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NEED OF SEPERATE SERVICE TAX DEPARTMENT

CA SUDHIR HALAKHANDI (PRACTICING CHARTERED ACCOUNTANT) (13196 Points)

08 January 2009

IN 1994 SERVICE TAX WAS IMPOSED ON ONLY 3 SERVICES WITH THE FAMOUS QUOTE OF THE TEN FINANANCE MINISTER DR. MANMOHAN SING :- WHEN GOODS ARE TAXABLE , WHY NOT SERVICE.

THE RESPONSIBILITY WAS GIVEN TO CENTRAL EXCISE AND CUSTOMS DEPARTMEN

NOW MORE THAN 100 SERVICES ARE TAXABLE AND THE SAME ARRANGEMENT IS GOING ON

IS THERE ANY NEED OF SEPERATE SERVICE TAX DEPARTMENT?

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5 Replies

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 08 January 2009

No new department is required. In fact what is required is consolidation of all the indirect taxes (Custom, Excise duty, Service Tax, Various cess, CST, VAT, Octroi, entry tax etc.) in one tax, called Goods & Services Tax, to be executed by only one authority.

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CA SUDHIR HALAKHANDI (PRACTICING CHARTERED ACCOUNTANT) (13196 Points)
Replied 08 January 2009

GST ITSELF IS IN CONFUSING STAGE AND THERE IS A TALK OF DUAL GST IN WHICH STATES WILL ALSO IMPOSE TAX ALOGWITH THE CENTRE

HOW CAN STATE AND CENTRE COLLECT TAX UNDER ONE AUTHORITY

FURTHER GST HAS BEEN PROMISED IN 2010 AND THIS IS PROBALBLE DATE AND HERE SEE STATES ARE NOT AGREE TO ACCEPT SINGLE GST FROM THE CENTRE AND IN THAT CASE ALSO THERE WILL BE TWO DEPARTMENTS HANDLING THE GST - ONE FRM STATE AND OTHER FROM CENTRE.

Surendra (tax consultancy) (146 Points)
Replied 09 January 2009

ya, i m also think about that spearate department must be created. when in joint family there are much member then that family has occured or face some demerits. such as work load on department becomes too much. and department not complete there duty with seriously.

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 09 January 2009

Taxation structure in india is very complicated. A unified GST is possible- and in fact required. The union government, state government and local government can share the proceeds of the taxes as per the recommendation of any constitutional body like Finance Commission. Even today although Income Tax or Central Excise duty or service tax levied and collected by the union but it is shared among union and state government as per the sharing formula developed by finance commission. There is no reason why such formula cannot be applied to GST.

It is not only required, probably it is indispensable if we want our manufacturing and service sector to be globably competitive. A complicated tax system, apart from increasing red tapism and corruption, reduces the competativeness of the country in a globalised world. It hampers growth of the economy.