News Update

IT Sector urges FM to lower GST on telecom services to 12%NIC CERT launched to predict cyber attacksConnectivity with ASEAN is India's priority: GovtTreading GST Path - XXXIX - Tribunal at crossroadsST - Denial of CENVAT credit on ground of failure to deposit tax by service provider is not correct in equity when there is no express condition to that effect in CCR, 2004: CESTATI-T - Reopening of concluded assessment by invoking provision of section 147 will not fall under ambit of change of opinion where AO formed an opinion contrary to binding decision of Apex Court: ITATCus - A court is expected to make an overall assessment of fact situation and test same on touchstone of law to reach to its conclusion: CESTATVice President calls for ranking of legislatures & notifying disruptors on daily basisOnline exam portal of IAF launchedPre-Budget Meet - Economists ask FM to lower MAT & spell out roadmap for tax reformsNadda launches Operational Guidelines for HDUs & ICUsRahul Gandhi formally elected unopposed Congress President; PM congratulates him on his elevationCBDT Task Force for reviewing Income Tax Law to hold its first meeting on Dec 14, 2017NCLT Favoring takeover of Unitech Management- Apex court to hear case tomorrowRyan Row- SC Declines to repose trust in trustees in bail applicationReal Estate- ITC a double edged sword under GSTI-T - Assessees cannot avail Post decisional hearing if their case is transferred u/s 127 to some other I-T Officer located in same city: HCST - Service of taking repossession of vehicle from borrower is a part of 'security' service which is specifically included in definition of input service: CESTATCX - Tribunal, not being court of equity, it is difficult to entertain prayer of appellant for grant of interest from date of deposit made in accordance with HC order: CESTATWTO Meet in Buenos Aires - India hopeful of support on food security issueOver 15 mn girls aged between 15 to 19 experienced forced sex: UNICEF
 
No More Cess from July 1, 2012?

JUNE 26, 2012

By K Vaitheeswaran, Advocate

A careful reading of the various provisions/notifications ushering in the new negative list based concept of service tax indicates that there are many pitfalls which are likely to cause difficulties for the Government.

Section 91 of the Finance Act (No.2) Act, 2004 levied education cess at the rate of 2% and Section 95 reads as under:

"The Education Cess levied under Section 91 in the case of all services which are taxable services shall be a tax (in this Section referred to as The Education Cess on taxable service) at the rate of 2% calculated on the tax which is levied under Section 66 of the Finance Act, 1994 (32 of 1994)."

A plain reading of Finance Act, 2004 indicates that education cess of 2% was levied on the service tax payable under Section 66.

Section 136 of the Finance Act, 2007 imposed Secondary and Higher Education Cess and as per Section 140, the cess was at the rate of 1% calculated on the tax which is levied and collected under Section 66 of the Finance Act, 1994 (32 of 1994).

The Central Government vide Notification No.22/2012 dated 05.06.2012 appointed 01.07.2012 as the date from which the provision of Section 66 of the Finance Act, 1994 ceases to apply except as respects thinks done or omitted to be done before the said Section 66 so ceases to apply. Section 66 ceases to exist from 01.07.2012 and Section 66B which is the new charging section for the levy of service tax is effective from 01.07.2012.

Section 66B reads as under:

There shall be levied a tax (hereinafter referred to as the service tax) at the rate of 12% on the value of all services other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another and collected in such manner as may be prescribed.

Finance Act, 2012 has not made any amendment to Section 95 of the Finance Act, 2004 and Section 140 of the Finance Act, 2007 so as to enable the levy of Education Cess and Secondary and Higher Education Cess payable on service tax levied under Section 66B of the Finance Act, 2012.

Therefore when service tax as a tax is levied only under Section 66B, it may not be possible to levy education cess at 2% and secondary education cess at 1% which is a cess on a tax referred to in Section 66. With due respect, the Removal of Difficulty Order cannot be a solution since the cess is levied under Finance Act, 2004 and Finance Act, 2007 and has no connection to Section 66B introduced by Finance Act, 2012.


POST YOUR COMMENTS
   
Shemaleup.net x-comics.org vr-porn360.net