Service Tax – New Provisions in Finance Act to be effective from 1st September.
Now the official secret is officially out. Madam President has signed the Finance Bill and the Finance (No.2) Act, 2009 (33 of 2009) is legally LAW.
The Government has notified that the provisions of the Finance Act will be effective from 1st September 2009. Plastic Surgery, Water Transport, Rail Transport and Legal Consultancy will be under Service Tax net from 1st September.
DDT asked a senior Railway officer whether they were ready to collect Service Tax on goods transport. He told us that the Finance Ministry has no right to levy Service Tax on Rail freight and he had no instructions to collect the tax. He said his Board does not recognise this tax. We tried to explain to him that this was an Act passed by Parliament, but he was not impressed. He was sure that it requires approval by his Board and as of now his Board was not too keen to approve the Finance Act. He was aghast that somebody is trying to tax the Railways! When told that Railways are already paying Service Tax on catering, he said it was paid by IRCTC and not by Indian Railways. We really don't know whether Mamata Didi has the same views.
Board has to issue abatement notifications.
Notification No. , Dated: August 19, 2009