From last some years, the lawsuits regarding the Service tax have increased due to absence of India’s most crucial taxation regime- Goods and Service Tax (GST). The GST Bill will remove several indirect taxes like service tax, VAT etc and it will create a single market for one dozen levies states.
Now comes to service taxes cases, according to the India’s official auditor, around 75,314 lawsuits were stuck with a big amount of revenue implications of Rs 1,51,414 crore in the department of revenue, the Supreme Court, specific tribunals, state high courts and settlement commissions in the fiscal year of 2014-15.
The Comptroller and Auditor General (CEG) given a statement, “While the number of pending adjudication service tax cases increased by 66 percent, the amount involved in these cases increased by 143 percent. The number of cases pending for more than one year almost tripled.”
He further said, “As no action can be initiated for recovery of revenue till the appeal is pending, locking up of revenue of Rs.155,489 crores is a matter of concern.”
As per the audit report, Department of Revenue of the finance ministry had thousands cases with a monetary implication of Rs 77,463 crores on March 31, 2015. Around 12,668 cases from them were pending for more than one year.
A senior finance ministry officer said, “The scope of service tax litigation will be definitely curtailed once GST is implemented. There are certain grey areas in the existing laws around service tax, that is leading to many litigations”
He told, “It’s a consensus — that GST will be the solution to preventing service tax litigations.”
