The Hindu : Tamil Nadu / Madurai News : Dispel doubts on service tax, says MADITSSIA

Online edition of India's National Newspaper
Monday, Jan 31, 2005

Tamil Nadu

Tamil Nadu - Madurai

Dispel doubts on service tax, says MADITSSIA

By Our Staff Reporter

MADURAI, JAN.30. The Madurai District Tiny and Small Scale Industries Association (MADITSSIA) has exhorted the Centre to dispel doubts over the manner of levying service tax and explain how far the shifting of responsibility of payment on the part of service receivers was justified.

Speaking to reporters here on Friday, KR. Gnanasambandan, project director, MADITSSIA Business Information Centre, said though in all other services only the provider was responsible for registering with the department, collection and payment, only in the case of transportation of goods, the responsibility was shifted to the receiver of service. Condemning this `double standard,' he said theirs was a production-oriented organisation and hence its members would be the worst affected if service tax was levied on them. Though the industry was not against imposition of tax, it expected a level playing field.

There were several anomalies in the proposed service tax system, which required to be set right before it was implemented.

The Centre should clarify on how to ascertain whether the consignor or the consignee came under the seven categories for the tax payment.

The MADITSSIA wanted a general exemption limit to be prescribed in respect of all services and wanted the Central Government to take steps to totally exempt transportation of goods from the purview of service tax.

The Government should probe other avenues to generate expected revenues from this particular service.

The MADITSSIA would not participate in the nationwide strike next month but wait for the Government to make a favourable announcement soon, he said. "As a last ditch effort, we have petitioned the Finance Minister and officials concerned and are waiting for a reply from them. But if this fails, we have no option than to participate in the strike," he said.

Confusion prevailed on the implementation of service tax, as it did not prescribe to any general exemption for any service as in Central Excise.

It included dry cleaning, beauty parlours, health spas, workshops, train travel agents, etc. but did not specify how these units would pay the tax. For instance, in the case of workshops, the spare parts supplied or sold were exempted and in the case of transport of goods, it was charged 25 per cent of the freight rate.

This was not justified because the service providers would ultimately add burden to the consumer. This sort of tax widening measures would only result in social unrest.

`Promote Madurai'

A delegation from MADITSSIA presented a memorandum to the Union Minister for Communication and Information Technology, Dayanidhi Maran, seeking his intervention for promoting Madurai as an Information Technology hub.

They met Mr.Maran and requested the help of Central Government to develop required infrastructure for the development of IT sector, according to a press release from its president, S. Aravind. An invitation was also extended to the minister to take part in a forthcoming international conference, `India Soft.' They also wanted him to propagate Madurai as a potential area for IT companies and Business Process Outsourcing units. N. Somasundaram, association secretary, and past presidents, K.Ramachandran and KR.Gnanasambandan, accompanied him.

Printer friendly page
Send this article to Friends by E-Mail

Tamil Nadu

News Update

Stories in this Section

NGOs favour natural protective barriers

Dispel doubts on service tax, says MADITSSIA

Plea for Fast Passenger service to Chennai

Ex-servicemen to get `cashless' treatment

Destruction of manuscripts decried