Panaji, Oct 20 (IANS): The ban on mining in Goa will seriously affect service tax collection in the state, a top central taxman said here Saturday.

Speaking at a seminar on taxation, Commissioner of Customs and Central Excise V.P.C. Rao said that the central agency's plans to collect Rs. 500 crore service tax in the current fiscal would be an "uphill task".

"This year collection of service tax will be severely affected due to the problem in several mining-related sectors which includes extraction as well as transportation of ore through inland waterways, which are a major source of service tax in Goa," Rao said.

Rao said that over 6,000 industries come under the service tax bracket in Goa, but the ban on mining and the subsequent fallout would go a long way to show how critical mining or iron ore is to Goa's economy.

"One will now understand the importance of mining for Goa. It is almost like bread and butter (to the state economy). I don't know when the dust will settle. But the earlier the better. I wish that way," Rao said.

The Supreme Court earlier this month banned mining operations in Goa, after a judicial commission appointed by the parliament unearthed a Rs. 35,000 crore scam in which politicians, bureaucrats and mining companies were linked.