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: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS :: cpt :: articles on VAT and GST in India :: due date for vat payment :: form 3cd :: empanelment :: VAT Audit :: TAX RATES - GOODS TAXABLE @ 4% :: VAT RATES :: Central Excise rule to resale the machines to a new company :: list of goods taxed at 4% :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARD
 
 
« Service Tax »
 Recovery Of Tax Under Model Gst Law
 Income Tax officials hunt for Mumbai’s ‘ghost’ assessee
 GST delay to impact Budget
 If GST not rolled out by Sept, there won't be taxation in country, warns Jaitley
 India’s E-Service Tax Will Add To Foreign Content Providers’ Woes
 GST Council to discuss model laws, tax jurisdiction today
 Tax Invoice Under GST
 Insurance may fall under 12% tax slab in GST, from 14% service tax currently
 GST draft makes it must for companies to pass tax benefit to consumers
 To speed passage, Government plans GST Bills as money Bills
 No service tax on train tickets booked through IRCTC till December 31

Government should make law firms and film producers pay service tax
August, 16th 2012

Law firms and film producers reportedly want to be under the service tax net. This is welcome. An end to exemptions will ensure a smooth transition to the goods and service tax (GST).

There is simply no reason for the government to give a special dispensation to law firms. Unlike other registered service providers, their clients businesses with a turnover of over Rs 10 lakh pay the tax.

    Online Complaint Forum.File Your Complaint Here. Immediate Strong Action on Company. Consumer-Complaint-Forum.akosha.com
    Rs.647 p.m.??? PolicyBazaar.com/LifeInsurance-plan

This is called 'reverse charge' in parlance. But because law firms enjoy an exemption, they do not get credit for the taxes they pay on inputs. So, their expenses are charged to tax, and now, they are complaining. However, law firms can't have their cake and eat it too.

The only way to fix their problem is to register them as service providers and make them pay tax. A reverse charge makes sense only when someone buys services from an overseas supplier.

To extend the principle to law firms or even, say, goods transport operators is absurd. Film producers copyright providers of cinematic films too are spared of service tax. Keeping all these groups out of the mainstream distorts the tax structure. Also, exemptions spell patronage and kill the spirit of simplification that has been the hallmark of indirect tax reform.

The government must eschew exemptions. It will bring many untapped sectors under the net, reduce disputes and make tax collections easy. Today, though services contribute to over 60% of the economy, service tax revenues account for less than 1% of GDP. This must change.

GST will make revenues more buoyant and raise the share of service tax in GDP. This is because there is a built-in incentive to pay tax under GST, only then can a manufacturer or a service provider get credit for the taxes paid on inputs.

The model GST recommended by the Thirteenth Finance Commission and accepted by the Centre which allows for no exemptions other than a small negative list makes eminent sense.

Area-based exemptions should also be withdrawn as it would be difficult to subsume such schemes under GST. The government must make the tax system clutter-free and have simple rules if it is serious about implementing GST and eliminating tax dodges.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Sitemap

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