« Top Headlines » Open DEMAT Account in 24 hrs  Income Tax Rules 2026: CBDT Introduces Revised Form 161 for Penalty Waiver, Clarifies Misreporting Categories and Taxpayer Relief  ITR Filing and Income Tax Audit Deadline Extended: 5 Critical Things Taxpayers Must Know  Filing Belated ITR for AY 2026-27? Know Which Losses You Can Carry Forward and Which You May Lose  CBDT Extends Tax Audit Report Deadline to October 21, ITR Filing Last Date to November 21 for AY 2026-27  CBDT Extends AY 2026-27 ITR Filing Deadline for Tax-Audit Cases: New Dates and Key Compliance Details  Foreign Assets Missing From Your ITR? Income Tax Department Opens One-Time Disclosure Window  Tax Audit Deadline September 30: Why AIS, TDS and GST Figures May Not Match Your ITR and What Taxpayers Should Do  Tax audit deadline September 30: Common mistakes taxpayers should avoid  Your ITR says ‘verified’, but the refund hasn’t arrived? 5 reasons why your money could be stuck  Missed the ITR Deadline but TDS Refund Is Due? Here’s How You Can Still Claim Your Money  ITAT Cuts ?4.85 Lakh Penalty After ?14.02 Lakh Interest Income Was Missed in ITR «  Budget may see big-ticket tax relief for oil explorers,... Tax emissions... » States to collect tax under GST from 2010 December, 28th 2007 From 2010 onwards, states will get power to levy and collect the dual goods and service tax (GST) on certain services like amusement parks, private health and education services.   On its part, the Central government will levy and collect GST on all India services like banking, insurance and telecom. In effect, states will collect both central GST and state GST on intra-state services, while the Central government will collect both taxes on all inter-state services.   This has been recommended by the Empowered Committee of State Finance Ministers in the draft GST roadmap, which will be submitted to the Union government for consideration next month.   The states will transfer the centers share from their collections as per the central GST rate on services. The Centre will do the same while transferring states share in tax on services, but it will be based on destination principle.   In effect, if the service transaction is between parties in two states, the state GST collected by the centre will be transferred to the importing state or consuming state. This is a well-founded principle globally where the dealer could claim input tax credit also if the services are used as an input.   This strategy for services under GST regime is more or less certain and waits for central governments approval. In this context, the Committee has recommended that states be given powers to levy tax on all services.   Currently, only Centre has the power to levy tax on services as per the Finance Act, 1994.   Currently, states receive full collections from 33 services and 30.5 share from the remaining 67 services taxed by the central government. This sharing arrangement will continue till March, 2010. However, the number of services, from which entire collections go to states, may go up by atleast six in 2008-09.   From April 2010, both central and state GST will be applicable on services comprehensively (compared to 100 services taxed now) with the exemption of primary education and primary health services.   Service tax is going to be a big money-spinner for both the central and state governments. Service tax collections are likely to be around Rs 55,000 crore in 2007-08, compared to the estimate of Rs 50,200 crore. It is expected that service tax collections are likely to cross Rs 1,00,000 crore by 2010.   Taxation of services is going to be difficult as both central and state GST will be applicable on all services. Currently, only centre levies service tax at one rate of 12 per cent.   Experts say governments should ensure that the effective tax rate on services under GST framework, that will see two rates - central GST and state GST - is such that the economy can bear.   The aggregate incidence of service tax must be moderate under dual GST. The combined GST rate on services should not be more than the tax incidence on goods, if not equal, said S Madhavan, executive director, PricewaterhouseCoopers.   It is expected that the combined GST rate will be around 20 per cent on goods. A combined tax rate of around 20 per cent on services is even okay as long as end-consumer bears the tax burden, Madhavan added.