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India is My Country and To Pay Others Taxes is also My Duty

CA Umesh Sharma , Last updated: 18 August 2014  

Karniti Part 50

India is My Country and To Pay Others Taxes is also My Duty

Arjuna (Fictional Character):  Krishna, In India on 15th August 68th Independence Day and on 17th August Shri Krishna Jannamashtmi was celebrated. Bhagwadgita has narrated the importance of strength, worship, intelligence. In today’s world due to these occasions all gets a lesson of brotherhood and love towards nation. But in real sense when did todays taxpayer will become independent?  

Krishna (Fictional Character): Arjuna, all feels proud to be Indian. Growth of the nation is carried out from the taxes collected from the taxpayers. For financial growth of the nation it is necessary to pay taxes. Taxpayer will have to pay his own taxes simultaneously taxpayer is required to pay taxes of the person with whom transactions were incurred. As if on “Jannamashtami” while breaking the “Dahi Handi” aim is achieved by putting pressure of one on other.         

Arjuna: Krishna, in Income Tax how other taxes were paid?

Krishna: Arjuna, Taxpayer will have to pay TDS as per provisions of Income Tax. It means while giving remuneration to other tax is required to be deducted and deposited with the government. For e.g. Mr. A is doing job with Mr. B. then Mr. B will have to deduct the TDS while paying salary to Mr. A and deposit the same with the government. Further if the taxpayer did not deposit the TDS with the government on time then the taxpayer is required to pay interest on it. Further if taxpayer did not file TDS return on time then late filing fees will have to be paid. It means taxpayers will have to pay other taxes and he is also responsible to pay interest and late filing fees.  

Arjuna: Krishna, in Service Tax how other taxes were paid?

Krishna: Arjuna, in service tax as per provisions of Reverse Charge Mechanism taxpayer on various types of services received as per provision is required to pay service tax of service provider. Further is service tax of other is late paid then interest and penalty is also levied. For e.g. Corporate taxpayer will have to pay service tax on transportation services received by it. Similarly the recipient of services of director, lawyer, security service, works contract service is required to pay service tax.  

Arjuna: Krishna, now does others taxes are required to be paid in VAT?

Krishna: Arjuna, VAT department verified the set off availed by the dealer at the time of assessment or through CDA system. If supplier has not paid taxes or has not filed the return or is supplier has not shown the sale made the dealer in return then the dealer have to pay taxes and interest and penalty on it. For e.g. If A has purchased goods from B and B has not paid taxes or not filed return then A will have to pay taxes on the goods purchased with interest and penalty.

Arjuna: Krishna, why one need to pay others taxes?

Krishna: Arjuna, due to collecting taxes from others in income tax and service tax government can collect the taxes transaction wise. Therefore small amount of taxes were paid and at the end the burden of paying huge taxes reduces. Government and taxpayer receive the information of taxes collected and paid from 26 AS. But taxpayer has to suffer from interest, penalty and late filing fees. In VAT government collects taxes after carrying out transactions on the basis of information of supplier’s payment of taxes. While doing transactions the dealer is not aware of payment of taxes due to these reasons. Therefore the dealer faces problem. In VAT there is no system of paying taxes at the time of transactions like in income tax. I have paid my taxes and become independent this does not happen. Therefore taxpayer is not independent.  

Arjuna: What one should learn on this occasion of Shri Krishna Jannamashtami?

Krishna: Arjuna, in life only looking at self doesn’t work. As in family others work is required to be done for growth of nation all will have to work and will have to help one and other. Government cannot work alone therefore taxpayer should follow its duty by considering all perspectives. Happy Jannamashtami to all.

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CA Umesh Sharma
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