Monday, February 28, 2011

Lawyer & Doctor Fees, Air Travel, Insurance, Hotels Now In The Net

Consulting a law firm or a doctor and getting tests done at the path lab are set to get more taxing with the Budget proposing to include these services within the ambit of service tax.
Ditto for air travel and meals at a restaurant that is air-conditioned and has a bar licence. The changes will take effect in June.
Besides, there will be a marginal increase in your life insurance premium for certain policies and stay at hotels will also get more expensive.
In fact, this year, service tax was one of the most important focus areas for the FM who is hoping to mop up an additional Rs 4,000 crore through the segment that accounts for more than half the economic activity in India.
As a result of the changes, the government has budgeted for an increase of over 18% in collections for next year, although it has left the overall rate unchanged at 10% as part of a strategy to move towards a single rate for goods and services once GST kicks in. As part of that strategy, the government is also looking at the option of notifying a negative list which will include services where taxes will not be levied.
There is, however, good news for exporters as transport charges on their consignments will be bereft of service tax burden and SEZ developers and units can also look forward to some relief.
Further, to reduce disputes, provisions related to input services are proposed to be rationalised by laying down clear definitions of services that are exempt.
For smaller businesses and individuals who pay service tax, there is soon going to be a hassle-free regime with those assesses having a turnover of Rs 60 lakh exempt from the ambit of audit.
The penal provisions are also being rationalised with a lower penalty for those who maintain documents but have been unable to discharge tax liability, Mukherjee said.
NEW SERVICES ADDED TO TAX NET AC restaurants with bar licence Short-term stay in hotels, clubs, guesthouses
To include advice, consultancy, assistance provided by a business entity to individuals
Services provided by arbitrators to businesses
Clinical Establishments
Those with over 25 beds, central AC
Diagnostic services through laboratories
Doctors who are consultants in these establishments
Life Insurance
To include all services, including investments
Club or Association
Service rendered to non-members
Air Travel
Service tax for economic class domestic air travel raised to 150
10% levy proposed for non-economy tickets For international travel, tax hiked by 250 to 750

No comments:

Post a Comment