imposition of service tax on services like healthcare and education, which impacted the common man.