Bangalore, Aug 30 (UNI) The Central Board of Excise and Customs (CBEC) is looking to increase collection through Service Tax, which had remained at just 1.1 per cent of the country's GDP.
Speaking at a meeting organised by Bangalore Chamber of Commerce and Industry here last night, CBEC Chairman P C Jha said the contribution of the service sector to the GDP was at 56 per cent but the share of service tax was just 1.1 per cent of the GDP.
The service tax ratio to GDP should go up, he said.
''Last year the service tax collected was at Rs 51,113 crore.
During the current fiscal, we expect to take this up to at least Rs 64,460 crore. I am confident we will surpass this target,'' he said.
Since its introduction in 1994, service tax revenue was growing at a rapid pace. In the first year, the collection was Rs 410 crore with rate of duty at five per cent on the tax imposed on three services. Now, 106 services come under the purview, he said.
Total tax collection, including direct tax, stood at Rs 2,80,738 crore and this year the target had been fixed at Rs 3,20,000 crore, 14.1 per cent higher than last year.
He said tax collection ratio to GDP rose to 12.6 per cent last year from 9.2 per cent during 2007-07. Out of this, indirect taxes that included central excise, customs and service accounted for six per cent last year.
Mr Jha said abolition of customs duty on motor spirit and diesel in the recent Union Budget would result in a drop of Rs 20,000 crore in the collection of indirect taxes. However, additional revenues from service tax and other positive factors would help the CBEC to make up this deficit, he added.
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