AP says no to service tax collection

Hyderabad, May 5 (UNI) The Andhra Pradesh Government wants the Centre to collect service tax from 77 services to offset the loss of revenue following the gradual phasing out of Central Sales Tax (CST) by 2010, State Commercial Taxes Minister K Ramakrishna said today.

The state opined that not much revenue could be generated through collection of service tax from the services like health resorts, corporate hospitals and corporate educational institutions, he told reporters here.

He informed the state would lose Rs 400 crore this year following the Centre's decision to reduce the CST from four per cent to three per cent.

The Centre had provided Rs 400 crore to the state during 2005-06 to offset the loss in revenue on account of implementation of the Value Added Tax (VAT), but no claim was made during 2006-07 due to good revenue growth, Mr Ramakrishna said.

Despite reduction in tax rates, the revenues of the department had grown remarkably by 70 per cent in the last three years, mainly due to good practices in tax administration, simplification of procedures, apart from building an efficient IT-based tax administration.

As against Rs 9,167 crore collected in 2003-04, the revenue collected in 2006-07 was Rs 15,587 crore. Revenue growth in the three years up to 2003-04 was only 27.40 per cent, he added.

The state government decided to make available all tax payers in the state online filing of returns, e-payment of commercial taxes, he said.

UNI