In the current financial year, the indirect tax collection, which includes excise duty, customs duty, and service tax, has been at Rs 91,035 crore, which is nine per cent higher than the previous year, while the service tax contributes Rs 3,705 crore alone, said Shreyas V Pandya, president, Gujarat Chamber of Commerce and Industry (GCCI).

Mumbai tops the list in the zone in the collection of service tax with Rs 580 crore, followed by Delhi with a collection of Rs 377 crore, Chennai with a collection of Rs 374 crore and Kolkata with a collection of Rs 177 crore.

Bangalore collected Rs 114 crore and Ahmedabad Rs 73 crore.
Ahmedabad ranked sixth among all the zones.

He was speaking at The open house interactive session with S C Mathur, chief commissioner, central excise, Ahmedabad Zone, at the GCCI premises on Wednesday.

The government, after realising that the indirect taxation rates have reached its peak and there was little scope left for upward tinkering with the indirect tax base, for the first time in 1994, decided to levy service tax on the service providers, said Pandya.

Mathur, while addressing the session, said, The government is on a process of identifying the service tax providers of the country. Threshold limits in the service tax will be established once the service tax providers are identified.
The registration process for the service tax has been simplified, and the service providers, including cable operators, must register themselves and the chamber should play an active role in this, Mathur said.

Services contribute nearly 50 per cent to the gross domestic product and the service tax collection and administration is transparent and simple compared to the complexities of the excise and customs tax, Mathur said.

Initially, service tax was levied on only a few services which have been spread very wide but at present, 58 per cent of the services are taxed.

Even the tax rate has been increased to eight per cent this year as compared to five per cent last year.
The government, instead of increasing the tax rate by 60 per cent at one go, should have maintained status-quo and concentrated only on widening the net, Pandya said.

To meet the target set for the current financial year, massive advertisements and other campaigns have been launched.
Door-to-door surveys of commercial centres are being carried out with a view to registering maximum number of service providers and over 2.9 lakh service providers have been registered in the country.
The continued drive of registering maximum number of service providers through various means, including issuing notices, has resulted in higher tax collection.