What a Budget!
Budget speeches are like mini-skirts:
++ What they reveal is interesting but what they conceal is downright fascinating.
++ What they reveal is trivial, what they conceal is crucial
++ What they hide is much more important than what they reveal.
++ What they reveal is suggestive, but what they conceal is vital.
If you have a drink in an air conditioned bar, you have to pay Service Tax; so is the case if you hire a room in a hotel; If you send your child to a college or institute, you will have to pay Service Tax on the fee. Can you imagine that in a country like India, where literacy is low and the government is supposed to provide education, education is being taxed and taxed heavily using all the intellectual might of the babudom , most of whom are products of state funded education. If you get into trouble and hire a lawyer, apart from the fee he fleeces from you, you are subject to a Service Tax.
If you file your Service Tax returns late, the penalty can be as high as Rs. 20,000/-. Getting the officer to accept your return with a backdate has suddenly become lucrative, though not with e-filing.
Interest for delayed payment of Service Tax, Excise or Customs is sharply increased to 18%. If you don't pay them, they will charge 18% interest, but if they don't pay you, they will pay you 6%. Your money is not as good as theirs.
Gone are the days when Government treated service tax assessees in our country with kid gloves. Many officers in the Department were eagerly waiting for the FM to give them the power to arrest Service Tax offenders. Arrest is big business in India. You can collect money with threat of arrest and anybody who doesn't pay up is made to realise that it would be cheaper to pay the officer than the lawyer and other worthies in the judicial system to get bail. Now though the FM has disappointed his officers while not wasting on them with the power to arrest, he has blessed them with the power to prosecute. Now in the following cases, prosecution can be launched:
++ Provision of service without issue of invoice;
++ Availment and utilization of CENVAT credit without actual receipt of inputs or input services;
++ Maintaining false books of accounts or failure to supply any information or submitting false information;
++ Non-payment of amount collected as service tax for a period of more than six months.
And the punishment can be imprisonment up to three years with a minimum of six months.
Prosecution can be launched only with the sanction of the Chief Commissioner, but which Chief Commissioner is going to reject the recommendation of his inspector endorsed by a Superintendent, Assistant Commissioner, Additional Commissioner and Commissioner?
Beware you can go to jail, if you are not careful. Any way with hardly any prosecution in Customs and Excise cases, the Special Courts for Economic Offences do not have many cases and a few Public Prosecutors told DDT that their lives have become miserable with no work and no remuneration. Now there is bound to be smiles all around and stakeholders in the business are sure to have good days ahead – except of course the hapless assessee.
All these days you had to pay the Service Tax only after your client paid you – no more; you have to pay the tax soon after you provide the service or raise the invoice. You provide the service and pay the Service Tax but your client runs away without paying you – what happens to the Service Tax paid by you?
Deccan Airways brought air travel down to earth and within the reach of common men, but government seems to be determined to keep it beyond the reach of ordinary people. Today for a short air travel, you have to spend about Rs. 200 to reach the airport by bus; pay about Rs. 500 as user charge to the airport and now pay a Service Tax of Rs. 150. Even before you have entered the aircraft, you have paid Rs. 850.
In Central Excise, galvanisation is now defined to be amounting to manufacture.
A major change in this budget is the introduction of self assessment in Customs. Though self assessment is publicised as a trust based compliance, many assesses feel that the department is abdicating its responsibility of doing assessment and transferring it to the assessee and then penalising the assessee for all kinds of violations.
Tail-spark: The JS (TRU), Service Tax in his DO Letter has been very humble while thanking everyone who helped in making this budget possible and stated, “It is impossible to capture adequately in words my thanks to all my colleagues in the Department or other Ministries and members of commerce and industry, who gave us a lot of fodder for thought, which set us in motion to meet the challenge that our nation faces .”
Please note he says fodder for thought, not Food for thought!