The Centre, on Friday, proposed to increase service tax revenues by bringing in services companies like stock and commodity exchanges, asset management firms offering unit-linked insurance plan, clearing houses and customised software makers under the levy.

Besides, right to use goods, in cases where VAT is not payable, those would also come under the service tax net.
Providing relief to small services providers, Mr Chidambaram proposed to increase the threshold limit of tax exemption from the existing level of Rs 8 lakh to Rs 10 lakh. “As a result, about 65,000 small services providers will go out of the tax net,” Mr Chidambaram said.

Money changers

He also clarified that money changers, persons running games of chance and tour operators using contract carriage vehicles are liable to pay service tax, although it is widely believed that need not.

The budget proposed to include purchase or sale of foreign currency, including money changing, by an authorised dealer or an authorised money changer, under banking and other financial service.

Even testing or analysis of information technology software under technical analysis service would come under the tax net.