LOGIC OF NEW SERVICE CODE INTRODUCE

[RAM SHARMA]

R.Sir,

What is the reason to introduce the new service tax accounting code as per

NOTIFICATION No. 48/2012-ST [F.No. 137/22/2012-ST]/GSR 858 (E), dated 5-12-2012

when a universal one accounting code has already introduced for payment of service tax wef 1.7.2012. (All Taxable Service other then Negative List)

Pl clerify

Thanks

[CASeetharaman KC]

There could be several reasons. One of the reasons could be to monitor the sector wise collection and also now since reverse charge mechanism is applicable in case of major heads like "Works Contract" the introduction of the old codes could be to monitor the payment of tax by service provider and service receiver

[YAGAY andSUN]

Just of administrative purpose, the codes to specific services has been re-introduced by the MOF DOR.

[JAMES PG]

The reason behind the introduction of partial reverse charge mechanism is despite growth in  service sectors like labour supply, security, rent a cab, there is negative growth in Service Tax collection. This was possible to be viewed by Govt through the accounting of revenue in separate accounting codes for different services. If single accounting code is in force, it is very difficult to monitor revenue and that may be the reason for  reintroduction of old codes

AI Summary

New Service Tax Code Introduced: Analyzing Notification No. 48/2012-ST and Its Impact on Sector-Wise Tax Collection. A discussion on the introduction of a new service tax accounting code as per Notification No. 48/2012-ST, despite a universal code being implemented earlier. The participants suggest reasons for this change, including monitoring sector-wise tax collection and the application of the reverse charge mechanism for major sectors like 'Works Contract.' It is also noted that the Ministry of Finance reintroduced specific codes for administrative purposes and to address negative growth in service tax collection from sectors like labor supply and security, which was identified through separate accounting codes.