Financial Daily from THE HINDU group of publications
Thursday, Aug 18, 2005
Financial Daily from THE HINDU group of publications Thursday, Aug 18, 2005 |
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Industry & Economy
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Taxation Create a single authority for imposition of service tax, VAT: Assocham Our Bureau
New Delhi , Aug. 17 IN a memorandum submitted to the Empowered Committee of State Finance Ministers, the Associated Chamber of Commerce and Industry of India (Assocham) has suggested setting up of a single authority to resolve issues of imposition of service tax and value added tax (VAT) for work contracts undertaken by a large number of builders and contractors. The chamber has pointed out that, at present, on every work contract the labour part is being taxed for service tax by the Union Government and its material part is taxed under VAT laws in the VAT implementing States. Mr Sanghi, President, Assocham, pointed out that ever since the expansion of service tax, the contractors are liable to pay service tax on the part of the contracts that they perform and also pay either VAT or sales tax on items that they purchase for performing the contractual job. Further, the chamber feels that on account of non-uniformity in the application of VAT laws all over country, the work contracts are taxed at the whims and fancies of authorities spread all over the country that encourages corruption and distortions in the taxation system. Therefore, Mr Sanghi suggested that the Empowered Committee of State Finance Ministers take up the issue of creation of single authority with Finance Ministry so that it comes into being and all such transactions which create confusion are taxed by one such authority to bring in place a transparency and simplicity.
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