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Service tax

V. R. Kannan, e-mail

The Government recently introduced service tax on various services, including credit card transactions. The Government's move to include credit card transactions under service tax net is surprising.

If the Government's intention is to increase their direct tax collection through this method, they are wrong. When the whole world is moving towards plastic money, electronic banking avoiding direct cash transaction, the proposed move by the Government w ill discourage people from using the credit card. Few business enterprises/shops are coming forward to accept the credit card as they are more comfortable with cash transactions. On one side, cash transactions encourage black money circulation, and on th e other, the common man will face the risk of carrying heavy cash on hand.

Is the Government not in a position to identify other avenues for their tax collection? Then why is this move affecting the salaried classes? The Government should withdraw service tax on credit card transaction.