SSIs oppose imposition of service tax from Feb 28

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New Delhi, Feb 22: Small scale sector industry association, Laghu Udyog Bharati, has protested the imposition of service tax on the sector, which is to come into effect from February 28. In 1999 the Supreme Court had struck down the government decision to impose service tax on transportation of goods by road on the small scale sector. The court had said the service provider was to be considered as the assessee. The new circular issued by the central excise department was being seen as a contempt of court, and would be challenged in the court, industry association president Balwant Rai Gupta said here on Tuesday. “We will go on a nation wide strike if this backdoor entry of the 10.2% service tax is not withdrawn,” he said.

The association has demanded the collection point for the service tax should be transporters and not the small scale units as transporters are the service providers. “It is better that one transporter files the tax rather than a hoard of small units, making it easier even for the excise department,” he said. The association is waiting for the Girish Chandra Committee’s report on the issue, even as lobbying with the government is on.