The Hindu Business Line : Ministry to broadbase large taxpayer unit norm

Widening the scope
A taxpayer can opt to transfer any excess CENVAT credit accumulated in one manufacturing unit or service providing unit to any other eligible unit of his choice.
Taxpayers not to be subjected to mandatory audit under the LTU scheme.
Each taxpayer to get exclusive "client executive".

New Delhi , March 17

The Finance Ministry has decided to broad base the eligibility criterion to let taxpayers avail themselves of the proposed large taxpayer units (LTU) scheme.

This would enable more organisations to opt for the LTU scheme than envisaged. Apart from manufacturing entities, even services-based organisations can now opt for the LTU scheme and avail themselves of the benefits under the same.

Every taxpayer (single PAN-based entity) who has paid in cash an excise duty of Rs 5 crore or more; or a service tax of Rs 10 crore or more; or an advance income-tax/corporation tax of Rs 10 crore or more during financial year 2004-05 and also assessed to income-tax in any of the five specified metros is now entitled to avail himself of the scheme.

Hitherto, the Finance Ministry was looking to allow only those large taxpayers who have paid an excise duty of over Rs 5 crore in a year and assessed to income-tax in the five specified metros of Delhi, Chennai, Mumbai, Kolkata and Bangalore to opt for this scheme.

Excess CENVAT credit

Another important benefit that would arise from the LTPU scheme related to transfer of excess CENVAT credit (of central excise duty or service tax) from one unit to another unit. A taxpayer would have the option to transfer any excess CENVAT credit (of central excise duty or service tax) accumulated in one manufacturing unit or service providing unit to any other eligible unit of his choice through a simple mechanism, official sources said.

Moreover, under the LTU scheme, taxpayers would not be subjected to mandatory audit. The selection of a taxpayer for audit would be based on `risk assessment'. The Revenue Department would ensure that audit schedules are drawn in consultation with the taxpayers so as to cause minimum inconvenience. Cases for scrutiny under the Income Tax law would be picked up on the basis of scientific risk management procedure.

Client executive

Another interesting feature of the proposed LTU scheme relates to the appointment of "client executive" for each taxpayer. Upon joining the LTU, an officer of the level of Assistant/Deputy/Joint/Additional Commissioner would be appointed as `client executive'.

The taxpayer can remain in touch with the client executive for assistance in any/all tax matters (for example return filing, classification issues, intimation matters relating to refund, rebate, exports, other claims etc). This would ensure that the taxpayer is not required to interact with different section/officers of the LTU.

LTUs are being designed as self-contained tax administration offices under the Department of Revenue and would act as a single-window clearance point for all matters relating to central excise, income-tax/corporate tax and service tax.

Entities would be able to file their excise return, direct taxes return and service tax return at such LTUs and for all practical purpose will be assessed to all these taxes at these LTUs.