What about the balance of credit of Education Cess? CBEC should clarify immediately to avoid unnecessary litigation
WHILE there will be no education cess on Service Tax from today, somehow CBEC is shying away from giving a clarification on how the balance of CENVAT credit on education cess lying in the accounts as on 1.6.2015 can be used by the service providers and as on 1.3.2015 by the manufacturers.
CBEC should understand that they have put every manufacturer and every service provider in the country under deep distress, because there is no clarity on the issue. A leading manufacturer asked us, "What is the status of balance amount lying in both the cess in CENVAT account as on 01.03.2015 and Service tax Edu cess lying as on 31.05.2015. Shall we wait till the board clarifies or can we merge all the cess with basic excise duty?." With the hope that Board will soon clarify, we advised them to wait. But how long? Does the Board believe in the concept of ' ease of doing business' ? Or are our tax laws intentionally made complicated to torture the assessees?
Unfortunately there is a school of thought in the Department, which believes that this credit will lapse. Before such dangerous thoughts spread and the litigation system is further clogged with unwanted notices and appeals, CBEC/TRU should wake up to the reality and urgently issue the clarifications/amendments.
Will TRU listen?