Budget Wishlist from Mr. Rohit Jain, Partner, Economic Laws Practice - Kindly carry

1st July 2009

 

Please find pasted below Budget Wishlist from Mr. Rohit Jain, Partner, Economic Laws Practice.

Attached is the picture of Mr. Rohit Jain

 

Wish List for the Budget 2009: Indirect tax Perspective

Budget 2009 is a crucial event as it will set the tone, tenure and agenda for the UPA Government's program, policy and approach towards fiscal governance for next five years.  At a time when Indian industry is battling recession, the expectations of the Industry from the Budget to provide a stimulus are high. One of the ways by which the Budget can provide the stimulus particularly to manufacturing and service sector is by rationalizing various Indirect taxes which forms around 20-40% of the transaction cost. The key changes/provisions which may be implemented can be listed as under:-

With the countdown to April 01, 2010, the Budget should outline the steps towards implementation of much awaited Goods and Service Tax ("GST"). A time line for releasing a White Paper towards Implementation is expected so as to clarify the structure sought to be implemented. The other key issues which are required to be addressed are uniform rate of GST, comprehensive credit mechanism and levy on imports and Constitutional Amendment. The commitment towards phase-out of Central Sales Tax will require reduction of the present rate from 2% to 1%. In effect, the Budget 2009 should set in motion the time line and approach of the Government for Implementation of GST.

Keeping consistency with the earlier approach of the Government, the Customs peak rate should go down from 10% to 7.5%. This will be in accordance with the WTO Commitment to rationalize the rate of Customs duty of goods uniformly across borders. The other issue which requires urgent attention is towards making available the refunds of Special Customs duty and Revenue Deposit, which, though granted has not been actually made available to the importers due to ambiguity in the procedure with regard to the same. These refunds have been lying in the book of accounts of Importers as cost. A time bound program should be provided for granting and making available such refunds. A step towards time bound grant of refund will help Importers to tide over the severe cash flow crunch faced by them particularly during these recessionary times.   

Excise duty rate change in the past has been done as a part of stimulus package to support industries in manufacturing sector.  The reduced rate of Excise duty should continue atleast for the current Fiscal Year  to assist industries in recession. 

Though an enlargement of Service tax net is expected to cover more services, however, there should be no increase in the present rates of Service tax. The Service Industry is showing signs of recovery and any increase in the rates will adversely affect them. Also, clarity should be brought with regard to what constitutes Import of Services as this issue has seen increasing litigation. Further, the confusion over refund to Service providers providing services to SEZ should be cleared and it may be prudent to revert to the earlier position.

 

Brief profile of Mr. Rohit Jain:

Rohit Jain is one of the youngest partner of Economic Laws Practice. His core practice area includes the field of Indirect tax i.e. Customs, Excise, Service Tax, Sales Tax / VAT and Foreign Trade Policy related matters. He has been associated with both advisory and litigation services for various Fortune 500 companies on Indirect tax issues.

 

In the field of VAT, he has advised various leading corporates for the smooth transition from Sales tax to the VAT regime. Since the implementation of VAT, he has been actively engaged in assisting on various complex as well as day to day issues on VAT of those companies. He has worked closely with various industries notably Gems & Jewellery, Aviation, Shipping, Manufacturing and Transport sector and has been part of a number of representations on their behalf to the Ministry of Finance.

 

 

 

 

 

Regards,

Vivek Nair / Varsha Talreja

Paradigm Shift PR

Mumbai

Tel: 22813797 / 98

Cell: 9833115116 / 9821195211