Budget to make life more expensive
AS the Budget impact sinks in, more and more people are unhappy. In one of his budget speeches, the present Prime Minister, Dr. Manmohan Singh said that voting the Congress is not only good politics, but also good economics. Pranab Da can make no such claim. Income Tax paying women will not certainly vote for his party as they have not been given even the small increase in exemption that has been given to the men. And this at a time when the President of India, the Speaker of the Lok sabha , the Chairperson of UPA and the Leader of Opposition in Lok Sabha are all gracious women. Maybe there will be a demand from the leader of the opposition for a hike in exemption, during the budget debate (if at all there is one) and the FM will gracefully yield.
But what is the justification for taxing health? In India there is no ‘social security' and the government has miserably failed in providing proper heath care. When a middle class person suffers a serious ailment like cancer, or suffers from heart or kidney problems, the hospital bill could be anything from 2 lakhs to 5 lakhs and his Service Tax liability would be between 20,000 to 50,000. Can he really afford it?. For such a person, dying is a better option than getting treated and living the rest of his life in debt.
Taxing education is the most regressive step any government anywhere in the world can take and this year they want to enlarge the scope of the levy. In the Malappuram District Parallel Colleges association case – , the Kerala High Court observed, “tax on education, particularly when the incidence of tax is passed on to the beneficiaries, that is, the students, is a regressive legislation and has to be condemned, more so, when large number of poor people seek salvation through education and employment.” However the court expressed its helplessness when it said, “So long as there is no constitutional bar against levy of service-tax on education, and statute stands the test of article 14 of the Constitution, then the levy has to be fully upheld, no matter whether the Court considers the levy unwise, improper or even a regressive measure which is a policy matter to be left to the wisdom of the Legislature ”.
In that case, the Government Counsel had argued that “ so many educational institutions are mushrooming and education is carried on as business. Therefore, according to him, there is no illegality or even impropriety in levying tax on such educational institutions”. This is a general argument we hear from people who complain about the loot that private educational institutions are indulging in. But the Court was not impressed and observed, “ this malady has to be corrected only by levying income-tax on the institutions and not by licensing the institutions to collect service-tax from students. ----- the levy of service-tax on students will not serve the purpose of disciplining those who make business out of education”.
Air travel is going to be more expensive – Do you want keep the middle class grounded? Is air travel meant only for the rich?
The 1% and 5% excise duty is creating havoc in the field with prospective assesses running from consultant to officer. They have so many questions – all simple but genuine like are they liable to pay duty on pre-budget stocks?; about CENVAT Credit; about registration; about invoice; about SSI exemption; about payment and there is nobody to guide them. Is the department ready to issue registration certificates to all the new assesses? And can they clear goods pending registration; Is there any assurance that they will not be penalized for this? Industry in many sectors has come to a grinding halt and goods are not being cleared for want of clarity. When they bring in such major changes, can't they explain the provisions clearly and provide the assistance of knowledgeable officers?