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ksk/2.00/1w

SHRI SANTOSH BAGRODIA (CONTD): Next, Sir, I do not approve clause 20 and clause 33 which seek to insert new section 28BA in the Customs Act, 1962 and section 11DDA in the Central Excise Act, 1944, respectively to enable the Government to attach provisionally the property belonging to the importers, exporters, assessees during the pendency of the proceeding -- I would like to underline the words "pendency of the proceedings" -- relating to determination of customs, Central excise duties evaded. Sir, this is draconian. It is not a healthy reflection because if duty is evaded, you judge it and let it be decided by the Appellate Authority, by the Court. If you have a provisional attachment and you take the possession of the property, the production might be harmed. Lot of day-to-day problems will arise. Even if you attach only on papers, I can understand it, but if you attach it physically, I do not approve that. So, you should make an amendment that it will be attached only on paper, and not physically; no possession will be taken physically. It can be understood. But, if it is physically taken, it will not be in the right spirit of a democratic system.

Then, Sir, clause 23 is very good because it says that to include a new section 110(A) under the Customs Act to enable provisional release of the goods, documents, things to the owner prior to adjudication of a case. But, I would like to add here one amendment for the hon. Minister to consider, maybe under the rules, to give photocopies immediately. Because normal practice is that the photocopies are not given, and all the papers from the assessee are taken. Assessee can do nothing. The whole process is delayed. You cannot expect him to remember lakhs and thousands of documents which are taken over by these departments. So, photocopies should be given to the assessee immediately.

Sir, similarly, clause 24 seeks to insert a new section under the Customs Act which provides for a levy of penalty up to five times of the value of goods against improper exportation of goods. Export is one thing which we want. Now, what is 'improper exportation'? This is a very, very vague term. And, for this, five times penalty. This is draconian. It will affect the promotion of export. This should be considered and this penalty should be reduced otherwise exporters may be affected.

Next, Sir, clauses 26 of the Bill seeks to amend the Customs Act to provide for filing of appeal by the authorised officer of the Department. Sir, normally, what is noticed is that the Income Tax Officer makes an assessment, and in favour of the assessee. Still, the Department is such that they do not trust their own officers. The Department goes for an appeal. In the appeal also, they lose. They go for higher authorities. And, they go on going up to the Supreme Court or to the High Court. Thousands and lakhs of cases get piled up at different levels. When you don't trust your own officers, then it is a very sad situation. So, this must be avoided. Filing of appeals should be made to the minimum so that unnecessary litigation can be avoided.

The last point is regarding clauses 30 and 35 which respectively provide for publication of names and other particulars relating to importers, exporters, assessees, who are regarded as tax evaders and defaulters as a deterrent measure to recover the dues. Who has regarded them as tax evaders? It is the Department. They might be regarding them wrongly. Till this final decision is taken by the judicial authority, it will not be fair in this system of democratic society that only one sided assessment is done and not only this, you announce them and then the entire system of their business will get into trouble. Why do you want their business to be in trouble by this kind of putting their names in the papers? Give them a fair chance. Go to the Court. If the Court finally decides that they have evaded, please, by all means, you publish it. I have no objection. But, don't do it when it is pending.

Sir, as my friend Bhardwajji has mentioned, laws are very complicated. Once I made a mention, which I have mentioned many times in this House. Sir, I am assessed since my childhood. In our business, we have been filing our returns even before we become adults for fifty years. (continued by 1x)

GSP-SCH/1X/2.05

SHRI SANTOSH BAGRODIA (CONTD.): But, Sir, believe me, despite possessing some kind of education on this subject, I cannot file even my Income Tax Return myself. I only sign blank papers and the tax consultant puts all the figures in it. It is all because the form is very, very complicated. I do not know when are we going to have simplified forms for all kinds of taxation, which will make it easier to file returns. Otherwise, it appears that the laws are made to help the tax consultants, and, not the assessees. Sir, my friend mentioned about the black money. I think that the amendments brought in by the Minister will help the Government to curb the black money and also to recover the black money. That is why it is coming in a more broad-based manner.

