FAST plans united stir against 5 per cent service tax
Our Infrastructure Bureau
Mumbai, Jan 20: The Forum Against Service Tax (FAST) is approaching about four crore business establishments all over the country to forge an unified front in opposition to five per cent service tax.FAST, an alliance formed by various manufacturing associations and chambers of commerce including the Maharashtra Chamber of Commerce & Industries (MCCI) and Tarapur Industrial Manufacturers' Association (TIMA), has also demanded withdrawal of the levy.The service tax will have a cascading effect as now the onus of collecting the tax has been shifted from the transporters to those who avail of their services, said President, MCCI, Dilip Dandekar. For instance, the price of a loaf of bread would go up by 15-20 per cent as the service tax will be levied at all the stages beginning from the raw material is brought to the bakery to the final product reaches the customers.On the one hand, the government has simplified procedures by introducing the Value Added Tax (VAT) system and the MODVAT but on the other hand,levies like service tax are introduced to cause confusion, said President, TIMA, Ramakant Pilani. He felt that service tax on transportation of goods will not only lead to more harassment but will also inculcate corruption. The government has extended the service tax net on 17 different areas including advertising, shipping agents, couriers and paging companies and travel agents. According to Dandekar, the service tax levy should be scrapped and the revenue loss should be compensated by hiking the rates of customs or excise duties.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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