Govt likely to roll back some of tax proposals, including hospotal service tax
March, 18th 2011
The government is likely to roll back some of its tax proposals, including service tax on healthcare services and the proposed 10 per cent excise duty levy on branded garments.
Finance Minister Pranab Mukherjee had in Budget 2011-12 proposed extending service tax on diagnostic tests and medical services provided by a centrally airconditioned hospital that has 25 beds or more.
He, however, allowed a 50 per cent abatement, so that the tax rate would work out to 5 per cent.
While the rationale was to complete the tax credit chain, it came in for public and industry criticism. Significantly, the National Human Rights Commission also expressed its disapproval last week.
The Finance Ministry is also planning to provide some relief to garment manufacturers hit with a 10 per cent excise levy. This could either be lowered, said sources, or set off against the Central excise duty paid.
The proposal to levy service tax on rail freight may be postponed once again as Railway Minister Mamata Banerjee gears up for elections in West Bengal. Mukherjees reply to the discussion on the Finance Bill is slated for March 22.