Service Tax Shall Not Form A Part Of Total Receipts For: Fill & Download for Free

I thought I had covered this before, but a search of my content seems to indicate I’ve expressed my opposition to both amendments, but not really gone into all of the reasons why.These were part of a handful of amendments passed during the so-called “Progressive Era” of the early 20th century. The 16th permitted the federal government to levy an income tax on the whole country without regard to apportionment, and the 17th required the states to directly elect their Senators. These were attacks on Federalism as designed by the framers of the Constitution, designed to concentrate more power in Washington at the expense of the states. The 18th was Prohibition; you have the Progressives to thank for the modern-day American Mafia. The 19th gave women the right to vote (even Progressives got something right occasionally).The 19th was OK and the 18th was eventually repealed after the damage was already done, but the 16th and 17th are still cancers on the body of our Republic.The 17th doesn’t sound so bad in and of itself, but directly electing the Senators defeats the entire purpose of the Senate in the same way that anyone calling for direct popular election of the President doesn’t “get it”—this is a huge country and we adopted the model of a Federal Republic for very good reasons. In 1787, the needs of Rhode Island or Georgia and those of New York or Virginia (both huge states in the original USA) were very different. The Founders designed the Electoral College and the U.S. Senate in a way that the States would have a great deal of power, as States, in deciding who the head of state would be, and in how the upper house of Congress (the Senate) would be operated. However, they left the purse strings as the purview of the popularly elected lower house (the House of Representatives). The idea was that the People had the final say in how their money was spent, but by dividing the other powers of the government between the federal government and the States, we would avoid the stupid mob rule decision-making that is a hallmark of true (direct) democracy.The Senate is the body that ratifies treaties and confirms Presidential appointments. It tries cases of impeachment. The Founders wanted the Senators to make their decisions in the best interest of the Nation, rather than be subject to the whims of the mob. To ensure this, they get a six-year term of office, even longer than the President, and they were to be chosen by the State Legislature of each State—in short, the best leaders in each State were to choose the very best amongst themselves to represent their interests in the Senate.We don’t want Senators having to respond to the whims of the electorate. We want them to be wise leaders who make their decisions in the best long-term interest of their State and the Nation. We already have a body that responds to concerns in the short-term; it’s the House, and the House (and by extension the People) control all of the money.Allowing the Senators to be directly elected may have made things more democratic, but “more democracy” is NOT a good thing. Study the history of ancient Athens.The 16th amendment, allowing for direct income taxes, was just a Progressive scheme to grow the government by giving Washington a vast new source of revenue to spend. In fairness, it wasn’t abused all that badly early on, but what had been a fairly stable, and small, federal bureaucracy did eventually get bigger and bigger—and it was fueled in large part by the ability to the federal government to tax the hell out of its citizens without regard to apportionment:The amendment never should have been passed in the first place, but the really serious abuses began, like with so many other things, during the reign of FDR:Prior to 1940, most ordinary Americans didn’t have to pay any income tax. And you can’t blame World War II for the change; nothing changed in WW1 in this regard. And in any case, the new taxes weren’t rolled back once the war was over. Income tax revenue, coupled with out-of-control spending and borrowing, was to the national government what heroin is to a junkie, and the cravings are insatiable.And so now you have the bloated federal government that is $21.4 trillion in debt and running a myriad of agencies and services that exist in flagrant violation of the Enumerated Powers of the Constitution.And you also have a federal government where whatever party is in charge at a given time tries to impose its views and values on all 50 states, and more often than not, they can get away with it, because for the last century, they have slowly but surely eroded federalism in favor of trying to turn this country into a single, unitary entity. If we were to suddenly limit Washington to the Enumerated Powers, there wouldn’t be the stink there has been about Obama, or Trump, or any other POTUS in recent memory—because they wouldn’t possess nearly the power that they do.Want to start us on the road back to fiscal responsibility and constitutional government? Well, let’s call a convention of the States, and then pass this as the 28th Amendment to the Constitution of the United States of America:Section 1The sixteenth and seventeenth articles of amendment to the Constitution of the United States of America are hereby repealed. The constitutional provisions in regard to federal taxation and the selection of U.S. Senators in place prior to the ratification of these amendments are hereby restored.Section 2Total outlays for any fiscal year shall not exceed total receipts for that fiscal year, unless the following two conditions are met:The United States is in a formally declared state of war with a foreign power or powers, and;Congress has instituted and enforced conscription as a result of this state of war.John Cate's answer to If you had the power to write the next amendment to the US Constitution, what would the next amendment be?

