Dated:- 20-6-2012 – Union Finance Minister, ShriPranabMukherjee released the Guidance Paper on the new approach to service tax, here today. The release of the Guidance Paper marks the culmination of the year long efforts made by the Government to introduce a negative list based comprehensive approach to taxation of services as a part of the Budget exercise. The new approach to taxation of services is intended to take the country and the economy a step closer towards the introduction of Goods and Service Tax (GST). Speaking on the occasion, Union Finance Minister ShriPranab Mukherjee said that the journey of service tax has been a step-by-step progress that began in 1994 and will complete 18 years at the end of this month. The revenue has also increased from nearly ₹ 400 crore in the first year to more than ₹ 97,000crore in the last financial year, an increase of nearly 37% over 2010-11,he said. The current year is also witnessing growth in excess of 40% in the first two mo
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fts to Government, services provided by sub-contractors to the main contractors who are exempt, services by public libraries and Employees State Insurance Corporation (ESIC), services by way of public conveniences and sale of going concerns. The Finance Minister said that we have also taken note of the concerns of many States that some of the autonomous bodies set up under a special law may not be able to enjoy the benefits that are available to Government or local authorities. Accordingly, services provided by Government authorities in relation to functions entrusted to municipalities and a number of other services provided to such authorities have also been brought within the purview of exemption, he said.The Finance Minister said that as a result of these exemptions and some other minor changes, the total number of exemptions has gone up from 34 to 38. Shri Mukherjee stated that we have already released the final version of Place of Provision Rules, 2012. He stated that as he had sa
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while we have set a target of ₹ 1,24,000 crore from service tax for the current year, he was hopeful that the new reform will act as a catalyst to help us exceed the target significantly. He once again commended the CBEC, its Chairman, the concerned Members and Team TRU, ably guided by the Finance Secretary in this bold experiment. The release of the Guidance Paper on the new approach marks the end of the positive list based selective approach to taxation of services, which is in vogue since 1994. The Guidance Paper has become necessary to explain the changes which have been brought about as a result of the new approach. The Guidance Paper brings out in a lucid language, the magnitude and depth of the changes arising on account of the introduction of the new approach. Comprehensive in coverage, the Guidance Paper attempts to anticipate and answer almost all the questions that may arise in the minds of an ordinary taxpayer in the wake of implementation of the new approach. – News
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