Techshristi's Forum

Author Topic: Most services get costlier from July 1 under new tax regime  (Read 1526 times)

0 Members and 1 Guest are viewing this topic.

Offline Mr. Patel

  • Behind Every Sucessful Business Decision there is always a CMA!
  • Global Moderator
  • *****
  • Posts: 301
    • http://www.techshristi.com/
  • Education: BBA,MBA,CMA
Speed post and express parcel service of post office, earnings of TV and theatre artists will come under the 12 percent service tax bracket from July 1 with the government embracing the new Service Tax regime based on negative list.

From now, with the exception of 38 services, which figure in the negative list, all other activities would attract 12 percent tax. Besides, air tickets and overseas holiday package bought from online portals would be subject to the levy. Also tests like GMAT and GRE would get more expensive as the institutions which conduct these exams would be subject to tax. However, entrance tests of institutions such as IITs and IIMs will be exempted from the levy.

While private tuition providers will now be subject to service tax if their annual turnover exceeds Rs 10 lakh, although the tax will not be levied on school, university education and approved vocational courses.

As per the negative list, services like metered taxis, auto rickshaws, betting, gambling, lottery, entry to amusement parks, transport of goods or passengers and electricity transmission or distribution by discoms have been kept in the negative list.

Other important services which will not attract the tax include funeral, burial, mutate services and transport of deceased.

The government has widened the definition of 'Services' to bring in more activities under the tax net. Till now, 119 services that come under 'positive list' are subject to the levy.

The switch-over to a negative list would help in smooth transition towards the Goods and Service Tax (GST) regime and would also expand the tax base. This is also expected to increase the Centre's Service Tax collection to Rs 1.24 lakh crore in 2012-13, up from Rs 97,000 crore in the last fiscal

Besides, services provided to the government, local authorities or a government authority for the repair and maintenance of an aircraft would also come in the negative list.

Also, services provided by advocates to other advocates and business entities up to a turnover of Rs 10 lakh in the preceding financial year is exempt from service tax.

Services provided by way of public convenience such as provision of facilities of bathroom, washroom, urinals or toilets would be included in the negative list.

The other services which would be exempted from tax include auxiliary educational services and renting of immovable property by educational institutions in respect of education exempt from service tax.

Besides, services relating to works contract to a scheme under JNNURM or Rajiv Awas Yojana would also come under the negative list.

Hike in train fares not effected from July 1

A hike in railway fares under the new service tax regime, was not effected due to a confusion over whether the Railways have been exempted from it, officials said.

"No hike has been effected on rail passenger fares from July 1," said a Railway Ministry official.

If brought into force, the hike would have been about 3.6 percent in all AC classes and first class. While transport of goods or passengers have been kept in the negative list, Railway officials said they are assuming Railways are under this category as they have received no communication from Finance Ministry that Railways have been exempted too.

They said Roy, who is expected here tomorrow, could clear the confusion. Railway Minister Mukul Roy had on last Friday requested Prime Minister Manmohan Singh, looking after the Finance portfolio, not to introduce service tax on passenger fare and freight traffic from Sunday expressing confidence that he would realise the situation and accept his request.

Earlier, he had also requested former Finance Minister Pranab Mukherjee to exempt Railways from paying service tax.

Railways will have to bear close to Rs 6000 crore if it decided against passing on the service tax burden to the passengers.

Service tax on passenger travel and freight was introduced in the general budget for 2009-10, but was kept on hold due to the then Railway Minister Mamata Banerjee's opposition.

The exemption has been extended since then on a quarterly basis but this time the Finance Ministry has decided to exclude freight charges and AC rail travel from the negative list, which gets service tax exemption.

With freight and passenger fares enjoying a 70 percent subsidy, the impact on the increase in freight charges and fares of First Class and AC-I, AC-II and AC-III will be 3.6 percent.


Source:http://post.jagran.com/most-services-get-costlier-from-july-1-under-new-tax-regime-1341203388

Techshristi's Forum


Offline TechShristi

  • Welclome to Techshristi
  • Administrator
  • *****
  • Posts: 556
    • techshristi
Most services get costlier from July 1 under new tax regime
« Reply #1 on: July 02, 2012, 10:53:41 AM »
Hello kaustubh,  July 2, 2012, 10:53 am

Welcome to Techshristi Forum

In case if you find any link not working or any Abnormal activity then contact us at above contact page.
http://forum.techshristi.com/index.php?action=contact

PLEASE HELP US TO IMPROVE OUR FORUM.

YOU CAN VISIT OUR WEBSITE FOR THE PROJECTS AT

http://techshristi.com/

Offline Mr. Patel

  • Behind Every Sucessful Business Decision there is always a CMA!
  • Global Moderator
  • *****
  • Posts: 301
    • http://www.techshristi.com/
  • Education: BBA,MBA,CMA
Re: Most services get costlier from July 1 under new tax regime
« Reply #2 on: July 02, 2012, 10:55:41 AM »
Guidance paper

Releasing a 107-page guidance paper titled ‘Taxation of service: an education guide’ to mark the new approach to service tax at a function at his North Block office here, Finance Minister Pranab Mukherjee expressed confidence that with the expansion of the service tax base, it would be possible for “the Central Board of Excise and Customs (CBEC) to exceed the collection target of Rs.1.24 lakh crore in the current fiscal”.

Having mopped up Rs.97,000 crore by way of service tax during 2011-12, the government has sought to switch over to the negative list based approach to taxation and has set a much higher collection target for the current fiscal in view of the extended tax base and the increase in the indirect tax levy from 10 per cent to 12 per cent. According to the guidance manual, among the 14 services that have been added to the negative list and, thus, exempted from payment of tax are lending of books, publications or any other knowledge enhancing content or material by public libraries. Also, services provided to the government, local authorities or a government authority for repair and maintenance of an aircraft would also not come under the ambit of service tax.

Apart from the services provided by advocates to other advocates and business entities up to a turnover of Rs.10 lakh in the preceding fiscal being exempted from tax, other services which would be tax-free are auxiliary educational services and renting of immoveable property provided by educational institutions in respect of education. Alongside, services relating to works contract to schemes under JNNURM or Rajiv Awas Yojana have also been included in the negative list and exempted from tax.

Hitherto, a total of 119 services on the basis of a ‘Positive list’ were liable to service tax. To widen the tax base in keeping with the extension of services, the government widened the definition of 'Services' to bring in more activities under the tax net on the basis of a negative list.

In effect, barring the 38 exempted services in the negative list, all other services will come under tax from July 1.

As per the negative list, services such as metered taxis, auto rickshaws, betting, gambling, lottery, entry to amusement parks, transport of goods or passengers and electricity transmission or distribution by discoms have been exempt from services tax. Other important services which will not attract the levy include funeral, burial, mutate services and transport of deceased.

On the other hand, services such as coaching classes and training institutions will come under the tax net, though it will not be levied on school, university education and approved vocational courses, Travel in first class and in air-conditioned rail coaches, too, will attract service tax.

Techshristi's Forum

Re: Most services get costlier from July 1 under new tax regime
« Reply #2 on: July 02, 2012, 10:55:41 AM »

 
Sitemap 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18