SERVICE-TAX

• THE HIGHLIGHT OF SERVICE TAX IS THAT THE TAX HAS BEEN IMPOSED ON 14 CATEGORIES ON NEW SERVICES, THE MOST IMPORTANT BEING SPECIFIED BANKING AND OTHER FINANCIAL SERVICES. SERVICE PROVIDED TO LEASE CIRCUIT HOLDERS HAS ALSO BEEN ADDED IN THE TAX NET. THE TAX ON THESE SERVICES WILL COME INTO FORCE FROM A NOTIFIED DATE (1.7.2001) AFTER THE FINANCE BILL IS PASSED.

• DEFINITIONS AND OTHER DETAILS OF THESE SERVICES HAVE BEEN PROVIDED IN THE FINANCE BILL. I WOULD LIKE TO REQUEST YOU TO EXAMINE THEM AND HOD DISCUSSIONS WITH YOUR OFFICERS, THE CONCERNED ASSOCIATIONS OR INDIVIDUAL SO AS TO IDENTIFY AREAS OF DOUBTS. THEREAFTER, YOU MAY KINDLY SEND YOUR VIEWS AND SUGGESTION TO ME SO THAT SUCH DOUBTS CAN BE CLARIFIED TO ALL . YOU ARE ALSO REQUESTED TO WRITE TO ME, AS EARLY AS POSSIBLE, ABOUT ANY PRACTICAL DIFFICULTIES THAT ARE LIKELY TO ARISE IN THE IMPLEMENTATION OF TAX ON ANY OF THESE SERVICES.

• IT IS ALSO TO BE NOTED THAT CERTAIN LEGISLATIVE CHANGES HAVE BEEN PROPOSED IN THE AREA OF SERVICE TAX. THE MOST IMPORTANT IS THAT THE SCHEME OF SELF ASSESSMENT HAS BEEN INTRODUCED. IT IS ALSO STIPULATED THAT THE ORIGINAL ORDERS IN SERVICE TAX MATTER WILL BE PASSED ONLY BY THE ASSISTANT COMMISSIONER OR DEPUTY COMMISSIONER AND NOT BY OTHER OFFICERS. THESE CHANGES WILL, HOWEVER, BE EFFECTIVE FROM A DATE TO BE NOTIFIED AFTER THE FINANCE BILL, 2001 IS PASSED.