|Home > Money > Budget 2001 > Report|
Channels: Astrology | Broadband | Contests | E-cards | Money | Movies | Romance | Search | Weather | Wedding | Women
Partner Channels: Auctions | Auto | Bill Pay | Jobs | Lifestyle | Technology | Travel
|March 2, 2001||Feedback|
Major overhauling of taxation regime on cards
BS Economy Bureau
Revenue secretary S Narayan on Thursday said the government is likely to undertake a customs duty rationalisation programme during the course of the next financial year by taking into account import trends in the wake of complete removal of quantitative restrictions (QRs) from April 1, this year.
He said the government decided against effecting major changes in the customs duty structure in the wake of a number of factors including lifiting of QRs on 715 items. The revenue department would take up the task around the third quarter of the 2001-02. "We need time to understand the implications," he said.
Speaking at a post-budget seminar organised by the Federation of Indian Chambers of Commerce and Industry, Narayan said the government has chalked out a roadmap for taxation reforms, which includes reduction of customs duty to around 20 per cent over the next three years.
He added that there will be no product with zero customs and excise duty and the excise duty on all items would gradually be brought to 16 per cent.
"In the next two-three years, there will be only three customs duty rates on products -- primary, intermediaries and final products," the revenue secretary said. Answering a question on value added tax (VAT) regime and a sales tax rationalisation programme, Central Board of Excise and Customs chairman BP Verma said that based on the views of the group of state finance ministers, the shift can be completed in two-three years.
Narayan said that Finance Minister Yashwant Sinha in his Budget for 2001-02 has announced a set of proposals to make the taxation structure more user-friendly.
He said that the income tax department is trying to go fully online by the end of the next fiscal and returns can be filed online. The secretary also said that filing of corporate tax returns would also be made online by June-July, 2002. "The target should be to make revenue department online in five years," he said.
On procedural streamling, Narayan said a number of steps have been initiated including disposal of cases within 180 days if an appeal petition gets a stay from the Income Tax Appealate Tribunal.
The revenue secretray further said that service tax net could not be broadened in a major way in the budget for 2001-2002 due to the paucity of time for analysing the interim report of the expert committee on service tax.
He said that there was too little time to analyse the recommendations of the committee, which suggested that barring a few exceptions, all the services should be brought into the tax net.
Narayan said on the sidelines of a Ficci seminar on Union Budget 2001-02, that subjecting all the services to tax in one go would be difficult as prior proper valuation of these services required to be completed.
He said that more discussion was required before any change in rates from 5 per cent and the government was waiting for the final report of the expert committee to sort out these issues.
The government extended service tax to only 15 services in the budget for 2001-2002 while continuing with the existing 5 per cent rate. The new services proposed to be brought under the tax net from the next fiscal would raise the budget estimate for 2001-2002 by 63 per cent to Rs 36 billion over revised estimates of Rs 22 billion for 2000-01.
The new services are expected to contribute only about Rs 750 crore of the Rs 1,400 crore incremental revenue from service tax.
The expert committee on service tax and the major industry chambers had asked for broad-basing of the service tax structure in the budget.
The Economic Survey for 2000-2001 also pointed out "the growing contribution of services makes the sector conducive for mobilisation of greater resources".
The budget for 2001-02 proposes to include auxiliary insurance services like brokerage and agency services, certain services of banking and financial institutions, broadcasting services, ports, scientific and technical consulting services.