Chandigarh, May 10
Have you ever heard of tax on the services of authors, composers and sculptors? If not, go through the list of services on which the union government has proposed the levying of service tax by state governments.
The list includes service tax on performing arts and live entertainment services; services of performing artistes; hospital services; technical and vocational secondary education services; amusement parks and similar attraction services; and the services of athletes. In fact, the list, covering 77 services, has been sent to various states by the union government for consideration.
Flatly declining to give a share to the states from the services already taxed by it, the union government has preferred to send the new list to the states proposing the collection of the tax on their own. The union government collects about Rs 50,000 crore as services tax from various states. A major collection is made from telephone and professional services.
The previous Amarinder Singh government had repeatedly asked the union finance minister to give due share to Punjab from the service tax revenue. In fact, former Punjab finance minister Surinder Singla had told the union finance minister that Punjab was making a significant contribution to the services tax revenue and deserved to be compensated accordingly.
When questioned in this regard today, Punjab finance minister Manpreet Singh Badal told The Tribune that the union government had not made any promise to give a share from services tax collected by it. However, it had now forwarded a list of 77 services.
He said VAT would be replaced by goods and services tax (GST) by 2011-12. With the enforcing of the GST, the issue of services tax would come to an end, he added. Already, a committee of state finance ministers was engaged in selecting the proper model for the implementation of the GST.
As far as providing the list of 77 services is concerned, the union finance ministry has acted cleverly. The list includes mostly those services from which there is less scope of collecting tax. The union government has kept those services with it from which the collection of tax in bulk is assured. For instance, the density of telephones is almost the highest in Punjab as compared to other states. The collection of
services tax from telephone services in Punjab is considered quite significant.
Among other services proposed by the union government for levying services tax are wholesale trade services on a fee or contract basis for agricultural raw material and live animals; hotel and motel lodging services; meal serving services with full restaurant services; other food services; bus stand services; parking lot services; electricity transmission and distribution services; legal advisory and representation services; legal documentation and representation services; library services; archive services; pre-school education services and higher secondary education services; technical and vocational secondary education services; and primary medical and dental services.
The other services include veterinary services for pet animals; performing arts; event promotion and organising services, their production and presentation services; recreational sports event promotion services; beauty treatment services; internet café services; and commercial training and coaching services.
