Finance Minister Pranab Mukherjee on Monday assured in the Rajya Sabha that the representations on the proposal to impose 5 per cent service tax on high-end healthcare services will be taken up next week. The tax has been since described as misery tax.
Replying to the discussion on the Budget, Mukherjee hinted that the healthcare service tax could be rolled back. But he noted that the issue can be announced or decided only when the Finance Bill is taken up for passing. I, therefore, urge all of you who are agitating to wait till the Finance Bill is approved.
Mukherjee also made a case for raising the Tax- GDP ratio to a reasonable level of 12-14 per cent to enhance the governments capability to fund social sector scheme.
I do believe that Tax-GDP ratio, which has come down to 10 per cent plus, must reach 12 per cent. So that the Tax GDP ratio is at reasonable level, Mukherjee said.
The Rajya Sabha returned the Appropriation Billsthe first stage of the passage of the Budget proposals. The Lok Sabha already passed the supplementary demands for grants for 2011-12.
Adopting a rather conciliatory tone, Mukherjee said that the Government needed the Oppositions cooperation in passing crucial financial reform Bills, including the Insurance Law (Amendment) Bill that seeks to raise the FDI cap to 49 per cent from the current 26 per cent.
On the issue of tax evasion which has been a dominant point of debate, Mukherjee said that the revenue authorities have detected tax evasion of about `1 lakh crore during the past 18 months. He also said that the under-pricing in international transaction to the tune of `33,784 crore has been detected and brought within the tax loop. During domestic searches, seizure to the tune of `25,000 crore has been made. In addition, the Directorate of Foreign Taxation has detected evasion worth `34, 601 crore.