Now, Sir, I come to another point that is being raised. Every year, in the month of March, and, not during the year, assessing officers are given a target. I cannot understand how can you give a target to any assessing officer of any taxation authority. The target should be that you should be able to draw every pie of tax. Let us suppose, the target given is 'x' amount of money, a few crores of rupees, or, let us say, hundred crores of rupees to be collected by a tax officer, and, actually, he should have assessed say, five hundred or thousand crores. Now, if he has already assessed hundred crores of rupees, and, he has met his target, does it mean that he has achieved good results. I don't think that he has achieved good results. Sometimes, just to meet these targets, these officers take steps, which are not good, which are not in the interest of the department, which are draconian. Sir, there should be no target like this. The target should be that you must assess, you must do everything efficiently and cover all the assessees, and tax as per the law and recover whatever amount is involved in the assessment.

Sir, now, I will refer to the controversial draft circular issued to the tax officers by the CBDT, which is gradually beginning to dawn on the market. The whole country is concerned. There is no doubt about it. I fully agree that the Finance Minister or the Government is not responsible. The prices go up and down for various reasons, for thousands of reasons. Nobody can be held responsible. Sir, the real investor is not bothered. The real investor will wait and get his dividend. It is the speculators. The Government is not bothered about the speculators. Somebody said, he should inform all the investors in time. What do you mean? Is it the duty of the Finance Minister to inform the investor to invest in so and so company? That is not his duty. But why this kind of controversial draft circular -- firstly, 'controversial', and, secondly, 'draft' -- of the department should not have been leaked. I am told that it is available on the Internet. I cannot understand this. It is not a final circular, it is not an Order and that is what creates confusion in the minds of the entire country and that has created probably lot of problems for the market. This kind of thing has to be explained by the officer who is responsible for this act and appropriate action should be taken against him. Sir, this circular says, "the huge difference in tax rate, chargeable under business income and capital gains will prompt corruption, litigation".

: ֯ ױ ֱֻ ֵԾ , ֯ և ֵ֮ ו ָ ϳ־ ֛ , ֯ ָ י ו֋

SHRI SANTOSH BAGRODIA: Sir, I am speaking as a Member of the House, ֯ , פ ֯ ִ , ֟և ֟ ֯  ֮ , , ױ ֯ , ֤ ױ I am equally responsible. Please. I am equally responsible. I am concerned about the economy. I am concerned about the market conditions.

(Contd. by 1y-sk)

SK-MCM/1y/2.10

SHRI SANTOSH BAGRODIA (CONTD.): And, if my Government also commits a mistake, I want to dare to say that this should be corrected. What more do you want?

: ֯ ָָ ֻ֮ ׸ ֕ ָ ֛ ......(־֮֬)

SHRI SANTOSH BAGRODIA: You cannot put words into my mouth. ֯ ׻ ו֋ ә , ָ ֯ ״ֻ֟ ꅠ ָ, ָ , ֜ ֟ ֻ ֮, ֜ ָ כ ״ֻ כ ״ֻ, ־ օ ֟ ֮ ֮֟ Sir, "high net worth individuals and retail investors will feel the maximum heat as it would be easy to brand them as traders, another draft instruction. Since this kind of clarifications have come, this kind of suspicion has come in the minds of the investors, I will request the hon. Finance Minister to consider that before making a final circular. Sir, there is only one speaker and I have 45 minutes.

MR. DEPUTY CHAIRMAN: Does that mean you want to take all the 45 minutes?

SHRI SANTOSH BAGRODIA: Do you have any objection, Sir?

MR. DEPUTY CHAIRMAN: I have no objection.

