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Health, education to come under service tax ambit

Health, education to come under service tax ambit


The finance ministry is likely to impose service tax on health and education in the forthcoming Union Budget at a rate lower than the 10% currently levied on 117 services as it seeks to cautiously expand the tax base to the two sensitive sectors. A lower duty is expected to make taxation acceptable in these sectors, where taxation and profiteering are generally not tolerated by the public. Although the proposed goods and services tax (GST) aims at a single rate for service tax, a dual rate structure could be the order of the day for the services sector initially. The rates would be converged in due course. Once approved, the proposal could bring health sector services like lab testing and education sector services like training institutes along with few others in the tax net.

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