Mumbai: Service Tax is likely to widen in the approaching Budget.
Multi-marketing companies like Amway and Oriflame are expected to come under the service tax net whereas travelling in Shatabdi and Rajdhani Express might become costlier as per the new Budget.
Just when the rail fares were expected to get cheaper with the advent of low cost airlines the government decided to change its plans.
Their might be a possible addition in the service tax like; elite railway services, operations of direct selling companies and credit card sale commissions.
The Finance Ministry is planning to include some elite railway services in the service tax net which will result in fare hike of Rajdhani and Shatabdi Express.
Direct-selling companies like Amway and Oriflame may also have to rethink their strategies. Bankers commission on credit card transactions is also slated to be taxed.
In the last Budget, nine new services were added to the service tax list. Some of them include club memberships in the residential complexes having more than 12 units.
These additions took the number of services under the tax net to 81.
Collections from Service Tax have inceased considerably since last year. Till January the service tax department has reported revenues exceeding Rs 16000 crore which is around 65% more than the previous year.
But still, the Finance Minister further wants to widen the service tax net.
Experts opine that even if the Service Tax list grows bigger, it is unlikely that rates will be revised. Similarly, the annual exemption limit of Rs 4 lakh on Service Tax may also be increased.
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