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Service tax mopup falters

Calcutta, Nov. 17: The government may miss its target of collecting Rs 8,000 crore as service tax this fiscal.

In the first seven months, only Rs 3,705 crore has been collected as service tax which is much below the half-yearly target of Rs 4,000 crore.

The amount (Rs 3,705 crore) is down by Rs 900 crore on a pro-rata basis, figures — provided by K. P. Singh, director-general of the directorate general of service tax — reveal.

“The amount should have been more than Rs 4,000 crore by this time,” Singh said.

“However, we expect an increase in service tax collection between January and March,” he added.

The director-general said although there are 30 lakh service providers in the country only 2.9 lakh have registered themselves and are paying taxes.

Bringing services under taxation is not simple, as services are intangible and are provided by large groups of organised as well as unorganised service providers scattered across the country.

“The public, traders and even the officers who administer the tax are not aware of its ramifications,” said Sanjay Budhia, chairman (eastern region) of the Confederation of Indian Industry.

The government is trying to expand the tax base by providing information on the tax so that service providers voluntarily register themselves, Singh said.

“The services sector is growing at a rapid pace and it has immense potential to be the prime contributor to GDP (gross domestic product) in future. We want to be fair enough in implementing the service tax regime,” Singh added.

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