NEW DELHI: The government today announced some concessions for mutual fund industry and income tax payers, while committing to low tax regime to promote industrial activity to generate jobs and create more resources to undertake social welfare activities.
In this regard, the Minister said he was accepting a suggestion made by Congress leader Jyotiraditya Scindia and some other members as it amounted to levying tax with retrospective effect for about three months.
The Lok Sabha later passed the Finance Bill, 2014 completing the budgetary exercise in the Lower House.
In order to provide some relief to the tax payers filing returns late and paying penalty on daily basis, the Minister said that CBDT will be empowered to exercise discretion in this regard. He also expanded the scope of Settlement Commission to include cases where proceedings have already been initiated.
The Minister rebuffed his own party MP Nishikant Dubey for saying that “we will not be able to bring back black money from Switzerland in our lifetime.”
Jaitley said “we pray for his long life but we will not have to wait for long (to get back black money from abroad).”
Justifying his emphasis on having low tax regime and smooth tax system, the Minister said the government wants to revive the investor sentiment “which has been disturbed” and mop up additional resources to fund social welfare activities.
He said low tax regime will make India goods competitive and cited China as an example in this regard. The changes proposed in the Finance Bill, Jaitley said, “will further simplify and smoothen the tax structure of the country and help us in raising the revenue because this year we need higher revenue itself because of meeting the fiscal deficit targets.”
On his proposal for relaxing norms for late filing of returns, Jaitley said “for late filing of returns there is a provision which has become onerous as huge penalty (is levied) per day and there are no power of waiver itself.
“So if somebody says it’s filed after a year than per day the penalty used to become extremely exorbitant. So some discretion is given to the CBDT with regard to that penalty where cases of late filing of returns were involved. The penalty as such will remain.”
As regards the proposal on the Settlement Commission, Jaitley said it will take up “cases where proceedings have been initiated for reassessment and proceedings which are pending for fresh assessment in pursuance of an order of a tribunal or a commissioner for setting aside or canceling the assessment itself.”
In order to reduce mounting tax litigation, Jaitley said he proposed to provide for more benches of Advance Ruling to deal with transfer pricing disputes.
Seeking to boost the wind energy sector, he announced extension of the accelerated depreciation benefit to the sector as demanded by members.
Talking about the concerns expressed by members over tax forgone, Jaitley said it is permitted by law and eventually it benefits consumers and make domestic products price competitive.
“Ours is not high tax government…Consumers want to buy goods not taxes… if you load every product with high taxes, your products will become less competitive,” he said, adding that Chiha has learnt the art of low cost productivity.
Jaitley said he had extended the concessional duty rate on automobiles and capital goods till December 31 to give boost to the manufacturing sector. The previous UPA government had given the concession up to June 30.
“We are interested in creating a situation that the sentiment that had been disturbed…. to revive that sentiment back. There is no contradiction in being pro business and pro poor at the same time. When economy does well we can take care of lower strata of population which is 30 per cent,” he said.
Rejecting the opposition charge that the government was giving tax relief to benefit corporates, Jaitley said it was a “misnomer” as tax concessions lead to reduction of prices and finally the consumer get the rebate.
Referring to the controversial General Anti-Avoidance Rules (GAAR), the Minister said he will take a final call on it later.
The implementation of GAAR, brought in by the then Finance Minister Pranab Mukherjee to check tax avoidance, was deferred by two years following widespread concerns by domestic as well as foreign investors.
Talking about the efforts to revive investor sentiment which had been “damaged” by retrospective amendment to the Income Tax, the Minister said, the government in principle will not bring any such legislation which will create fresh liability.
As regards the earlier cases, Jaitley said, the judicial process would continue.
On the eve of Kargil Vijay Diwas, Jaitley said he had provided an additional Rs 5,000 crore over and above what was allocated in the interim budget of the UPA government.
The government is working on formula to implement one-rank-one-pension for defense forces, he said, adding the proposals are afoot to set up a war museum and war memorial in honor of 21,000 soldiers who sacrificed their lives for the country after 1947.–PTI