Retrosoective effect

This query is : Resolved

CA Sanjay Baheti (Querist)
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04 November 2010 In the last budget Commercial Training and coaching has been charged service tax from retospective effect from 2003 for Charitable Education Trusts providing education/ training not recognized by law.
Shall they have to pay service tax for whole 7 years from their pocket?
And why did they asak for retrospective effect in 2010, why not in 2020 and then the clint would have to shell out service tax for 17 years from his pocket virtually sweeping him out of business permanantly.
is it reasonable on the part of Govt? and what should client do now and can he go to Supreme Court to challenge it?

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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04 November 2010 The Board has issued circular no. 107/01/2009 ST dt 28.01.09 explaining in detail the scope of levy of tax on educational institutions.

At the end, conclusion is like that

" All pending cases may be disposed of according to the circular. In case any difficulty is faced in implementing the instructions of the board , the same may be brought to the notice of the board.

So , if problems arise, that may be discussed.

However, service tax was applicable since 2003 on this service.

CA Ankit Shah

CA Ankit Shah (Expert)
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04 November 2010 Same issue arise with my client, I suggest to pay tax after budget declaration and not for earlier tuition income.

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Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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10 November 2010 First principle of taxation - There is no equity in taxation.
The govt frames law ( it is like the bat and ball in a cricket match) and if the same is faulty and tribunals/ courts say so they amend the laws.
They take the bal and bat and go away [ no responsibility for their action] when they lose their wicket.

Other than philosophy, pl challenge in the HC. In the case of rental stay was granted by the AP HC in the case of Trent Ltd on the stay for the past.
In the meantime SCN, replies, appeals, appeal to Tribunal/ HC would go on. A collosal ossof time and energy [ also substnatial monies] of the tax payer lost. Also the Govt after litgating may be forced to issue 11C notification for waiver.
In my opinion only leads to loss of faith in the system |+ enriching those in the litgation practice.