E-Filing of Service Tax to be Mandatory : Parande at PHD Chamber

E-filing of Service Tax will become mandatory in the next two months. This was disclosed by Mr. Y G Parande, Member, Service Tax and Budget, CBEC at a Seminar on “Significant Initiatives in Indirect Tax Reforms : ACES & GST” organized by the PHD Chamber in the capital today.  Mr. Parande said that the drop in service tax collection by 5.4 % was due to the Government’s stimulus packages.  He also expressed hope that the government would meet service tax collection target during the fiscal despite impact of stimulus package on revenue realisation. 

The service tax collection during the first seven months has gone down by 5.4 per cent to Rs.28,926 crore compared with corresponding period last year.

Under the Automated Central Excise and Service Tax (ACES) system the Government will make e-filing of returns mandatory in 2-3 months time. Mr. Y G Parande said that this would be done segment wise so that more and more assessees get included in the electronic interface launched by the Government.

On the Goods and Service Tax, Mr. S Dutt Majumder, Member, Central Excise, CBEC assured that the existing exemptions given to the industry would be grandfathered and not suddenly withdrawn. However, there would certainly be a reduction in the number of exemptions extended to the industry. Referring to the PAN based identification system proposed in the GST model; he said that there would be greater emphasis on audit and enforcement by the Government.

It was also shared that property transactions at this stage would be kept outside the purview of GST, given the complexities involved.

Mr. R Muralidharan, Co-Chairman, Indirect Taxes Committee, PHD Chamber observed that the Octroi not being subsumed in GST was a disappointment as it would mean that entry barriers would continue for trade and industry across the States.  He said that many issues still need to be addressed such as double taxation of goods and services, as in case of software. He also called for clarity with regard to treatment of works contract in the GST regime. Many other issues that need to be further clarified were highlighted at the Seminar including refund for unutilized credit, definition of capital goods, threshold limit, treatment of liquor on the same lines as tobacco etc.

It was emphasized by PHD Chamber that there must be a Constitutionally Empowered Authority which could ensure uniform implementation of the proposed GST otherwise the new tax regime would continue to have distortions. It was also urged that the Government should put in place an institutional arrangement to address the common transitional issues which are bound to be numerous as we move to the new system of taxation.