Service Tax Not Shareable?

By Vijay Kumar

IS the Service Tax collected by the Central Government not shareable with the States? Well, that is what the Finance Minister told the Rajya Sabha yesterday. In reply to a question, the Finance Minister said,

Besides this 42 per cent for the Centrally-sponsored Schemes, out of the Centre's share of 58 per cent, a lot of assistance goes to the States. Some of the States, which don't have adequate resources, get the money. But as far as service tax is concerned, the States don't get a share. The sooner you pass the GST the better it is for the States. Because the States will then start getting the service tax.

Former Finance Minister Chidambaram was quick to point out the FM's slip.

Chidambaram tweeted:

FM told Parliament that Service tax revenues are not shared with the States. FM was wrong. He slipped. All taxes including Service tax are shared.