Views By CA SUDHIR HALAKHANDI
1. Do you think that deferment in Direct Tax Code (DTC) is the right move?
The Finance Minister himself asserted that the report of Parliamentary committee has just received so the time is needed to study it and then implement the DTC. I think this is the sole reason of postponement of the DTC. Further introduction of DTC will make a big difference or not –it’s answer can only be get after it’s introduction. So it is not the big disappointment.
2. What is the implication of rise in Service tax (10% to 12%)?
The Budget deficit is increasing and now it is 5.9% of the GDP. The earlier service tax rate was 12% which was reduced due to recession. Though it will be a burden on taxpayers but it was expected and further there was no alternate with the FM.
3. Are you satisfied with the new tax slabs?
No, the initial Limit should be Rs. 2.50 Lakhs and when the extra limit is there for female assessee for years and it’s removal cannot be justified. Though in money terms it was not very material but it shows the respect to the half of the population of the country and it should be continued. The upper limit relief of 20% up to 10 Lakhs is a welcome sign but the expectations are with lower limit.
4. Is this the right time to make GST operational?
It is only a statement of the FM. See in 2006 the then Finance Minister Mr. Chidambaram has declared 2010 as the date of GST. it was deferred since then 2 times and the new date should not be taken very seriously. The GST proposed to be introduced is not the standard format of GST and it is a dual tax –one for Central and other for States. Even on this compromised format states and the centre are not agree. It will not be easy to make a way for constitutional amendment. So for GST instead of taking the date so seriously we should wait for the right moment for this purpose.
5. Are you satisfied with Budget 2012? Any other views do you have.
The constraints with the Hon. FM were very strong and what is presented by him , we cannot expect anything more from him . The fiscal situation is not very good hence innovation and innovative budget is needed to face boldly this situation. The coming time will be very harsh. For this purpose we need a government which have “full and absolute Majority” and young and dynamic Finance Minister. See here the strange thing that the same Finance Minister who presented the Budget in 1982 is also presenting the Budget this year also i.e. even after 30 Years in 2012. Are we really the progressive state?
So the budget is a routine Budget without any future positive effects.
Views By CA Vijay Kalia
1. Do you think that deferment in Direct Tax Code (DTC) is the right move?
DTC deferment was bound to be there on account it having been cleared by Standing Committee on 9th of March, 2012.
But few of the provisions have been touched upon raising the tax exemption though not to the extent recommended as also touching upon GAAR and targeting the blackmoney by briing in TCS on bullion and jewellery over Rs.2lac purchase and covering TCS on certain minerals.
Deferment of DTC is not otherwise a good sign but revenue considerations and late receipt of the recommendations are the bottleneck.
2. What is the implication of rise in Service tax (10% to 12%)?
Tax shortfalls have forced the government to raise the tax rates but these should have been done on economy recovering even during the year.Pre-2008 crises rates have come in force though crises is not over.
3. Are you satisfied with the new tax slabs?
New tax slabs are in response to the constraints of the government though it is miserly and not in tune with the DTC.
4. Is this the right time to make GST operational?
GST requires constitutional amendment and would take time for sharing the power to tax.
Its coming in August 2012 would also be fettered with political situations though FM is confident.
5. Are you satisfied with Budget 2012? Any other views do you have.
The budget has many changes made say for example the services area is widened. More or less satisfactory in view of the constraints to raise taxes.
Others:-
Nice it is to tax by amending S.2(47) and S.9(1) r/w provisions which is going to hit Vodafone due to the tax contrivance by bringing in the legislative clarification.
Nice to observe unaccounted money targeting by TCS and other provisions.
More than 60% comes from services and tax contribution is 9% of GDP. The provision of service tax enlarged to cover every service other than negative list of 17 services and also those specifically exempt. This is a colossal amendment and is likely to garner much more revenue to the tax kitty.
Views by CA Aditya Maheshwari
1. Do you think that deferment in Direct Tax Code (DTC) is the right move?
Yes it was a right move as the DTC draft is not in proper shape and hence needed refinement before being passed by the Parliament.
2. What is the implication of rise in Service tax (10% to 12%)?
The rise in the rates of service tax would lead to increase in inflation and not reduce it and will increase the burden of the ultimate consumer only.
3. Are you satisfied with the new tax slabs?
More changes were expected but was not announced in the budget. Even the standing committee had suggested a higher slab rate exemption. However the increase was a very marginal increase.
4. Is this the right time to make GST operational?
It should have been made operational by now and budget on budget it is being saying that it will be implemented next year. But still the same has not been done. Further introduction of GST would bring clrity to the industry whether they have to pay service tax or VAT.
5. Are you satisfied with Budget 2012? Any other views do you have.
The TDS and TCS on sale of jewellery and property is a very wrong move going forward. TDS & TCS provisions were introduced to collect revenue to the government. Now they are being used as tax compliance provisions which is very much on the wrong footing.
If GST was going to be introduced in the month of August then what was the need to introduce negative list of Services now.
Views by CS Ankur Garg
1. Do you think that deferment in Direct Tax Code (DTC) is the right move?
Direct Tax Code (DTC) is a kind of reform to deal with current tax regime. Hence the continuous postponement of DTC is a reason of worry. However as the Tax Experts of the Industry quoted, postponement of DTC may be because of the late receipt of the report of Parliamentary Standing committee. I hope study and analysis of the report of Parliamentary Standing committee will pave the way for introduction of DTC in quick succession.
2. What is the implication of rise in Service tax (10% to 12%)?
Considering the present economic slowdown rise in Excise duty and Service Tax from 10% to 12% is a bit disappointing from the industry point of view. Increase in excise duty and service tax will have a cascading effect on prices. The suggestion to tax more services along with increase in excise duty and service tax rates is not in favour of industry and Public. Further rise in service tax rates by 2% would definitely result into higher prices for goods and services across the country for common man. However, the move has positive implications for government revenues in the years to come as far as dealing with Fiscal deficit is concerned.
