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Saturday, Mar 01, 2003

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Opinion - Taxation

The party is over

Rajendra Kumar

IN HIS Budget speech, the Finance Minister stated that the Constitution would be amended to enable the Centre to levy tax on services. Currently, the tax is levied under the residuary category. This would allay the fear of a service tax provider dealing with the sales tax department of the State. If the proposed amendments introduced in this Budget can be taken as a clue, then the party is over, the Minister has asked the service provider to join the mainstream and become patriotic. The ball has been set rolling, may be after a decade or so we may have tax on goods and services instead of excise duty and service tax.

Rate hike: The tax rate has been hiked to 8 per cent for all taxable services; the current rate is half the Cenvat rate. A clear indication of moving towards the Cenvat rate of 16 per cent in the near future.

New in the net: Authorised dealers of foreign exchange, business auxiliary services, commercial training or coaching centres, commissioning and installation agencies, franchises, Internet cafés, maintenance or repair, technical testing and analysis agencies, technical testing and certification agencies and services from other ports are the new services which have been roped into the net.

Set-off: Hitherto, the set off of service tax was restricted to the same category of taxable service. This restriction now stands removed for the benefit of the taxpayer.

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Account well opened

Pat on the back in order
Changing the psyche, not the system
Well-intended despite detail
A question of horizons
A well-balanced exercise
Private players will miss mass pensions action
Emphasis is on reforms, fiscal discipline
It's driven by political expediency: Swamy
Glowing with promise
A Budget for the common man
More to spend, but...
Too harsh on the edible oils sector
This Budget will put economy back on reform path
Good news for cement sector
`Service tax hike will lead to price spiral'
A Budget that means business
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It delivers the goods
Understated, practical
The boss gets cracking
Some middling, some meddling
What a relief
He bites the VAT bullet
At last, he spoke
Come to grips with the new regime
Follows the custom
The party is over

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