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The changes to the service tax, which will come into effect from July 1, will have significant impact, speakers at a seminar in the city said on Tuesday.
Ms Sheila Sangwan, Member – Service Tax — Central Board of Excise and Customs in her address to the seminar hosted by the Federation of Andhra Pradesh Chambers of Commerce and Industry, said so far the Government has been working on a positive list for services.
A total of 119 services on the ‘positive list’ were liable to service tax.
There have been litigations which are interpreted by High courts and the Supreme Court.
The effort now is to move to the negative list. To widen the tax base in keeping with the extension of services, the Government widened the definition of services to bring in more activities under the tax net on the basis of a negative list, she added.
Step towards GST
The Federation, along with the CBEC, Institute of Cost Accountants of India (ICAI) – Hyderabad Chapter, and Institute of Chartered Accountants of India (ICAI) jointly organised the “Impact of Budgetary Changes – Taxation of Services” seminar. Mr J. M. Kennedy, Director, Tax Research Unit, CBEC said that the ‘positive list’ approach was being followed over the past 18 years and the service tax structure has become complex. “The service tax (regime) in India has matured and the sector now contributes 5.9 per cent of the Gross Domestic Product (i.e more than half to country’s GDP).
Step closer
Stating that the implementation of the negative list was a step closer to the GST, Mr Kennedy said the advent of GST should usher in uniform rates and procedures and the taxes should be business neutral.
Through this new approach, “we are trying to define services by moving towards negative list and exemption list; whether the activities are taxable or not”, he stated.
Mr Devendra Surana, President, FAPCCI, in his welcome address said the industry is eager to see GST implemented at the earliest.
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