labels: economy - general
Finance ministry effects sweeping changes in Service Tax rulesnews
20 June 2007

New Delhi: In what is the largest-ever revision of service tax rules and procedures by the government, the finance ministry on Tuesday issued two omnibus circulars aimed at simplifying procedural and technical service tax rules. The fresh draft will supersede all existing circulars and notifications issued since 1994, when service tax rules came into effect.

Finance ministry officials said the new circulars could result in increased tax collection and was also likely to widen the service tax net. These circulars are expected to plug loopholes in the existing ones that are being used by many service providers to escape the tax net.

The Centre has now made it mandatory for companies seeking service tax exemption to register with the tax department after their annual turnovers cross Rs7 lakh, even though tax exemptions are applicable till the Rs8-lakh- turnover mark.

All the existing 200-odd circulars issued by the Central Board of Excise and Customs (CBEC) stand superseded by the two new ones.

The new circulars take on board the recommendations of the TR Rustagi Committee, formed last year to suggest ways to simplify service tax rules.


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Finance ministry effects sweeping changes in Service Tax rules