While ‘education’ continues to be of utmost importance for the country’s economic growth, it also has been a priority for the Government in extending tax benefits and other concessions to boost education (both primary and professional / technical) in the country.For every benefit received, there is a cost which could be in form of tax also. Perhaps this seemed never so real than today in the Indian context. The much thoughtful leaders of India have spared the education sector all along from levy of taxes considering the importance of the same for the country. If a country wants to grow manifold than building infrastructure for education and educated infrastructure (people of the country) is a pre-requisite. The more knowledgeable the human capital of a country is, more are its chances of development.Goods and Services Tax (GST) as a tax reformMigrating to Goods and Services Tax (GST) is a time to revinict the taxation and remove the anomalies. Almost 4% of the GDP is spent for educating India’s hidden talent out of which 50% of the amount is spent for primary education alone.Goods and Service Tax (GST) is a destination based consumption tax which is a levy of tax on all goods and services with the objective of expanding the tax base through wide coverage of economic activities , mitigating the cascading effect , reduction of exemptions , enable better compliances etc. thereby resulting into formation of common national market for goods and services .Present ScenarioEducation in India is presently covered as one of the priorities of the Government and as such is allowed tax relief both in direct and indirect taxes. So far as indirect taxes are concerned, education is considered as a service and as such it is subject to levy of service tax. No other indirect tax is levied. For the purpose of service tax, education has been distinguished from coaching or training which facilitates the education.Presently , educational services are excluded from the levy of Service Tax and are in ‘Negative List’ under section 66D(i) which are related to delivery of education as ‘a part’ of the curriculum that has been prescribed for obtaining a qualification prescribed by law. Conduct of degree courses by colleges, universities or institutions which lead to grant of qualifications recognized by law are also in negative list. Similarly , vocational training is also out of tax net. However, training or coaching imparted by coaching institutes would, however, not be covered in this exclusion as such training does not lead to grant of a recognized qualification. Such services are liable to service tax but subject to exemption under Notification No. 25/2012-ST dated 20.06.2012 vide entry no. 9 and 9A in relation to following services:Services provided,—(a) by an educational institution to its students, faculty and staff;(b) to an educational institution, by way of,—(i) transportation of students, faculty and staff;(ii) catering, including any mid-day meals scheme sponsored by the Government;(iii) security or cleaning or house-keeping services performed in such educational institution;(iv) services relating to admission to, or conduct of examination by, such institution9A. Any services provided by,—(i) the National Skill Development Corporation set up by the Government of India;(ii) a Sector Skill Council approved by the National Skill Development Corporation;(iii) an assessment agency approved by the Sector Skill Council or the National Skill Development Corporation;(iv) a training partner approved by the National Skill Development Corporation or the Sector Skill Council in relation to —(a) the National Skill Development Programme implemented by the National Skill Development Corporation; or(b) a vocational skill development course under the National Skill Certification and Monetary Reward Scheme; or(c) any other Scheme implemented by the National Skill DevelopmentCorporation.The present rate of service tax is 15% including cesses viz Swachh Bharat Cess (SBC) and Krishi Kalyan Cess (KKC).In GST Regime:According to the Model law on GST which neither contains the exemptions nor the rates of taxation , it appears that all services in relation to coaching and training would be subject to levy of GST as the scope of ‘service’ is very wide. However, the rates are expected to be in the range of 18-20%.In the proposed GST regime, GST shall be payable by taxable persons on the supply of goods and services. Taxable person is defined in Section 9 of Model GST law which stipulates that the Central Government , a State Government or any local authority shall be regarded as a taxable person in respect of activities or transactions in which they are engaged as public authorities other than the activities or transactions as specified in Schdeule IV to the Act. Clause 3 of Schedule IV specifically provides that services provided by a Government or local authority or a governmental authority by way of education shall not be regarded as a taxable person.Further, ‘education services’ have been defined in the said Schedule IV which means services by way of –(i) Pre-school education and education up to higher secondary school or equivalent;(ii) Education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force; or(iii) Education as a part of an approved vocational education course.Hence, the exemption may be restricted to activities or transactions done by Central Government, State Government or any Local Authority.It, therefore, appears that education services provided by Government will not be taxable. There is no specific provisions for inclusions or exclusions of coaching and training services or any other activity related to education elsewhere in the proposed law.Likely Impact in GST regime:Based on the provisions of Model Law , it can be said that education sector shall be impacted both positively and negatively under the GST regime.(i) The rate of tax is likely to go up by 3-5% as it is expected that GST may be levied @18-20%. If coaching is considered as an essential service, a lower GST rate is not ruled out.(ii) There are likely to be concerns in valuation of coaching services in view of the industry practice of discounts / concessions / scholarship. The proposed valuation rules are different from the existing ones and as such coaching institutes need to frame an appropriate policy for such discounts in advance making it a part of documentation.Service providers having centralized registration will have to get registered in each state whether providing coaching on own account or through agent (franchise).(iv) Service providers will have an option to take different registration or separate business verticals which needs to be examined on case to case basis.(v) The procedure for all the invoices / receipts towards inward and outward supplies will become cumbersome as each one of them will have to be uploaded in the system.(vi) The frequency and number of returns to be filed will go up.There is a provision for GST audit if the turnover is more than Rs. 1 crore.The procedure for taking credit of input taxes will become simple and seamless which will have a positive impact.SummaryIn the present scenario, while Cenvat Credit on all inputs / input services is not available, once the GST would be implemented, tax component will also increase by 3-5% resulting in an increase of cost of services to the end user i.e., students.In fact, undeniably, education / coaching institutions play an important role in fulfilling the objectives of various students as well as parents, thus should be zero-rated and be exempted from Goods and Services Tax to lessen the financial burden on parents as well as students. Doing so will not only help improve the quality of education, students and life but also facilitate India to leap frog in the trajectory of top economic powers of the world as India is poised to be so by 2030, given its demographic strength.Therefore, in order to provide real benefit to the education sector, seamless credit should be allowed across the supply chain so that even if GST comes into force, the total cost of education will be lower that what it is today. The idea of zero-rated tax on inputs must be, thus, explored.The lacunas in the present regime of indirect taxation in India demands for the major breakthrough in this field for facilitating the ease of doing business effectively and efficiently. Hopefully, GST is going to be pinnacle which aims at evolving an efficient and harmonized consumption or destination based tax system and will remove the problems faced by the sector leading to cost optimization and free flow of transactions.

Hello jalay,The salary drawn by you is taxable under the head :- Income from salaries (under income tax act)The sum received on account of freelancing services are your professional receipts which is taxable under the head profits and gains from business/profession under income tax actTogether they shall form part of your total income for the purpose of income tax.Now coming upon GST (previously for your understanding it was service tax)The freelancing service provided by you shall billed to the client @18% (9% cgst and 9% sgst each if interstate) only if your turnover from freelancing is exceeding or expected to exceed Rs 20 lakh rupees in a financial year.Thank you,Feel free to respond in case any query related to this.