Budget Proposals 2006-07
February is the month for the Budget, as the Budget for the
year is presented in the Parliament in the last week of February. Every section
of the society is waiting for the Budget with high expectations from the Finance
Minister. A period of three to four months prior to it is the period when
everyone is preparing the proposals for budget in his own way. The Government
and its representatives make proposals for enhancing the revenue. The
businessmen and tax-payers make proposals for reduction of their tax liability
and hardship. The professionals and the professional organizations like the
Chamber make proposals for rationalization and simplification of the tax laws.
This process is an annual feature and all these sections of the society are
occupied in preparing such proposals almost for three to four months prior to
the budget day, i.e. 28th February of each year. Though such proposals play some
role in the process of making changes and amendments; our system is not properly
equipped to make the best use of such proposals in their right perspective. The
persons in charge do not have sufficient time to go through the proposals; and
even if they are convinced they do not have the inclination to incorporate the
proposals. Thus the process of proposal making has become somewhat futile
exercise.
For us, the tax professionals and the professional
organizations like the Chamber, the budget proposals primarily mean the
proposals for amendment of tax provisions in the Finance Bill. For years, the
members of such professional organizations and in particular the members of the
Chamber have been doing a laborious exercise of analyzing each of the provisions
of the tax laws and have been making proposals for rationalization and
simplification of such provisions. This year also the Chamber has formulated and
made its proposals. The reasons and the purpose of the proposals have been
elaborately explained. The proposals include the suggestions regarding the TDS
provisions and many other provisions entailing the hardship/difficulties
suffered by the assessees and the suggested changes thereto with reasons. Such
suggestions include the suggestion for deletion of the most unpopular,
irrational and illogical Chapter XII-H on 'Fringe Benefit Tax' introduced by the
Finance Act, 2005. Convincing reasons have been given for the proposals. We wish
that the proposals are taken in the proper perspective and implemented to the
best extent.
One of the long-standing suggestions is as regards the
absence of accountability on the part of the authorities in performing their
duties. The authorities are responsible for collecting the tax dues from the
assessee only in accordance with law and nothing more. Even a very old Circular
dated 11-4-1955 requires the authorities to bring to the notice of the assessee
the beneficial provisions and to grant relief and refunds accordingly. However,
such instructions are ignored and in a number of cases it is found that the
attitude of some of the authorities is such that their only duty is to extract
maximum revenue in any manner and at any cost. There is no provision or
efficient machinery to make them accountable for the damage caused to the
assessees due to their arbitrary or illegal actions. These suggestions, made for
making such authorities accountable are unfortunately totally ignored. We hope
that one day the Finance Minister would feel the importance of these suggestions
and take steps.
However, due to lack of proper machinery and time a number of
such proposals go unnoticed, even though they are important and valuable. Even
the proposals having nominal tax effect or tax neutral are ignored.
Implementation of such proposals would give a substantial relief to the
assessees and citizens with nominal revenue cost or no cost. In view of this
position the Government should set up a machinery to consider such proposals on
a continuous basis and review the provisions regularly and periodically.
Special Story – Taxation of I. T. Industry
