The need for summoning so many documents from all tax-payers, necessitated under the recent Notification, needs to be questioned.

Ronald Reagan once remarked The federal government has taken too much tax money from the people, too much authority from the states, and too much liberty with the Constitution. While one could say the same about service tax whose contribution to the Government kitty is certain to exceed Rs 50,000 crore this fiscal, it has to be accepted that the very nature of the levy a tax on services was bound to gross such revenue. While the service tax v oyage has not been a roller-coaster, the recent Notification No 45/2007 dated December 28, 2007, promises to make the ride bumpier.

The Notification states that every assessee shall furnish to the Superintendent of Central Excise at the time of filing of return for the first time or January 31, 2008, whichever is later, a list in duplicate, of-

(i) all the records prepared or maintained by the assessee for accounting of transactions in regard to,-

(a) providing of any service, whether taxable or exempted;

(b) receipt or procurement of input services and payment for such input services;

(c) receipt, purchase, manufacture, storage, sale, or delivery, as the case may be, in regard of inputs and capital goods;

(d) other activities, such as manufacture and sale of goods, if any.

(ii) all other financial records maintained by him in the normal course of business

In addition, the Notification grants some unbridled powers to the Department:

(1) An officer authorised by the Commissioner in this behalf shall have access to any premises registered under these rules for the purpose of carrying out any scrutiny, verification and checks as may be necessary to safeguard the interest of revenue.

(2) Every assessee shall, on demand, make available to the officer authorised under sub-rule (1) or the audit party deputed by the Commissioner or the Comptroller and Auditor General of India, within a reasonable time not exceeding 15 working days from the day when such demand is made, or such further period as may be allowed by such officer or the audit party, as the case may be,-

(i) the records as mentioned in sub-rule (2) of rule 5;

(ii) trial balance or its equivalent; and

(iii) the income-tax audit report, if any, under section 44AB of the Income-tax Act, 1961 ( 43 of 1961), for the scrutiny of the officer or audit party, as the case may be.

All assessees paying Service Tax need to submit the list of documents at the time of filing their first return or January 31, 2008, whichever is earlier. The need for summoning so many documents from all tax-payers needs to be questioned.

Service tax as a law has matured to an extent wherein the Department and the tax-payers have complied with the law to a large extent. This would be one of the primary reasons for the buoyant revenues from this levy.