The Hindu Business Line : Corporates have to pay Rs 1 cr excise a year to be termed `large taxpayer unit'

THE Government has decided to set the criterion of a minimum excise payment of Rs 1 crore a year for corporates to be included in the proposed large taxpayer units (LTU) scheme, which would eventually evolve into a single-window facility of all major tax payments, a senior Finance Ministry official told Business Line.

Such units are to be located initially in New Delhi, Mumbai, Chennai, Kolkata, and Bangalore.

The LTU scheme may be later extended to Ahmedabad, Coimbatore, Hyderabad, Kanpur and Pune.

The Finance Ministry is looking to implement the LTU scheme in the five identified metros from January next year, industry sources said.

The Finance Ministry is of the opinion that the LTUs should initially cater to large taxpayers on excise-related requirements. This could then be extended to other areas such as corporation tax over the next few months.

"The Government plans to initially stipulate that LTU set up in the metros would have jurisdiction over Central excise assessees paying Rs 1 crore and above annually. But there is a rider to the proposal to the effect that the assessee's corporate office must be located in the same city and should pay corporation tax in that city," a senior industry representative who attended a meeting in the Finance Ministry on this issue said.

Going by the proposed eligibility criteria, the representative said, it is estimated that 1,900-2,000 assessees could take advantage of the LTU facility in the five metros.

The Centre received over 90 per cent of its Central excise revenues of about Rs 1,00,720 crore in 2004-05 from 5,500-odd assessees.

Last Friday, the Finance Ministry had convened a meeting with apex industry associations on the issue of LTUs. Senior officials from the Finance Ministry told industry representatives at the meeting that a study conducted by the Revenue Department had indicated that LTUs have been working successfully in many countries such as Australia, Bangladesh, Cambodia, Indonesia, Japan, Singapore, the Philippines, Sri Lanka, and Thailand.

LTUs are intended to be self-contained units administering both direct and indirect taxes.

These units are expected to provide single-window facility to large taxpayers who would have to deal with only one agency for income-tax, corporation tax, Central excise, and service tax.

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