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印度：印度特许会计师协会建议重新考虑FBT和银行现金交易税 |
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| 印度：印度特许会计师协会建议重新考虑FBT和银行现金交易税 |
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作者：佚名 文章来源：不详 点击数： 更新时间：2006-12-21 16:57:23  |
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The Institute of Chartered Accountants of India has submitted to the Government its Post-Budget Memorandum on the proposals contained in the Finance Bill, 2005. The ICAI has made the suggestions on some of the important proposals notably FBT and Banking Cash Transaction Tax after long deliberations in its Fiscal Laws Committee.
Mr. Kamlesh Vikamsey, the president of ICAI, pointed out that the proposed tax rates structure would result in genuine hardship to senior citizens and ladies below 65 years and has suggested that the proposals be modified so that the benefit presently available to senior citizens and women tax payers below 65 years continues to be available. He pointed out that the withdrawal of standard deduction in respect of income from salaries would result in taxing the gross income of salary whereas under the Income-tax Act only the net income is the subject matter of taxation under all other heads.
Regarding the reduction in rates of depreciation across the board, the ICAI has pointed out that the same was not in accordance with international practice. Due to rapid changes in technology, the plant and machinery, becomes obsolete much quickly and as such economic life is not so long as is being considered for reducing rate of depreciation. .It has urged that the existing rates of depreciation should continue.
The ICAI has recommended that transactions other than those of derivatives carried out in a recognized stock exchange should not also be considered as speculative transactions. The distinction need to be removed for all transactions carried out in a recognized stock exchange in view of the increased transparency and effective audit trail .
The ICAI has suggested that the condition that the qualifying investments for the purpose of section 80C should be made out of income chargeable to tax, be deleted to avoid the old controversy which arose in the context of earlier sections 80C and 88.
For widening the tax base and check possible tax leakage, the ICAI has further suggested that all educational institutions, hospitals and mutual funds enjoying exemption under the provisions of sections 10(23C) and 20(23D) should be required to file the return of income irrespective of the fact whether the income is taxable or not as is proposed in the Finance Bill for partnership firms and entities enjoying exemption under Section 10A or Section 10B of the Act.
Mr. Kamlesh Vikamsey told that the objective of audit trail by levying Banking Cash Transaction Tax .can be achieved by collecting this information through Annual Information Return under section 285 BA of the Act and asking account holders to quote PAN. Further, all taxpayers be required to give details of all their bank accounts in their return of income to have an effective trail of all bank transactions not only cash transactions. If at all the levy was to be retained in the statute, the limit should be realistic and linked to the turnover or total expenditure (both capital and revenue). In that case the Government need not cast the responsibility on the banks to collect the special tax. The assessee may be asked to furnish relevant information in the return of income and form of return may be suitably redesigned. Form 3CD for tax audit report may also be suitably amended so that the tax auditor can certify the amount of cash withdrawal. The ICAI has pointed out the anomaly whether under the proposed provisions, those who are in business or profession will be able to claim deduction of banking cash transaction tax in the computation of income from business or profession whereas the assessees having no business or profession will not be eligible to avail the benefit of such deduction. It has suggested that the limit of Rs.10,000/- be increased to 50,000/- to facilitate easy administration. Further, the limit per day should be with reference to each branch of a bank and not with reference to each bank. Remittance of cash by a branch of a bank to branch of another bank to facilitate payment to customers should be excluded from the levy of this tax.
In order to simplify the levy of fringe benefit tax and reduce litigation, the ICAI has made a number of suggestions. As per Mr. T.N.Manoharan, the Vice President of ICAI, the institute is of the opinion that the existing Rule 3 of the Income-tax Rules should be retained and made stringent, so that perquisites and benefits which are enjoyed by employees individually, are taxed in their hands as hitherto. While the ICAI is clearly of the opinion that no payment or expenditure incurred by the employers which result directly or indirectly in any perquisite or benefit to the employees should go untaxed, at the same time those perquisites which are clearly identifiable to specified employees should be taxed in their hands and not in the hands of the employers.
The ICAI is of the view that the proposal to consider a fixed percentage of the expenditure under specified heads as deemed fringe benefit ignoring the actual amount of the expenditure incurred for extending the fringe benefit to the employees for the sake of simplified procedure and to avoid discretionary powers to the Assessing Officer will not be able to achieve the desired objective as it will make certain taxpayers to pay tax on that part of of the expenditure which has no element of any benefit to the employee and at the same time certain taxpayers will end up paying a lesser amount of tax despite the fact that the entire expenditure goes to provide fringe benefit to the employees only . The gap under both the situations can be too wide and cannot be measured to invoke presumptive system of taxation.
The intention of the proposed FBT is not to charge tax on certain expenditure incurred for the business purposes or to disallow such expenditure but to tax that part of the expenditure which extends benefit to the employees and thus becomes income in their hands. As such, proper identification and precise computation of such expenditure is of prime importance. There cannot be two opinions on the issue that no part of the income which is chargeable to tax should go untaxed but at the same time it is equally important that no tax be levied on such amount which is neither the income of the employer nor of the employees. Even in Australia from where the proposed FBT is being adopted, fringe benefit is first identified and computed individually with each employee and it is only the aggregate of such benefits identified with each of the employees, the employer is required to pay fringe benefit tax. The FBT in Australia in the hands of employers is not being levied because of the problem of identifying such value of the fringe benefits enjoyed in common by the employees but as a matter of policy to recover tax from the employer rather than the employees.
Mr. T.N. Manoharan further informed that Mr. Ved Jain, Chairman, Fiscal Laws Committee, has represented the Institute on the FBT Committee constituted by the Finance Minister and had also apprised the Committee of the various issues arising from the proposed FBT including the distinction in the proposed Fringe Benefit Tax and the Australian model of FBT.
He further pointed out that this objective can be achieved by putting the obligation on the employers to include value of all benefits, including the ones which are proposed in the Finance Bill as deemed fringe benefits in the income of the employee, while deducting tax at source under section 192 of the Act . On failure to deduct the same not only such tax can be recovered from the employers but the full amount of such expenditure will not be eligible for deduction while computing business income of the employer in view of specific provision in section 40(a)(ia) of the Act.
ICAI is further of the view that the proposed percentage of deemed fringe benefit is too high. The element of fringe benefit should not exceed 10% of the expenditure for levy of the tax. Even in such a situation, travelling expenses for personal purposes, scholarships to children, use of employers car etc. should be considered as perquisites in the hands of employees and taxed in their hands. So far as travelling, advertising, sales promotion and publicity are concerned, there can not be any element of fringe benefits to employees and therefore such expenses should be excluded from the purview of section 115 WB(2). In the case of persons who are engaged in small businesses or professions, it would not be equitable to levy such a tax because no significant fringe benefits are provided to employees by such employers. Therefore, exemption from this tax could be granted where the turnover/gross receipts are less than Rs. 50 lakhs and where the number of employees do not exceed 20. The ICAI further pointed out that medical facilities which are not considered as a perquisite in terms of the proviso to section 17(2) should not be the subject matter of fringe benefit tax. Further, relief may be considered for genuine charitable institutions who are not carrying on business.
The ICAI has made detailed suggestions regarding the various amendments relating to service tax. It observed that a new section be incorporated so as to empower the Government to draft Rules for determining the place where services would be deemed to have been provided, known as the Place of Supply Rules which should be applicable to both import and export. It also suggested that services provided by practising Chartered Accountants, practising Cost Accountants and practising Company Secretaries being professional services must be categorized under rule 3(3) along with other professional services such as management consultants, consulting engineers, etc. according to which the services are considered as exported if recipient of the service is located outside India.
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