The Union Budget 2011-12 aims to sustain economic growth, strengthen infrastructure, moderate the price rise, particularly of agricultural produce and reduce social imbalances through inclusive development. Presenting the Budget for FY 2011-12 in the Lok Sabha on Monday, Finance Minister Pranab Mukherjee said that the budget is a transition towards a more transparent and result oriented economic management system in India.
The following are the important Service Tax proposals:
Standard rate of Service Tax retained at 10 per cent, while seeking a closer fit between present regime and its GST successor.
Hotel accommodation in excess of Rs 1,000 per day and service provided by air conditioned restaurants that have license to serve liquor added as new services for levying Service Tax.
Tax on all services provided by hospitals with 25 or more beds with facility of central air conditioning.
Service Tax on air travel both domestic and international raised.
Services provided by life insurance companies in the area of investment and some more legal services proposed to be brought into tax net.
All individual and sole proprietor tax payers with a turn over upto Rs 60 lakh freed from the formalities of audit.
To encourage voluntary compliance the penal provision for Service Tax are being rationalised. Similar changes being carried out in Central Excise and Custom laws.
Proposals relating to Service Tax estimated to result in net revenue gain of Rs 4,000 crore.
Proposals relating to Direct Taxes estimated to result in a revenue loss of Rs 11,500 crore and those related to Indirect Taxes estimated to result in net revenue gain of Rs 11,300 crore.