Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: Central Excise rule to resale the machines to a new company :: VAT Audit :: ACCOUNTING STANDARD :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT RATES :: form 3cd :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: due date for vat payment :: ACCOUNTING STANDARDS :: TAX RATES - GOODS TAXABLE @ 4% :: empanelment :: articles on VAT and GST in India :: cpt
 
 
« Service Tax »
 GST to strengthen organised logistics companies
 No need for Parliament nod to waive property tax in Delhi
 CBEC to be renamed, reorganised for GST regime
  GST debate now continues on categorisation of products
 GST coming soon, but don’t expect quick benefits; rich valuation to stall stocks
 FM Arun Jaitley underlines urgency to pass GST bills in this Parliament session
 Government may table 4 GST bills in Parliament today
 Applicability Of Gst Law On Educational Institutions
 Cabinet clears 4 Bills, GST likely to roll out by July 1
 GST may also impact income tax collections: Experts
 Companies, consultants grope in the dark to meet GST deadline

Post GST, Modi government to cushion impact of hike in service tax
September, 16th 2016

The government will try and cushion the impact of the goods and service tax (GST) on services in case of an increase in the levy after the implementation of the tax reform measure, government sources said.

The government currently imposes a service tax of 14.5% but the GST rate is expected to be higher with states such as Kerala seeking a rate of over 20% to ensure that they do not lose revenue in the new tax regime. A committee under chief economic adviser Arvind Subramanian had recommended a rate of around 18%."The GST council will look into various options to reduce the impact on several sectors. We are working on various parameters," said a senior finance ministry official, who did not wish to be identified.

"We will give our inputs and the various scenarios under GST. It is a political call which has to be taken," the official said. Sources said in the run up to the general election in 2019, the government will be wary of any adverse impact of a sharp spike in prices and will therefore take measures to shield consumers in case of an increase in the service tax rate.

While discussion on the levy will begin in the GST Council, sources indicated that the government will try and ensure that crucial services such as life or medical insurance may not see a significant increase in the overall burden on consumers.

This can be done through abatement, where only a part of the service is taxed. For instance, in case of restaurant bills the levy works out to around 5.7% due to abatement. The sources said the levy on restaurant bill will be reviewed as the higher abatement for the service is due to the argument that several food products face excise duty , which is factored in currently .With these food products coming under GST along with the service provided by restaurants, the burden on the consumer may not rise significantly .

Effort will also be made to minimize the impact of GST on under construction houses and the government may provide for abatement for land and other commodities used for construction. The problem arises as no abatement is allowed in lieu of land and other commodities such as steel, cement and sand used for the construction.

In contrast, there may not be acushion for services such as telecom, which will impact your mobile bill. " Abatement may continue for some consumers facing services where it is impossible to segregate value of services and goods such as restaurants where combined impact of the GST rate is much higher than present tax rate under VAT and service tax," said M S Mani, senior director at consultancy firm Delloite Deloitte Haskins & Sells LLP .

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Privacy Policy

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions