While being a largely growth-oriented policy document, the Union budget for 2011-12 is on a weak wicket when it comes to dealing with international taxation, according to experts at a post-budget session on direct and indirect tax.
Addressing the session jointly hosted by the Federation of Indian Chambers of Commerce and Industry (FICCI) and Fox Mandal, G. C. Jain, Chief Commissioner of Income Tax-II, Chennai, highlighted the provisions in the Finance Bill 2011 and remarked that the changes made by the budget were cosmetic in nature.
The budget sets forth the direction along which the country would progress, he said.
S. Rajaratnam, senior advocate and tax management consultant, said industries that would like to invest should be encouraged and incentives should not be withdrawn.
Wondering whether the bunch of amendments aimed at bringing back black money stashed away in overseas banks would prove effective, Mr. Rajaratnam said a more pragmatic measure would be to encourage the business class to bring back the money through amnesty schemes.
As the IT laws have in-built amnesty schemes, the government only needs to adequately publicise the provisions, he said.
He requested P. Murari, Advisor to FICCI president, to recommend these measures to the Central government.
Rafeeque Ahmed, FICCI chairman, said FICCI had committed its support for the Goods and Services Tax regime and said it would help in interstate transaction and facilitate overall growth.
He also noted that the Ministry of Finance was working on reducing transaction costs for the exporter community. The step would make exports more competitive, he said.
C. S. Venkataraman, Superintendent-Central Excise Settlement Commission, said the objective of the Commission was to create a conciliatory channel to resolve tax disputes and avoid costly litigation.