Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: VAT RATES :: articles on VAT and GST in India :: TDS :: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: Central Excise rule to resale the machines to a new company :: due date for vat payment :: VAT Audit :: form 3cd :: ACCOUNTING STANDARD :: cpt :: ACCOUNTING STANDARDS
 
 
Service Tax »
 Central excise organizes seminar on GST
 Kerala tops in GST registrations
 GST tax structure ready; how will it impact economy and various sectors
 Service tax department doles out advice on migration to GST
 IT infrastructure firm of GST under scrutiny for tax evasion
 GST council OKs draft law on relief to states
 GST Network gets notice for avoiding service tax
 GSTN contract may attract tax
 GST Council may discuss tax rate on gold at Udaipur meet
 Govt may rework indirect tax estimates mid-way after GST
 GST Council meeting: States allowed to tweak taxpayer division after consulting Centre

Centre-state consensus on service tax, finally
January, 10th 2012

Consensus has eluded the Centre and states on the proposed Goods and Services Tax (GST). But in a pre-Budget exercise, states on Monday gave their approval to the introduction of a list of areas to be exempted from the service tax planned to be introduced by the Centre from April 1, before the GST roll-out.

The nod, however, came with riders, with the Empowered Committee of state finance ministers (EC) asking the Centre not to venture into their territory by levying service tax in areas such as construction, entertainment, restaurants, transport of goods by road and inland waterways, beauty parlours, health and fitness, etc. If the Centre accepts, that may pave the way for the announcement of a negative list (of exempted areas) in the Budget. It would increase Central revenue from service tax by 20-25 per cent.

ON THE NEGATIVE LIST
Prominent areas according to
The Centre's revised 
concept paper:
* Non-AC second-class passenger travel by the railways and any class by the metro
* Construction, renovation/repair of specified infra projects, single dwelling unit 
* Services by clinical establishments, except health and fitness
* Advertisements other than published in newspapers or broadcast by radio or television
* Betting and gambling
States wish list:
* Beauty parlours
* Other areas of construction
* Health and fitness
* AC restaurants
* Entertainment
Source: Union Ministry of Finance, state finance ministries

In a negative list approach, all services will be taxed by the government barring those specified in the list. That will be a shift from the existing system of a list of over 125 services that are taxed.

We have given our in-principle approval to the negative list for services. Service activities may be taxed based on the negative list after some amendments, with effect from April 1, said EC chairman and Bihars deputy chief minister Sushil Modi after the meeting on Monday. The meeting was held in Madhya Pradesh, which is most vocal about its opposition to the Centres GST proposals.

Owing to the upcoming assembly polls in five states, just eight state finance ministers of Bihar, Madhya Pradesh, Haryana, Jammu & Kashmir, Assam, Tamil Nadu, Delhi and Chhattisgarh attended. But, officials of other states were present and the consensus got their support as well.

Earlier, states had expressed reservations on the negative list. They had argued the Centre was levying service tax on several items within the states taxable jurisdiction. Now, they have proposed activities already taxed by the Central government or proposed to be taxed but under the state list in the Constitution be kept in the negative list.

States proposed the negative list include services within the ambit of the Centres residuary powers but critical for socio-economic reasons, such as social welfare and public utilities, agriculture, education and health. They argued if states were taxing certain activities, the Centre should not cover those under service tax, as it would not provide an additional tax base to state governments in the GST regime.

States also proposed changes in the definition of economic activity suggested by the Centre. They want the Centre to put it in the definition itself that items that can be taxed by states do not constitute service. The Centres concept paper has defined service as anything which does not constitute supply of goods, money or immovable property.

Currently, states do not impose any service tax and cannot do so unless the constitutional amendment Bill pending in Parliament for the GST roll-out is passed.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Achievements

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions