The Hindu Business Line : CBEC nod for 6 service tax commissionerates

THE Central Board of Excise and Customs (CBEC), it appears, is finally giving service tax the importance that it deserves. The Board has now given its assent for the setting up of six independent service tax commissionerates in the country.

Currently, the Excise Department administers service tax, which is relatively a new tax. Taxation of services was started in July 1994 in a limited way on three services - stockbrokers, telephone services and general insurance. As of today, about 58 services are under the service tax net.

A Revenue Department official said that service tax commissionerates would now be set up in Delhi, Mumbai, Kolkata and Chennai. A service tax commissionerate would also be set up in Ahmedabad and Bangalore. A service tax commissioner, who would report to the Chief Commissioner of Central Excise, would head each service tax commissionerate. All the service tax divisions in the excise commissionerates would now report to the service tax commissioner.

With the Union Budget round the corner, indications are that the UPA Government might unveil measures to enlarge the service tax kitty. Besides revising the service tax rate, the UPA Government may also look at inclusion of more services within the service tax net to bolster tax revenues for the current fiscal.

The UPA Government may also relax some of the existing rules to waive penalties on non-compliance to service tax regulations.

Industry representatives have been urging the Finance Ministry to evolve a mechanism to enable those assessees who for any reason have not been able to conform to service tax rules to graduate to the service tax mainstream without the levy of any penalty.

Currently, stiff penalties are levied for non-payment or short-payment of service tax to the exchequer

The erstwhile NDA Government had in January this year targeted service tax mop up of Rs 13,500 crore in 2004-05.