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CII organised a session on ‘Union Budget 2013-14: Insights & Analysis’ at the Northern Region Headquarter at Chandigarh today. Addressing the session Mr S J Singh, Commissioner, Central Excise, Customs & Service Tax, Commissionerate, Chandigarh - I said that much ground has been covered with respect to GST, however, we should not look at it as a panacea for all our taxation problems. While allaying the fears pertaining to the strict enforcement provisions of the indirect taxation mentioned in the Union Budget 2013-14 he assured the industry members that the Department of Central Excise, Customs & Service Tax are partners in progress and facilitators in the growth process.
Mr Man Mohan S Kohli, Chairman, CII Chandigarh Council described the Union Budget 2013-14 as an inclusive growth oriented budget. Measures announced by the Finance Minister in the Budget such as removal of bottlenecks in infrastructure and power sector - establishment of 2 new ports, fast tracking of industrial corridors, setting up a Road Regulatory Authority, creating a grid connecting waterways, roads and ports, exploring PPPs for coal production, incentivizing states for financial restructuring of SEBs, extending tax holiday on power plants to 2014, enhanced credit facilities to MSME sector and 15% investment allowance for projects with a minimum investment of Rs 100 crores in plant and machinery will provide much needed fillip to the manufacturing sector, he opined.
Sharing his perspective on the direct tax measures, Mr Girish Vanvari, Co-Head of Tax & Partner, KPMG India said that the tax-GDP ratio has declined from 11.9% in FY08 to 9.9% in FY12, which is a cause of concern. In this respect, he said that setting up of Tax Administration Reform Commission to review the application of tax policies, tax laws and submit periodic reports to strengthen the capacity of the tax system is a welcome move.
However, Government’s plan to cap the fiscal deficit at 4.8% during 2013-14 is very ambitious and is based on the assumption of 20% increase in tax collections, said Mr Vanvari.
Elaborating on the indirect taxation, Mr Pratik Jain, Partner, KPMG India expressed that the strict provisions of compliance and enforcement measures like extended recovery mechanism and penal implications in this year’s Union Budget will deter the defaulters of the indirect tax. Amnesty scheme under service tax offers a chance to recover due payments. He added that the higher excise and customs duty tax on luxury products such as motor cars, bikes, yachts and mobile phones will curb their imports and help in reducing the imbalance in the current account deficit. However, industry’s demand for Cenvat credit liberalization and rationalization of negative list regime remains largely unfulfilled.
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