Infrastructure consulting companies seek exemption from service tax: FICCI

NEW DELHI: Infrastructure consulting companies want the government to treat them at par with contractors and concessionaires for exemption from service tax payment, FICCI said today.

In a letter to Finance Minister Arun Jaitley, infrastructure consultants said that "the government should provide relief to the consulting engineering companies at par with other agencies for government and local authorities infrastructure projects," it said.

"The government funded infrastructure projects is impeded by discrimination against the Consulting Engineering Companies by levy of Service Tax," FICCI's National Committee on Transport Infrastructure co-chairman KK Kapila said in a statement.

For implementing the infrastructure projects, practically other agencies like contractors and concessionaires carrying out erection, construction, maintenance, repairs etc are exempted from payment of service tax whereas consulting engineering companies have been denied the exemption, he added.

Besides this, the consultants are required to pay service tax within 30 days of issuance of invoice itself, even if the invoices remain unpaid for months. Delayed payment of Service Tax further attracts huge interest at the rate of 18 per cent.

Many of the consultancy companies are likely to go out of business or become defaulters in payment of service tax, due to the above stated discriminatory, unfair and unjust provisions, he said.