The centre has deferred imposition of tax on new services by a month. It would now come into affect from September 1, 2009.
Finance minister Pranab Mukherjee, while replying to the debate on Finance Bill, stood firm on taxing business-to-business legal consultancy. He, however, excluded road repair and maintenance services from the ambit of service tax.
He rejected the demand of Mamta Banerjee to exempt goods carried by Indian railways from service tax. The ministry of railways had argued that service tax on goods carried by rail would make commodities like iron ore, coal and cement dearer.
Railways carry about one third of the total cargo, with bulk commodities constituting major chunk of it. Roads serve as a lifeline to the country.
Construction and laying of new roads attract zero service tax, but repairs and maintenance do attract service tax. Repairs and maintenance work too would not attract any service tax, he said.