Comprehensive circular on service tax soon
The ministry is mulling similar exercise for customs and excise duties as well, Revenue Secretary KM Chandrasekhar said.india Updated: Jun 05, 2006 15:12 IST
The Finance Ministry will soon bring out a comprehensive circular on services tax by codifying it to provide clarification to people and doing away with overlapping in the existing circulars on the same issue.
The ministry is mulling similar exercise for customs and excise duties as well, Revenue Secretary KM Chandrasekhar said.
While the ministry has appointed its former joint secretary TR Rastogi to prepare a comprehensive circular on services tax, it will go for in-house job for customs duty, Chandrasekhar said.
"We have appointed a one-man committee, chaired by TR Rastogi. He will take a view of existing circulars and prepare a comprehensive circular on services tax, taking into account existing provisions of law," Chandrasekhar said.
The Revenue Secretary said he expected Rastogi to come out with the circular within a month. "He has already started work on that," Chandrasekhar said.
He said the need of comprehensive circular arose because there are a number of existing circulars and they need to be codified. "Codification will tell everyone where do these circulars stand. Besides, there are two-three circulars on the same subject which need to be clarified," he added.
The committee would study all the circulars issued on services tax since 1994 and make them consistent with changed provisions of law, if any.
Chandrasekhar also said the department is asking an officer in Mumbai to prepare a comprehensive circular on customs duties. "We will also get on to the excise duties," he added.
The Finance Ministry has already constituted an expert group to prepare a draft on simplifying Income Tax Code. The group would soon submit its report, Chandrasekhar said.
The Government has proposed to withdraw customs and excise duty exemptions on 75 items, including imports of cameras and personal computers up to Rs 1 lakh by accredited journalists.
However, before taking a final view, the Government invited suggestions from various stakeholders to its proposals on withdrawal of customs duty exemptions on 21 items and excise duty exemptions on 54 items.
Similar exercise is followed on reviewing all 162 income tax exemptions, including housing loans, contributions to provident, pension, VRS package and sensitive farm income.
Despite the fact that agriculture income tax is difficult to bring in since it would require states consent and constitutional amendment, public comments are invited for the sensitive issue as the ministry did not want to differentiate between various types of exemptions, Chandrasekhar said.
He said the department has received an enthusiastic response on phasing out of income tax exemptions. "We are in the process of examining the responses," he said.
The revenue secretary said the response to the proposal to phase out excise and customs exemptions has also been good. "Representations from about 30 associations, business houses have been received in about five weeks of posting the details of the proposals on the departmental website," he added.