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| Law firms in service tax net |
| BS Reporter / Jul 07, 2009, 04:25 IST |
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Speedier grant of refunds
The Union Budget, while keeping the service tax rate unchanged at 10 per cent, has expanded its ambit to include services provided by legal consultancy and advisory firms. The tax would, however, not be applicable if the service provider or receiver is an individual.
Rail and coastal goods transport and cosmetic and plastic surgery services will also have to factor in service tax now.
"Till now only transport services through road, air and pipelines were taxed. Inclusion of railways and coastal services will provide a level playing field for all players," Finance Minister Pranab Mukherjee said in his Budget speech today.
However, the Budget exempts some services from service tax, especially those that boost exports.
The Budget estimate for service tax collection for 2009-10 stays at the level of last financial year’s revised estimate of Rs 65,000 crore.
The Budget focuses on the revamp the refund scheme for exporters to facilitate speedier grant of refunds. The finance minister has announced the government’s intention to trust exporters and introduce self-certification to ensure faster disbursement of funds for exports where the refund is below 0.25 per cent of the freight on board price. The condition for filing refund claims once in a quarter has also been dispensed with and exporters can claim refunds anytime within a year of the date of export.
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