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Ministry to issue 2 master circulars on service tax
June, 12th 2007
The Finance Ministry is expected to come out soon with draft version of two master circulars on service tax, which when finally issued would consolidate all existing service tax circulars issued by the Government since 1994.

"We will soon issue two master circulars. One will deal with taxable services and matters related to taxability. The other would purely be on procedures," a senior Finance Ministry official said.

Indications are that the two master circulars would come into force from July 1, after giving some time for the public to put forth their views on these circulars.

Official sources said the master circular on taxable services (taxability) would be a compact one and not go beyond 15 pages. All the existing service tax circulars would be "deemed" withdrawn once the master circular was issued, sources added.

Currently, about 97 services are under the service tax net and the Central Government hopes to collect service tax revenues of about Rs 50,200 crore in fiscal 2007-08.

Only last month, the Government had, on the basis of the recommendations of the Rustagi Report, withdrawn as many as 48 circulars that had become outdated due to changes in laws and procedures over the last decade.

The Rustagi Report, which was submitted to the Government in February 2007, had segregated the circulars and instructions issued by the Revenue Department into three categories - to be withdrawn, to be retained and to be modified. The Government has accepted the recommendations of the Rustagi Report.

 
 
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