IIA an apex body of Micro, small and medium enterprises has sought reverse charge on Goods transport Services and demanded it should be abolished and should be levied on Service Providers as in case of all other services.

Here are ten key demands:

1. The general rate of tax has been reduced from 12% to 10% w.e.f. 24/02/2009. Historically the rate of service tax has always been less than the Central rate of excise duty. Keeping this in view, IIA has suggested that the rate of service tax should be reduced from 10% to 8%.

2. As per service tax notification no. 33/2004 dated 3rd December 2004, there is no laibility of service tax on transportation of Milk, Eggs, Vegetables. This list had been further extended to Pulses also subsequently.

3. The criteria for exemption appears the perishable nature of foods products being transported. Bread also falls in the same category hence Service tax on transportation of Bread should be exempted.

4. Service tax was levied on Industry Associations in 2005. Industry associations representing the cause of Micro Small and Medium Enterprises (MSME) are like Farmers Association/Trade Unions and they work for the public cause and clubbing them with entertainment clubs is unjust and unfair. Hence the liability of Service Tax on MSME Industry Association membership fee should be exempted.

5. All kinds of surcharges and Cess should be merged with basic Service tax rates.

6. Any entity registered under Service Tax Act / Rules should be allowed to render any other service which is taxable under Service Tax Act without requirement of any additional registration or modification in the existing registration.

7. Threshold for applicability of Service Tax should be enhanced from Rs 10 Lacs to 15 Lacs. There should be a threshold limit of Rs 10.00 Lacs for Service recipients also which at present is nil . The cost of compliance for this is relatively very high for all such assesses who are otherwise not subject to any other service tax /cenvat compliance obligations. Putting a threshold will facilitate taking out the small ticket Service Tax payers under this head.

8. Entrepreneurs in Micro & Small Sector do not have any social security from Government, so we take Life Insurance, Medical Insurance, General Insurance. Service Tax is applicable on Insurance Premiums also, and recovered from insured. Insurance Premiums should be taken out from Service Tax net.

9. Service Tax on rent of immovable property should be abolished, because by no stretch of logic "rent" can be construed as "service". The case of service apartments run on commercial basis may however be different. Treating rent as a service and applying service tax to it has increased the cost of infrastructure for many SME units. Besides, the very jurisdiction of central govt. to impose tax on immovable property which is a State subject raises a debatable constitutional issue.

10. Service tax payable under works contract category for compounding scheme should be brought down to 2 % from 4%.