Service Tax Provisions to be Rationalised

Shri Pranab Mukherjee underlined that the strength of good value added tax lies in the free flow of the credit of the tax paid at the previous stage. In view of the legal disputes on the availability on a number of inputs or input services due to inherent complexities in the tax structure, it has been proposed to rationalize this by laying down clear definitions of the scope of inputs and input services and those that are not.

Allocation of CENVAT credit to exempt and taxable goods and services is also being streamlined.

Accommodating the view of experts to tax services based on a small negative list so as to bring in many untapped sectors in the tax net, the Finance Minister proposed to initiate a public debate on the subject to facilitate finalization of approach to GST.

Source : Equity Bulls

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