1% education cess 100% unproductive labour - You can tax but should you torture? Why can’t we use a pencil instead?
The babus really don’t realise the cascading effect of their careless actions. Look at the new 1% education cess. Paying 1% tax may not be all that difficult fiscally but physically it is a torture.
The invoices should have a new column "Secondary and Higher Education Cess" and so should PLA, Cenvat account, periodical returns, challans and a host of other documents and then you should keep track of which credit is going where and which credit is being used where. Please see our Budget article Education Cess and confusion – Siamese twins?.
What will happen to all the pre-printed stationery? Should you just dump them? How much paper are we going to waste? The worst hit are the ones who use computerised accounts, especially when the programmes are managed by outside agencies. The software programme does not have this new cess and unless the programme is updated, this cannot be added. Updating the programme will take some time. But the cess is immediately effective. Throughout the country hundreds of assessees stopped clearances yesterday because they had no clue as to how to integrate the new education cess with their systems. Is this what we call progress? Is this what we call simplification?
An anguished industrialist A.Srinivasa Rao, called up DDT and asked, “Is there no way to stop this madness?”. He followed up his oral outbursts with a mail, which is just an example of the anguish and frustration of a sincere assessee.
In the Budget Proposals Hon'ble Finance Minister proposed for a new tax "Secondary and Higher Education Cess" of 1% which is applicable on all the Direct and Indirect taxes similar to that of Education cess. I feel we in the industry do not have any clue why there is a new tax if every calculation is similar to that of existing education cess and why cannot our Hon'ble FM increase the existing Education cess from 2% to 3% and allocate the additional resources proportionately for the intended purpose. This additional tax leads to scraping the tons of pre-printed stationery used by number of assessees, numerous changes in many computer programmes, delayed the dispatches and lakhs of man-hours for on warranted issue. I suppose this has certainly resulted in waste of national resources much more than the additional revenue expected by the Finance Minister. Further this leads to changes in the Monthly / quarterly / Annual returns of Excise / Service tax and Income tax and God only knows how much additional productive income this country has generated with the new tax and frustration on the Govt policies.
For a simple process modification in the companies we consult the IT team and why cannot Govt propose such a change in an IT friendly manner.
Will the mandarins of the North Block understand the plight of the assessees in complying with their directions? As pointed out by the assessee what was the need to create a separate cess, to be charged separately and accounted separately? Can’t the ministry do it at the end of the year instead of wasting thousands of man hours and tons of paper? Can’t we really think of some simple things or are we used to complicating everything that ultimately a strong impression is created that government is there to harass the citizens. This certainly can’t be the goal of the Finance Minister.
There is a story about the US Space administration having spent millions of dollars for inventing a pen that can write in space. All experiments failed. Gravity or the lack of it would not allow the ink to come out of the pen. And this was a secret and so the CIA was commissioned to find out how the Soviet cosmonauts managed to write in space. The CIA came with startling facts. The Russians gave their cosmonauts pencils to write with.