Corruption in Service Tax - Addl Inputs

Below are the key solutions to issues related to Corruption in Service Tax. Kindly review and share any additional inputs that you have.

We look forward to your inputs and will soon be making a submission to key stakeholders requesting actions!
Transparency International India

Corruption in Service Tax – Solutions

1. The service tax registration process should be made online
2. The monthly service tax filing process should also be made completely online
3. The documentation required to apply for service tax should be decreased to a bare minimum
4. The errors and loopholes in filing service tax returns should be plugged
5. A helpdesk should be started where people could call in to get answers to their queries about filing a service tax return
6. Promotional videos should be made to educate people on how to register for service tax and to file a return
7. The inspectors should be asked to file a detailed report on every visit they make to a business. This would help in reducing corruption
8. The service tax department website should be simplified and it should be ensured that all the rules and regulations are easily understandable
9. The entire department should be technologically upgraded through systems and trainings
10. Service tax department should create a circle where citizen/business queries can be answered and any challenges faced reported
11. Inspectors should be made accountable for their decisions and actions
12. Service tax billing machine should be connected to the seller's bank account
13. Inspectors should be asked to report every visit that they make to a business with a reason to visit.

Corruption in Service Tax - Root Causes

1. The online registration of service tax is complicated
2. There are a lot of middle men involved in the service tax work
3. The service tax department website is not professionally managed
4. The service tax department does not have the technological capability to find and correct the errors automatically
5. There is a lot of human interaction required in applying service tax number or filing a return
6. Service tax inspectors have a lot of authority and very less accountability
7. There is no fool proof system to ensure that 100% of service tax recovered by the service providers and the business houses is deposited with the government
8. Purposely names, addresses etc. are entered wrongly so that you run after them with affidavit, form filling etc.

Corruption in Service Tax - Key Issues

1. Service Tax registration process is hard and getting it done off line requires bribery
2. Errors in service tax returns exist for no valid reasons
3. They don’t correct errors and ask return filers to resubmit revised return and ask for bribes
4. Department has boys running asking for bribe to get registration formalities done
5. Service tax inspectors also collude with service provider companies (large and small) directly or through middlemen/consultants and take bribes to overlook their service tax errors
6. Even if a businessman is caught in the service tax department’s net, he can easily get away by paying bribes. more