Laughter – The best medicine
IN 10.12.2009 , we carried a news item regarding Supreme Court asking why the Government cannot legalize the world's oldest profession when it is not able to curb it by laws. We also discussed a little about the applicability of service tax. A netizen has gone a step ahead and sent me this piece. The intention is only to just laugh it off and not to belittle any person or institution.
Issue: Whether condoms are eligible for credit as input:
Revenue: The input is not absolutely necessary for providing the output service. The service can also be performed without the use of the input. Therefore it fails the test of essentiality and hence cannot be treated as input.
Assessee: Though it is not disputed that the output service can be performed without the use of input, the input is required to shield the clients from possible transmission of diseases. Not only the clients, but in some cases, the service provider is also shielded. Hence it is eligible for input credit.
CESTAT: The facts are not in dispute. Though the output service can be provided without the use of the inputs, it cannot take the item outside the definition of input. To draw a parallel, pollution control equipment is eligible for credit. We are convinced that the item is eligible for credit.
DGCEI case of misuse of Credit:On detailed investigations conducted, it was found that the assessee have shown only 1 lakh clients in the records whereas they have availed credit on 1,50,000 items, thus availed credit of 50,000 items which are not used for output service, but diverted for other purposes.
CAG: In the Commissionerates of Bhopal, Bangalore and Ahmedabad, the Audit observed that some of the clients have disappeared in the darkness of night without paying for the service, which was finally written off. Therefore the assessee is not entitled for corresponding credit on inputs. The department's reply is awaited.
Finally,
KSWN Y, Consultants:
The gender of a human being is determined by the Chromosomes, X and Y. If it is XX, it is a female and if it is XY, it is a male. (Researchers are still working on the Transgenders). Thus, the whole world is divided into two sexes, Male and Female. With the globalization of world economy , certain new benefits are bound to accrue. When a falling apple has led to the discovery of gravity, eating it has resulted in attraction between the opposite sexes. Now, can the Government levy service tax if such attraction has some professionalism in it? The Supreme Court in Chartered Accountants Association Vs UOI , upheld the constitutional validity of imposing service tax on professionals.
After 40 such pages…….
The client is advised to buy the inputs not bearing a brand name from small manufacturers so that the dispute on input credit can be avoided.
Please find enclosed the bill for Rs 1,00,000/- towards PROFESSIONAL chares , Service Tax extra.
Tailspark:
Condoms are classified under CETH 4014 10 10 and attract NIL rate of duty.