Advertisement

  • News
  • Columns
  • Interviews
  • BW Communities
  • Events
  • BW TV
  • Subscribe to Print
  • Editorial Calendar 19-20
BW Businessworld

No Rollback, Transfer Pricing Rules By April

Photo Credit :

Virtually ruling out rollback of 3 per cent hike in excise duty on SUVs, Finance Minister P Chidambaram assured India Inc on Monday, 4 March that a clutch of decisions, mainly on indirect taxes, would be announced during the course of debate on budget and Finance Bill in Parliament.  Merely because something was not announced or touched upon did not mean that those areas would be ignored, he said.

India will issue so-called safe harbour rules by April 2013, a set of provisions that under certain conditions would enable tax authorities to accept companies' transfer pricing claims without further scrutiny, Finance Minister P. Chidambaram said on Monday, 4 March, 2013. Transfer pricing is the value at which companies trade products, services or assets between units across borders, a regular part of doing business for a multinational.

The finance minister also said India's fiscal deficit may be less than the provisional figure of 5.2 per cent of gross domestic product for the 2012-13 fiscal year that ends on March 31. Chidambaram said in his budget speech last Thursday, 28 February that 2012-13 fiscal deficit is seen lower at 5.2 per cent of GDP, compared with his earlier estimates of 5.3 per cent.

As for GAAR, India will seek parliamentary approval for amending retrospective tax rules, after it reaches an agreement with Vodafone Group Plc over a tax dispute, Finance Minister P. Chidambaram said.

The rule set last year enabled the government to raise tax demands on long concluded deals. British telecom group Vodafone Group Plc is contesting a more than $2 billion tax dispute over its 2007 acquisition of Indian mobile assets.

The Union Cabinet will take a decision on a conciliation offer from Vodafone, Chidambaram said last week, without giving a time frame.

Failure To Pay Excise, Service Tax May Lead To Arrest: FinBill
The Finance Bill has proposed to introduce Section 91 to provide for power to arrest a person for specified offences, particularly non-payment of collected service tax, by an officer not below the rank of Superintendent of Central Excise.

It has also proposed to make at least four offences non- bailable under Section 135 of the Customs Act.

This would include import or export of any goods which have not been declared in accordance with the provisions of this Act and the market price of which exceeds Rs 1 crore.

Also, if a person fraudulently attempts to avail of drawback or any exemption from duty provided under Customs Act, if the amount of drawback or exemption from duty exceeds Rs 50 lakh, it would be non-bailable offence.

The move comes against the backdrop of lower than budgeted collections of excise and customs duties. As per the Budget papers, the Customs collection during 2012-13 is estimated at Rs 1.65 lakh crore, as against the target of Rs 1.87 lakh crore.

In case of excise duty the realisation is likely to be Rs 1.72 lakh crore, compared to the target of Rs 1.94 lakh crore.

However, on the positive side, the Service Tax collection is estimated to be Rs 1.33 lakh crore, as against the budget estimate of Rs 1.24 lakh crore.

Chidambaram Warns Tax Dodgers, Rules Out Amnesty
Earlier, in a warning to tax dodgers, Indian Finance Minister P Chidambaram said that a huge amount of data is being mined to go after them and ruled out any amnesty scheme for defaulters.
 
"No. In income tax there is no case for amnesty. Because now almost all returns are online except a small category which was exempt. We have a huge amount of data which is being mined. Therefore, there is no case for amnesty today. Best case I can make out is tell people 'please don't hide your income'. Just admit your income and pay tax and be a proud citizen," he told PTI in an interview.

Failure to pay excise duty and service tax could lead to arrest of defaulters, as per the provisions proposed in the Finance Bill 2013 introduced by Finance Minister P Chidambaram in the Lok Sabha.

As per the provisions, offences relating to excise and customs duty evasion of over Rs 50 lakh would be made cognisable and non-bailable.

Similarly in case of service tax, the failure to deposit the tax amount exceeding Rs 50 lakh with the government would result in imprisonment up to seven years.
 
No Rollback Of Duty Hike On SUVs,Other Announcements
Virtually ruling out rollback of 3 per cent hike in excise duty on SUVs, Finance Minister P Chidambaram also assured India Inc that a clutch of decisions, mainly on indirect taxes, would be announced during the course of debate on budget and Finance Bill in Parliament.

In his post-budget meeting with the captains of industry, he said the auto sector needed some help observing that high interest rates are impacting auto sales. He also expressed the confidence that the Reserve Bank will reduce interest rates though RBI Governor will have to take a call in this regard.

"We will re-look at all suggestions on indirect taxes and announcements will be made in Parliament. I have all of March to look into all suggestions. We will take decisions and announce them when I reply to debate in Parliament by end of March," he said.

The budget, he said, contained certain announcements that require legislative changes and some on which only mere executive actions are needed.

Merely because something was not announced or touched upon did not mean that those areas would be ignored, he said.

"Budget making is a continuous process. When I reply to the debate on the Budget, there will be some more announcements and then when we reply to the Finance Bill there will be more announcements. A number of decisions which are in the making, or are in the process of being taken will be announced in Parliament," he said.

Referring to the increase in excise duty on SUVs from 27 per cent to 30 per cent, he said dual pricing on diesel at the retail pumps was not possible. The three per cent increase can be a way of realising the subsidy on diesel, which 98 per cent of the SUVs use.

The basic message of the budget was to give signal to the country and world that India was on the path of fiscal consolidation and to investors world wide that they can invest in the country.

(Agencies)