A second large taxpayer unit (LTPU) in the country is expected to get off the ground at Chennai in December this year, a top Finance Ministry official has said.

The second LTPU is likely to become operational at Chennai from December this year. After the Chennai launch, similar units would also be launched at Delhi and Mumbai for the benefit of large taxpayers, Mr P.C. Jha, Member, Central Board of Excise and Customs (CBEC), said at a national conference on service tax organised by industry chamber Assocham here on Friday.

The LTPU scheme was launched in October 2006 and the first such unit was set up at Bangalore. A taxpayer opting for this scheme would be able to file returns on excise duty, service tax and income-tax at the LTPU and for all practical purposes be assessed for all these taxes at the unit itself.

Meanwhile, Mr R. Sekar, Joint Secretary in the Finance Ministry, said at the conference that clarification would be issued by the ministry on whether the composition scheme for service tax on works contract would be available for ongoing contracts or not (contracts executed prior to June 1 and ongoing).

Services involved in the execution of works contract were brought under the service tax net in the Budget this year and the tax came into force from June 1. The Finance Ministry had simultaneously introduced a composition scheme that provides a person liable to pay service tax on works contract services the option to pay service tax at an amount equal to 2 per cent of the gross amount charged for the works contract, instead of paying service tax at the normal rate.

The industry wanted to know if they could opt for the composition scheme even for contracts executed (and ongoing) prior to June 1.