There was a gap of almost 10 days in writing daily blogs. The reason is that I have paid visit to historical spots of Jaipur, Udaipur & Mount Abu of Rajasthan.  Now, I resume my social work with full spirit.

Shri V. R Yadav has been nominated as President of "Right Thinking Indians Association, Raipur, Chhattisgarh" of Raipur District and he will ask RTI querries from the State Government Departments of Chhattisgarh as well as Central Govt Department of the same state. We will start with seeking A.G reports from sensitive departments of the Governments. The Accountant General Report is an accepted Report as the office is a statutory Department created by Law. As a non Govt social organisation, our "Right Thinking Indians Association" will see whether the Report submitted by the AG office is being actually implemented or not. For fulfillment of this limited object, we hereby undertake the self imposed task of one type of "Audit by Public of Public Accounts". This sharing of Information & document kept in Government offices is the true spirit of "Right to Information Act, 2005."

platform for expressing public feelings

We, the members of "Right Thinking Indians Association" Raipur, Chhattisgarh are arranging a small gathering for expressing public desires, feelings and the requirements of the public. The leaflet of the meeting is uploaded for public viewing.

Information on Defaulters of SBI sought under the RTI Act, 05

We have raised two questions on State Bank of India under the RTI Act, 2005. The 1st one is Recovery Agent of the Bank. We wanted to know the list of Recovery Agents and the amount paid by them. The amount received by such Agents is a taxable service and we, the Right Thinking Indians Associations wants to examine whether Service Tax has already been paid by them or not. The newly appointed CIC Information Commissioner has rejected our Appeal on the ground that the information sought does not serve any public interest.

The second one RTI Application was to know about details of Defaulters of SBI. Our contention is that the loan amount given by the Banks is nothing but public money and therefore it is matter of public interest. The copy of PH letter is uploaded for public awareness. We do not believe that the retired IAS of Bihar will deliver any good judgment and therefore do not feel any such necessity of attending the PH date on 18th Feb, 2013.

RTI matter on SBI in the court of CIC, New Delhi

We have raised two questions on State Bank of India under the RTI Act, 2005. The 1st one is Recovery Agent of the Bank. We wanted to know the list of Recovery Agents and the amount paid by the them. The amount received by such Agents is a taxable service and we, the Right Thinking Indians Associations wants to examine whether Service Tax has already been paid by them or not. The newly appointed CIC Information Commissioner has rejected our Appeal on the ground that the information sought does not serve any public interest.

The second one RTI Application was to know about details of Defaulters of SBI. Our contention is that the loan amount given by the Banks is nothing but public money and therefore it is matter of public interest. The copy of PH letter is uploaded for public awareness. We do not believe that the retired IAS of Bihar will deliver any good judgment and therefore do not feel any such necessity of attending the PH date on 18th Feb, 2013.

CIC, New Delhi is the apex body of Information Commission and has been formed as the final Authority of Appeal in providing of Information & documents under the RTI Act, 2005. It has also the power to impose penalty under Section 19 of the RTI Act for non providing, delay in providing of information and for providing of misleading information.
One such case has been decided on dtd 18.12.2012 by Information Commissioner Smt Susma Singh. The facts of the case is that Shri R.K Jain, the renowned publisher of ELT has asked certain information & document under the RTI Act from CESTAT, New Delhi. The Commission found that there was delay of 42 days for which a penalty amount of @Rs 250/- per day total amount of Rs 10,500/- was imposed on Shri Mohinder Singh CPIO & Shri Pramod Kumar, deemed CPIO.
I have also sought information about dropping of Demand cases from the same Tribunal which was denied. Hence, I feel glad to see this Order. The "Right Thinking Indians Association" Raipur, Chhattisgarh hopes this type of orders will go a long way in curbing the ego, authoritarian attitude & the negligence of Govt Officers while dealing with matters relating to Public life.

It is pertinent to mention here that a few years back, Shri Pramod Kumar was the Commissioner of Central Excise, Raipur, Chhattisgarh. My best wishes for Shri R.K Jain who championed the public cause. I hereby upload the 1st two pages of the said decision.

