Why I need to pay tax if everywhere I am paying Service Tax ?
Nice Question! Had me thinking for a while to answer in a simple language. Only 3% of people pay Income Tax in India. Also the average rate of tax is around 14-15% after all the deductions Govt gives. But they have to do lot of stuff for such a big country. So they need more taxes. Voluntarily people dont want to pay taxes. So Government says we will take tax from manufacturer or service provider and that will make product or service expensive for you. If you own a car, please see your invoice - you will be amazed to see the real cost of the car & the taxes we have to pay over that. I know you may be feeling cheated and the Govt should incentivise the Income Tax payer when he/she uses services but taking less tax. But it is not going to happen in near future. Till then, lets keep on paying the service tax