Finance Bill 2007 passed in LokSabha

By Vijay Kumar

The Finance Bill is almost through – it has been passed by the LokSabha and that really is the end of it. The approval of RajyaSabha and the President is just a formality. In his reply the FM said,

++ In the three years of the UPA Government, we have increased the tax, GDP rate from 9.2 per cent to 11.2 per cent. Of this, the ratio of direct taxes to GDP is 5.6 per cent and it is rising every year.

++ Gross tax revenue at Rs.4,71,742crore exceeded the Budget estimates by Rs.29,589crore and exceeded Revised Estimates by Rs.3,894crore.

++ As against an effective threshold of Rs.80,000 for salaried tax payers, we increased the threshold to Rs.1lakh. Besides, we continued with the exemption of up to Rs.9,600 per year for Transport Allowance, and up to Rs.15,000 per year for medical reimbursement.

++ Regarding the number of individual assesses who admit to an income of more than Rs.10lakh per year, in 2003-04, the number was approximately 97,500. In 2005-06, the number is estimated to have increased to approximately 1,40,000.

++ Although services account for 56 per cent of GDP, service tax contributed 7.92 per cent of the total tax collection in 2006-07.

++ Renting is liable to Service Tax. We have introduced Service Tax only in respect of renting of large commercial properties. Properties used for education and religious purposes, for sports and entertainment are exempted.

++ As regard to the number of Income Tax Officers leaving the service prematurely 103 Group ‘A’ Officers out of a total number of 4150 have left the service since June 2004. But on an average about 65 Group ‘A’ Officers have been recruited every year in the last five years to the Income Tax Department and hence there is no cause for alarm.

++ The cement industry has not respond positively to the dual Excise Duty regime. Hence the Government has decided to replace the dual rates of cement. Now onwards the concessions granted to cement sold at Rs.190/- or less per bag will continue; for cement sold at a higher price the Ad valorem rate will apply.