CBEC doesn't know under what Section Service Tax is Levied!
ON Friday the Government issued three most complicated notifications, two of which mentioned a condition,
If the said excisable goods are manufactured from inputs or capital goods or by utilising input services on which appropriate duty of excise leviable under the First Schedule to the Excise Tariff Act or additional duty of customs under section 3 of the Customs Tariff Act, 1975 (51 of 1975) or service tax under section 66 of the Finance Act, 1994 (32 of 1994) has been paid...
Section 66 of the Finance Act, 1994, was removed from the statute on 1.7.2012, by Finance Act 2012. Now Service Tax is levied under Section 66B of the Finance Act. Maybe Board doesn't have an updated copy of the Act! This is not the first time they have committed this mistake.
In fact in 2012 itself, they committed a huge blunder by not incorporating this 66B in Section 68, thereby jeopardising the entire levy of Service Tax. 15.06.2012, carried a headline - No Service Tax from 1.7.2012? We carried it on a Friday, which sent shock waves in North Block and on the same day, the Board issued a ‘Removal of Difficulty Order' amending Section 68. And on 18.06.2012, Monday, wrote that this order was illegal. As the Revenue always has the retrospective legislation weapon with them, in the 2013 Finance Act, they rectified the lapse retrospectively. Actually I had called up the top Revenue Officer at that time before writing that Service Tax was not leviable from 1.7.2012 - he took it very casually and said, "we will issue a difficulty removal order" - only when DDT carried the news, the jitters started. If the ‘Removal of Difficulty' order was right and enough, what was the need to amend the Act retrospectively?
After three years, the Board is still not aware of Section 66B and issues a notification stating that Service Tax is levied under Section 66. Now, they will coolly issue a revised notification and say that is the right notification.
We have been requesting them to clarify on the education cess credit lying in balance and there is deafening silence from them, but they rush in with such notifications.
And the three deadly notifications issued on Friday, read on.