Finance Ministry to discuss tax concessions with CAG
July, 21st 2006
The Finance Ministry on Thursday said it will hold talks with the Comptroller and Auditor General officials to prevail upon them to allow tax concessions on services of goods transport agencies.
In his address to an Assocham seminar here, joint secretary in the Finance Ministry, R Sekar said the tax department is of the opinion that concessions should be given to those who pay service tax if they do not avail input credit.
However, CAG views that recepient of services cannot be given abatement.
Those availing services provided by goods transport agencies pay service tax due to the unorganised nature of these agencies.
The tax department wants to provide them abatement, but CAG is opposing it.
"We are planning to have meeting with CAG officials to convince them of our views," Sekar said.
To a question raised by courier services officials, he said the sector was not given abatement because of its high-end nature, while cargo transport agencies are given abatement.
Reacting to a demand of tour operators to allow the industry more abatement than the current level of 60 per cent, Sekar said the commission provided by them would be subject to tax only if tour operators provided a break up of the total package they charged customers.
If they fail to give such a break-up 40 per cent tax would be imposed tour operators.