The Hindu Business Line : `Service tax laws are more lenient'

DESCRIBING the Service Tax legislation, with 33 Sections and 9 Service Tax Rules, along with the related Cenvat Rules as most assessee-friendly, Mr Kamal Jyoti, Commissioner of Service Tax, West Bengal, said the department would not exercise the discretion of best judgement with regard to declaration by service-providers.

Speaking at an export awareness meet on "Implications of service tax on foreign trade," organised by Capexil here , he urged the assessees to be thorough with documentation, assuring them that show cause notices would be issued only if something has to be recovered, and not for ordinary lapses, as service tax laws are far more lenient compared to other laws relating to economic offences. Even where dues exist, if the assessees agree to pay up, as is the case now with 90 per cent of them, no show cause would be served, he clarified.

He, however, said while there may be waiver of penalty in the case of late payment, interest at a slightly higher than bank rate, would certainly apply, as "this should act as a disincentive against tax evasion". While agreeing that the tax was somewhat regressive, he said it was brought in at a time when the government thought there was a perceptible decline in the buoyancy of customs and central excise collections. He said out of the 6.5-lakh service tax assessees in the country now, some 80 per cent would fall outside its purview following the raising of the turnover threshold to Rs 4 lakh. The highly reduced assessee base, however, will help the Central Excise department to stay totally focused.

Mr Kamal Jyoti also clarified that there was nothing sacrosanct about collection of service tax from the service-provider, as it has be decided by legislation alone; as in the case of transport providers, the tax is now payable either by the consignor or the consignee, and not the provider of the service.

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