why do we have to pay service tax at such high rate? isn't there any law or rule which put upper ceiling on it

Question

i m very disappointed to see the rate of service tax levied on us.. 12.2% now the whole service sector have become 12.2% costlier. thus ultimately rise in inflation. i do not understand y there is no objection or y no rule is there to have an upper ceiling.

Answer 1

I am also againest it. But what to do. The Govt. is looting the public from back door. Anyway thanks for your question.

Answer 2

Hi
My dear friend the service tax rate is going to reach around 25% gradually.
The FM Mr. P. Chidambaram is not implementing it at one go but he is going to take it to that level in a phased manner.
Taxes are supposed to kill inflation and not create inflation.
More taxes means that know people will have to pay more to get same amount of money. This causes the prices to go down as people are having that much amount of money only to pay for a commodity.
For example if a person has Rs.100 and he needs to have food.
Now if food would be without tax than he can buy suppose 25 kg of wheat @ Rs.4 per kg
Now govt imposes a tax of Rs. 1 per kg, then he would get only 20kgs of wheat.

For more explanations get to me at [e-mail]

Answer 3

I too agree with you. Actually this is a severe problem. It is ridiculous to take such a high rate for telephone charges, insurance premiums,workshop bills, cable TV , even for cheque bouncing charges or for penalty paid for delayed payment of telephone bills. I think no one is aware of the impact.. I suggest we should start a campaign against this as well as approach the court also

Answer 4

Even i think it is too high. I would ideally like it be around 6% to 7%, 12% is off is way off the mark. the only saving grace is that you are recovering it from your client.

Answer 5

Ask Mr. P. Chidambaram