FM inaugurates Chennai LTU

By Vijay Kumar

Large Tax Payers Unit (LTU) will start functioningin Mumbai by the end of March and in Delhi by April 2008, our FM announced yesterday after inaugurating the country's second LTU in Chennai. Mr. Chidambaram said that the revenue department has been advised to adopt a friendly attitude while dealing with small and medium enterprises.

Inaugurating the LTU, the Finance Minister said that LTUs are being setup with a view to find solution to the difficulties faced by big organisations having branches or units in many parts of the country. Such a system is being followed in 13 Asian countries, including Pakistan , Sri Lanka , Bangladesh and Nepal . This system is in operation in countries like Japan , Australia and western countries.

The country's first LTU was inaugurated in Bengaluru during October 2006. This LTU is functioning successfully and has collected Rs.1756 crores during the last financial year. Another 16-18 large taxpayers have evinced interest to join the Bengaluru LTU .

Twenty-five big tax payers have already registered themselves to avail the services of Chennai LTU . This LTU will collect taxes over Rs.8,000 crores.Chidambaram said efforts should be taken to bring all the units of large tax payers under this system by December 2008.

The FM said lower tax rate means better tax compliance. As the trend is the same all over the world, India is also moving in this direction, he added.

LTU offers a single-window facility to payers of large amounts of tax, including central excise, service tax, corporate and income tax. Assesses who paid during preceding financial years central excise duty or service tax of Rs.5 crores or more, or advance income tax of Rs.10 crores or more, are eligible to join LTU.

Minister of State for Finance, S.S. Palanimanickam , spoke about the salient features of the LTU.

Senior Finance Ministry officials, including PV Bhide , Revenue Secretary, R. Prasad, Chairman – CBDT, S.K. Shingal, Chairman-CBEC, and Jayendranath, Chief Commissioner, LTU, Chennai, took part in the function.