New Service Tax Structure a Step Closure Towards Proposed GST - Service Tax Regime on Hotel Accommodation, Restaurant Services Restructured

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..... New Service Tax Structure a Step Closure Towards Proposed GST - Service Tax Regime on Hotel Accommodation, Restaurant Services Restructured
GST
Dated:- 28-2-2011

Hotel accommodation, in excess of declared tariff of ₹ 1000 per day and service provided by air conditioned restaurants that have license to serve liquor are the new services which have been brought under the service t .....

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..... ax net. While proposing to levy service tax on these services, the Union Finance Minister, Shri Pranab Mukherjee has said that the hotel accommodation with declared tariff of over ₹ 1000 per day will have to pay the service tax with an abatement of 50 per cent. This will mean an effective burden of only 5 per cent of the amount charged. Air conditioned restaurants with license to serve liquo .....

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..... r will now be paying service tax with an abatement of 70 per cent. The effective burden will be 3 per cent of the bill only in this case. Shri Mukherjee has also proposed various measures to achieve a closure fit between the present service tax regime and its GST (service and goods tax) successor. These measures would include: * Bringing in a few new services into the tax net to expand the ta .....

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..... x base while ensuring that the impact is predominantly on sections of society that have the ability to pay; * Suitably expanding or rationalizing the scope of existing service categories; * Rationalizing certain provisions relating to import of services and valuation; * Modifying provisions of the Cenvat Credit scheme to achieve a more realistic balance between input credits and output tax a .....

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..... nd harmonizing the provisions of the scheme across goods and services; * Rationalizing penal provisions to reinforce the message that honest taxpayers would be facilitated and deviants would be dealt with severely; and * Adoption of Point of Taxation rules for services which would shift the basis for tax collection from "cash" towards "accrual" basis as with Central Excise duty.
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..... ss release - PIB .....

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