Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
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) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: VAT Audit :: ACCOUNTING STANDARD :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: ACCOUNTING STANDARDS :: cpt :: articles on VAT and GST in India :: Central Excise rule to resale the machines to a new company :: TDS :: VAT RATES :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: form 3cd :: due date for vat payment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes
« News Headlines »
 TDS on rent and other tax tasks to complete before March 31
 5 income tax changes which will come into effect from April 1, 2018
 Why you shouldn't be a last-minute tax filer
 How to calculate income tax for this assessment year on Moneycontrol
 6 Tax notices you may get and how to cope with them Income Tax Notice
 Deadline to pay advance tax ends tomorrow: Here is a step-by-step guide
  Central Goods and Services Tax (Second Amendment) Rules, 2018
 Income Tax Return Filing Deadline: Waiver On LTCG Tax To End On 31 March. Details Here
 Income tax returns (ITR) filing: Top mistakes that can be very costly
 Income Tax Return (ITR) filing: 6 last-minute things you can still do to save tax for FY17-18
 How to file Income Tax Returns online in 5 simple steps

Service tax may not be raised
February, 22nd 2007

The governments move to usher in a uniform tax rate for goods and services is likely to gather momentum only in 2008-09. The finance ministry has put on hold the proposal, under active consideration till now, to hike service tax rate from 12% to 14% due to worries about managing public perception in the context of rising inflation. While new services will be brought under the net, the existing service tax rate is unlikely to be tinkered with.

One option being considered by the finance ministry was to lower the excise duty rate from 16% to 14% along with the hike in service tax rate. Such a move would have meant a uniform rate of tax for goods and services. An across-the-board cut in excise duty would have benefited consumers.

However, the ministry is understood to have shelved this proposal as well, after assessing the revenue implications. Selective cuts in excise duty to tame inflation is, however, not ruled out. Conventionally, excise revenues have accounted for the largest share of the Centres tax kitty: the budgeted excise collections for the current fiscal are Rs 1,19,000 crore. A 2% cut in excise would mean a revenue loss of Rs 2,380 crore.

However, the share of service-tax revenues in the total tax collections is much smaller: collections are budgeted at Rs 34,500 crore. This is reckoned to be low, considering the fact that services contribute to over 54% of GDP. However, service-tax collections have been more buoyant than excise over the last couple of years.

Some tax experts argue that a large proportion of services is consumed by high income groups. A hike in the service tax rate may, in a sense, not be a regressive measure. The UPA government has set 2010 as the target date for introducing a goods and services tax (GST), integrating state-level indirect taxes as well, to usher in a seamless common market in the country. The convergence of rates between taxes on goods and services at the central level is a pre-requisite for the big-ticket reform measure.

However, it is wary of raising the service tax rate at this juncture due to the perception that the move could trigger cost-push inflation.

Currently, there are 99 services under the service tax net. The tax rate was raised from 10% to 12% in Budget 2006 along with the introduction of new services. Service tax was introduced in 1994 on three services: telecom, stock broking and insurance. Ninety-six more services have been brought under the net in the 13-year span.

States are asking for a larger share of the service-tax pie to make good the revenue loss on account of a cut in the central sales tax rate from 4% to 3% this fiscal.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - We Bring IT. Offshore software outsourcing company. We use Global Delivery Model (GDM) and believe in Follow The Sun principle

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