In a first, service tax collection is projected to exceed customs and excise duties. The projected service tax collection for 2014-15 is Rs 2,15,973 crore compared to customs duty collection of Rs 2,01,819 crore and central excise of Rs 2,06,356 crore.
In the previous year (2013-14), service tax collection was Rs 1,64,927 crore against customs duty collection of Rs 1,75,056 crore and central excise of Rs 1,79,537 crore, as per revised estimates. The rate of service tax was increased from 10% to 12% from April 1, 2012. The same year, from July, the government implemented a negative list where services specified in the list were kept outside the tax net.
The projected increase of over Rs 51,000 crore in service tax in this fiscal has been on account of further pruning of the negative list, bringing more services into the tax net. Out of the government's proposed gross tax revenue of Rs 13,64,524 crore for the current fiscal, the total collection from indirect taxes has been estimated at Rs 6,24,902 crore. "To broaden the base in service tax, it is necessary to prune the negative list and exemptions to the extent possible. Accordingly, the negative list has been reviewed," FM Arun Jaitley said. The new levies will come into effect from a date to be notified after the Finance Bill is passed.
The FM has extended 24x7 customs clearance facility to 13 more airports in respect of all export goods and to 14 more sea ports in respect of specified import and export goods for faster clearance of cargo and reduction of transaction costs.