The Hindu Business Line : Service tax net expanded

Fifty-five per cent of the GDP is contributed by the services sector, which is a growing sector that must contribute its legitimate share to the exchequer. I propose to bring under the service tax net four services. They are:-

(i) asset management service provided under ULIP, to bring it on par with asset management service provided under mutual funds;

(ii) services provided by stock/commodity exchanges and clearing houses;

(iii) right to use goods, in cases where VAT is not payable; and

(iv) customised software, to bring it on par with packaged software and other IT services.

I also propose to remove unwarranted doubts raised in respect of certain services and clarify that they are liable to service tax. These include money changers, persons running games of chance, and tour operators using contract carriage vehicles.

Finally, I am happy to announce that the threshold limit of exemption for small service providers will be increased from Rs 8 lakh per year to Rs 10 lakh per year. As a result, about 65,000 small service providers will go out of the tax net.

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