The Hindu Business Line : Single-window facility for taxes may not work: Corporates

Tax net or web?
Excise, unlike I-T, rests on provisional assessment
LTU facility now optional for corporates, may become mandatory.
Hence, there should be further examination of such practical difficulties before implementation of LTUs.

Kolkata , March 12

Income-tax logic cannot be applied to central excise, and therefore a one-window facility for payment of I-T, excise and service taxes through a large taxpayer unit (LTU) may not work.

A section of the corporate sector feels that large companies with multi-units cannot be brought under a single excise assessment, as each unit pays its own excise (one unit, one assessment), and, therefore, to cull all these data from different centres and aggregate at a single point (for filing a weekly return) is cumbersome and may defeat the very purpose of such a facility.

Speaking at an interactive session on Union Budget 2006 proposals with regard to central excise and customs here recently, Mr T.B. Chatterjee, Vice-President and Company Secretary, DIC India Ltd (formerly Coates of India), said excise, unlike I-T, rests on provisional assessment, which was a totally different kettle of fish.

He felt that though opting for LTU facility (expected to be in place by April 1, 2006) was optional for corporates, eventually it may become mandatory. Hence, there should be a further examination of such practical difficulties large corporate houses may before implementation of LTUs, he pointed out.

ACT FOR SERVICES

Explaining why despite so many amendments in service tax rules, the Government was not thinking of a full-fledged Act for services at the moment, Mr S.R. Bal, Chairman, Indirect-Taxes Sub Committee of The Bengal Chamber of Commerce and Industry (BCCI), said eventually services tax may be merged with VAT and Central Excise to form a

Goods and Services Tax (GST), warranting a single comprehensive indirect form of taxation system in the country governed by a single Act.

Giving his expert views on the Budget proposals, particularly with regard to direct taxes, Mr P.M. Narielvala, former president of the Institute of Chartered Accountants of India, said the Budget did not contain any clear proposals indicating a strategic course of economic development, particularly with regard to important issues like PSU divestment.

Describing the Finance Minister as a guardian of the economy, and not a mere collector of revenue, he advocated a separate ministry of economics with a department of finance under it. Cautioning against fiscal indiscipline, particularly in an election year, he said the Fiscal Responsibility and Budget Management Act should be implemented fully.