The government hopes to increase the contribution of service tax to GDP which is currently as low as 1.1 per cent, a top official has said.
Contribution of the service sector to GDP is 56 per cent but the share of service tax in the GDP is just 1.1 per cent, Chairman of the Central Board of Excise and Customs (CBEC), PC Jha, said in Bangalore last night. “So, it’s quite low. This has to go up. Service sector is one from which the government expects to get more revenue”, he said.
Jha said the service tax revenue was growing at a rapid pace. In 1994, service tax was imposed on three services and the rate of duty then was 5 per cent, with service tax revenue at Rs 410 crore from 3,900 service tax-payers.
Now, 106 services come under tax and the rate has gone up to 12.36 per cent.
