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Govt to unveil two-rate structure to minimize impact of tax

By Religare
|

The Indian Government has said that it is planning to unveil a two-rate structure to minimize the impact of steep rise in service tax on consumers, media reported.

As per reports, key services may be taxed at a lower rate to give relief to consumers who saw the levy increase to 14 per cent this year from 12.36 per cent.

Commenting on the issue, a Finance Ministry Official told the media, "There is a thinking that some essential services be taxed at a lower rate. A sudden, steep rise could pinch the common people."

 

"There could be a standard rate and a threshold rate for select services," he added.

As per reports, the Government is expected to call a short session to get the crucial legislation passed in time to unveil the new tax regime from April 1, 2016. While the service tax rate will increase under the GST regime likely to 18 per cent or more there will be a substantial reduction in taxation on goods as the new regime will eliminate the so-called cascading of tax.

Story first published: Thursday, August 20, 2015, 23:00 [IST]
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