Rahul Mehta Gandhinagar LsCandidate
Service Tax dept arrests MMT = MakeMyTrip's apex officer on tax dispute. But how does such behavior help MakeMyTrip? Because such harassment will simply force a small competitor to shut down and thus reduce competition !!!
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The case between service tax dept (so called Board of Customs and Excise) is as follows : say service tax on hotel is say 15%. Say MMT = MakeMyTrip charges Rs 1000 for a hotel. Then it will collect Rs 1000 + Rs 150 = Rs 1150 from customer for that hotel. MMT pays Rs 100 + Rs 15 as commission and pays Rs 900 + Rs 135 to the hotel, And then MMT pays service tax of Rs 15 on its commission of Rs 100. And then rest of the service tax i.e. Rs 135 will be paid by hotel as applicable.
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But service tax department told MMT that "no, you pay service tax on full amount i.e. 15% of Rs 1000 i.e. Rs 150 and give only Rs 900 to the hotel". MMT opposed service tax dept saying that MMT should pay only Rs 15 on its Rs 100 commission and service tax dept should collect remaining Rs 135 from the hotel.
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But while all these arguments were going on , Service tax dept arrested apex officer of MMT and threw him in prison !!! Later, High Court judges gave him bail.
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Now on surface, MMT was damaged. But such rash behavior of service tax dept actually helps MMT. How?
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Lets say some small company starts same service as MMT. And say that small company's owner was arrested by service tax dept . Then that small company would have literally collapsed. They may not have been in position to pay lakhs of rupees for bail in high court and could have closed down or sold company to big competitors.
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IOW, in general, govt harassments do more favor to a big company than damage it does. Damage is visible --- MMT had to hire lawyer, pay lakhs to get bail alone and case is still going on. But a large company benefits because such harassments wipes out small competitors completely. This is prinicipal reasons why owners of large companies are seldom interested in fixing laws to reduce harassment of officers in general.
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Thats why I say that activists should not chase elitemen with hopes that they will work to improve law-drafts in genera;. Because most bad law-drafts in genera;l favor them by doing more damage to smaller competitor (more as % of revenue). .2 out of 200-200 elitemen may be willing to work, But then finding those 1-2 will be too time consuming.
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So activists MO should focus on chasing other activists and not spend much time in chasing elitemen