The Hindu : New Delhi News : Taxpayers upset over wider, higher service tax net

Online edition of India's National Newspaper
Sunday, Mar 05, 2006

New Delhi

New Delhi

Taxpayers upset over wider, higher service tax net

Staff Reporter

`Budget would help industrialists; salaried class neglected'

NEW DELHI: A post-Budget survey of taxpayers in the Capital has revealed a great deal of public anger and anguish over Union Finance Minister P. Chidambaram's proposals to widen the service tax net and raise the service tax rate from 10 per cent to 12 per cent. An overwhelming 80 per cent of the taxpayers complained that this would mean increased costs to consumers in every area of purchase, making life much more expensive.

The survey, conducted by the Delhi-based market research firm Shyam Vyas MARC, covered a total of 610 respondents across the Capital. Most of the 500 randomly selected respondents interviewed immediately after the Budget from February 28 to March 2 said it would help industrialists and business sections the most while the salaried class are the most neglected.

While 74 per cent of the respondents had approved of the Government's handling of economic matters when interviewed before the Budget, post-Budget the figure dropped to around 50 per cent.

On incidence of tax evasion being a matter of concern in government circles, 75 per cent of the respondents said there would be lesser evasion if the peak income tax rate of 30 per cent for the highest bracket of taxpayers was reduced by the Finance Minister. No wonder, only about 40 per cent rated it a "good budget". A good 60 per cent of the taxpayers were of the view that the Budget would spur economic growth even though it made 55 per cent of them unhappy as they felt that their tax burden had increased. Over 70 per cent of them strongly felt that the Budget required major and many corrections.

A majority of the respondents asserted that the Budget would lead to increases in prices and make life more difficult for the salaried taxpayers.

About what they disliked the most in this Budget, 73 per cent of the respondents said the increase in service tax was what they "detested most". Seventy per cent also claimed that they were overly burdened with taxes imposed by the Government.

Asked about the Railway Budget, a whopping 90 per cent of the respondents rated it as "good" and gave the thumbs up to Railway Minister Lalu Prasad for the job. Seventy per cent also felt that the Railway budget would make a difference to the way people travel and perceive Indian Railways.

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