Rail travel, donations and capitation fee to be brought under GST
29 Aug 2011
Services like rail travel as also donations and capitation fee paid to educational institutions may come under the tax net as the government prunes the negative list of services to expand the goods and services tax (GST) base.
A concept paper released by the government today has excluded these from the negative list of services, making them eligible to be brought under the GST.
The concept paper has kept open services such as rail travel, capitation fee or donations made to educational institutions, non-compete services, services by way of right of admission to building or events, renting of vacant land for commercial use besides others for GST impost.
Service tax currently covers 119 services, which are taxed at the rate of 10.3 per cent.
"Many new services are likely to come into the tax net as a result of transition towards negative list."
The negative list contains 27 services, including funeral, burial and mortuary agencies, interest paid on deposits by bank, services provided by independent journalists, dividend on investments, and transport of passenger in public transport that are excluded from paying tax.
The concept paper prepared by the Tax Research Unit of the Department of Revenue in the finance ministry brings several new services under the GST as a result of transition towards negative list.
The government has invited feedback, views and suggestions by 30 September on the concept paper prepared by a team of officers with inputs from industry bodies like CII, Ficci, Assocham and PHDCI.