Service tax was introduced in India in 1994 with a limited coverage of taxable services. Later on, the Government used this tax collection mechanism as a means to balance the deficits in the budget by introducing new sort of taxable services in to statute book and by defining what amounts to 'taxable service' under each of those new heads.
Mainly when the service tax is imposed on any essential civil services like caterer's service, training and coaching services, dry cleaning services etc. the burden of tax is directly on the individual citizens who are not in a position to take the input tax credit. This sort of tax imposition is indirect way of luring the tax from individuals through assessees apart from normal income tax. A common man who does not have any other income has to afford service tax only out of his hard earned salary.
In this regard, provisions need to be amended to exclude imposition service tax on individuals who are the end beneficiaries of services. The government has to adopt the rationale behind taxing any service, so that the service recipient should not be burdened under multiple tax heads when they can not take the input tax set off benefits like assessee in commercial segment.
Pramod Shrikanth D
Bangalore-based Chartered Accountant
No comments:
Post a Comment