FM says more services in tax net

FM says more services in tax net

By agencies   |   Friday, 20 January 2006, 08:00 Hrs
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TOKYO: Finance Minister P Chidambaram today said government will bring more services in the tax net in the coming budget to raise revenues and ruled out withdrawing the controversial Fringe Benefit Tax.

Chidambram also indicated the budget for 2006-7 could include measures for moving towards a uniform tax for all services.

"It is difficult to categorize services as essential and non-essential. Some services are input for other services, some services are inputs for production of goods. There is now today a Cenvat between services and goods. Let's not complicate it further," he said.

Chidambaram also ruled out withdrawing FBT but promised the government would look into the concerns that have been raised. "Perquisites are taxed universally. They cannot go untaxed. But how they are to be taxed, we can look at that again. If some simplifications are required, we will look at it," he said.

Chidambaram said government was committed to giving incentives job-creating sectors like textiles, food processing, leather and auto parts.

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