Service Tax on GTA - DGST’s missive finally put to rest – TIOL crusade finally succeeds - Board issues Section 37 B order
Please bear with us for a rather lengthy DDT, but we have good news for you.
However much we want to, it is very rarely that we get an opportunity to praise the Board for some good work and today is that great day we have been looking forward to for a long time.
A Bouquet with the choicest flowers to the Board.
We are extremely happy to report that finally reason, law and good sense have prevailed over ridiculous clarifications. For nearly two years we have been running a virtual crusade on the issue of abatement for GTA. And finally the good Board has put the issue to rest, even clarifying that notices need not be issued pursuant to CAG’s objections.
The Board is meant to issue this kind of clarifications and we join thousands of harassed assessees all over the country in thanking the Board for the wise decision.
A little history:
It all started in 2005.
In - 11 04 2005, we wrote,
What will the poor assessees do if the officers who are meant to be there to solve their problems themselves create confusion? Most of the Central Excise assessees who are also required to pay Service Tax on goods transport have been paying tax only on 25% of the value in terms of Notification No. 32/2004-Service Tax, Dated : December 3, 2004 and they are right. Now the DG, Service Tax has issued a clarification to all the Chief Commissioners that this exemption is available only if the transport agency pays the tax and not if the consignor or consignee pays it. The learned honourable and totally confused DG does not mention, why he thinks so.
Two days later inTIOL- - 13 04 2005, we wrote,
WE are happy to report that the DG Service Tax has withdrawn the controversial clarification we reported yesterday. On behalf of thousands of assessees spread across this large country, we express our deep feelings of gratitude to the DG Service Tax for the courage in withdrawing the clarification which we pointed out was patently illegal. Any one can make a mistake; it takes real strength to correct a mistake. A responsible and responsive tax administration ready to admit a mistake and that too promptly before much damage could be done is the greatest happening. Now the consignors/consignees can continue to pay Service Tax on 25% of the value.
But officers in the field who knew their DG were not prepared to believe that the DG would withdraw his circular. So in - 02 05 2005, we confirmed that the DG had indeed withdrawn his circular.
In TIOL-DDT 341 13 04 2006, we reported,
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 DG’s letter was indeed withdrawn. But even this is no leash for the Show Cause Notice hungry officers. They continue to be issued merrily.
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 DG’s 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.
In 17 04 2006, we reported,