The Union Budget does not offer much for assesses already numbed by the contentious Central Board of Excise and Customs circular dated January 1.
‘Go collect’ is the message given out to tax authorities by initiating recovery proceedings within 30 days of filing of the appeal.
This can happen even when the stay application is pending, said S. Srinath, Director, KPMG, Bangalore, while speaking here at the Budget analysis event. This is in line with the overall theme of enforcement and collection that the Budget enunciates, he said.
Not unsurprisingly, the circular has triggered a spate of litigation, with both appellants and authorities being called to appear before court after court.
At least Rs 50 crore may already have been spent on litigation in the two months since the circular was issued.
Srinath also took exception to a provision under advance ruling to extend the stay granted against an appeal filed before the appellate tribunal.
Currently, every appeal filed in respect of which a stay is granted is required to be disposed of within 180 days from the date of stay order.
Beats logic
The Budget proposes that in case they are not disposed of within this period due to reasons not attributable to appellant, the tribunal may extend it by a further 180 days. This beats logic and is something best done away with, Srinath said.
Another piece of ‘beautiful piece of mischievous drafting’ pertained to SUVs as those vehicles with 4,000 mm in length and 170 mm ground clearance.
This comes perilously close to answering the specifications of a Sedan, which has not been notified in the Budget fine-print. Officers are trained mostly to go by the language of notification, Srinath said.
As for Customs duty, fixing a threshold limit of Rs 50 lakh in evasion for triggering non-bailable offence is too low especially with respect to large IT companies.
Draconian law
If passed in its current format, it will make for a draconian law, he pointed out.
Service tax exemptions for the film industry looked fair on the face of it, but Srinath doubted whether this would actually help bring down production costs.
Another ‘mischievous piece’ of drafting pertained to tax imposts on eating out in air-conditioned spaces. “Does the 2,000-sq ft threshold include the service area and the kitchen,” Srinath wondered.