MUMBAI, June 9: The Institute of Chartered Accountants of India (ICAI) has demanded withdrawal of the service tax on chartered accountants as the institute feels the levy will confer undue benefit on other professionals who render services similar to that of a CA.A majority of the CA firms practice in the field of direct and indirect taxes, accounting and other allied services, where various other practitioners also render same or similar services, on whom now an undue benefit would be conferred only because they are beyond the purview of the service tax, said Rahul Roy, President, ICAI.To such extend, a CA would face unfair competition as other professionals would naturally be billing their clients lesser than what a CA (who would add the service tax to the bill) would be billing, he added. According to Roy, the government has levied the service tax on "Chartered Accountants in practice as a group" and not on the nature of service provided.The ICAI has urged the government to remove thediscrimination by either total withdrawal of the service tax or specify all those areas where the CA do not provide exclusive services and exempt these areas from the levy.The institute has also suggested that a legislation should be enacted so that all areas where CA presently provides his services, should be exclusively preserved for him. "The fact that there is no lower limit for levy of service tax would cause untold hardship to the new and young entrants to the profession, particularly since it is very doubtful as to what extent CAs would be in a position to realise service tax from all their clients for any job performed irrespective of the quantum of job, billing amount or nature of the clients," Roy said.He added that the CA, in most of cases, would end up paying from his own pocket. "It is also seen that most CAs prepare their accounts and offer themselves to tax on cash basis, whereas under service tax the levy would have to be levied on the bills and liability would arise the moment the billsis raised, irrespective of the fact whether the same is realisable or not," Roy felt.He lamented that the government has singled out only those professionals for levying service tax which predominantly deal with the corporate sector and where the bulk payment is received through banks while other professionals which collect the payment in cash are completely left out of the levy.
