The government on Friday put on notice “willful” evaders of service tax but assured the service sector that all existing ambiguities in the service tax administration would be sorted out soon. 

“The government is working on sorting out areas of ambiguities in Service Tax. At the same time, it will take serious note of any willful evasion of Service Tax,” Central Board of Excise and Customs (CBEC) member P C Jha said at an interactive session with the Assocham. The Government proposed to come out with two Master circulars spelling out technical and procedural issues relating to service tax with the objective of bringing more clarity about the subject.

Twin circulars
 “We are collecting feedback from trade and industry and after studying these we will finalise the Master circulars. We hope these circulars will remove many of the existing irritants and uncertainties and make procedures easy to follow,” Mr Jha said. The twin circulars could come before August end, he added. Service Tax has been one of the fastest growing sources of revenue for the Central Government over the past few years as more services have been brought under the purview of the Service Tax net while the rate of tax has also been revised upwardly. 

“The potential of revenue collection out of Service Tax is very high,” Mr Jha said adding that the projected revenue collection on this count during the current fiscal year would be around Rs 50,200 crore as against Rs 37,500 crore in the fiscal year 2006-07.