FEBRUARY 24, 2016

By Samir Kumar Sinha

Direct Tax:

1. REMOVE all exemptions for Income Tax except for the following cases:

(a) Housing loan with no limit for principal and interest amount;

(b) All retirement benefits;

(c) Medical expenses with no limit;

(d) Maturity amount of Pension Funds, PF, LIC and UTI.

2. Provision for New Income Tax Act.

3. Proposed Income Tax Slab (For all categories of person):

4. Similarly, Income Tax Slab and exemptions for corporate may be considered.

5. Impose 1% Expenditure Tax on all transactions billing more than Rs.20,000/-(except home purchase and medical expenses).

Indirect Tax:

(a) Provision for New Customs Act, Central Excise Act and Service Tax Act. Consequently, Manuals, Rules, Regulations, Notifications, Circulars and Instructions made under the old Acts are also required to be rewritten. It is to be noted that laws framed during the British Rule and particularly issued prior to 26th January 1950 and still in force even after completion of 66 years of Indian constitution are required to be rewritten in the present scenario. At present there are plethora of Rules, Regulations, Notifications, Circulars and Instructions creating confusion and litigation for the trade, revenue department and courts;

(b) No duty benefit for goods imported under Export Promotion Schemes such as MEIS, SEIS, DEEC, DFIA, DEPB, EOU, EPCG, Import Authorisation etc as the duty rate has been considerably reduced since the last 30 years;

(c) Rescind Circular No.58/97-Cus dated 06.11.1997 and amend Section 87 of the Customs Act, 1962 in order to have exemption from payment of customs duty on imported stores/ bunkers such as fuels, consumables etc to be consumed on coastal going vessel. All these stores are consumables for shipping service provider and used for operating the shipping vessels. Since these stores are meant for use on the vessel and not for sale, levy of duty on such stores is not justified. Also, filing of Bill of Entry as per the Circular No.58/97-Cus dated 06.11.1997 for payment of duty on ship stores is against the provisions of Section 46 of the Customs Act, 1962 read with Section 30 of the Customs Act, 1962 and the Import Manifest(Vessels) Regulations, 1971. To safeguard the revenue, conversion charges may be recovered on the basis of Gross Register Tonnage (GRT) of the vessel or the voyage period of the vessel for conversion from foreign run to coastal run;

(d) Modify Circular No.16/2012-Cus dated 13.06.2012 since S. No. 462 and entries relating thereto of Notification No.12/2012-Cus dated 17.03.2012 alongwith the condition number 82 and entries relating thereto has been omitted vide Notification No.12/2013-Cus dated 01.03.2013;

(e) Modify Circular No.96/2002-Cus dated 27.12.2002 read with Circular No.6/2006-Cus dated 12.01.2006 in view of decision of the Hon'ble Supreme Court in the case of Mangalore Refinery and Petrochemicals Ltd Versus CC, Mangalore - 2015-TIOL-199-SC-CUS in respect of assessment of the imported bulk liquid cargo;

(f) Any unconditional Basic Customs Duty as well as Excise Duty(CVD) must be made effective through Customs Tariff and Central Excise Tariff only and not by notification;

(g) If any notification provides exemption from Basic Customs Duty as well as Excise Duty (CVD), it must also provide exemption from any other duty or cess levied under the Finance Act or any other Act;

(h) There should be no bar of unjust enrichment in the case of refund of duty or any amount. A ny provision appearing or trying to bar refund of illegally collected tax is violative of Article 265 of the Constitution and it must be struck down. As per the Article 265 of the Constitution, "no tax shall be levied or collected except by authority of law";

(i) Simplify the duty structure on all items by merging the other duties with Basic Customs Duty or Excise Duty(CVD) as the case may be;

(j) Simplify the duty structure on Motor Spirit(Petrol) and High Speed Diesel with uniform Excise Duty(CVD) on petrol and diesel irrespective of its brand;

(k) Exempt High Speed Diesel imported by EOU from levy of Additional Duty of Customs. As such, Circular F.No.305/148/2004-FTT dated 11.10.2004 is required to be withdrawn retrospectively. As specified in para 6.01(d) of Foreign Trade Policy 2015-2020, an EOU may import, without payment of duty, all types of goods provided they are not prohibited items of import in the ITC(HS);

(l) Drawback must be sanctioned after submission of Bank Realization Certificate;

(m) Where there is provision of conditional refund of duty or tax after its payment(for example refund of SAD or Service Tax), such notifications may be amended in order to exempt the goods/services from duty or tax directly;

(n) Reduce service tax from 14% to 10%;

(o) Remove Education Cess and Secondary & Higher Education Cess.

Others:

(a) Withdraw currency notes of denomination Rs.1,000 and Rs.500 and make transaction more than Rs.20,000 compulsory through credit/debit cards and demand draft/cheque only with exception for transaction in respect of medical treatment;

(b) Rescind all laws which were framed during the British Rule and particularly issued prior to 26th January 1950. These laws are required to be rewritten and enforced in the present scenario. There is no point in continuance of such laws even after completion of 66 years of Indian constitution;

(c) No Pay Commission for central government employees and pensioners as per the report submitted by the 7th Central Pay Commission(CPC). As suggested by the 7th CPC, India should have a permanent Remuneration Authority that should review the pay structure based on job roles evaluation, remunerations prevailing in the market for comparable job profiles, general working of the economy etc within a budgetary outlay.

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