Health clubs, beauty parlours brought under tax net

Health clubs, beauty parlours and fashion designers have been brought under the service tax net.

Hotels have been exempted from the service tax for one more year under the budget proposals announced in Lok Sabha by Finance Minister Yashwant Sinha.

Stating that the service tax confined to limited number of services has gained ground, Finance Minister Yashwant Sinha said the service tax would be extended to the services provided by life insurance, including insurance auxiliary services.

These relate to life insurance, inland cargo handling, storage and warehousing services (except for agriculture produce and cold storages), event management, rail travel agents, health clubs and fitness centres, beauty parlours, fashion designers, cable operators and dry cleaning services.

Pointing out that service tax is applicable to specified services provided by banks and non-banking financial companies, he further extended the service tax to corporate bodies that provide similar services.

The tax on these services will come into force from a notified date, he said.

Observing that the tourism industry has been adversely affected by recent events, he proposed that the services provided by hotels be exempted from the service tax net for one more year up to March 31, 2003.

PTI

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