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K.R. Srivats

New Delhi, July 29

The Finance Ministry has decided to soften the service tax blow on both inbound and domestic tourist packages.

The revenue department has agreed to increase the abatement level for levy of service tax purposes from the existing 60 to 75 per cent, a top Finance Ministry official confirmed. “The abatement increase is not only for inbound packages but also for domestic packages,” the official said, indicating that the increase in abatement rate would be notified shortly.

The tour operators have been pitching for an increase in abatement levels from 60 per cent to 90 per cent for over two years now.

For this purpose, they had approached the abatement Committee that was set up by the Finance Ministry in May 2005.

The abatement committee is an advisory committee that advises the Government on the extent of abatement for both excise duty and service tax.

More Stories on : Taxation | Policy | Tourism

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