Service tax GTA - DGSTs clarification Truly withdrawn
Since DDT carried the information on 13-04-2005 that the DGST has withdrawn its controversial clarification on service tax on GTA, we were flooded with request for copies of the clarification. While the Chief Commissioners were very prompt in sending to the field the DGFTs original, clarification it appears that withdrawal of the letter has not been communicated to the field. One hapless assessee wrote to us that his Range Officer is asking him to produce a copy of the DGSTs letter or pay higher tax. We confirm that the DGST has indeed withdrawn the clarification in a letter address to all the Chief Commissioners. The letter states :
The letter F NO V/DGST/43-GTO/02/2005 dated 30.3.2005 issued by this Directorate in respect of applicability of Notification No 32/2004 dated 03.12.2004 is hereby withdrawn. And it is signed by the DG himself. It would be very nice if the DG gives an official clarification that his original clarification is withdrawn to avoid further damage.
The officers are not impressed and DDT understands that Show Cause Notices are being issued in several places. Recently the Commissioner, Service Tax in the Board clarified in a seminar that the DGs letter was indeed withdrawn. But even this is no leash for the Show Cause Notice hungry officers. They continue to be issued merrily. DDT got this frantic mail from a harassed assessee,
Though TIOL has reported that the 75% abatement on GTA is available to everyone as per clarification given by Mr. Gautam Bhattacharya - Commissioner of Service Tax, our local Service tax office (Raigad commisionerate in Maharashtra) is not ready to listen to this and asking us for the payment. They are in fact in the process of issuing show cause notices to us.
We are surprised at the attitude of this office. Is it possible that the DGST has not issued any circular to its offices? What should we do?
We confirm that the DGST has withdrawn his letter and this was confirmed by the Commissioner, Service Tax in CBEC. It is exactly a year since the DG has withdrawn his clarification but it strange that field officers are more loyal than the king. The Chief Commissioners who were prompt ion communicating the DGs letter were not equally prompt in communicating his withdrawal. Unnecessary litigation is being produced and multiplied. Board and the DGST should once again clarify that the instructions are withdrawn and any body who acts on the withdrawn instructions should be punished.
With a hope to put the issue to rest we are giving here a copy of the letter from DGST withdrawing his instructions. It may please be noted that the letter is signed by the DG himself.
Letter — the image was hosted by the publisher and was not captured.