MADURAI: On behalf of the Tamil Nadu Chamber of Commerce and Industry, a pre-budget memorandum was submitted to the Union Finance Ministry, for Union Budget 2021-2022. Some of the important points
mentioned in the memorandum were enumerated by the Tamil Nadu Chamber of Commerce and Industry Dr.N.Jegatheesan, in a press note, issued from Madurai, on 4th January 2021.
RATIONALIZATION OF GST TAX RATES:
(A) GST 18% and 28% should be scrapped:
It is submitted that the implementation of GST in India in its present form and tax rates, the most unrealistic higher tax rates like 18% and 28%, not to be found in any other country implementing GST, has induced evasion of tax besides driving away the honest traders from trade and industry. These two tax rates should be scrapped.
(B) Tax rates should be limited to Three:
Excluding the exempted category, the tax rates should be limited to three rates i.e. 5%, 10% and 15% only. For sin goods and super luxury cars 18% tax plus Cess may be levied.
(C) Essential branded food products should be tax exempted. Essential food products branded or unbranded should be tax exempted. There should not be higher tax rates for branded food products. All food manufacturers should be motivated to go in for Branding to ensure quality. So taxing branded products is not a step in the right direction to ensure safe and
healthy foods to the end consumers.
(D) The maximum rate of GST for services should be reduced to 15%
For services, apart from the exempted services, the tax rates for other services should be fixed at 5, 10 and 15 percent according to the nature of the services. 18% GST on services is unbearable for the consumers and that is why people do not find surplus money in their hands for making purchase of goods. The maximum rate of GST for services should not exceed 15 percent.
There should not be any tax rate for any dealer under GST without ITC benefits.
No GST without ITC
Input Tax Credit (ITC) is the basic principle of Goods and Services Tax (GST). This will ensure the tax chain link and avoid cascading effects of taxation on price as it would avoid tax on tax. GST without ITC benefit is a multipoint tax, which is against the concept of GST.
Service sector threshold limit to be enhanced
GST is “One nation One Tax” and it was introduced as a tax with threshold limit of Rs.20 Lakhs both for Goods and Services but later when threshold was enhanced as Rs.40 lakh it was enhanced only for Goods and not for services. Small service provider should also be given benefit of the same and for them also the limit should be enhanced to Rs. 40 lakh to a certain level to make it “One Nation One Tax”.
GST rates have to be brought down for the following products:
GST on Bio-diesel should be brought down from 12% to 5%.
Lamp oil – GST rate to be reduced from 12% to 5%.
Paper covers – environment friendly – Tax rate to be reduced from 12% to 0%. Medicines should also be tax exempted. Now that after the attack of novel Corona 19 virus, almost all the drugs have become life saving. Hence, there is every justification to grant total exemption for all medicines as life is more important than livelihood, preached by the government on several occasion, which is very much true.
DO’S AND DONT’S TO BE PRESCRIBED FOR VEHICLE CHECKING,
SURVEY, INSPECTION AND RAIDS:
Goods carrying vehicles are intercepted by the tax officials especially from State Tax Department and detained for several hours on the ground of petty reasons and vehicles are even seized until alleged tax amount / penalty fixed at the whims and fancies of the inspecting official is paid. If any discrepancy is found and the GSTIN of both the seller and buyer are available the inspecting official should give a notice and forward the file to the concerned assessing officer and allow the vehicle to proceed. No cash
transactions ie., payment of tax / penalty on the spot should be permitted. Do’s and Don’t’s should be prescribed to Vehicle inspection, shop inspection, reach and raids. Provision to punish erring officials should be also included in the GST Act & Rules.
Representation for Trade and Industry in GST Council:
It is vital to secure the views and suggestions of trade and industry chambers on changes to be made in GST rate structure and procedures, since businessmen and manufactures are one of the main stakeholders in the GST system, collecting more than one lakh crore rupees per month. But they are not given an opportunity to directly put forth their concrete suggestions to the GST Council. The State Finance Ministers, who are all members of the Council, cannot be expected to properly represent the
demands and suggestions of Trade and Industry in the implementation of GST.
Hence, there is an imperative need for inclusion of representatives of leading Chambers of Commerce from all states in the country in the GST Council for enlisting their views and suggestions directly for consideration. This will ensure smooth implementation of GST without creating any confusion and scare.
B. DIRECT TAXES
- Personal Income tax: Personal Income Tax Exemption Limit and Slab Rates needs to be reviewed. It will be appropriate if exemption limit across the board is fixed at Rs. 5 Lakhs and Tax Rate for the slab between Rs. 5 Lakhs to 10 Lakhs is fixed at 5 per cent; next slab between Rs. 10 Lakhs to 20 Lakhs with tax rate of 10 per cent and on income in excess of Rs.20 Lakhs tax may be taxed at 25 per cent. Such
a tax regime will help in developing tax culture and true disclosure of income by all. - Monetary Limit for Tax Audit of Accounts: The TN Chamber from Madurai would like to bring to your kind notice that eligible business for the purpose of section 44AB is considered if total turnover or gross receipt in the previous year does not exceed Rs. 2 Crore. That means that if they opt for presumptive Income scheme, the tax audit is not required even if the gross turnover is upto Rs. 2 Crore. Considering the inflation, the Monetary Limit for Tax Audit of Accounts under section 44AB should be reviewed and increased to Rs. 2 Crore in place of present Rs. 1 Crore.
GENERAL INFRASTRUCTURE:
a) AIIMS in Thoppur in Madurai – Work to be expedited: We thank our Central Govt for clearing the proposal for the establishment of AIIMS in Thoppur near Madurai in Tamilnadu at a cost of Rs. 1264 crore. The
foundation stone for the ambitious project was laid by our Prime Minister on January 27, 2019. However there has been inordinate delay in the
commencement of work for the project. We appeal to our Central govt, to take appropriate steps in collaboration with the Tamilnadu govt for expediting commencement of work immediately and for its completion within 2 or 3 years with timely allocation of funds.
b) Madurai Airport – to be included as a point of call in BASA agreements
Madurai Airport which is the gateway for fourteen south and south central
districts of Tamilnadu has not been included so far as a point of call for any
foreign airliners (except Sri Lanka) despite repeated representations. This has been restraining foreign airliners, in particular Air Asia, Singapore Airlines,
Tiger Airways, Air Arabia etc., though willing and fully convinced about the
potential and viability, from operating direct service to Madurai. We pray that Madurai Airport may be included as a point of call immediately in the first instance with the BASA with Malaysia, Singapore and UAE.
c) Affordable Medical Insurance for all the citizen in our country: The Corona-19 virus has emptied the pockets of several lakhs of people in our
country as there was no discipline in the charges to be collected and most of the insurance companies refusing to accept that this virus infection was also covered under their medical insurance policies. The general public should be able to predict their health related expenditure. Our focus should be that a day should come that people need not spend for health out of their pocket. So we suggest that each and every citizen of our country should be covered by affordable medical insurance for any disease and for that the government should introduce a public private partnership scheme by establishing adequate medical infrastructure, the TN Chamber president Dr.N.Jegatheesan has said in a press release given from Madurai to the Union Finance Ministry on January 4th 2021.
