Sub Vces : Finance Minister Speech
Vces Budget
Sub-Heading Finance Minister Speech (relevant extract)

Budget  2013-2014

Speech  of

P. Chidambaram

Minister of Finance

February 28,  2013


Madam Speaker,

          I rise to present the Budget for the year 2013-14.


179.    As regards service tax, I have only a few proposals.  The negative list became effective after the last Budget.  Stability in the tax regime is important.  Hence, I propose to include only two services which deserve to be in the negative list.  They are vocational courses offered by institutes affiliated to the State Council of Vocational Training and testing activities in relation to agriculture and agricultural produce.

180.    Last year, at the request of the film industry, full exemption of service tax was granted on copyright on cinematography.  The industry has now requested to limit the benefit of exemption to films exhibited in cinema halls.  I propose to accept the request. 

181.    At present, service tax does not apply to air conditioned restaurants that do not serve liquor.  The distinction is artificial, and I propose to levy service tax on all air conditioned restaurants.

182.    Homes and flats with a carpet area of 2,000 sq.ft. or more or of a value of `1 crore or more are high-end constructions where the component of ‘service’ is greater.  Hence, I propose to reduce the rate of abatement for this class of buildings from 75 percent to 70 percent.  Existing exemptions from service tax for low cost housing and single residential units will continue.

183.    While there are nearly 17,00,000 registered assessees under service tax, only about 7,00,000 file returns.  Many have simply stopped filing returns.  We cannot go after each of them.  I have to motivate them to file returns and pay the tax dues.  Hence, I propose to introduce a one-time scheme called ‘Voluntary Compliance Encouragement Scheme’.  A defaulter may avail of the scheme on condition that he files a truthful declaration of service tax dues since 1.10.2007 and makes the payment in one or two instalments before prescribed dates.  In such a case, interest, penalty and other consequences will be waived.  I hope to entice a large number of assessees to return to the tax fold. I also hope to collect a reasonable sum of money.



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