States not averse to widening of service tax net
05 Mar 2012
States had no objection to the widening of the service tax net, in the forthcoming union budget, as long as 35 services like ambulance, beauty parlours, marriage halls, interest on bank deposits, leasing of vehicles and machines were kept out of the ambit of the levy.
With a broad consensus seen to be emerging between the states and the centre, finance minister Pranab Mukherjee may announce coverage of most of the services used by individuals and business in the budget 2012-13 to be presented on 16 March.
The centre has come out with the proposal of a negative-list service tax regime, that would exclude from taxation, services not listed under it.
A unanimous view to the effect emerged at the meeting of the Empowered Committee of State Finance Ministers.
The panel, chaired by Bihar deputy chief minister Sushil Modi, is going into the centre-state issues on the much-delayed Goods and Services Tax (GST).
"The Empowered Committee is in favour of negative list. Centre can go ahead of with the negative list. It can be implemented from April 1, 2012, (but) 35 items approved by States (must) be kept in the negative list," Modi told reporters in New Delhi.
