The Hindu Business Line : Govt open to further simplification of Cenvat credit scheme

Mr K.M. Chandrasekhar, Revenue Secretary, with Mr Anil K. Agarwal , President, Assocham, at a conference on "Service tax and Cenvat credit" in the Capital on Thursday. — Kamal Narang

New Delhi , Nov. 24

THE Government is open to suggestions on further simplification of Cenvat credit scheme, the Revenue Secretary, Mr K.M. Chandrasekhar, has said.

Addressing a conference on service tax and Cenvat credit, organised by Assocham, Mr Chandrasekhar, however, said the suggestions from industry should not create any new avenues for misuse of the scheme.

Stating that the Finance Ministry is determined to eliminating the cascading effect of taxes, Mr Chandrasekhar, at the same time, said that the Revenue Department is keen on ensuring that there is no leakage of revenues.

He was responding to industry's observations that there were certain implementation problems in the Cenvat credit scheme.

In 2004, the Government had allowed Cenvat credit across goods and services.

The Revenue Secretary also said that there are still a large number of service providers in the country who are not paying service tax.

He urged industry associations to guide the potential taxpayers.

On the question of introduction of national value-added tax (VAT), Mr Chandrasekhar said that national VAT could come about only after the "building blocks are in place".

On the issue of computerisation of tax departments at the central level, the Revenue Secretary said that he expects the computerisation to be completed by 2006.

Later, when asked whether the forthcoming Budget would see another hike in the rate or an expansion of the service tax net, Mr Chandrasekhar told reporters that it was "too early" and the Department was yet to come to any decision on these issues.

"All that we are doing now is to hear the views of the industry on taxation issues. We will in the coming days look at the resource position and then take decisions accordingly," Mr Chandrasekhar said.

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