Financial Daily from THE HINDU group of publications
Wednesday, Jan 12, 2005
Financial Daily from THE HINDU group of publications Wednesday, Jan 12, 2005 |
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Industry & Economy
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Taxation TN Chamber against service tax liability on trade Our Correspondent
Madurai , Jan. 11 THE Tamil Nadu Chamber of Commerce and Industry has opposed the shifting of service tax liability on trade and industry and has threatened to launch nationwide agitations if the move is not suspended. Addressing the press here today, the Chamber President, Mr S. Rethinavelu, said the service tax at 10.2 per cent was introduced in the Central budget 2004-05 on the services rendered by lorry transport agents. When the agents, along with lorry transporters, resorted to a nation-wide bandh disrupting the movement of essential goods throughout the country, the Union Finance Minister kept the enforcement of the tax in abeyance and constituted a high-level committee for suggesting an appropriate mechanism for collection and payment of the tax on goods transport agency. The committee, which had no representation from trade and industry, made a startling recommendation, shifting the burden on traders and industrialists, who are merely recipients of the service. Accepting this erroneous recommendation, the Ministry of Finance has notified the tax, effective from 1.1.2005, he said. Mr Rethinavelu said the step is "illegal and totally against the concept of the levy of service tax". This has "created great discontent among the traders and industrialists all over the country". The service receivers can only bear the extra financial burden of the levy and cannot be made responsible for collection and remittance of the tax and submit returns to the government. Shifting the burden of the levy on another sector is both unfair and unethical, he maintained. He further said that instead of a few lorry booking agents being brought under the levy, innumerable small, medium and large-scale traders and industrialists all over the country are required to register with the Excise Department, which is unfair.
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