If Service Tax can have a brand ambassador to spread the good word, you can't find any one better than Gautam Bhattacharya the simple, casual, humble effective preacher – the Commissioner, Service Tax in the CBEC. In a seminar in Hyderabad on Saturday, Gautam faced volleys and googlies from the trade with an ease that only the likes of Sachin Tendulkar can perform. Though there were not many sixers, the match was a lively one. With his candid humility he admitted that he cannot give answers to all the questions, but he can certainly carry the message to North Block. That of course is itself a great march ahead for many assessees as it is difficult to get your problems reach to the law makers. For nearly four hours Mr. Bhattacharya answered questions from the audience. Please our breaking news for a detailed coverage of the seminar.

NCAER wants doctors and lawyers under Service Tax net

The National Council of Applied Economic Research (NCAER) is unhappy that the Finance Minister has not imposed Service Tax on lawyers and doctors. “It is a matter of concern that the finance ministry, while seeking to expand the ambit of the service tax, has not thought it fit even to mention professionals such as lawyers and doctors”. The Council observed that these professional enjoy almost 100% tax exemption and even those who pay taxes inflate costs. With the Service Tax net spreading wide, it should be only a matter of time before the doctors and lawyers come under the Service Tax net.

Builders go to Court

The DGST's circular proposing to levy service tax on all builders found great favour with the Chief Commissioners and they have been going great guns to rope in the builders under the tax net. (For details on the circular please see (DDT- 309 dated: 23 02 2006). The Builders had sent a representation to the Board which had been forwarded to the DG Service Tax. But even before the DGST answer them, coercive action is being taken to ‘recover' the taxes. The Promoters and Builders Association of Pune (PBAP) is understood to have filed a writ petition in the Bombay High Court. Tax consultants will soon have to shift base from Tribunals to High Courts as many Service Tax issues will be going to the High Courts for immediate redressal. Given the style of tax administration, the Government will be contribution eagerly for clogging the courts with litigation, with their clarifications and circulars.

Even non performance can be a service – titbits on Service Tax

What is Service?

Service is the non-material equivalent of a good. Service provision has been defined as an economic activity that does not result in ownership, and this is what differentiates it from providing physical goods. It is claimed to be a process that creates benefits by facilitating either a change in customers, a change in their physical possessions, or a change in their intangible assets. By supplying some level of skill, ingenuity, and experience, providers of a service participate in an economy without the restrictions of carrying stock (inventory) or the need to concern themselves with bulky raw materials. On the other hand, their investment in expertise does require marketing and upgrading in the face of competition which has equally few physical restrictions. Providers of services make up the Tertiary sector of industry.

Supply of service

Singapore Law

Anything which is not a supply of goods but is done for a consideration (including if so done the granting, assignment or surrender of any right) is a supply of services

EU Law

Supply of ‘services' shall mean any transaction which does not constitute a supply of goods (i.e. the transfer of the right to dispose off tangible property as owner). Supply of service includes,-

Assignment of intangible property

Obligation to refrain from an act or to tolerate an act or situation

Performances made in pursuance of an order of public authority.,

From Mr. Gautam Bhattacharya's presentation on Service Tax at Hyderabad on 25.3.2006

1. a pri·o·ri -

- Proceeding from a known or assumed cause to a necessarily related effect; deductive. Made before or without examination; not supported by factual study.

“In any investigation of the constitutional powers of these great Dominion legislatures, it is not proper that a Court should deny to such a legislature the right of solving taxation problems unfettered by ”a priori¶ legal categories which often derive from the exercise of legislative power in the same constitutional writ.¶

In (1959 SCR 379: AIR 1958 SC 560) quoting a passage from the Broken Hill South Ltd. v. Commissioner of Taxation, N.S.W. 56 CLR 337 at p. 379

¶We must all obey the great law of change. It is the most powerful law of nature.¶ - Edmund Burke

Until Tomorrow with more DDT

Have a nice Day.

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