The government is expecting additional revenue of Rs 40-50 billion in 2010-11 (April-March) from tax levy on eight new services with effect from Friday, a senior finance ministry official said.
These services were brought under the tax net in the Union Budget for 2010-11. The eight new services include promoting or marketing games of chance, including lottery, specific health services, services provided by electricity exchanges, special services provided by a builder to prospective buyers such as providing preferential location and a service tax on domestic air travel.
?We are expecting Rs 4,000-5,000 crore (Rs 40-50 billion) extra in this financial year (2010-11) from the new areas of service tax,? Gautam Bhattacharya, joint secretary, Central Board of Excise and Customs told reporters on the sidelines of a seminar here.
To a question on the rationale behind expansion of services tax net less than a year before the Goods and Services Tax comes into existence, Bhattacharya said ?government revenue needs are increasing and we cannot perhaps wait till the GST?.
The new GST will do away with most of the exemptions under the current tax regime.