Date:17/01/2005 URL: http://www.thehindubusinessline.com/2005/01/17/stories/2005011701340201.htm

Back Maditssia plea on service tax

Our Correspondent

MADURAI: The Madurai District Tiny and Small Scale Industries Association (Maditssia) has opposed the levy of service tax on transportation of goods.

In a statement here, the Maditssia President, Mr S. Aravind, said, at this stage, the Finance Minister has resorted to the most confusing method of tax collection by implementing service tax to the simplification process as well as to trade and industry.

Even though the Finance Minister has reiterated that the tax is not levied on trade and industry, in reality it is not correct, said Mr Aravind.

According to the notifications, it is clear that the trade and industry is solely responsible for this.

"Maditssia feels that the entire act and the notifications are confusion galore. Normally, only the service provider will have to take the responsibility of tax collection and remittance. But in this case, the responsibility is completely shifted to the receiver of service," he said.

Mr Aravind said the seven categories prescribed by the Finance Ministry included everyone except street hawkers. Further, the exemption of 75 per cent is given with a restriction of availment of CENVAT by the service provider. It will create confusion because the tax prayer, a `service receiver', may not be aware of the CENVAT credit availed of by the service provider.

"Under the circumstances, Maditssia feels that practically it is not possible for the industry to implement the present Service Tax Act with regard to transportation of goods."

Maditssia has appealed to the Finance Minister to withdraw the Act, failing which the industry has no option but to resort to a nation-wide strike, in consultation with apex bodies such as TANSTIA and FASII and announce the future course of action in this regard, Mr Aravind said.