• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Our Bureau

Corporates, which are already contributing much to the Exchequer, will be driven to the wall by the Government wanting to meet its targets.

CHENNAI, March 3

SPEAKERS at the `Budget 02-03' meeting organised by the Madras Chamber of Commerce and Industry (MCCI) recently criticised the Government for, inter alia, its lack of consistency in policy.

The removal of income tax benefits for software companies set up in export processing zones (under Section 10A and 10B) came in for particularly strident criticism.

"You cannot have taxation policies altered to meet temporary exigencies," Mr V. Ranganathan, taxation expert of MCCI, said.

He also criticised the Budget for taxing dividends in the hands of the recipients, observing that such reversal of policy was not correct.

Mr Prayaag Joshi of Arthur Andersen, said, "The Government by the day loses its credibility in this country."

Speaking on indirect taxation, Mr Lakshmi Kumar, a lawyer, noted that the amendment to the Section 25 (A) of the Customs Act, empowering the Government to issue retrospective explanation to notifications, was meaningless.

If the explanation was a clarification, it was all right. But if it was an amendment, it could not have a retrospective effect, because no amendment could be done by a subordinate office.

Both Mr Ranganathan and Mr Lakshmi Kumar were critical of Budget provision which says that in case of a dispute in excise matters, the Tribunal should dispose of the case within six months of granting a stay, or otherwise, the stay will be automatically deemed to be vacated. They said that the litigant would have no control over when the Tribunal would vacate the stay and hence the provision would be a raw deal for him.

Mr Lakshmi Kumar pointed out that in any case, the litigant could file another stay application at the end of six months and this could go on indefinitely.

Mr Ranganathan said that the MCCI had requested the Finance Minister that tax collection projections be kept at realistic levels.

Last year, the collections were short of the target, also because the target itself was set unrealistically high. This mistake has been repeated this year, he said.

The projected increase in direct and indirect tax collections by 22 per cent and 24 per cent respectively, "is extremely unrealistic" and slippages will happen, he added.

He further pointed out that the corporates, which were already contributing much to the exchequer, "will be driven to the wall" by the Government wanting to meet its targets.

Mr Joe Cunnane, First Counsellor, Economic and Commercial, European Union, New Delhi, said he was unhappy that some states levied a "discriminatory" tax on imported spirits.

He said that the Government reducing customs duty on imported textile machinery and some steel items, was positive.

Send this article to Friends by E-Mail

Stories in this Section
`Taxation policy must be consistent'

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line