Double taxation in VAT and service tax under HC scanner
PrintListen to this Article
The practice of charging value-added tax (VAT) and service tax on the entire bill amount by hotels and restaurants has come under the scanner of the Punjab and Haryana high court.
On the basis of a public interest litigation (PIL) filed by Sukhmani Foundation, Sector 33, a division bench of the high court on Wednesday issued a notice to the central government, UT administration, Punjab and Haryana, Chandigarh service tax commissioner, excise and taxation commissioner of Punjab and Haryana as well as Chandigarh Hotel and Restaurant Owners’ Association.
The PIL challenged the practice of charging both VAT and service tax on 100% of the bill amount. It accused hoteliers and restaurant owners in Chandigarh, Punjab and Haryana of “fleecing innocent customers and citizens”.
The petition pointed out that customers were being taxed twice on the same amount – for sale of goods and for provision of service.
Making the submission on behalf of the petitioner, advocate Munish Kapila pointed that as per norms service tax should be charged on 40% of the bill, while VAT should be levied on 60%. But, the current practice lead to double taxation, he said.
The petitioner also attached bills to prove that a customer was charged both taxes on the entire amount.
Kapila submitted before the bench that excise and taxation authorities of Chandigarh, Punjab and Haryana, as well as service tax authorities at Delhi failed to address the issue.
Based on a complaint by city-based social activist Ajay Jagga about charging of Value Added Tax (VAT) and illegal levying of service charges by city restaurants and hotels, UT finance secretary Sarvjit Singh on September 6, asked officials to get the issue legally examined and submit a report in a week.
Jagga had raised the issue of applicability of VAT and service tax under the Finance Act, 1994. The central government had fixed that the service component of a bill is 40%, and goods component is 60%. But, currently VAT is being charged on the entire bill. He alleged that customers were additionally taxed. (Hindustan Times)
Category : Corporate Law | Comments : 0 | Hits : 1058
Ashneer Grover, former managing director of BharatPe, has moved the National Company Law Tribunal (NCLT), Delhi, alleging opression and mismanagement at the company. The case came up for hearing on December 6, wherein his lawyer sought additional time to address the tribunal on maintainability. The case will be heard next on January 11. According to the plea, reviewed by Moneycontrol, Grover has filed the plea against BharatPe holding company Resilient Innovations and 11 of its directors i...
Over 96,000 companies have wound up their operations in the past five years, according to the Ministry of Corporate Affairs. Businesses opt for winding up for various reasons, including financial unviability. From April 1, 2018 to March 31, 2023, as many as 96,261 companies exited voluntarily, invoking a section in the Companies Act, according to a report in the Mint. According to the data from the ministry, under the Insolvency and Bankruptcy Code (IBC), final resolution orders have be...
Three board members of Ed tech company Byju’s resigned on Thursday, June 22. According to reports, Peak XV Partners' GV Ravishankar, Prosus' Russell Dreisenstock and Chan Zuckerberg Initiative's Vivian Wu have stepped down from their responsibilities from the board. The company spokespersons have denied reports dismissing them as speculative. Meanwhile, The Ken has reported that Byju’s auditor’s Deloitte Haskins & Sells had also stepped down with immedi...
The Enforcement Directorate has accused Amway India Enterprises of running a multi-level marketing scam, while attaching its assets worth Rs 757 crore on Monday, including its factory in Tamil Nadu’s Dindigul district and bank balances of Rs 346 crore. The agency said its money trail against Amway revealed that the company had collected Rs 27,562 crore from its business operations from 2002-03 to 2021-22. Out of this, Amway paid a commission of Rs 7,588 crore to its distributors and m...
The Insolvency and Bankruptcy Board of India (IBBI) has issued a fresh set of rules to fast track voluntary liquidation by companies under the Insolvency and Bankruptcy Code (IBC). The amendments to the IBBI (voluntary liquidation process) regulations notified on Tuesday sharply cuts short the time allowed to complete various procedures, showed an official order. As per the new regulations, the timeline for preparation of list of stakeholders by liquidators has been shortened to 15 day...
Comments