Skip to Article Skip to Youtube

Information of Service Tax increase from 10 to 12 percent in 2013


The Mr. Pranab Mukherjee, Finance Minister has amended Tax rates in the Finance Budget 2012 - 2013, as in the same way he as increased the Service Tax rate with 2% w.e.f March 1st, 2012. So, the people will have to bear extra service charge as they are accustomed to the services in today's life such as Cell Phone Eating in Restaurants and etc.,. It is the quite impossible to survive without services like Telephone, Debit Card usages in this globalisation.

"I propose to raise the service tax rate from 10 per cent to 12 per cent ... My proposals from service tax are expected to yield an additional revenue of Rs 18,660 crore," - Pranab Mukherjee said while presenting the Budget for 2012-13

as well added,

"The government has estimated to collect Rs 95,000 crore from service tax in the current fiscal and has pegged the next year's target at Rs 1.24 lakh crore. I propose to tax all services except those in the negative list. The list comprises 17 heads and has been drawn up, keeping in view the federal nature of our polity, the best international practices and our socio-economic requirements,"

So, as the final conclusion the Services not under negative list attract 12% Service Tax. Last year, the Centre had proposed a negative list containing 22 services. Tax at the rate of 12% is currently levied on 119 services.The services that comprise the negative list include those provided by the government or local authorities, except a fewspecific services where they compete with private sector.

The list also includes pre-school and school education, recognized education at higher levels and approved vocational education, renting of residential dwellings, entertainment and amusement services and a large part of public transportation including metered cabs, and agriculture and animal husbandry.

The Negative List concept is practiced globally and is proposed to be introduced in India as part of the Goods and Services Tax (GST) regime.

"Movement towards the negative list will result in reducing nearly 290 definitions and descriptions in the Act to 54, and the exemptions from the existing 88 to 10," - Pranab Mukherjee said

Exempted List from Service Tax

He also announced a list of services which are exempted from Service Tax. This include Health Care, Services provided by Charities, Religious Persons, Performing Artists in Folk, Sportspersons and Classical Arts.

Service Tax on Advocate Service

Also individual Advocates providing services to non-business entities, Independent Journalists, and services by way of Animal Care or Car parking will be exempt from tax.

Film Industry

Further, Mukherjee also proposed to exempt the Film Industry from service tax on Copy Rights, relating to recording of Cinematographic Films.

Life Insurance Service

Service tax on life insurance services, if the entire premium is not towards risk cover, then the first year's premium shall be taxed at the rate of 3%. Subsequent premium shall attract tax at the rate of 1.5%, he said adding availment of full CENVAT credit is being allowed.

Transport Service

Transport of passengers embarking in India for Domestic and International Journey by Air would attract an ad-valorem rate of 12%, with abatement of 60% in case of Economy Travel. The dual rate structure of maximum service tax of Rs 150 and Rs 750 in case of Economy Class Travel has also been proposed in the Budget.

At current prices, the contribution from services during 2010-11 works out to about Rs 50 lakh crore. However, the total collection from service tax during 2010-11 was over Rs 70,000 crore.

Labels:
is the founder of AccountsGuy.Net with the view of providing Accounting and Technical support using Accounting package Tally ERP 9, and Office Tools to the people. I write articles on Accounts, Blogging, Computer Operating, and technical issues and some of my experiences on them for students, beginners. Follow our Networks or sing-up for the email newsletter below for your daily dose of Tips and Tricks.
Subscribe To Newsletters

{ 0 Comments... read them below or add one }

Post a Comment

How do you feel about this Blog Post.