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Water spilled on happiness of Assessee

CA Akshay Yetiwar 
on 18 June 2012

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Yesterday a wave of happiness flowed in the minds of all the service tax assesse, as some learned person from the our professional community pointed out a defect in  the new amendments made in the Service Tax  Law viz. section 68 of the Finance Act ,1994 , which is the  section for payment of service tax.

New amended section read as under – defective till date 14/06/2012

SECTION 68. Payment of service tax. -  (1) Every person providing taxable service to any person shall pay service tax at the rate specified in section 66 in such manner and within such period as may be prescribed.

(2) Notwithstanding anything contained in sub-section (1), in respect of such taxable services as may be notified by the Central Government in the Official Gazette, the service tax thereon shall be paid by such person and in such manner as may be prescribed at the rate specified in section 66 and all the provisions of this Chapter shall apply to such person as if he is the person liable for paying the service tax in relation to such service.

"Provided that the Central Government may notify the service and the extent of service tax which shall be payable by such person and the provisions of this Chapter shall apply to such person to the extent so specified and the remaining part of the service tax shall be paid by the service provider.";

It came to their notice that section 68 asks the assessee to pay the service tax at the rates specified under  Section 66. But as we all are well aware of the fact that Section 66 ( which specifies the rate of service tax is going to be replaced by section 66B ) is going to be rescinded from 1st July 2012. And new amended section 68 is applicable from 1st July 2012. Hence the professionals came to the conclusion that as it is a drafting failure , service tax assessee will no have to pay service tax from 1st July 2012.,

But our beloved Finance Department spilled water on the happiness of the asessee’s by bringing a new order dated 15th June 2012 wherein they had rectified the mistake and substituted “section 66 B” in place of “section 66”  in clause (1) and (2) of the said section 68 of the Finance Act, 1994

Our Finance department will never take any step which will be harmful to the revenue. Yesterday a wave of happiness flowed in the minds of all the service tax assessee, as some learned person from the our professional community pointed out a defect in  the new amendments made in the Service Tax  Law viz. section 68 of the Finance Act ,1994 , which is the  section for payment of service tax.

New amended section read as under – defective till date 14/06/2012

SECTION 68. Payment of service tax. - (1) Every person providing taxable service to any person shall pay service tax at the rate specified in section 66 in such manner and within such period as may be prescribed.

(2) Notwithstanding anything contained in sub-section (1), in respect of such taxable services as may be notified by the Central Government in the Official Gazette, the service tax thereon shall be paid by such person and in such manner as may be prescribed at the rate specified in section 66 and all the provisions of this Chapter shall apply to such person as if he is the person liable for paying the service tax in relation to such service.

"Provided that the Central Government may notify the service and the extent of service tax which shall be payable by such person and the provisions of this Chapter shall apply to such person to the extent so specified and the remaining part of the service tax shall be paid by the service provider.";

It came to their notice that section 68 asks the assessee to pay the service tax at the rates specified under  Section 66. But as we all are well aware of the fact that Section 66 ( which specifies the rate of service tax is going to be replaced by section 66B ) is going to be rescinded from 1st July 2012. And new amended section 68 is applicable from 1st july 2012. Hence the professionals came to the conclusion that as it is a drafting failure , service tax assessee will no have to pay service tax from 1st July 2012.,

But our beloved Finance Department spilled water on the happiness of the asessee’s by bringing a new order dated 15th June 2012 wherein they had rectified the mistake and substituted “section 66 B” in place of “section 66”  in clause (1) and (2) of the said section 68 of the Finance Act, 1994.

Our Finance department will never take any step which will be harmful to the revenue.




Category Service Tax
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CA Akshay Yetiwar 

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