States Reach Consensus On Tax On 44 New Services

New Delhi: State Finance Ministers have come to a consensus on the list of 44 new services of intra-State nature on which service tax could be imposed by the Centre and passed on to them as part of the compensation package for central sales tax (CST) phaseout. The Chairman of the Empowered Committee of State Finance Ministers, Dr Asim Dasgupta said that the common man would not be affected on services like education and health and indicated that only services consumed by the richer sections will be brought under service tax. Moreover, States have decided to exclude artistes and sportspersons from the ambit of the 44 services. The list of the 44 new services forms part of the 77 identified services whose entire service tax proceeds is to be shifted to the States by the Centre during 2007-08. The other 33 services are already under the tax net of the Centre.