IAMAI asks for service tax cut to spur consumption
January, 06th 2009
Demanding a moratorium on service tax for nascent industry segments in the IT sector, Internet and Mobile Association of India today made a strong case for slashing service tax by four per cent across the board.
Noting that service tax should be reduced to all services in line with the excise duty cut announced last month, IAMAI said,"A cut in service tax will come as a major relief to the micro, small and medium-sized service sector companies."
In a memorandum to the Union Government, the body said slashing service tax will immediately boost domestic consumption up to the value of the rate cut, or leave more money at the hands of the consumer.
" Unlike the longer cycle time in manufacturing, a cut in the service tax will make an immediate impact," IAMAI said.
IAMAI said it has been demanding a moratorium on service tax for nascent industry segments like Internet and mobile value-added services business for some years.
"A reduction in service tax to 8 per cent on all 104 categories of services under this tax for at least two years would be an appropriate measure to match the revival packages recently announced for the manufacturing sector," IAMAI said.
Among the services listed by IAMAI for a tax relief are the likes of online advertising, online services, mobile value-added services, Internet cafe and units in special economic zones.