8.Future growth path for service tax in India.
Service tax is envisaged as the tax of the future. Well synchronized taxation
on manufacturing, trade (domestic & international) and service without
giving rise to cascading effect of taxation would be an ideal worth pursuing in
the immediate future. This would bring in VAT in its truest sense, though the
ultimate objection usher in the regime of Goods and
Service Tax (GST).
Continued growth in GDP
accompanied by higher rate of growth in service sector promises new & wider
avenues of taxation to the Government. If the tax on services reduces the
degree of intensity of taxation on manufacturing and trade without forcing the
Government to compromise on the revenue needs, then one of the basic objectives
of taxing the service sector would be achieved.
Advanced economies of Western Europe, North America and Far East have share of
service sector in their GDP
ranging from 60% to 80%. The growth in absolute quantum ofGDP and proportion of Service-sector in GDP holds promise for larger revenue generation
without increasing the existing level of taxation
Future
Course of Action
The
following items of works have to be attended to urgently to improve the
administration of Service Tax in the country.
1.
Service Tax collection Target (Budget estimate) of
Rs.180141 crores for F.Y. 2013-14 to be exceeded.
2.
Intensify the field survey operations to ensure that
all taxable service assessees are brought into the tax net and Service Tax due
from them are collected without hitch.
3.
Recalcitrant/ habitual evaders of Service Tax have to
be booked for appropriate action under the law. There could be no leniency in
this regard.
4. Effective use of Audit and Anti-evasion
as tools for ensuring the compliance on the part of the assessee and curbing
the instances of irregularities and tax evasion. With the launch of ACES greater emphasis will
be on training the staff in computer skills necessary to carry out effective, systematic
and result oriented analysis of data available in the system to achieve greater
result.
5.
Effectively implement an Electronic Tax Administration
(ETA) system for service tax so
that service tax could be administered as a pioneer e-tax of the country. The
Directorate General of Systems & Data Management has developed a web based software named as 'AUTOMATION OF CENTRAL EXCISE
AND SERVICE TAX' (ACES) which automates various processes of Central Excise
& Service Tax for Assesses and Department and gives complete end to end
solution. This web based software is available at 'www.aces.gov.in'
6.
Concentrate on liquidation of Service Tax arrears and
issue necessary clarifications to the field officers so that arrears linked up
with disputed interpretations of the provisions of the law could be easily
resolved.
7.
Attend to all major court cases relating to Service
Tax law for early decision.
8.
Deploy adequate staff to attend to the service tax work and provide
infrastructure and conveyance to implement service tax law effectively.
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