Economy

Tax actions should not hurt manufacturing sentiment: Jaitley

K. R. Srivats | Updated on December 16, 2014 Published on December 16, 2014


Finance Minister Arun Jaitley on Tuesday called upon taxmen to strike a right balance between revenue realisation and boosting manufacturing sentiment in the country.

Any aggressive approach by the taxman could affect manufacturing in the country, Jaitley indicated during his intervention on the Companies (amendment) Bill in the Lok Sabha on Tuesday. .

Jaitley is expected to reply to the discussions in the lower house on Wednesday.

Without naming mobile manufacturer (Nokia) that had recently shut operations in Sriperumbudur near Chennai, Jaitley said this was one example for everyone to see the “direct impact of attitude and how it affects….”

Referring to the recent contraction in factory output, the Minister indicated that incidents like the one at Sriperumbudur may partly explain the not so satisfactory performance on the manufacturing front.  

A run-in with the income tax department over non-deduction of tax at source on purchase of software that went into the mobile phones manufactured in India led to the closure of the Nokia facility at Sriperumbudur.

The income tax department’s attempts to recover the tax dues with interest and penalty had led to a bitter tax dispute, which eventually led to loss of over 15,000 jobs (direct and indirect put together).

Opposition members who spoke on the Bill criticised it for it being “cosmetic” in nature.

This Bill does not go far enough and does not look to help on the ‘ease of doing business’ front, said Pinaki Mishra of Biju Janata Dal.

Many members wanted the Finance Minister to give “deep thought” to the company law and come up with “comprehensive” changes to the legislation through a new Bill in the Budget session.

Congress leader Veerappa Moily urged Jaitley to refer the Bill to the Standing Committee. “It will be safer to refer this Bill to the Standing Committee”, he said.  

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Published on December 16, 2014
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