Budget 2014: Radio cabs driven into service tax checkpost

Hiring a radio taxi will become costlier with a service tax now being imposed on it just like it is on rent-a-cab services. Also, the levy has been extended to cover advertising in online and mobile media. So far, service tax was applicable only in broadcast media.

Advertisements in print, however, will remain excluded from this tax. The FM said services provided by Employees' State Insurance Corporation till July 1, 2012 was being exempted, thereafter, it would be under the tax net.

Certain exemptions were withdrawn, including those extended to air-conditioned contract carriages and technical testing of newly developed drugs on humans.

However, the FM allowed Cenvat credit for services of rent-a-cab and tour operators. The exemption at present available for specified micro insurance schemes is being expanded to cover all life micro-insurance schemes where the sum assured does not exceed Rs 50,000 per life insured.

To encourage safe disposal of med ical and clinical waste, services provided by common bio-medical waste treatment facilities have also been exempted.

Certain changes were also proposed to bring about greater clarity and reduce litigation regarding the scope of exemptions. These include functions ordinarily entrusted to a municipality and services in relation to education.

For the agriculture sector, service tax on loading, unloading, storage, warehousing and transportation of cotton is being exempted.