THE pre-budget
exercise is generally a time for budget makers as well as for the Councils,
associations, trade bodies to look into the Archives for outstanding and
current wishes from the F.M. While the F.M plays Santa Claus to some, others
are left high and dry waitng for the goodies to come next year. Only in this
case the Santa claus has decided to visit us in India in the peak of the summer.
The hopes are high this time, with all and sundry having expressed faith in
the Government and People of India having granted the biggest gift this year
to the Government of the day. With baton having been handed over to new FM,
he will also be equally keen to prove his worth on a familiar turf, playing
his second innings.The wish list that I making is one which has few points oft repeated in the past and few fresh ones.
++ Abolition of wealth tax considering the cost of recovery involved and amount collected. This tax should have long gone, for it is the most breached piece of Tax legislation. If all the political candidates, who stood in current general elections this time are made to stand scrutiny on the assets declared by them before Election Commissioner, I have an uncanny feeling that about 50% will be found to be defaulting on this tax. Just about 300 croes being garnered with equal amount of tax collection charges and heavy cost in terms of wastage of filing information. Earlier when its abolition was debated, same was stalled on the ground of need for more information about assets by tax authorities, but now that purpose is being met of Income- Tax department through Information returns, So, the continuance of a tax regime which is followed more in breach seems to be serving no purpose except to force our own citizens to become defaulters of tax.
++ Tax rebate for individuals or any member of the family adhering to small family norm to check population growth can be Rs 10,000 for two children and Rs.15,000 for one child per family. It has been real long since this Government or any other Government in the past has even paid a lip service to family planning. So, why not reward those who voluntarily think of the National Cause. The PM and his team will also show that they are sincere towards the burning issues of the Nation.
++ One time amnesty scheme to allow Indians holding money in tax havens to bring it back to India (to be invested in low yield or no yield Infra bonds with a lock in period of three years). If this Government really wants to be a step ahead of what Advaniji thought for his biggest poll-plank, then here is the solution. Pressurizing tax heavens to give details will only make the tainted money to run from one tax haven to another, with very little of it likely to land in India. One big solution for all our recession related woes, even though Supreme Court had recommended that amnesty schemes should not be resorted too often. But one last time, this seems to be the only pragmatic solution.
++ To avoid pitfalls of vagaries of highly unpredictable tax litigation in India, it is suggested that advance pre-deposit tax accounts for litigation should be introduced, wherein any taxpayer can deposit money and earn savings rate of interest for any uncertain tax liability of Income-tax, Customs, Excise and Service tax and can be free from interest or penalty liability to the extent of credit balance in the deposit account and in the event of fruit of litgation going in favour of assessee. DOR should pay nominal interest of 3% to 4% on credit balance.
++ Provision for separate tariff for import of services from SEZ units to DTA. This can be equivalent to prevailing rate of service tax applicable for DTA to DTA service provider i.e. 10 percent. This will remove existing anamoly under SEZ Act which requires such services to be subjected to customs duty. Also, since a policy decision to this effect has already been taken, FM should also introduce import duty tariff for supply of electricity from SEZ to DTA during this budget only.
++ CHA Regulation, 2004 needs to be amended to provide guidelines for taking various kind of disciplinary action against CHA linked with gravity of offence. This will ease the burden on Commissioners by creating certainty and will make the job of CHA`s easy after a spate of suspensions in Mumbai.
++ Settlement Commission to be allowed to take cognizance of clandestine removal and smuggling cases again. However, department can retain the right to appeal in case aggrieved by the decision. Power of Chief Commissioners in this regard which in any case is hardly being used can be taken away. This will make a defunct establishment atleast to have some work.
++ SAFEMA should be abolished in view of the Money Laundering Act covering customs Offences and providing for attachment. Similarly, offences of NDPS are being covered under Money Laundering Act. Attachment provisions under NDPS Act can be done away with. Do not need too many nooses around the neck of a man to be hanged.
++ National Tax Tribunal be notified. Let us feel that Government is not only interested in creating provisions in the statute book but also likes to notify them. Let the present FM cut this ribbon, we will all clap.
++ Qualification for becoming Member (Technical) of CESTAT be brought at par With ITAT i.e an Additional Commissioner with three years standing to be eligible to catch young Member (technical) for CESTAT. With so many young faces in the Cabinet, is it not the right time to allow young faces to come in CESTAT also atleast theoretically.
++ Advance Ruling Authority - Jurisdiction be extended to cover all Indians or atleast all service tax matters. Why not give the foreign treatment to even Indian Nationals also? Alas, the WTO only created Rules for foreigners not getting National Treatment, never thought there could be a reverse situation also in countries like MY INDIA.
++ Free allowances under Income-Tax Act be indexed as provided for in the 6th Pay commission. If pay Commission can do it why should not Income Tax Department do it as well. So, have the free Income-Tax limit, Section 80-C limit, other allowances indexed. It would reduce the burden of budget exercise for future FMs.
++ Creation of a Seperate Directorate For IPR (Border ) enforcement and adjudication under CBEC. Let this be a focused area for us to prove to the world that we really care on enforcement aspect of IPR. Even enforcement of foreign Trademarks, copyrights etc. can be entrusted to this agency even if violations occur in the interior. It Will definitely keep Customs and Excise Department busy in post G.S.T regime.
I think it should be enough of homework for FM and his team to do, what with so many Associations and trade bodies after him. It reminds me of my own times of summer home work, which I used to leave incomplete, weighing the consequences of getting scolded from the teachers, as not so grave as to forego the fun with the friends in sweltering heat. But for FM, there is always a next time and next year will be more congenial February to complete the task.