The Hindu Business Line : Bill introduced in LS to replace taxation Ordinance

The Ordinance, which had been promulgated on September 8, had exempted from income-tax the interest paid outside India by the ship-breaking industry for purchasing a ship from abroad.

The Ordinance had also reduced the interest chargeable from assesses and interest payable to assesses under the Income-Tax Act, the Wealth Tax Act and the Expenditure Tax Act, 1987 in view of the reduction in interest rates prevailing in the market.

This move was aimed at reducing the disparity between the prevailing market rates of interest and the rate of interest granted on refunds or payable by the assessee under the various direct tax laws.

The taxation Bill was introduced by the Minister of State for Finance, Mr Shripad Naik.

The Bill seeks to exempt from tax, the interest income of the Nordic Investment Bank in respect of the loans advanced by such bank in terms of the memorandum of understanding (MoU) already entered with the bank.

The exemption has been granted to fulfil the commitment made by the Centre through an MoU entered into with the bank on November 25, 1986.

The Ordinance has already granted such an exemption to the interest income of the bank.

The Bill also provides for deduction of 100 per cent of the profits derived from the export of wood-based handicraft items keeping in view the problems faced by the exporters of such articles.

Further, the Bill seeks to amend Section 206C of the Income-Tax Act to reduce the rate of tax collection at source on the alcoholic liquor for human consumption and scrap, timber and other forest produce, tendu leaves.

Besides excluding the Union and State Governments, clubs and embassies from the definition of buyers, the Bill has also clarified that collection of tax at source should be made from buyers at each stage of the sale of specified goods except the last stage where the goods are purchased for personal consumption.

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