Published On : Tue, Dec 13th, 2016

VTA stresses on single assessment in GST in Pre Budget Memorandum to Finance Minister

Vidarbha Taxpayers Association (VTA) convened a meeting of its executive body specifically to discuss and submit suggestions on pre budget 2017-18 to finance ministry which was presided by its president J. P. Sharma and after detailed discussion VTA dispatched pre budget memorandum to Arun Jaitley – Union Finance Minister and Sushil Chandra – Chairman, Central Board of Direct Taxes, New Delhi.

In direct taxation VTA suggested to increase threshold limit of personal taxation to Rs.3 Lakh from existing Rs.2.5 Lakh. VTA further suggested that this threshold limit should be linked to India Inflation Ratio (IIR), whereby every year exemption limit should increase minimum in ratio with IIR so that it becomes logical and causes some mandatory increase every year.

However on tax slabs, VTA suggested tax slab of 10% up to Rs.10 Lac above basic exemption limit, 20% above Rs.10 Lakh to Rs. 20 Lakh and 30% above Rs.20 Lakh up to Rs.5 Crore. To target very high income group, VTA suggested that another slab of 35% should be introduced for individuals, firms & partnership having income above Rs.5 Crore.

Corporate Tax on domestic companies is currently being levied at 30%, which is quiet high in comparison with the global standards. The Finance Minister while presenting Budget 2015-2016 stated that the rate of corporate tax will be reduced from 30 per cent to 25 per cent over the next four years. The Finance Act, 2016 has phased out many exemptions and deductions available under the Act, however, the rate of tax has been reduced to 29%, that too, for a domestic company provided its total turnover or gross receipts in the previous year 2014-2015 does not exceed Rs. 5 Crore; under such circumstances VTA suggested that Corporate Tax should be brought down to 27%.

Education of children these days imposes a heavy burden on the middle class. A good beginning was made in 2003 by providing deduction for tuition fees under Section 80C of the Act. But Section 80C of the Act is particularly a provision granting incentive for savings and also considering the long list of eligible investments in this Section, there is very little relief to the individual on account of the education fees incurred by him. It is therefore recommended to de-link deduction for educational expenses for children from Section 80C and provide under a separate provision like Section 80D of the Act for medical insurance. A reference to the Ministry of Education to find out the tuition fee for an average middle class household will give an indication about the limit of the deduction.

In Indirect tax, VTA stressed for single assessment in Goods and Service Tax (GST); if it is proposed to have more than one assessment, then the very attraction of single tax policy will lose its steam. Memorandum also stressed on accountability of assessing officers to curb litigations, which will also be another step towards centre’s aim of ease of doing business. VTA also appreciated demonetization carried in November 2016 and agree that its positive effect even if not visible will be carrying well for the nation in the long run.

Prominently present in the meeting were Tejinder Singh Renu – secretary, Pawan Chopra – Treasurer, Hemant Trivedi – joint secretary; executive body member Sanjay K. Agrawal, Amarjeet Singh Chawla, Saqib Parekh, Rohit Kanoongo, Vedant Agrawal, Umesh Patel, Viru Balani & Rahul Agrawal.