TIOL-DDT 546 · the untouched capture
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<html> <head> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <title>Taxindiaonline's DDT 402</title> </head> <body > <p align="justify"><b><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 546</font></b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><br> 06.02.2007<br> Tuesday</b></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Refund cheques by post – Ahmedabad’s laudable move</font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per request of the trade during the RAC/PGC meeting on 21.12.2006, AHMEDABAD Central Excise II COMMISSIONERATE has decided that in future all cheques in refund/rebate filed under section 11B of the Central Excise Act, 1944 will be sent by Registered Post to the applicant as soon as they are ready. The assessees are requested to attach unstamped self addressed envelope along with the refund/rebate application. Their complete and correct postal address should be typed/written neatly on the envelope to avoid postal delays. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This will go a long way in reducing contact points and will be welcomed by the trade. The Commissioner should explore the possibility of monitoring as to when the cheque was signed and when it was posted. Strict time frame should also be fixed for processing the refund claim and dispatch of the cheque. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Rebate wing is considered so sensitive (read what you could infer) that recently DDT saw a transfer order where a Commissioner posted Superintendents to Divisions with a note in bracket – <b>non rebate</b>. So there are rebate Superintendents and non rebate Superintendents!</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/trade_notice.htm">Trade Notice NO 01/2007</a></u></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Anti dumping duty on NBR – Board accepts CESTAT order</font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Apar Industries v Designated Authority - <u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2006/2006-TIOL-1255-CESTAT-DEL-LB.htm">2006-TIOL-1255-CESTAT-DEL-LB</a></u><b><u>,</u></b> the Tribunal directed that the notification No 78/2005 dated 1st September 2005, will be suitably amended by the Government of India by imposing the antidumping duty at the rate of US$ 38.73 per MT on the subject goods imported from Korea Kumho Petrochemicals</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Government had imposed anti-dumping duty on import of NBR, vide notification No. 78/2005-Customs, dated the 1st September, 2005. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the government has accepted the Tribunal’s order and amended the notification to make the duty as US$ 38.73 for imports from Korea Kumho Petrochemicals. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2007/ctariff07_011.htm">NOTIFICATION NO. 11/2007-Cus., Dated: January 31, 2007</a></u></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Budget 2007 – what is right for the left?</font></b></font></p> <p align=center><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Will Corporate India see <font color="#FF0000">red?</font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The left parties have sent in their proposals for PC’s Budget 2007.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Salaried employees will be happy to note that the comrades are with them</b>. “The withdrawal of standard deduction of salaried employees along with the raising of the basic income tax exemption limit to Rs 150000 made in Budget 2006-07 have put the salaried employees in a disadvantageous position compared to businessmen. Businessmen are able to book expenditures like travel, depreciation etc. as business activities while salaried employees cannot claim exemption on account of travel and other related expenses. This can be corrected through the reintroduction of standard deduction for salaried employees. Tax relief should be provided to senior citizens. The health allowance for pensioners who cannot access the CGHS should be enhanced.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The left memo says,</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The 6% plus inflation rate surely cannot be justified by the 8% GDP growth rate being experienced in India today, since developing countries like China have succeeded in holding inflation at much lower levels despite having a higher GDP growth rate than India”. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>The other important suggestions:</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> The shortage in food items like wheat, sugar and pulses that has arisen is a direct fallout of the sustained neglect that agriculture in general and the food economy in particular has suffered since the policies of liberalization were initiated in the early 1990s. (What can the champions of liberalization, Dr. Singh and Mr PC say to this?)</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The Budget should also demonstrate the political will to mobilise resources, primarily through taxation of burgeoning corporate profits, capital gains and wealth.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ While the scheduled corporate tax rate is 33.66% including the surcharge and the education cess, it has been recently reported that the effective tax rate for the corporate sector in 2005-06 has only been around 16.5-17%, due to the myriad tax breaks.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Continuing with such corporate tax exemptions in a context where corporate profits have increased sharply in the past few years, besides being morally unjustifiable makes little economic sense.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Doing away with the myriad corporate tax exemptions, which are nothing but subsidies to the corporates, would be sufficient to finance the entire increase in Plan expenditure that is being sought.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++Tax exemptions for sectors like IT, which have been registering record profits in recent times, have also outlived their economic rationale. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The reintroduction of the long-term capital gains tax and increasing the rate of the Securities Transaction Tax should be seriously considered, in view of the speculative excesses currently being witnessed in the financial markets.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++Why should the effective tax rate of any FII be substantially lower than what is being paid by Indian corporates?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++The dismally low rate of capital gains taxation currently prevailing in the country, with a 10% short-term capital gains tax and zero long-term capital gains tax as compared to above 30% rate of corporate tax, is an open invitation for reckless speculative activities, which stifle genuine entrepreneurship.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Reimposition of a long-term capital gains tax of 15% and a flat STT rate of 0.1% on the trading in all financial instruments, including equities, bonds, derivatives and government securities, would not only remove the anomaly but also contribute to the resource mobilisation effort. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++<b>The list of Indian billionaires show that within one year, i.e. between August 2005 to August 2006, the wealth of the richest Indian grew by over Rs. 32000 crore, which is nearly 1% of India’s GDP.</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ One wonders why in such a backdrop, the wealth tax collection of the Government remained at a paltry Rs. 265 crore in 2005-06, and exactly the same amount was budgeted for 2006-07.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The Wealth tax rate should be increased from 1% to 3% without further delay and initiatives need to be taken to broaden the wealth tax base by bringing all the urban as well as rural crorepatis into the wealth tax net. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The obsession with cutting customs duties down to ASEAN levels with scant regard for its implications for revenue and adverse impact on domestic industries and agriculture need to be abandoned.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The recent cut in customs duty on a host of items including cement, metals and chemicals just ahead of the Budget, was an ill-conceived move.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Expenditure on Education has to increase substantially in order to meet the commitment of spending 6% of GDP on education.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Additional funds for expanding secondary and higher education should be generated by increasing the education cess.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++<b>Taxpayers do not resent paying the education cess since it directly contributes to social welfare through expansion of education in the country</b>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Reduce Petrol and Diesel Prices by Restructuring Duties and Taxes Reduce excise duties for Small Scale Industries. </font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Freeze Home loan interest– FM’s request to Banks</font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Finance Minister has asked the Banks to hold in abeyance any decision that hits the monthly budget of the common man, like hike in Home Loan interest. The interest rates have gone up from 7% to 10% in the last few years. That means your EMI must have also gone up by nearly 40%. Banks have agreed to the FM’s request but for how long?</font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until tomorrow with more DDT </font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></span></font></p> </body> </html>