Service Tax net to be widened to cover lawyers and doctors
New Delhi, Mar 21: Justifying his budget proposals on various issues, Finance Minister P Chidambaram today said the government will make more simple the filing of income tax return under SARAL form and was also willing to widen service tax net to bring the lawyers and doctors within the ambit of this tax.
Replying to a debate on Finance Bill 2006 in Rajya Sabha, Mr Chidambaram made it clear that the profit making cooperative banks will also have to file returns and pay income tax virtually like any other bank.
An amount of Rs 14,500 crore has been earmarked in the budget to restore life to these cooperatives.
He said his budget proposals on direct and indirect taxes will bring in only Rs 6000 crore as additional revenue to the exchequer.
The Finance Minister pointed out five years back that the GDP was 5.3 per cent and during 2004-05 it went upto 7.5 and was hopeful that it would be 8.1 per cent in 2005-06.
He said ''We have to strike a balance in the budget. We cannot burden people. Better tax proposals will make more people to pay taxes.'' About 30 to 40 per cent of the companies under minimum alternate tax do not pay corporate tax although they make book profits.
One-third rate of the tax is fixed for MAT companies and these exemptions would be gradually removed.
On countervailing duty (CVD), the Minister said it was not like customs duty, it is vatable to protect domestic manufacturers from the importers of such products. CVD is fixed at 4 per cent to protect the domestic manufacturers and importers have to pay that.
Mr Chidambaram pointed out that there was no uniform policy on excise duty and it was corrected from time to time to strike a balance.
The Minister said with the introduction of GST in 2010 all the tax rates will be converged.
Mr Chidambaram said to give a boost to certain sectors like food processing industry, manmade fibre and paper industry, big concessions have been given to them. He said barring the list of essential services, all other services will be brought under the tax net. The Minister pointed out that import duty on computers have been reduced to zero per cent as India is a signatory to the world body ITA.
He said to provide employment to the educated people, a new job has been provided to them to work as Income Tax Return Preparers to help people fill their returns and deposit.
Mr Chidambaram said State Finance Minister found the implementation of value added tax (VAT) useful and in the next meeting with them the issue of phasing out of central sales tax (CST) will be discussed in detail.
The Minister said the excise duty on cars has been reduced in the Budget to make India a big destination for small cars in the world.
Lok Sabha has already passed the Finance Bill 2006 and Rajya Sabha returned it today.
Eds: here pick up suitably from earlier series.