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No service tax on health, education
December, 22nd 2007
Conceding to populist sentiments, state governments have ruled out levying service tax on education and health facilities, especially those for the common man. Areas relating to health and education may not be included in the service tax. That is the view we have taken, Asim Dasgupta chairman of the empowered committee of state finance ministers, which met on Thursday, said after the meeting. He also hinted that even private health and educational institutions might be exempted as certain private entities also provide these services to the common man. Along with health and education, states had been given 44 new services for taxing, as part of the bail out package for the phasing out of central sales tax (CST). States have so far been unable to reach a consensus on which services to tax as certain services like education could evoke a public outcry and most others are local in nature, such as sports, entertainment and legal services. CST is reduced from 4% to 3% this fiscal and would be eliminated by April one, 2010, when the goods and service tax regime is finally introduced.
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