The government hopes to increase the contribution of service tax to the country's GDP, which is currently as low as 1.1 per cent, a top official said.

Contribution of the service sector in the GDP is 56 per cent but the share of the service tax in the GDP is just 1.1 per cent, Chairman of Central Board of Excise and Customs (CBEC), P C Jha, said in an interaction meeting organised by the Bangalore Chamber of Industry and Commerce in bangalore on Friday night.

"So, it's quite low. In future this ratio has to go up. Service sector is one from which the Government expects to get more revenue in future", he said.

Jha said the service tax revenue is growing at a rapid pace. In 1994, service tax was imposed on three services and the rate of duty then was five per cent, with service tax revenue at Rs 410 crore from 3,900 service tax payers.

Now, 106 services come under tax and the rate of tax has gone up to 12.36 per cent.

The number of service tax players in the country has now gone up to 5.5 lakh and the service tax collection in 2007-08 was Rs 51,113 crore.

In spite of this rapid growth, the contribution of service tax to the GDP is only 1.1 per cent while the service sector's share in GDP is 56 per cent, he said.

For the current financial year (2008-09), the target for collection of service tax is Rs 64,460 crore, he said, adding, the Department's expects it to go up.