New Delhi: Service tax demand raised by the The Central Board of Excise and Customs (CBEC) has brought together competing industry chambers FICCI, CII and Assocham. They have asked Finance Minister P Chidambaram if they were liable to pay tax.
“I have spoken with Finance Minister P Chidambaram personally, to put this question whether chambers are liable to pay tax. To this, he said very clearly, that chambers are non- profit making entities”, Federation of Indian Chambers of Commerce and Industry (FICCI) Secretary General Amit Mitra told PTI.
CBEC has served a show cause notice demanding Rs 33 crore as service tax from the Confederation of Indian Industry (CII). From FICCI and other chambers it has sought details on membership fee.
Mitra said he has also spoken to CII that has informed him that they have also taken up the issue with the Finance Minister. Assocham, along with five of its regional promoter chambers, has also written a letter to the Finance Minister requesting him to consider chamber activities as charitable and be made eligible for tax exemption.
Asked why business chambers should not pay service tax, Mitra said FICCI is registered under the Section 25 of the Companies Act and was not liable to pay tax. An entity registered under this section is treated as a non-profit organisation and is free from tax liabilities.
Mitra said FICCI works not only for industry but also for the larger national interest. “Our primary work is for policy change...this is not for the industry (alone). FICCI had worked earlier for national independence. There was no money made in that”, he said.