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| Article Name : | | | THE ORIGIN AND GROWTH OF SERVICE TAX IN INDIA | | Author Name : | | | DASHARATH. S.NAIK | | Publisher : | | | Ashok Yakkaldevi | | Article Series No. : | | | ROR-437 | | Article : | |  | Author Profile | | Abstract : | | | An interesting aspect of the tax system in India is that except for a few specified services assigned to the states such as the entertainment tax, passengers and goods tax, and the electricity duty, the services were not specifically assigned to either the center or the states. This omission violated the principle of neutrality in consumption as it discriminated against the goods component of consumption. Because services are relatively more income elastic, the tax system is rendered less progressive when these are not taxed (Bird &Wilson). An even more important argument for taxing services is to enable a coordinated calibration of a consumption tax system on goods and services because services enter into goods production and vice versa. | | Keywords : | | - economy,economy
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