The taxes can be imposed on selective services. The government can identify the certain services like tour operator services, travel agents services, air travel serves, content and web-designing services etc. and can impose service tax. It is true that in matters of taxation, the Legislature possesses large freedom and wide discretion can be exercised and the legislation cannot be attacked for the reason that while taxes are levied on some persons/categories of services while leaving out others. Therefore, any legal hardship that can be met in court can be easily tackled.
It is a policy decision for the executives/legislatures to decide whether to tax or not and on which sector to tax and which sector to leave. Courts can not tell government to tax any particular sector and not to tax another service sector. It is a policy decision and generally will not be challengeable in the courts of law. It is for the Legislature to determine the question of need and to select the goods or services for taxation. Courts cannot review the wisdom or advisability or expediency of a tax as the Court has no concern with the policy of legislation, so long as they do not violate the constitutional provision. Taxes may be and often are oppressive, unjust and even unnecessary but this can constitute no reason for judicial interference. Every tax must discriminate and only the authority that imposes it can determine how or in what directions.
Valuation of service rendered
The value of service normally refers to the gross amount charged for the service provided, upon which tax is to be calculated. In the event of mix up of goods and services, the value of goods has to be deducted to arrive at value of service.
It will be in the interests of nation if services are exported more and more amount of foreign reserves are earned. To benefit from it, it should be noted that service tax should not be imposed where the services are exported outside the territory of the country as it increases the international competitiveness.
Where a single service provider provides multiplicity of services and when all the services are not taxable, payment of tax and assessment will be difficult and fraught with complications. A single contract may cover both goods and services and tax may be levied both under VAT and Service Tax Act upon the consideration. But, on the portion of consideration on which service tax is levied, VAT can not be levied.