New Delhi, India (PressExposure) July 08, 2009 -- The new Budget 2009-10, which was announced on Monday by Finance Minister Pranab Mukherjee has given a good news to the service providers. It says that the service tax rate will remain unchanged at 10%. The government of India has analysed that any increase in tax rate could result in increased cost and less consumption. Government is willing to achieve a stable recovery in the economy.
However, Mukherjee came up with expansion of service tax net for the goods transport by waterways, rail, cosmetic and plastic surgery services and law firms. Lawyers and law firms were exempted of service tax by former Finance Minister, P Chidambram.
The oil and gas companies, and the companies relating to the shipping sector are however, not benefited by Budget 2009-10 as Mr Mukherjee has not provided any relief in the exclusive economic zone and continental shelf of India. However, IT sector is very much relieved with the budget.
The new services will generate the revenues of Rs.1,200 crore for the government, while it is going to suffer a loss of Rs.15,000 crore in the fiscal because of the reduced 2% service tax.
The service tax is also exempted from forex transactions between scheduled commercial banks and export promotion councils and sub brokers of stock brokers.