The Hindu Business Line : 15 new services under tax net — Scope expanded in banking, financial services

The Finance Minister, Mr P. Chidambaram has brought 15 new services under the tax net, while extending the scope of the levy on 12 existing services and withdrawing exemptions on six others.

The 15 new services made taxable include services provided by share transfer agents and registrars to issues, recovery agents, maintenance and management of Automatic Teller Machines, sale of advertising space or time (except for print media), sponsorship of events by companies (except for sports), public relations management services, ship management services, international air travel (excluding economy class), rail container handling services (excluding haulage charges), cruise ship travel, internet telephony services, business support services and credit card, debt card and other payment card-related services.

The services whose scope has been expanded are banking and other financial services (bankers to issues and transfer of money through different modes), life and general insurance services (services provided to policyholders by insurers and re-insurers), basic auxiliary services (computerised data processing) and technical testing and analysis (clinical testing of drugs and formulations, excluding testing for diseases and disorders). The services for which existing exemptions are being withdrawn are taxable services provided by call centres; Enterprise Resource Planning (ERP) software system services; services provided by outside caterers in trains, academic institutions and medical establishments; and non-accounting, non-auditing services provided by chartered accountants, cost accountants and company secretaries.

At the same time, tax exemption has been granted to the hire purchase and leasing industry by abating the interest and instalments of the principal amount in calculating the value of service.