Service Tax rate low?

By Vijay Kumar

While many of us feel that the 12.24% Service Tax is a heavy burden, the FM’s adviser, Parthasarathi Shome does not think so. Addressing a meeting of the FICCI, he said that taxation on goods amounted to about 30% (16% excise duty plus 12.5% VAT on a value that included excise), while that on services was a mere 12.24%. He said that internationally, the tax on goods and services was more or less equal.

Dr. Shome wanted the professionals and consultants to explain to assessee-customers the procedural reforms in central taxes so that officials would not be able to exploit the latter's ignorance of the changes.