Rs. 1000 tariff hotels to pay service tax
By ANIMonday, February 28, 2011
NEW DELHI - Union Finance Minister Pranab Mukherjee today said that the hotel accommodation with declared tariff of over Rs. 1000 per day will have to pay the service tax with an abatement of 50 per cent.
Presenting the Union Budget for 2011-12 in the Parliament, Mukherjee said: “This will mean an effective burden of only five per cent of the amount charged. Air conditioned restaurants with license to serve liquor will now be paying service tax with an abatement of 70 per cent. The effective burden will be 3 per cent of the bill only in this case.
Mukherjee has also proposed various measures to achieve a closure fit between the present service tax regime and its GST (Service And Goods Tax) successor. These measures would include:
Bringing in a few new services into the tax net to expand the tax base while ensuring that the impact is predominantly on sections of society that have the ability to pay
Suitably expanding or rationalizing the scope of existing service categories
Rationalizing certain provisions relating to import of services and valuation
Modifying provisions of the Cenvat Credit scheme to achieve a more realistic balance between input credits and output tax and harmonizing the provisions of the scheme across goods and services
Rationalizing penal provisions to reinforce the message that honest taxpayers would be facilitated and deviants would be dealt with severely and adoption of Point of Taxation rules for services which would shift the basis for tax collection from “cash” towards “accrual” basis as with Central Excise duty. (ANI)
