Who decides the tax policy?
FM or AG? The AG has objected to the non-inclusion of the value of branded goods and export goods in computation of the aggregate value of clearances in the preceding year for SSI units. The AG believes that because of this lapse, large manufacturers are getting SSI benefits. No, they don’t. The value of branded goods cleared by SSI units are not included in the aggregate value, because they are duty paid and this facility would help SSI units getting orders from large brand owners without the Government losing a penny. But AG does not understand this elementary principle. In a rare exhibition of courage, the Department informed the AG that this was a deliberate policy decision – means AG has no business to interfere. But AG is not impressed. The report states,
The fact remains that this ran contrary to the declared intentions of the Government through Budget, which enabled the large scale manufacturers to derive undue benefit of duty concession.
First of all there is no undue benefit to any large manufacturer. This would have been clear to the AG’s if they had read the whole notification. More importantly, who has a better understanding of the Finance Minister’s declared intention in the Budget? The Finance Ministry or the AG? How can any one reply to this objection? Should the AG tell the Minister what his intentions were?