Service tax office on bank awareness drive

The commissioner of service tax (West Bengal) will conduct awareness campaign among banks and financial institutions to raise the level of compliance in this field.

The service tax department feels that the level of collection from the banks, financial institutions and non banking finance companies is quite low compared to the size of their business in the state.

The service tax department has convened a meeting of the CEOs and regional directors of banks and financial institutions on January 25 to address the issue.

Kamal Jyoti, the commissioner of service tax, said the department is meeting bankers in order to create awareness about the incidence of the service tax in this sector.

"I am conducting a seminar on service tax compliance later this month for banks and FIs. I feel that the contribution of this sector is quite low compared to its size. Now banks and FIs are offering various kind of services so the collection should be more healthy than what it is now," he said.

However, he did not quantify the collection from these sectors.

He said lack of awareness among employees is one of the main reasons behind the low service tax collection from the banking sector.

He said telephone and insurance service companies headed the list of service tax collection.

"These two sectors taken together account for more than 50 per cent of the collection in the state," he added.

Service tax collection in West Bengal was expected to double in 2004 -05.

The commissioner said service tax collection from West Bengal was Rs 446 crore in 2003-04 but 2004-05 was expected to generate Rs 800 crore.

"This figure does not include Siliguri and Darjeeling, so the total figure could touch Rs 1,000 crore. There is a tremendous increase in the number of assesses in 2004-05, and currently there are 15,000 assesses. Level of compliance has also improved," Jyoti said.