No Service Tax Paid on Tatkal Tickets by Indian Railways
IT looks as if the Indian Railways have not paid the Service Tax on Tatkal Tickets, cancellation charges and Bed Rolls charges. It is understood that the office of the Principal Commissioner of Service Tax, Delhi-1 has written a polite letter to the Adviser, Accounts of the Rail Board that it has come to the notice of the Service Tax office that Railways and its zones are not discharging Service Tax properly on the following issues and there is short collection and short payment of tax on the same.
1. Tatkal Charges/Premium Tatkal charges
2. Cancellation Charges
3. Bed Roll Charges
The Service Tax Commissionerate has requested the Railways to provide Zone-wise income received under the above heads during the financial year 2011-12 to 2015-16.
The Additional Commissioner who has issued the letter informs the Railways that the letter has been issued with the approval of the Principal Commissioner, Service Tax.
If the Railways have not really paid the Service Tax, the demand will run into hundreds of crores. Will there be a penalty on the Railways?
In DDT 2827 18 04 2016, I had briefly mentioned this issue - Evasion by Government? It is heard that the Ministry of Finance is already investigating the Ministry of Railways for alleged evasion of Service Tax.
If the Railways have not collected this tax from the passengers, it is gone forever. They cannot go back to the passengers to recover this tax. Then, what is the use if the Finance Ministry of the Government of India collects the tax with a penalty from the Rail Ministry of the Government of India? If the case goes to the Court, will the Attorney General represent the Finance Ministry or the Rail Ministry? Is it Revenue Neutral when one department of the Government collects tax from another department which cannot be passed on to the consumer?
Who will win this IRS vs IRS battle?