The Hindu : Tamil Nadu / Madurai News : Chamber plea to Finance Minister

Online edition of India's National Newspaper
Friday, Sep 17, 2004

Tamil Nadu

Tamil Nadu - Madurai

Chamber plea to Finance Minister

By Our Staff Reporter

MADURAI, SEPT.16. The Tamil Nadu Chamber of Commerce and Industry has urged the Union Finance Minister, P. Chidambaram, to issue a notification granting reasonable basic exemption limit for service tax.

In a release, the chamber president, S. Rethinavelu, said the Finance Act 2004-05 had added 13 new ones to the list of 58 services already brought under service tax levy. The rate of service tax had also been gradually enhanced from the original 5 per cent to 8 per cent and now re-fixed at 10 per cent.

Barring services rendered by advocates and medical practitioners, almost all other services had now been brought under the levy of service tax, he added.

Under the service tax, there was no basic exemption limit prescribed to provide succour to small and very small service providers. In all other taxes like income tax, sales tax, excise tax, etc., basic exemptions were given. If a basic exemption was given for service tax, the revenue loss to the Government would be negligible and it would also provide the much-needed relief to small service providers, Mr. Rethinavelu said.

One of the reasons given for periodic increase in the rate of service tax was that input tax credit was given under service tax. However, this concession did not accrue to many small service providers, who did not use input services, he said.

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