The Hindu Business Line : Service tax collection in April-Jan surges 75 pc

SERVICE tax mopped up in the first 10 months of the current fiscal surged 75.60 per cent to Rs 5,972 crore, raising hopes in North Block that the revised estimate of Rs 8,300 crore for 2003-04 is well within reach.

The Centre had mobilised Rs 3,401 crore as service tax in April-January 2003 while the mobilisation during the nine months ended December 31, 2003, stood at Rs 5,089.87 crore.

"We are making all-out efforts to achieve the revised estimate," a top Finance Ministry official told Business Line.

While the general growth of the services sector and increase in service tax rate have helped increase the mop-up, the Ministry has been doing its bit by intensifying efforts to collect more tax.

The Revenue Department had, in February this year, extended the scope of service tax audit to all the 58-odd services for which the service tax is currently levied. Prior to this extension, only a few services such as telephones, general insurance and stock-broking services came under the ambit of service tax audit.

The Central Board of Excise and Customs (CBEC) had also recently launched a nation-wide survey to educate service providers and widen the service tax base.

The increasing contribution of the services sector in the gross domestic product (GDP) had prompted the Ministry, in the recent interim Budget, to revise the estimates for service tax for the current fiscal to Rs 8,300 crore. A large chunk of this is expected to come from telephones (Rs 3,024 crore), insurance (Rs 1,044 crore), and brokerage services (Rs 378 crore).

The Government had budgeted receipts of Rs 8,000 crore from service tax for 2003-04 (Rs 5,000 crore for 2002-03).

For the ensuing fiscal, the Ministry has targeted Rs 13,500 crore from service tax. A sum of Rs 4,968 crore is expected during 2004-05 from telephone services alone.