Daijiworld Media Network – Mangalore (NR)

Mangalore, Jul 31: At a news conference here on Monday July 30, the commissioner of Central Excise and Customs, M Ajit Kumar told media persons that the Union Government has brought seven new services under the service tax net from June 1, this year. For this purpose the Central Excise Commissionerate (Service Tax) of Mangalore will open special counters at divisional offices in Mangalore and Udupi on August 2 and 3, for spot registration of the assesses, he added.

Providing information to the media he said that the new services are telecommunication services, mining; renting of immovable property service for commercial purposes, service provided in the execution of a works contract excluding works contract in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams, development and supply of content service for use in telecommunication services which has been brought under the service tax net.

In addition to this, advertising agency services and online information and database access or retrieval services, designing service, asset management including portfolio management, and all forms of fund management service provided by any person, have also been brought under the service tax net, he added.

Ajit Kumar further informed that the new service tax is leviable on the seven new services at 12.36 per cent (12 per cent service tax, 0.24 per cent education cess and 0.12 per cent secondary and higher education cess) and the threshold exemption on aggregate value of the taxable services is fixed at Rs 8 lac per annum for the financial year 2007-08 onwards. However, such service providers have to register their names with the department, the moment the aggregate value of taxable services in a year exceeds Rs 7 lac.

Ajit Kumar was however disappointed at the response from the trades as many still have confusion in their minds regarding the tax net preview he stated. While registrations have been not yet made under telecommunications, designing service and mining services, 36 registrations have been made under renting immovable property service and 35 registrations under development and supply of content service for use in telecommunication services etc, four registrations under advertising services and one registration under asset management.  Since the response has not been encouraging the commissioner informed that seminars will be held to educate people about this tax..

As regards central excise Ajit Kumar stated that as against a target set last year of Rs 2,685 crore the Central Excise had in 2006-07, collected Rs 3,913 crore. This was possible owing to four major units functioning in the region, he stated. MRPL itself contributes about 94 per cent of the total revenue, which is a sum of Rs 3,691 crore in the last financial year, whereas West Coast Paper Mills paid Rs 39 crore, KISCO paid Rs 38 crore and Solaris paid a sum of Rs 11 crore, he averred.

The government has set a target of Rs 3,950 crore as central excise revenue target for the current year. While a target of Rs 590 crore was set last year for customs duty,   but the said department had collected Rs 600.35 crore. For the current year 2007-08, the government has fixed a target of Rs 840 crore custom duty to be collected, Ajit Kumar informed.

K Kesavan and P Rangaswamy, joint commissioners, Central Excise, Mangalore, were present on the occasion.