3. Are you satisfied with the new tax slabs?
No. I really found introduction of new tax slabs disappointing. The reason may be high expectation and increase in service tax rates. Increase of 20,000 in the income tax slab is quite low. My expectation was to see the exemption limit around 2,50,000 to 2,80,000. Also there was nothing for female taxpayers and budget put them at par with male taxpayers. Again it was a bit disappointing. Further increase in service tax from 10% to 12% will take away everything from the hands of taxpayers.
4. Is this the right time to make GST operational?
Again I would say Goods and Services Tax (GST) is a kind of reform to deal with current tax regime. As per FM Mr. Pranab Mukharjee we are going to see the applicability of Goods and Services Tax (GST) very soon in August 2012. However statements are statements and it is just another statement from Mr. Mukherjee. Still taking a step closer to the preferred GST is a very positive sign for the economy. Well let’s hope for the best.
5. Are you satisfied with Budget 2012 ? Any other views do you have.
On the whole it is a balanced budget. Not much for the common man for sure. However the spirit and intentions of FM were high, but in India main problem is in execution of policies. Steps should be taken to rectify the same. Budget 2012 has some good and bad sides. Some of the positive sides are marginal increase in Income Tax exemption Limits, the decisions to pin down subsidies, FDI considerations, tax free infrastructure bonds. On the other hand negative sides are the Increase in Excise Duty and service Tax rates, Postponement of DTC, Lack of proper roadmap for introduction of GST and probability of Increase in petrol prices sometime during the year.
Views by C A S.S.Agarwal
The budget 2012 has nothing new except overburdening the general public. Whatever hike in price was there it was done before budget and fuel has been added to the fire by the budget. Except some relaxation in the direct tax nothing has been done. I can say that this is nothing but merely a eye wash. The firms and proprietors have been brought under the MAT concept which was never desired. Increase in Excise duty, Service Tax are also major player in taking the National economy towards downwards whereas every country think for an upward progress. The Rail budget has also set another burden on the general people. Since there was provision of implementation of DTC why it was not implemented is best known to the FM. Over all the budget will be further burden on the General Public. The rich has become more rich and the poor has become more poor.
Views by CMA. Sanjay Gupta
Not a very good budget. Exemption limit is not increased in proportion to the inflation. Section 80CCF was also discontinued whereas this amount should have been made at least Rs 50000/- because we need more capital expenditure for secured future of India. It also encouraged savings and the amount was used in Improving Infrastructure. 80C limit should also have been hiked encouraging more investment which is the etho of the Indians. We are borrowing money from outside then why not encourage more investment and let the common people provide you the money.
GST , as it seems to me can not be operational midway through the year. Dont think it will come to effect either. DTC differed again as expected. This type of budget is not taking us anywhere.
Views by G S Rao,Chief Manager (Legal ),OCL India Limited.
1. Do you think that deferment in Direct Tax Code (DTC) is the right move?
The present Government is a coalition government. Implementation of Direct Taxes Code (DTC) and a definite road map for implementation of GST was deferred possibly because of coalition compulsions. The other reason for not giving a road map for implementation of DTC is that some suggestions that were made by the standing committee are still under consideration for enactment of DTC.
2. What is the implication of rise in Service tax (10% to 12%)?
The centre through concept papers for discussion has already signalled its intention to widen service tax base and improve revenues. Therefore the concept of Negative service tax list is a positive step towards introduction of Goods Service Tax (GST). Service accounts for 59% of the GDP but contributes nine percent of the gross tax revenue. Hence, indenting the applicability of service tax is a fiscal measure in the right direction.
3. Are you satisfied with the new tax slabs?
The new tax slabs for individuals are in line with DTC rates. Every time the salaried persons are the worst hit. An increase of ' 20,000 in the basic income tax exemption limit is very small amount. People were expecting that tax exemption would be raised to at least Rs.3,00,000. Atleast deduction limits u/s 80 C 80 CCA should have been increased
4. Is this the right time to make GST operational?
NO. The tax proposals indicate that direction is set towards GST, although some issues are to be addressed by both the Central and State governments. Constitutional amendment bill has been introduced in the Parliament and recommendations of standing Committee are still to be given. The expeditious implementation of GST will reduce the burden of taxes on the consumer.
5. Are you satisfied with Budget 2012 ? Any other views do you have.
This is the best possible an FM could have done in the coalition scenario. It is neither a bad one nor good, rather a balancing act. The GDP growth for the year at 6.9% is certainly a cause for concern. The Finance Minister (FM) has accepted this rate due to a significant reduction in private investments.
Major reforms are not attempted as the FM is not sure of the support from its coalition partners. He however avoided populist measures. In the process FM had failed to lay down a concrete roadmap for fiscal consolidation.
The laudable steps are intentions to control subsidies, cut their leakages and to improve computerize the PDS system.
FDI considerations, tax free infrastructure bonds, and tax sops for security transactions, coal and gold imports are also good.
On the negative are the fiscal deficit projection .The hiked excise duty rate to 12% is very unfortunate. It will have a cascading effect on prices. This in turn will affect the end consumers and stirs up inflation.
Dropped petrol subsidy implies that sometime during the year, the government will have to partially decontrol petroleum products
Scope of ‘source rule’ in Section 9 of the Income Tax Act, 1961 (Act) is expanded through a retrospective clarification which will again invite litigation.
The introduction of General Anti Avoidance Rules (GAAR) is a controversial one. GAAR provisions can only further add to uncertainty, insecurity and increase protracted litigation.
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