Budget 2011: IMC's pre-budget memorandum on indirect taxes
IMC has also urged the government to urgently address issues relating to dual taxation of Service Tax vis-à-vis Vat and Service Tax vis-à-vis Central Excise.
By Agencies |
NEW DELHI: In a detailed pre-Budget (2011-12) Memorandum on Indirect Taxes submitted to the Central Government recently, Indian Merchants’ Chamber has demanded the enactment of specific legal provisions empowering the tax payers to initiate actions against tax authorities if they pass inappropriate and vexatious orders against them.
Among other more significant policy recommendations of the IMC are that the Budget Papers must provide particulars of the spending of the tax money collected by the government, and that the disparity between the rate of interest payable by the tax payers and by the Government must be removed.
The IMC has submitted that these measures were needed to "improve the standards of accountability, governance and tax administration for achieving a higher level of transparency and better compliance”.
The Chamber has also urged the government to urgently address issues relating to dual taxation of Service Tax vis-à-vis Vat and Service Tax vis-à-vis Central Excise, "which is having a spiralling and cascading effect on the burden of costs borne by the consumer and adversely impacting the Aam Aadmi.”
The Chamber has also made the following recommendations:-
Among other more significant policy recommendations of the IMC are that the Budget Papers must provide particulars of the spending of the tax money collected by the government, and that the disparity between the rate of interest payable by the tax payers and by the Government must be removed.
The IMC has submitted that these measures were needed to "improve the standards of accountability, governance and tax administration for achieving a higher level of transparency and better compliance”.
The Chamber has also urged the government to urgently address issues relating to dual taxation of Service Tax vis-à-vis Vat and Service Tax vis-à-vis Central Excise, "which is having a spiralling and cascading effect on the burden of costs borne by the consumer and adversely impacting the Aam Aadmi.”
The Chamber has also made the following recommendations:-
• Reduction in Central Sales Tax (CST) rate from 2% to 1% in line with the intention of the Government to phase out CST before introduction of GST.
• Revamping and rationalization of Cenvat Credit Rules for manufacturers and service providers which has resulted in substantial legal and practical issues and extensive litigations. Wide ranging suggestions (around 35) have been made in around 20 areas so as to provide clarity, minimize litigations and ensure that the laudable objective of its introduction is properly achieved.
• The construction sector has gained prominence in recent years. Provisions relating to the sector (including in particular recent amendments) need clarity and rationalization, so as to avoid extensive litigations. Suggestions include in particular, introduction of 1% Composition Scheme for builders and threshold of Rs. 25 lakh for the benefit of the Aam Aadmi so as to ensure that the slogan of "Housing for All" becomes a reality.
• Eliminate discrimination under Service Tax in taxation of individuals prevalent in practising CAs and other professional service providers vis-à-vis legal consultants.
• Increase the existing Service Tax threshold of Rs. 10 lakh to Rs. 25 lakh for the benefit of the common person for ensuring that efforts of tax administration are focused on high tax potential service providers.
The Chamber has also urged the Government to rationalize and reduce penalties for ensuring that there is no harassment caused to trade and industry and for improving the compliance of tax payers.
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