Finance Bill enacted – Even Finance Ministry not aware!
The Finance Act 2006 is a reality now. It was enacted on 18.4.2006 with the President giving his assent to the Bill, but till late evening of 19.4.2006, even the Finance Ministry was not fully aware of this. It seems the Service Tax assessees of this country are expected to have an agent in the Rashtrapati Bhavan, who will inform them, when the President signs the Bill. All the assessees, who did not have the facility of appointing a secret agent in the Rashtrapati Bhavan, are condemned to pay the excess Service Tax applicable from 18.4.2006. Ignorance of law is not an excuse for the assessee; it may be for the government. The CBEC has come to know about the enactment on 19th and promptly they have issued some notifications. Real good work TRU, but what about the poor assessees who charged only 10% Service Tax on 18th and 19th of April 2006? He has to now pay the differential duty for the two days and what will happen if his customers refuse to pay the difference? This raises a question, “was it necessary to make the budget changes effective from the day of enactment?. Why could these not be made effective from a notified date, which could have been May 1st? Are the Parliament and the Government so insensitive to people’s woes? How fair is it to say that your duty has gone up with effect from day before yesterday? How on earth somebody is to know what papers the President signs? We talk so much about the Right To Information but laws are brought into effect without making them known to the stake holders. Can a law have effect if it is not made known to the public? Perhaps Parliament should make a law that no Act is effective till fifteen days of its publication in the official gazette and through the mass media. Heavens are not going to fall if the Finance Act is not implemented immediately, but a lot of silly litigation can be avoided if proper announcements are made. Except TIOL nobody had carried the notifications issued on 19th April pertaining to the Finance Act which became effective from 18th April. And our sincere efforts to bring the laws of the government to the governed as soon as possible do not always get any support from the government.
Any way the fact of the matter is the Finance Act has come into force from 18.4.2006 and the higher rate of 12% Service Tax is effective from that date. Whether you have collected the higher rate or not you will be liable to pay this rate. Several other provisions of the Act come into force – no have already come into force. The following Sections have come into force.
Section 66A – charge of service tax on services received from outside India.
Section 67 – valuation of taxable services for charging service tax.
Section 73(1A) – payment of service tax after issue of show cause notice.
Section 73A – service tax collected from any person to be deposited with Central Government.
Section 73B – interest on amount collected in excess.
Section 73C – provisional attachment to protect revenue in certain cases.
Section 73D – publication of information in respect of persons in certain cases.
Section 76 – penalty for failure to pay service tax.
Section 87 – recovery of any amount due to Central Government.
Section 93A – power to grant rebate.
Section 94(2) – power to make rules.
Section 96(C)(2)(f) – application for Advance Ruling.