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ICAI moots taxing of all services

Our Bureau

NEW DELHI, Jan. 23

THE Institute of Chartered Accountants of India (ICAI) has recommended that all services barring the health services provided by government-aided hospitals and educational services provided by government-aided schools be brought under the service tax net .

In its pre-Budget memorandum, ICAI has emphasised that ``no discrimination should be made between services'' in the matter of imposition of service tax.

Further, the institute, a representative body of professional accountants, said the Government should factor in issues of cost of collection of service tax and the level of the tax base while deciding on the threshold limit for the registration of assess ees.

Calling for a self-contained code for service tax, ICAI said that it would be advisable to have a separate Service Tax Act covering all aspects of service tax.

If its recommendation on taxing all services is accepted, ICAI said that it must be provided that no service tax should be payable on sub-contracted services, regardless of whether or not the sub-contracting is for the same service category. Now, service tax is exempt only where the sub-contracting is for the same service category.

On the definition of ``transaction value'' in Section 4 of the Central Excise Act, ICAI contended that the definition is likely to generate litigation and would result in uncertainty about the valuation of goods and resultant duty liability of the manufa cturers.

``Section 4 and Valuation Rules should be amended to bring the manner of valuation of excisable goods at par with valuation of goods for payment of customs duty. Post-manufacturing expenses should not form a part of the value of manufactured goods,'' ICA I said.

Further, it said that the scope of transaction value should be restricted by defining it exhaustively, with the items that are required to be included therein being clearly specified.

On the Customs front, the professional accounting body has urged the Government to abolish the four-per cent special additional customs duty.