Finance Ministry will soon come out with a discussion paper on service tax to increase its contribution to the overall tax kitty and align it with the proposed Goods and Services Tax (GST). “The Finance Ministry is working on a discussion paper on taxation of services to get opinion and feedback before moving to GST,” a source told PTI.
The source further said, based on the feedback, the ministry would decide on the need to prepare negative list of services, adding, “The services sector contribute more than 50 per cent of the GDP but its representation in revenue is relatively low.”
Finance Minister Pranab Mukherjee in his Budget 2011-12 speech had said that many experts have argued that it will be desirable to tax services based on a small negative list, so that many untapped sectors are brought into the tax net.