Service Tax on Builders wef dtd 1.7.2010

Recently, a Bengali gentleman of Nehru Nagar, Bhilai contacted me and wanted clarification on service tax payment liability of Builder vis a vis Customer. He was eager to get a confirmation of the view that he is not required to pay Service Tax on his Building purchased from a reputed Builder.

The facts of the case is that he has booked his house before dtd 1.7.2010 and prior to this date, Builder was not liable for payment of Service Tax on Construction of Complex Service popularly known as "Residential Construction" Service. The case is a little bit complicated that even though he has booked his house prior to the crucial date of 1.7.2010, a part payment was made after this date and the Builder is obviously demanding Service Tax from the gentleman. Our awakened customer has searched net and has downloaded some article from Taxguru site which emphatically stated that Buildings purchased prior to dtd 1.7.2010 is not liable for service Tax on this category of Service. He was impatient to prove his point and wanted that I should nod my head in his favour but I do not agree with  view of Taxguru site and as contended by our gentleman customer.

My point is that the value received by the Party (Builder) is inclusive of Service Tax. It is as per Section 67 of the Finance Act. When the Builder has received value of service on account purchase of house from the said customer, he is bound to make payment of Service Tax on such value of Service received after dtd 1.7.2010. The Value received prior to dtd 1.7.2010 is no doubt "not taxable" but it is not possible to stretch this date further on the plea of date of booking was prior to this date. Anyway, I could not convince that gentleman. 

Trying again

The danger to Society comes every time and every time a solution is found out. Therefore, we, some people sit every Sunday in Coffee House of Civil Lines, Raipur, Chhattisgarh. Since, we are feeling coffee house talk falls short of the expectation, we are planning to sit some more people say 200/250. Let us see, a force may emerge from it.

I know one Mr Anil Agarwal who is connected with vetran RTI Activist Mr Arvind Kejriwal.  Mr Agarwal meets him & talk with him every Sunday through video conference. All these things encouraged me that India is moving. So, I also decided to move. 

free discussion

Once, Late President of U.S.A while giving a speech during the Civil war in America spontaneously defined Democracy. He spoke to the people of his country that Democracy is of the people, by the people and for the people. Till date, it is best definition of Democracy as it came straight from the mouth of an excellent leader of America and that too in a crucial period. The Great Lincoln sincerely wanted to stop the evil design of certain people in making a separate state in America.

In this context, I want to share my feelings that nowhere we feel that our Democracy is of the people, by the people and for the people. I am giving example. I found my name in the voters list after 5 years and after taking much effort. Even then, there is no description of House No for which, my son has undertaken the strain for last one month in approaching the Govt official.

While I was looking at the incomplete list, a plumber came to my house for repairing job and he was more practical than me. He has got his voter card by payment of Rs 500/-. He was right in solving the problem of voter card. He accepted the best proposal of clerk of the Collectorate office of Raipur, Chhattisgarh. The rate of preparation of voter card is something like this. Rs 500/- immediate, Rs 300/- 1 months, Rs 200/- in 2 months and Rs 100/- in 3 months. A plumber, who is citizen of India and wants to caste his vote in election has to spare Rs 500/- to get the card immediate.  It happens only in India. The plumber was confident in clearing his investment of Rs 500/- in election at least partly and I begin to think what will be the fate of democracy, where an investment of Rs 500/- has already been made in an election project.

simple way 2 understand "works contract" service

Service Tax is adding impact on our day 2 day life in an increasing manner. Previously, Goods Transport Service was difficult 2 understand. Now, "Works Contract" service seems more difficult. What is difficult 2 me, i think it is also difficult 4r others.
Now, I have across an example in Internet which makes us to clearly understand the said service in a very easy way. It prompted me to share wd my net friends at the late night. Those who are sleeping now can read in the morning and afterwards.
The example is like this. We choose pant/shirt piece in the shop of a Tailor and ask him to take measurement of Pant/shirt. The Tailor stitches the same and hands over to us. He never says that u give the price of cloth, button, threads used and tailoring charges. It is a perfect example of "works Contract" service. Likewise, nobody says that he has purchased cement, rods, windows, doors etc, he says that he has purchased a building from a Builder. Construction service comes under "works contract" service. In a new construction  the service provider has to pay Service Tax @40% of the value of Goods. If the Builder prefers to treat his service as Builder, he can pay 12.36% S.Tax on the taxable value of 25% of the total price of the Building. Here the abatement is 75% of the total price of the Building.
Like the above example, works contract service consists of goods & service. In goods, there is sales tax charged by the sate Govt  and for service component , there is service tax.charged by Union Govt.
As per Constitution of India, the State can levy in the area of taxation demarcated for it and Union Govt of India can levy in area demarcated for them.

The Citizen lives in State which is also in Union and therefore has 2 bear both taxes. Now, the Union of India is planning to introduce GST (Goods & Service Tax) by merging both Sales Tax and Central Excise. The main protagonist of GST is Shri Pranb Mukherjee saheb but he can no more lead the cause. As President of India, his job is now to sign  the Bills passed  by the Parliament of India, a place where he argued a lot, assured  a lot and spoke a lot.

Advertisement service as a Taxable Service

Sale of space or time for Advertisement was a taxable Service w.e.f dtd 1.5.2006. Now, it is in the negative list except advertisement broadcast by Radio or Television.  The negative list has been mentioned in Section 66D of the Finance Act and it is effective from dtd 1.7.2012. So, this is a significant change in the old taxable service.

Prior to introduction of negative list, sale of space or time by a broadcasting agency or organisation was excluded from the purview of Service Tax. 

So, who are paying service tax previously? Service providers advertising in hoardings, bill boards in Public places, buildings, conveyances, cell phones, ATM machines and internet were required to pay Service Tax in this category of Service. Now, they are exempted by virtue of inclusion in the negative list mentioned above.

works contract service after dtd 1.7.2012

Works Contract Service was introduced w.e.f dtd 1.6.2007 vide Notification No 23/2007. At first, rate of Service Tax was 2%. Later on it was increased to 4%. After dtd 1.7.2012, the collection on the value of Service Tax has been changed which is detailed below:-

A. In original Contracts, service Tax is leviable on 40% of the value of the Service.

B. In repairing & maintenance of goods, service Tax is leviable on 70% of the value of the Service.

C. In contracts other than A & B, all other works contract Services like finishing jobs, glazing, tiling and finishing jobs including repairing & maintenance service, service tax is leviable on the 60% of the value of goods.

It may be noted that B is for repairing of goods.

Last not the least, what is the ingredient of works contract service?

The simple answer is that in works contract, transfer of property is involved and such goods is leviable to sales tax.

an open platform for discussing grievances of the people

We, some persons are planning to sit in Vrindavan Hall, Civil lines, Raipur (near IDBI Bank) on 24^th March , Sunday to discuss  as to how we can solve our problems that are coming in day to day life. If we are salaried employees, we have certain problems in office. We want to know about promotion, increment & other facilities which are denied to us. If we are businessmen, we are also interested to know the name of the businessman who has got the Tender in an Auction, what is lowest price of the Tender & the procedure of such Tender. If we are farmer, we will be naturally interested to know whether the Govt subsidy, loan, fertilizer has reached us or not and who is responsible in case, the same has not reached us. If we are young student, our interest may be to know whether the computer meant for our school/college has reached our school or college. These are just examples and the list of our wishes, requirement, rights & demands are long & exhaustive. Every day we face problem and find solution of the same.

It is an accepted fact that even if we try our level best, we cannot solve all problems but if we are united, then big problems can also be solved easily. A National issue or a State level issue cannot be solved by an individual effort. Obviously, a group effort is required. If u are not getting what u want from a Govt office by your individual effort, it is obvious that you need strength, support of other persons and for this purpose, we have to organize ourselves.

So, we are organizing an open meeting with an open heart with all the RTI groups in a friendly way. Unity and interaction among likeminded persons will give us strength, confidence and the power to achieve what we want & we dream in our life. Unless, we take effort, automatically, nothing will be achieved. We have to try it again & again until our Aim & Objective has not been achieved.

The question arises, what we want? The general answer is social welfare. How it will be achieved? We are striving for the same through the provisions of the RTI Act, 2005. We resort to RTI Act as it is the only Act through which we can get information & document from a Govt Department and this will help in achieving some of our objective.

This is the beginning and not the end. We, the “Right Thinking Indians Association, Raipur, Chhattisgarh” have chalked out a beginning and the end will be decided by the people & the result of our interaction.

So, friends, let us meet in Vrindavan hall, Civil lines, Raipur at 3 PM.

                                               

           (Arun Kumar) (Govind Thakre)

       President                      Secretary

“Right Thinking Indians Association”

             Raipur, Chhattisgarh

Penal provision of the RTI Act, 2005

There is penal provision under Section 19(b) (c ) of the RTI Act, 2005. It reads as under:-

Section 19(b) requires the public authority to compensate the complainant for any loss or other detriment suffered. Section 19(c ) prescribes any other penalties that is prescribed under this Act. A maximum amount of Rs 25,000/- penalty can be imposed under this sub section. Rs 25,000/- may not be big amount for some officer but when it will be deducted from the salary of the Govt servant who is the Public Information Officer and the fact of imposition of penalty will be recorded in service book, it will have the desired effect and we expect a wholesome effect for welfare of the people.

Right Thinking Indians Association, Raipur, Chhattisgarh is striving hard to bring awareness among people and fight for their Rights.

Penal provisions of RTI Act, 2005

There is a famous proverb “bhaya bin prit na hoye" which means love comes out of fear. It is applicable in all cases and like all medicines, it is administered in limited dosages and at certain intervals. What is its implication in RTI Act, 2005. Let me discuss.

You give an RTI Application to the Public Information Officer. The Govt Officer is bound to attend it. Either he has to reject it or provide the information. Suppose, he will not provide. Next , we have to Appeal. If the Appellate Authority is also of  the negative mentality, then what to do? Second Appeal before State Information/ Central Information Commission, New Delhi. Can any Applicant afford to run from pillar to post to get the information & document.

For this specific circumstance, the framers of RTI Act, 2005 has inserted a penal provision under Section 19 (b) of the RTI Act, 2005. The sub section of the Rule says as follows:-

Section 19

xxxxxxxx

(b) require the public authority to compensate the complainant for any loss or other detriment suffered.

(c ) impose any of the penalties provided under this Act.

A maximum penalty amount of Rs 25,000/- has been prescribed under the RTI Act, 2005.

Talk what u want & from ur heart

We, some persons are planning to sit in Vrindavan Hall, Civil lines, Raipur (near IDBI Bank) on 24^th March , Sunday to discuss  as to how we can solve our problems that are coming in day to day life. If we are salaried employees, we have certain problems in office. We want to know about promotion, increment & other facilities which are denied to us. If we are businessmen, we are also interested to know the name of the businessman who has got the Tender in an Auction, what is lowest price of the Tender & the procedure of such Tender. If we are farmer, we will be naturally interested to know whether the Govt subsidy, loan, fertilizer has reached us or not and who is responsible in case, the same has not reached us. If we are young student, our interest may be to know whether the computer meant for our school has reached our school or college. These are just examples and the list of our wishes, requirement, rights & demands are long & exhaustive. Every day we face problem and find solution of the same.

It is an accepted fact that even if try our level best, we cannot solve all problems but if we are united, then big problems can also be solved easily. A national issue or a State level issue cannot be solved by an individual effort. Obviously, a group effort is required. If u are not getting what u want from a Govt office by your individual effort, it is obvious that you need strength, support of other persons and for this purpose, we have to organize ourselves.

So, we are organizing an open meeting with an open heart with all the RTI groups in a friendly way. Unity and interaction among likeminded persons will give us strength, confidence and the power to achieve what we want, dream and goal. Unless, we take effort, automatically, nothing will be achieved. We have to try it again & again until our Aim & Objective has not been achieved.

The question arises, what we want? The general answer is social welfare. How it will be achieved? Now, we are striving for the same through the provisions of the RTI Act, 2005. We resort to RTI Act as it is the only Act through which we can get information & document from a Govt Department and this will help in achieving some of our objective.

This is beginning and not the end. We, the “Right Thinking Indians Association, Raipur, Chhattisgarh” have chalked out a beginning and the end will be decided by the people & the result of our interaction.

So, friends, let us meet in Vrindavan hall, Civil lines, Raipur at 3 PM.

                                               

           (Arun Kumar) (Govind Thakre)

       President                      Secretary

“Right Thinking Indians Association”

             Raipur, Chhattisgarh

Right to Information

Right to Information Act, 2005 is the only powerful Act on which common man of India can hope to solve his problems coming in his day to day life. The present day scenario is not very encouraging as the Public Information Officer of any Govt Department is trying his level best to oppose, discourage and demoralize the information seekers under the RTI Act, 2005.

I will discuss the points from my own experience and hope, u & me will ultimately find a way to know what we want. In fact, what we want from a Govt Department? It ranges from personal queries to public interests.
If u are Govt Servant, u may be interested to know what remarks have been written in ur Annual Confidential Reports, when u are getting promotion or why u are not getting promotion etc & etc. Similarly, if u are businessman, u may be interested to know who has got the Tender on what basis etc. If u are a farmer, u may be interested to know what was the Govt policy of distributing the subsidy, loan & fertilizer etc.

So, how u will write an RTI Application? There is no prescribed format. U can write a simple letter just saying what u want, which information and which document. U have to attach a postal Order / non-judicial stamp paper/ bank draft etc as prescribed the State / Central Govt Authority.

I want to share which will startle any man. The general RTI fees is Rs 10/- in Chhattisgarh but if u want to any information about Chhattisgarh State Assembly, it is simply Rs 500/-.  So, it is obvious that the State Govt does not want public should know anything about Assembly. The Govt has given something in one hand and at the same time, snatched in the other hand. A movement is required against this trend.

works contract service

Works Contract Service is taxable Service introduced by Union Govt w.e.f dtd 1.6.2007. This Service comes into picture in cases where Goods & Service can not be separated. It is applicable in following services:-

1. Erection, Commission & installing Service.
2. Construction of Complex Service which is generally known as Residential Construction.
3. Commercial & Industrial Construction Service.
4. Turnkey projects.

In all the above Services, the Service Provider can pay Service Tax on the usual rate of 12.36% after getting abatement or he may opt for payment @ 4% on the value of Service treating it as a Contract Service.
These days maximum service in big factories and business concerns is provided in this category of Service.

In works contract service, transfer of property is involved. Service provided by Govt Authority is excluded from taxation.

The earlier definition of the "works contract" service was restricted to immovable property but w.e.f dtd 1.7.2012 the definition was expanded. In the definition, movable as well as immovable property, repair & maintenance etc was added. Besides this a major change of Reverse mechanism in payment of Service Tax was introduced wef. 1.7.12. If a body corporate is Service Receiver, then they have to pay Service Tax. in this category of service.
rtia.n

Paradox of Service Tax provision

Impact of Service Tax in Public life of India   

The most critical type of Service Tax is Goods Transport Agency Service (in short GTA). Here, Service Tax is paid on the freight amount of the Goods Vehicle. There is abatement of 75% of the freight amount and Tax is paid on the 25% of the value of freight.

Who is required to pay S.Tax?

As specified in Notifications No 35/2004, the consignor or consignee who has paid the freight is required to pay Tax.

Who has been specified in Notfn 35/2004?

Limited Companies, public or private, body corporate, society & partnership.

Then what Transporter & Transporter Agency is required to do so far GTA is concerned?

The Rule 4B of Service Tax Rules, 1994 says that he has to issue a consignment note and tickmark in the consignment note as to who will make payment of Service Tax, consignor/consignee/GTA. That means the Service Tax provision has given them a responsibility to determine whether the consignor or consignee or the GTA will make payment of Service Tax. What is practically happening that a Transporting Agency is collecting Service Tax, keeping some amount and depositing the rest amount as per his conscience and courage.

When the Goods Transporting Agency (in short GTA) is required to pay S. Tax?

The GTA will pay only in cvases other than mentioned in Norfn 35/2004 that means in case of individuals like Rama ,Vima & Shyama etc & Hindu Undivided Family. When these individuals pay the freight and such freight amount exceeds Rs 10 lakhs, then only GTA will pay Service Tax otherwise NOT. What is happening is the reverse.

I know personally, there is a transporter in front of Rajkumar College, Raipur (near Procee Commercial Training Institute) Chhattisgarh who is not Regd and has not paid Service Tax for several years even though it is a partnership firm and as per Notfn 35/2004, they have to pay S.Tax.

The Service Receiver has to pay Tax from zero point. Only GTA is entitled to avail the initial exemption of Rs 10 lakhs.

So, why it is happening?

The inadequate staff of the Tax collecting department and lack of will power, the level of honesty of tax payers & the level of grasping power of professional Chartered Accountants in the field. Govt officers say that they are too busy, Businessman as the name suggests is already busy and C.A nods his head as per demand of the situation.

The short history of the Tax

In spite of these facts, it is the largest Revenue earning category of Service Tax. The reason is the all pervading Transport system in a big country. Long back Service Tax was imposed on Transporters. At that time, it was called “Goods Operator” Service. An unprecedented strike took place in India. The Govt had to take back the law. It was again introduced in 1.1.2005 named as Goods Transport Agency ( in short GTA ).

Service tax was collected from Service providers but in case of GTA, it was meant to be collected from Service receiver also. M/s Lagh Bharti Udyog a Service Receiver contested on this point in Supreme Court of India that when there is no provision in the charging section 66 of the Finance Act, 1994 how the Govt of India can collect tax from Receiver. The Supreme Court passed his verdict in favour of the party. The Govt therefore resorted a revalidation provision. As per this provision, the Parliament can revalidate a provision in spite of any decree, decision of a Court, Tribunal. So, Govt won and Tax is being collected. According the mechanism of Reverse Charge was introduced by making an amendment in Section 66 of the Finance Act, 1994

Paradox of the Provision

Let me give an example which will elevate the Service tax law to a position of piece of comedy. Sometime back, I purchased an Air Conditioner, Pandri, Raipur, Chhattisgarh who is partnership firm. So, they are covered under specified category. I have paid Rs 80/- as the freight and therefore I am liable for payment of Service Tax. As per law, I have to visit Servivce Tax Department, obtain a Service Tax Registration and pay Service Tax @12.36% of Rs 80/- i.e Rs 9.88. Next, I will cancel Regn and will again apply for it, in the next purcahse. What I will do, the rest of India is also required to do. It is ridiculous. I ponder in 121 crore of people why there is not a single person who can frame a rule with accuracy and clear cut provision.

Flash back

Now, it is 5.8 A.M. early morning. I realize the power the parliament in Revalidation procedure in spite of Supreme Court Ruling. That means in India i.e Bharat, the Parliament is supreme and not Supreme Court. The power of the Parliamentarian took me into my childhood memory when I was lean & thin boy studying in B.B High School, Pritipur, Cuttack, Odisha. In Annual Function of the High School, the local MP visits, speaks to the students and the final action was interesting at the time of departure. 2/3 live chickens were called by a subordinate staff of the said Representative and practically thrown to the back side of the Commander jeep. The chickens cry loud & loud and the chicken owners eyes give a blending expression of proudness, pleasure and also at the same time unhappiness. He is proud & there is reason of pleasure that his goods was required in such a big occasion. He is unhappy as he was not paid before such forced purchase and there is a possibility that he may not be paid. In fact, he was not paid.

I say to myself who is powerful and now I fully realize the power of “Revalidating clause”

Invitation letter for a school get together party.

GET TOGETHER for the “M”acarism “V”agility “M”abble (M.V.M.) Batch 2004 Party.

Today's time sees us running from post to pillar to earn our livelihood..!!!

Time crunch have taken our school life away with the most dreaded thing being, having no time for socializing our school hood memories. Whatever time we have we simply spent it on social networking sites for taking updates from our school friends & other than their mutual school mates which are not in been our contact list of the networking sites which we are using.

But all is not that dark now the time has come to get all of us to get join together in this summer for the ultimate get together party, Grab this fortune to relive your old school memories with all our school buddies.

RE-UNION for the “M”acarism “V”agility “M”abble (M.V.M.) Batch 2004” Party.

Taking pleasure in an another joy for getting ability to succeed in the struggle for existence to get warp up of batch.

DATE – 20th & 21st April, 2013.

PARTY THEME – “Disc Party “ at a 3 start hotel "N” Picnic at Funcity, Raipur

ORGANIZING BUDDY – Garima Sharma “Maggie", Gurjit Khangura "Defender baba", Ankit Jain "Lawyer Babu" & Dinesh Lalwani "Main Hoo Na".

Let we give us our school time another chance to get brief our old memories with each another. So that we can get the memories that last a life time...!!!

Requesting all batch buddies to provide your email address in the comment box or directly message or contact to above mention buddies id's to get the program details.

*T&C Apply.

RSVP

Saagar Kumar

M.V.M. Raipur (Batch 2004)

Impact of service tax on the public of india.

Renting of Immovable property used for furtherance of business & commerce is a taxable service w.e.f dtd 1.6.2007. All Shopping Malls, Go downs & Offices given on rent are covered within the ambit of service tax. The landlord who gets the rent from shopkeepers and other persons is required to pay Service Tax.

Who is exempted from taxation?

Educational Institutes, Residential premises, Vacant lands solely used for Agriculture etc.

The threshold exemption of Rs 4 lakhs is available for the Service provider and there is no abatement.

How people are avoiding this Tax?

The landlords are diving the rent between all the members of the family even though all are not owners of the same property. Is it correct that one can just artificially divide the Rental Income in order to escape from taxation? The Govt has no time to answer this question. If it will face deficit, Govt is powerful enough to impose more tax. The poor conscientious taxpayer bears the burden & the cunning & mischievous person always escapes.   This is tragedy of India.

Sant Tulsidas aptly said “Samarath  ko nahi dosh” means capable persons cannot be questioned.

This levy of Service Tax on “Renting of Immovable Property” was challenged by “Home Solutions Retail India” in Delhi High Court. The Delhi High Court gave its verdict in favour of Party. The Union Govt taking into account the above decision issued Clarification that this service is taxable. Now in the new provision of Service Tax w.e.f 1.7.2012 , it is a declared service. 

Impact of Service Tax on the Public life of India

In 1990s, Govt of India felt that the usual Income from Customs, Central Excise & Income Tax etc is not enough. Some more Revenue is required. The Customs Duty could not be hiked. It is internally linked. The Central Excise Duty could not be increased as price of goods will increase which will make people unhappy. Income Tax is mainly evaded by big people and makes life of salaried person miserable. So, the next option was to tax the service sector which was increasing in India. It was roughly 60% of Gross Development Growth in India.

So, Govt of India sent Dr Raja Chelliah, a prominent economist of Chennai to America and study the tax pattern of the developed country. Dr Raja Chelliah recommended for introduction of Service Tax. Service Tax @ 5% was imposed and in the initial years, it brought Rs 500 crore (appx) for the Govt of India. Govt. Being encouraged, the Union Govt brought several services year after year. The entire citizen of our Country & legal persons except the State of Jammu & Kasmir were required to pay Service Tax from zero point as there was no exemption.

Exemption was granted in 1.3.2005 by virtue of notification no 6/2005 dtd 1.3.2005. The Service providers providing the value of Rs 4 lakhs were given this facility. Later on, it was increased to Rs 8 lakhs and now it is Rs 10 lakhs.

State of Kasmir has a special status by virtue of Article 370 of the Constitution of India. Maharaja Hari Singh, the King of Kasmir who signed the treaty with Govt of India for getting this special status expired long back but this Article cannot be repealed due to continuous Muslim unrest. The rest boundaries are either fenced with barbed wire in the borders of Pakistan & Bangladesh. Coastal lands are demarcated by sea coast of Arabian sea in west & Bay of Bengal in East.

In 1994, the Govt defined territory of sea coast as 12 nautical miles. One nautical mile is 1.852 k.m. So, upto this area i.e. 12X1.1852 lkm=22.224 Km, the Govt possess the right of collection of Service Tax. In 2002, wef dtd 1.3.2002, the notification 1/2002 extended this boundary of India to 200 nautical miles which is called as continental self in the language of Geography. This is the maximum area in which any sea excavation etc can take place. After this 200 nautical mile, there is deep sea. Only shark & whales move there!

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