Ficci asks PM to look into consultants' service tax issue

Industry body Ficci on Thursday knocked at Prime Minister Narendra Modi’s door urging him to re-look at service tax collection for services providers such as consultants who currently pay service tax on behalf of employers much before they get their remuneration.

Ficci’s infrastructure committee said it has written to Finance Minister Arun Jaitley but of no avail.

“Our request to the Hon’ble Prime Minister is that the service tax payable by the employer of a consultant should be collected by the government directly from the employer. At present the consulting community continues to be made liable for payment of service tax on behalf of the employer, even before the consultants receive their remuneration from the employer.” K K Kapila, Co-Chairperson of Ficci Infra Committee, said in a statement.

At present, the consulting community is made liable for payment of service tax within 30 days of raising an invoice with the employer. “At present in case of delay in payment of service tax by the consultants, he is further liable for penalties at the rate of 18 per cent for the first six months,  24 per cent for further six months and thereafter 30 per cent,” he said.

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