Service Tax is an enigma. It has revealed to the governing administration that you can tax the premier sector of the economy without the need of obtaining a codified regulation. It has revealed to the tax directors that it is far better to tax without the need of a regulation as regulation lessens your discretion. The only sufferer is tax assessee- but in any scenario, regulation or no regulation, they are there to put up with. The administration of Service Tax demonstrate ad-hocism at its zenith. In this ad hocism the strategy of accumulating Service Tax on Merchandise Transport Operator is significant position in enforcing uncertainty- I have heard uncertainty of regulation is the biggest cruelty. The assistance tax administrator has forgot this cliché.
Report 265 of the Constitution stated that no tax shall be levied or gathered preserve by authority of regulation. No particular person can argue that assistance tax is currently being gathered without the need of authority of regulation- after all there are many clauses of Finance Act of many a long time authorizing levy and assortment of assistance tax. So what if these clauses are not apparent-Report 265 didn’t refer to apparent regulation. So what if these clauses are not certain- Report 265 did not refer to certain regulation. Hence I am positive that administration of assistance tax is not at all violating any word of the Report 265 of the Constitution. And spirit of any regulation is or was in no way important to the tax directors.
And then I observed an post prepared by a figured out tax administrator in this esteemed journal (GTA-Liability to fork out Service Tax and Credit score thereon, 2006 (2) STR J147]. The figured out author argued that liability to fork out assistance tax is not the only criterion to avail credit rating. I are unable to agree a lot more. But I differ from him on many counts. This paper is an try to study the authorized provision (howsoever unsure they are) with respect to Cenvat Credit score on assistance tax compensated on outward freight assistance- that is freight on transportation of goods after clearance from manufacturing facility gate, after the position of removing, after the Central Excise obligation has been compensated.
I agree with the figured out author that liability to fork out a tax and getting credit rating of that distinct payment of tax are two unique things. They are governed by unique provisions of regulation. You may well fork out a tax but you will not get any credit rating- like taxes compensated on significant speed diesel. You may well not fork out the tax but you may well get credit rating- we can even now remember many sort of considered credit rating readily available to the assessees. Off study course payment of tax may well be a criterion to let credit rating and in general it is a criterion.
Credit score of assistance tax is availed less than Cenvat Credit score Rules, 2004. Hence …