New Delhi: The Government is keen to resolve areas of ambiguities to increase the share of services from 1.1% of GDP said, Mr. P C Jha, Member, CBEC who also strongly cautioned service tax evaders that there could be serious consequences awaiting them.
At a conference on Service Tax and CENVAT organized by Assocham in the capital, Mr. Jha said that the government was finalizing the two Masters circulars on technical and procedural issues which would be issued in the third week of August. These were being drawn up with due consultation with members of industry.
Mr. Jha further said that though the service tax collection during 2007-08 was expected to be Rs.50,200 crore as against Rs.37,500 crore last year, there was still a lot of money out there, that had not been declared. He informed that the revenue department would take serious action against violators.
Large taxpayer units covering central excise, service tax and income-tax in Bangalore and Chennai were being set up, to be followed by Delhi and Mumbai in December 2007.
He agreed that there was need for better understanding and implementation of service tax provisions by the field administration and also for the service tax paying community to pay due taxes in accordance with the law.
Mr. R Sekar, Joint Secretary (TRU), CBEC clarified prevailing norms in areas like works contract, rental in immovable properties, mining, sub-contractor and main contractor, telecom and SEZs where hardships are currently being faced.
Mr. T R Rustagi, Chairman, Committee on Service Tax Circulars said that service tax being a new area with a complex tax system that dealt with a whole range of services was bound to create some problems and hardships. He pointed out there had to be a meeting point and agreements between tax policy makers, implementers and the taxpaying community.
He said that while the service tax design structure and law was reasonably evolved, a lot still needs to be done to make tax administration, especially at field levels effective.