Govt to take serious action against service tax evaders

New Delhi, July 27 (UNI) The Government is very keen on resolving the areas of ambiguities to increase the share of service tax from 1.1 per cent of GDP, said Central Board of Excise and Customs (CBEC) Member P C Jha, and also strongly cautioned the willful service tax evaders for serious consequences.

Inaugurating a national conference on Service Tax and CENVAT here today, Mr Jha said the government was finalising the two Master circulars on technical and procedural issues and shall be issued in the third week of August.

He further said that though the service tax collection during 2007-08 is expected to be Rs 50,200 crore against Rs 37,500 crore during the last year, the potential remains very high and therefore the revenue department will take serious action against those who deliberately violate the law.

He informed that the government has already set up large taxpayer units covering central excise, service tax and income-tax in Bangalore and Chennai and will come up in Delhi and Mumbai by December 2007.

The government is receiving feedback from industry and chambers circles and after studying the same, will finalise the master circulars.

This, he assured, will remove many of the existing irritants and uncertainties and make procedures easy to understand and follow.

He agreed there is a need for better understanding and implementation of the service tax provisions by the field administration, while urging the service tax paying community to pay the tax due in accordance with the law.

Reacting to the complaints that summons are being issued calling for records despite the board's directions against such practices, he assured the government will take serious note and rectify the situation.

Mr T R Rustagi, Chairman, Committee on Service Tax Circulars said the service tax, being a new area with complex tax system dealing with whole range of services, had created some problems and hardships.

There has to be a meeting point and agreements between tax policy makers, implementers and the taxpaying community, he said.

Mr J K Mittal, Co-Chairman, Assocham Committee on Indirect Taxes said the time limit for adjudication of cases should be prescribed which should be one from the date of issue of Show Cause Notice and those could not be disposed of within such time.

The reason should be informed to the assessee, said Mr Mittal.

UNI