The decision to increase service tax on several categories from 12.36 to 14 per cent and levy Swachh Bharat Cess of two per cent will kill the industry, speakers at a talk on Union Budget-2015-16 opined on Monday.
At a discussion organised by the Andhra Chamber of Commerce & Industry Federation, they said as soon as they raised invoice, along with 14 per cent service tax and two per cent Swachh Bharat Cess, 10 per cent amount would be deducted towards tax deduction at source (TDS) thereby forcing them to pay 26 per cent even before they get realisation of bills for the orders undertaken by them.
Federation vice-president and Sravan Shipping managing director G. Sambasiva Rao and Symbiosys Technologies CEO O. Naresh Kumar said gross injustice had been meted out to Andhra Pradesh by the NDA Government by not according special category status and allocating adequate funds for the special package promised in the AP Reorganisation Act.
Mr. Naresh Kumar came down heavily on the Centre for belying the hopes of investors in A.. P. “We expected a lot of incentives for the new State but nothing has materialised. The provision to attach property/bank account for non-payment of service tax arrears without any show-cause notice is a draconian move,” he stated.
Chartered accountant S. Ramakrishna said that levy of penalties had been liberalised by allowing service tax assessees to settle the amount within stipulated time of 30 days without payment of penalties in the budget.
Chartered accountants S. Ramakrishna, V.S.N. Murty, and former secretary of Vizagapatam Chamber of Commerce & Industry M.V. Narayana Rao spoke.
