The expectations from the 2013 budget which require consideration of the FM are highlighted as follows though some of them look more radical and pointed but worth the salt:
1. The budget should aim at reducing fiscal deficit. The budget should not be aimed at expending on welfare schemes which is being sensed out in the political parleys like debt waiver or enhancing welfare schemes which do not reach the targeted class of beneficiaries just to keep eye on the forthcoming 2014 elections. This exercise just before the last election may prove tempting to the ruling party but is coupled with the cost of raising huge fiscal deficit which added more than Rs.2lacs crore before earlier elections on pay arrears, debt waiver and MNERGA scheme. The tremors are felt not been able to balance forthcoming budgets thereafter though it might have proved useful for getting back to power.
2. The tax net should be stretched far and wide to cover untaxed sector by devising compulsory recording of the transactions at point of sales in malls, hotels, restaurants, retail outlets, lowering gold buy and sell transactions by value say at Rs.20000 and above, flying in domestic and international air and railways in specialized classes, real estate transactions over Rs.2lacs and enhancing the scope of quoting PAN in larger number of transactions.
3. There should be enough scope to cover unbridled business class which operate unhindered and earn quite handsomely like taxi fleet owners, hawkers with fixed place of business operating from fixed locations or markets with due cognizance of police and municipal authorities like rickshaw puller owners who collect daily by letting out huge fleet of rickshaws at their command. The construction mafia that operate in small colonies which are unauthorized or being regularized which go unnoticed but earn substantially in illicit manner in real estate unauthorized construction sector. Time is ripe for stepping out in markets where the businessmen flourish with the connivance of authorities in urban and semi urban markets. The higher authorities should fix targets for surveys in these markets for each of the officers and subordinates functioning under them to tap potential tax payers.
4. There should be trace of non filers to bring them back to tax net if they stopped filing returns after filing for a few years who may have been hiding the taxable sources. The TDS deducted on any income source or on specified payments be made to file returns compulsorily to verify all the potential tax assessees who may not file and hide income to avoid preening tax eyes.
5. There should be scope of coverage for allotting PANs to all probable and assessable class by the taxing authorities and these classes of assessees should be asked them to file returns. Such powers are already enshrined in the I. Tax Act, 1961. The big agriculturist may be required to be covered after lying down certain minimum criteria even if their income is untaxed to have vital statistics about their resourcefulness and future scope though requiring constitutional amendments being a state subject as hitherto.
6. The tax rates should not be increased though there should be scope for lowering the same further to attract more assessees vying to file tax returns.
7. There should be progressive taxation for the super rich, say getting salary or remuneration over Rs. 50lacs or so which is another vital area to harness revenue though being detested by many in the tax talk shows over television channels. The big US business magnates too have over the years now laid emphasis on such tax propositions like of Warren Buffet and Bill Gates.
8. There is enough scope in the field of international taxation where going by the conference held in Finland the DG International Taxation revealed many thousand crore in tax demands over last few years but the scope be brought more clearly by doing away with the retrospective amendments.
9. Sweden is one country where the tax rates are being brought down to near of 26% and it is a country having surplus budget with least corruption. This sets an example for us also besides the fact that their tax paying population is much more in absolute percentage terms compared with that of India.
10. The GST implementation should be ensued with vigor in 2013 with DTC being adopted though I am of the view that current tax statute is time tested with so many amendments which withstood the punishing lashes since 1961. It can be further tuned in line with DTC which has lost its original format.
11. There is scope for investment allowance reintroduction to enhance the scope of capital formulation by industry and business. The tinkering of depreciation rates and lowering them over the years have dented growth of capital formation which is least understood by tax legislators.
12. The scope of MAT be enlarged by bring book losses besides book profits in less capital intensive industries with set on provided in like manner with few years of infancy.
13. The scope of GAAR which is being whittle down by the Shome panel of experts need to reinforced as stipulated by the GAAR in present form rather than in diluted form as envisaged by the said expert committee as far as Mauritius route is concerned being a least tax jurisdiction. This view may not find favor by many but is justified on many counts.
14. On service tax we expect the negative list to be pruned further to bring maximum sector in the coverage of GDP.
15. Indirect taxes need to be subsumed in the GST structure at the earliest to the advantage of all the stakeholders besides Union and the States.
16. The huge mistake that I consider had been made in the last budget by FM was the raising of median indirect tax (service tax rates including) from 10% to 12% at a time when the business sentiment was at its lowest. The scope for reduction is still called for. These may be brought to previous level to boost the bogged down sentiments and the results would be exuberant.
Contributed By: CA. Vijay Kumar Kalia