FM to issue 2 master circulars on service tax

New Delhi: The Finance Ministry is expected to chalk out draft version of two master circulars on service tax, which when finally issued will consolidate all existing service tax circulars issued by the Government since 1994. They will soon issue two master circulars. One will deal with taxable services and matters related to taxability. The other would purely be on procedures. Indications are that the two master circulars would come into force from July 1, after giving some time for the public to put forth their views on these circulars.

All the existing service tax circulars would be deemed withdrawn once the master circular was issued. Currently, about 97 services are under the service tax net and the Central Government hopes to collect service tax revenues of about Rs 50,200 crore in fiscal 2007-08. The Rustagi Report, which was submitted to the Government in February 2007, had segregated the circulars and instructions issued by the Revenue Department into three categories - to be withdrawn, to be retained and to be modified.