Tuesday, 8 April 2014

Service tax woes of public has not caught the attention of politicians in state

With most regional political parties in the state having spelt out their election manifestos and are campaigning in full flow, there seems to be no mention yet on one of the most worrisome concern of a cross section of public – the burden of 12% service tax.

The move by the Congress-led UPA government to levy service tax of 12 % on every possible form of service rendered baring just 17 services from July 2012, has affected almost every Indian citizen who receives any service which includes eating food from a hotel, getting  a haircut from a saloon or even laundry service.

One of the most affected sectors by Service Tax, the hotel industry, has held several protests in the past demanding that the central government refrain from charging two different taxes on the food people eat.

“It has really affected our business and our customers are disgruntled at the alarmingly high taxes that are charged by hotels,” says R. Srinivasan, secretary of the Tamil Nadu Hotels Association. He pointed out that there has been a general discontent among public over the service taxes that they have to pay on top of existing VAT. "Even the Kerala High Court had recently ruled that central government has no right to levy taxes on the hotel industry against which the centre has gone on appeal," Srinivasan said. 

While powerful industry bodies such as the Tamil film industry and the hotel association has come out in protest publicly, the ordinary citizen who suffers the most has been silently cursing the government for increasing his burden at a time when inflation and price rise has been spiraling out of control. “We are the worst sufferers and no political party in the state has even bothered to fight for abolishing service taxes despite their claims to play a crucial role in national politics,” says A. Sukumar, a chartered account and a consumer rights activist.

The only party to have talked about abolishing service tax among other taxes so far is the BJP whose leaders mooted the idea of abolishing all taxes and bring about a common Transaction tax for every bank transaction. But, those words have remained mere words and have not found a place in the party's Election manifesto.

 Consumer activists point out that it is disheartening that no regional party in the state has talked about rationalization of service tax as an agenda for the coming Lok Sabha polls.

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