In one of the moves in the budget, the notification no. 59/98 dated 16th October 1998 was withdrawn by notification no. 2/2006 with effect from 1st March 2006. The development has astonished the entire community of Chartered Accountants, Costs and Works Accountants and Company Secretaries. As a result of the withdrawal of the notification, all the services being rendered by the Chartered Accountants (CA), Cost Accountant (ICWA) & Company Secretaries (CS) in their professional capacity will become taxable under the Service-tax.
It should be noted that even advocates do provide services like tax representation, company law matters, consultancy on corporate law matters etc. But they have not been brought under the gamut of service tax. By withdrawing the notification, only those services which were in the exclusive domain of the CAs, ICWAs and CSs have been made taxable.
It should be noted that there are many services like tax representation, Company law matters etc. where the advocates also offer their services and they are yet to be brought within the ambit of Service-tax. In order to do away with the discrimination and to bring all the professions at par, only those services which are within the exclusive domain of the CA, CWA & CS profession were made taxable by the above said notification.
Such withdrawal brings discrimination in the application of the Service-tax law and hence, violates the provisions of the Constitution also. Further why is there a step-brotherly treatment towards us ????
The move by the Finance Minister Mr P. Chidambaram has attracted a lot of ire from those who have been directly impacted. Heated arguments and discusions have been taking place on this issue within the circuit of the professionals.
One went to the extent of saying that ” this is a clear case of discrimination and we should fight this”. The other said “We should bombard Ministry of Finance with our E-Mails and Faxes against this move and also file Writ petition immediately for relief.” One more gentleman pitched in by saying “Why advocates and Doctors are not brought under ST net? Are they not providing service? Why only CAs?” .
A question which Hon’ble Finance Minister shall have to address, sooner or later.
I think that the earler position should be restored and exemption be granted until other professions competing are brought within the Service-tax net. Further i request fellow Chartered Accountants, ICWAs and Company Secretaries to comment in support of the issue.
CA Madhur Khandelia
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Friends,
I do not agree with most of you. If we have a client who does not wish to continue with us, but go to an ITP / Advocate, just because of a tax he has to pay (and perhaps get a set off too), in my view he should be asked to go.
Clients should come to us because they want us and our services, and not because we charge less than the ITP/ Advocate. In fact, our profession has a lot to learn from advocates who do not start work without an advance, but we remain at clients’ mercy much after the work is completed!
In my view, we need to change our profile and attitude, and focus on client servicing and client relationship management, rather than fight with the govt. Even if we win on the grounds of discrimination, it will be time wasted, and perhaps we can use that time for some more chargeable work, and make ourselves happy, rather than waste time for our clients who have to bear the tax.
I shall be happy to have other members views on this.
-Nilesh Kapadia