Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TAX RATES - GOODS TAXABLE @ 4% :: due date for vat payment :: articles on VAT and GST in India :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARDS :: cpt :: ACCOUNTING STANDARD :: VAT RATES :: TDS :: VAT Audit
 
 
« Service Tax »
 GST Network to begin accepting fresh registrations from June 25
 Indian GST is significantly unique, but is it better?
 GST example of national integration
 6 reasons you need not fear the GST regime
 Tax return filing extension on GST may not be enough
 GST: ‘Tech readiness, tax administration key challenges’
 GST return filing rules relaxed for Jul-Aug, July 1 rollout
 GST Council gives return filing breather to India Inc for 2 months
 All eyes on 18 June as GST Council meets to iron out niggling issues
 GST Council's June18 meet to finalise e-way bill, anti-profiteering rules
 Valuation of Tax liabilities Under GST Regime

Service tax demand on the ESIC
October, 20th 2010

A service tax demand on the Employees State Insurance Corporation may bring the labour ministry and the finance ministry on collision course, less than a year after they locked horns over a similar demand on provident fund payments.

The revenue department has decided that ESIC, which promises health benefits through ones working life, is liable to pay service tax, a move that could increase cost for India Inc to provide mandatory health cover for workers.

Over the last couple of months, field formations of the central board of excise and Customs have been issuing service tax demands to ESICs 600-odd branch offices across the country.

We are not running a for-profit activity that can be taxed as a commercial service, said a senior ESIC official at the corporations headquarters in New Delhi. We are a social security scheme set up under an Act of Parliament, he said, requesting anonymity. He said it would be difficult to put a consolidated number on the tax demand at this stage.

ESIC has an annual income of around Rs 4,500 crore with 5.5 crore beneficiaries under its net. ESIC has alerted the labour ministry about the tax demands and sought a policy-level intervention from the government.

This is the second time in less than a year that the ministries of finance and labour are heading for a showdown over taxability of social security schemes. Last November, a service tax demand was raised on the countrys largest retirement fund -- the Employees Provident Fund Organisation (EPFO).

The demand, originally at around Rs 461 crore, has now been confirmed at over Rs 1,000 crore. While the EPFO is filing an appeal against the demand, it is also creating a contingency plan to shift the tax burden to employers if the demand is upheld.

Employers currently pay 1.1% of EPF contributions as administration charges, which would go up if service tax becomes applicable. The ESIC is also expected to hike administrative costs paid by employers to factor in service tax.

Applicable on workers earning up to Rs 15,000 a month, the state-run insurance scheme is financed by contributions from employers and employees. Employers pay 4.75% of wages and employees chip in 1.75%. The ESIC has a large network of hospitals, whose operational costs are shared by the Centre and the states.

The scheme is applicable to all factories with 10 or more workers and retail trade establishments with 20 workers or more. There scheme covers 1.43 crore families.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Vision

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions