As someone said, there is no guarantee that service tax collected by lawyers and hospitals may not necessarily go to the govt. There is no point making health and law more unaffordable for the common man. Can common man not aspire to be treated in a star hospital if the facilities are better there? By levying service tax on star hospitals, the govt. would imply that only the rich should take treatment at such hospitals and the poor should die in queues of govt. hospitals.
If the govt.wants more revenue, from these two professionals, why not just focus on extracting income tax out of them. Most doctors and lawyers understate their incomes and evade income tax. The FM just needs to get stringent extract all the black money these two professionals are hoarding. Spare the common man Mr.FM, he approaches lawyers and doctors only in distress, why harass him more by charging that 12.36% extra?
RE:First get the income tax out of engineers and lawyers
by Vishal Grover on Feb 04, 2008 06:04 PM Permalink
Sorry, the title should read "doctors and lawyers"
RE:First get the income tax out of engineers and lawyers
by gopalakrishna narayana on Feb 04, 2008 07:43 PM Permalink
My friend appears to be bit confused. He may please note that Service tax collected on any type of service provided is ultimately borne by customers or consumers. Doctors and CAs may or may not pay Service tax collected to Govt. depending upon whether they have issued a valid receipt for the fess collected from customers. Moreover, if the total receipt of the profession during a particular financial year is not likely to exceed Rs.8 lakhs, such a professional should not charge and collect Service tax from customers. ST collected by a professional coming undr this category, is simply poketed by that person and no payment of ST is made to Govt. Or even if made, it is received back from the Govt. as refund since such persons are not liable to pay ST.
Next point is that doctors, lawyers and CAs should fully pay tax on their real income. Many a time these professionals discourage demanding valid receipts for the payments made to them by showing the ghost of Service Tax component. Consequently their real income is suppressed. Ultimately, the FM is trying to help the richy-rich professionals to reduce their income-tax liability by bringing more services under ST net. But then, FM refuses to see the dark side of Service Tax. At the end of the day, it is the poor nan who ends up paying multiple taxes in multiple forms and the rich people always escape.
