MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI GINGEE N.RAMACHANDRAN)
(a) , (b), (c), (d), (e), (f) & (g): A statement is laid on the Table of the House
STATEMENT REFFERED TO IN REPLY TO PART (a), (b), (c), (d), (e) & (f)
OF LOK SABHA STARRED QUESTION NO. 368 TO BE ANSWERED ON THE
14TH DECEMBER, 2001
(a) Yes Sir;
(b) Yes Sir;
(c) The Expert Group submitted its Final Report in March 2001.
The major recommendations made in the Final Report ,
inter alia, include,-
(i) Comprehensive coverage of services under the tax net with a
well-defined negative list.
(ii) A threshold exemption limit upto an annual turnover limit of
Rs 10 lakhs to keep small service providers out of the purview
of the tax.
(iii) Services which are developmental in nature or which cater
to primarily lower strata of society, to be exempted for a
limited period.
(iv) Integration of service tax with central excise duties on goods
to evolve into a comprehensive CENVAT on goods and services
by 2004-05.
(v) Input credit facility within the services sector immediately
and inter-sectoral credit between goods and services with
integration into CENVAT.
(vi) Retention of the service tax rate at 5 percent for the present.
(vii) Legilation of a separate, self-contained enactment on service tax
for its administration.
(viii) Improved administrative arrangement for the levy and collection of
service tax
(ix) The Central Government should consider sharing of powers to
tax services with the States, once the latter are committed to
uniformly introduce a comprehensive destination based VAT.
(d) The Expert Group has not made any categorical suggestion for amending
the Constitution at this stage.
(e) Does not arise in view of reply to part (d) above.
(f) & (g) In the conference of Chief Ministers held on 16.11.1999, all the
State Governments/ UTs took a unanimous decision to simplify the
sales tax system as prevailing in the States by introduction of VAT
from 1.4.2002. The Government of India has only played the role of a
co-ordinator and facilitator in the matter.
