Over 200-representatives of trade industry representatives have opposed shifting from to negative list of the 2012 regime of the service tax which, if carried out, will only create hassles, paperwork and additional burden to the tax payers, revealed at the ASSOCHAM National Conference on Service Tax here today.

Inaugurating the ASSOCHAM 50th conference on Service Tax by Mr. S. Dutt Majumder, Ombudsman, Customs, Central Excise & Services Tax Delhi. It was stated that hardships due to denial of CENVAT Credit in the case of service tax levied under reverse charge lead to cascading effect and break in tax chain.

Mr. J.K. Mittal, Co-Chairman, ASSOCHAM National Council on Indirect Taxes commented that Cenvat credit of Service Tax paid on Goods Transport Agency (GTA) services for outbound transport should be allowed without any condition like freight is a part of assessable value at the place of removal etc.

“CENVAT credit in the case of input services should be extended in respect of rent-a-cab service, medical or health insurance and catering services since these services are used in relation to business of a service provider or manufacturer. Necessary amendment in CENVAT Credit Rules should be made”, added Mr Mittal.

Airports are major essential infrastructure payer having key role in economic development. This facility should be available to large public at affordable cost. Periodical repairs and maintenance of airport facilities is essential. Recognising this need under the old Service Tax provisions (prior to 01.07.2012), the services with respect to Management, Maintenance and Repair of Airport are exempt from levy of Service Tax vide Notification No.24/2009.

However, after the enactment of the new Service Tax law (post 01.07.2012), neither the negative list nor the Mega Exemption provides for such exemption from service tax on the management, Maintenance or Repairs of the Airport. Thus, considering the present legal position and the importance of management, maintenance and repair of the Airports, ASSOCHAM advocates to provide/restore the similar exemption under the present service tax law as well.

However, under the Negative list of services, there are no such service tax exemptions provided to the concessionaire on payment made to NHAI by way of Negative Grants/ Revenue share. Therefore, ASSOCHAM has urged to extend similar exemptions from payment of service tax as provided under Circular No.152/3/2012 dated 22.2.2012 to Negative Grants / Revenue share.

Mr. D S Rawat said that Maintenance, Repair and Operations (MRO) Business has a huge potential to attract foreign investments and earn precious foreign exchange. Hence it is desirable to exempt the MRO services as a whole from imposition of service tax in order to promote the industry in India. MRO services needs to be included in the negative list of services which are not taxable. It is recommended that for promoting the upcoming MRO business which has just begun to grow in India MRO services should be exempted from service tax.


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October 2021