‘Budget seeks harmony in tax transactions’

The Budget seeks to ensure harmony in tax transactions, ease of doing business, and reduced litigation, said S Kannan, Commissioner of Customs (Appeals), addressing students of the School of Management, Pondicherry University and other institutions, as part of a panel analysing the Budget.

The Budget has proposed amendments to the statute by which the assessees can agree to solve the disputes at an early stage and settle them through payment of less penalties and compounding of offences. The Budget has also provided for creation of 11 new Benches of indirect tax Tribunals to liquidate case arrears, he said.

Another important announcement is the Customs single-window clearance. Clearing of goods at ports depends on verifications by various agencies and not just assessment of duties by Customs. There are 17 agencies that work with the Customs department. The Finance Minister has proposed a single-window clearance, where all agencies come together at the major ports and clear the goods speedily. Another unique proposal is of deferred Customs duty payment. If an importer has a good track record, he can pay the duty on a deferred basis and can, instead, use the cash for working capital or to run his business temporarily, pointed out Kannan.

Rural economy Moderated by D Sampathkumar, former Editor, BusinessLine , the panel had Amaresh Samantaraya, Associate Professor of the University, present his views to an audience comprising over 500 students. He said the Budget has a lot of incentives for rural and agri India, for infrastructure, for start-up India and for the banking sector. The share of agriculture in GDP is only one-fifth, but it provides the most jobs.

This government has provided a lot for agriculture and it has a plan to double farm incomes in five years, said Samantaraya. “This is a must for the economy. If you want to improve the standard of living of a sizeable population, agriculture and the rural economy have to do well.”

Gold monetisation Rajalakshmi Nirmal, Chief Research Analyst, BusinessLine , spoke on the huge market for gold in the country and the government’s two schemes — gold monetisation and sovereign gold bonds — which are expected to quell this appetite for gold. Elaborating on the government’s sovereign gold bond schemes, she said all the gains made from the appreciation in gold price for investors of these bonds have been tax exempt by the Centre. “An interesting feature of the gold bond is that there is an interest payment of 2.75 per cent a year which is irrespective of how gold prices move. Moreover, there’s a sovereign guarantee on this bond, which makes it a zero-risk and attractive option,” she said, urging students to invest in it once they started earning. R Anand, Partner, EY, dwelt on the Budget’s theme ‘I will tax the rich and spare the poor’. “The message is that the small and medium class — the salaried class — will be spared, and the rich will pay more tax. This is the direction the FM is moving in and nobody has a quarrel with this proposition of transfer of money from a surplus to where it is needed.”

The government’s intention of increasing the tax-payer base is clear. “In this country we have only 45 million tax payers. The government said that last year it added 4 million more tax-payers; if we can climb to 100 million tax-payers that will be good. The OECD average is 23 per cent of the population, so if we need to get to that figure it will take a lot of effort. The direct tax-paying population has to increase,” said Anand.

RP Raya, Dean, School of Management, welcoming the panelists and the gathering, said the youth of the country need to be enlightened, and provided with skills and knowledge. “That appears to be the endeavour of the Budget, though it will take two to three years to take effect,” he said.

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