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State seal on service tax rules

Calcutta, July 11: The Assembly today passed a resolution ratifying a central amendment of the Constitution that empowered states to impose and collect service tax from transport, telecommunications, health, bank and insurance sectors, among others.

Finance minister Asim Dasgupta placed the Resolution for Ratification of the Constitution (95th Amendment) Bill, 2003, in the Assembly. “We (the state) welcome the Centre’s move. We are happy that the Centre, at last, has accepted the long standing demand of the state governments that they should be allowed to get their share of income generated from the service taxes collected from their states,” he said.

The existing system does not entitle states to a share of the income from service tax. The Centre enjoys sole power to impose and collect the toll from taxpayers in the states. The amendment empowers the Centre to determine the service-tax rate.

Acknowledging the Congress MLAs’ support on the government’s stand, Dasgupta said the states would benefit from the amendment only if the Centre allowed them to impose and collect service tax in the sectors they had emphasised. “The government has made its stand clear. The amendment will be of hardly any use if we are not allowed to cover areas like transport, insurance, bank, health and telecommunications. The states will not benefit if we are asked to impose and collect the taxes covering minor areas,” he said.

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