Tax collection from service sector poor

The quantum of service tax collection was pathetic, said Biswajit Datta, commissioner central excise.

Addressing an interactive session organised Bengal Chamber of Commerce & Industry (BCCI), Datta said, almost all service sector were now getting covered but, collection from the service sector was much less than the manufacturing sector.

He however clarified that the rate of taxation in manufacturing was much higher at 16 per cent than the service sector at eight per cent. But, even then the tax collection was very low.

He said, every year some services were added and there could be some overlapping. He cited the example of the insurance sector and said that since big insurance companies were covered insurance auxiliary services were also covered. "Insurance companies will have to pay tax also on behalf of the insurance auxiliary services" said Datta.