(a) the item-wise rates of services added to the Service Tax Net since 1994-
95, year-wise
(b) whether there is a proposal to reduce the Service Tax Net;
(c) if so, the details thereof and if not the reasons therefor; and
(d) the objective behind imposing the Service Tax and extent by which the
same has been fulfilled?
MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI S.S. PALANIMANICKAM)
(a): Sir, item wise rates of services added to the Service Tax net since 1994-95, year-wise,
placed in Annexure,
(b) & fc): Sir, there is no proposal to reduce the Service Tax Net To achieve fiscal policy
goals and meet the expenditure towards development programs of the Government, it is necessary
to mobilize adequate resources.
(d): Service tax was imposed to mobilize resources by taxing the fast growing services sector
of the Indian economy. In the year 1994, service tax was introduced on three services which
gave Rupees 407 Crore revenue. Service tax to GDP ratio was 0.04%, After about eighteen years,
during the year 2011-12, service tax was leviable on 119 services, which gave revenue of Rs.
97,356 Crore. Contribution of service tax to GDP is broadly estimated to have grown to the
extent of 1%. Overall, services sector contribute 59% of the GDP, to the economy. Keeping this
in view, to further augment revenue by commensurate expansion of the tax base, a negative list
based comprehensive approach to service tax has been introduced with effect from the 1st day
of July, 2012.