SHRI SANTOSH BAGRODIA: Then, let me speak, Sir. If you gesture me to stop, I will stop. Had there been a second speaker, I would not like to speak more. But, since there is only one speaker, I am speaking. If I am making the point which has already been made by any speaker, then, you can stop me. I am making some points which have not been made. So, let me continue to speak for some more time. Sir, the next point is, 'occasional investors can also be brought into the net if the assessing officer so defines' -- the draft instructions. The assessing officer will have such a draconian power that even occasional investor can also be brought into the traders' list. I would like to request the hon. Finance Minister to consider all these factors. I really don't care whether the prices go down or up. This morning, the market has further gone down. The market has been closed. I don't care about that. But, don't make draft circular, and not a confusing draft circular. If you want to make this kind of confusion, make it. But, let it be the final circular. I don't want any confusion on this, Sir. One of the CEOs of a leading domestic private sector expressed a concern. Now, the whole country is concerned as to what happens to the FIIs for foreign investment, as if we were dependent only on foreign investments. Complete relief should be given to them. What happens to the domestic investors? They are the citizens of the country. We cannot ignore them. And, what does this CEO says, Sir? "We are so enamoured by foreigners in this country that no one has still figured out the impact this circular will have on domestic investment". I request the hon. Finance Minister to figure this out also so that the domestic investors do not suffer. There is no prejudice against them. The domestic investors should not suffer just because we are focussing on the foreign investors. Sir, a senior tax consultant has said, "The tax burden could alter substantially depending on how the assessing officer interprets it, as business income or investment income". And, that is why he said, "the interpretation should be done in favour of the assessee". Otherwise, if you give him this kind of power, the assessment will always be done against the assessee and this will bring innumerable litigations. So, we should have a very clear circular so that this kind of situation does not arise. Sir, I am not going into the details of the taxation rates because everybody knows that it will be much higher. "The instructions, however, do not refer to any time period, whether the criteria to distinguish between shares held as stock-in-trade and held as investment will be applicable from the date of issue of the final guidelines. This implies, it could cover even pending assessments" officials said. So, Sir, if we start assessing retrospectively, if the officer starts talking about pending assessments, based on the circulars which are being issued now, then, it will create unlimited problems for the department and the assessees. (Contd. by 1z-YSR)

-SK/YSR/2.15/1Z

SHRI SANTOSH BAGRODIA (CONTD.): I am not saying that the hon. Minister should take some steps, in view of the situation which has arisen in the market, so that the Sensex goes back to 12000 mark. I am fully convinced and I would like to let my hon. friends on the other side know that there is no scam. The Government is responsible if there is a scam. But there is no scam. Prices go up and down which is a normal procedure. One year before, in the same market, the Sensex was at about 4000-odd points. Now, it has come to 12000. At that time, Sir, the fluctuation was up to ten per cent, say 400 or 500 points. Now also, when it is at 12000, the percentage fluctuation remains the same. It is a normal thing all over the world. We have to see the fluctuation from the percentage point of view, not in totality. Let the House know once more that the real, genuine investor has not lost anything. We are saying that a cap worth 200 thousand lakhs or crores of rupees has come down. Lakhs of crores or crores and crores of cap has come, but nobody bothers about that. This coming down and going up is a normal thing. This is a paper loss and paper gain. It does not mean anything. It only means something to the speculators. Tomorrow if somebody speculates in a horse race, Government cannot be held responsible for that. It is the speculators who speculate to their convenience, and the market will go up and down for 1000 reasons. If some big investors in America sneeze, that can also affect the world market. Even if something happens to the Prime Minister of a country, the market will go up and down. If there is a civil war, or if there is some other strike, anything can happen anywhere in the world because markets are now affected by the world situation. So, Sir, for this reason, the hon. Finance Minister cannot be held responsible or the Government cannot be held responsible. If there is any scam, they can be held responsible for that. I don't think there was any scam, and nobody has mentioned about any scam. With these words, I once again thank you, Sir, for bearing with me if I have taken a little longer. (Ends)

SHRI PRASANTA CHATTERJEE (WEST BENGAL): Mr. Deputy Chairman, Sir, I will not take much time. I support the Bill to amend the Income-Tax Act, 1961, the Customs Act, 1962, the Customs Tariff Act, 1975, and the Central Excise Act, 1944 as enumerated in the Taxation Laws (Amendment) Bill, 2006. Sir, this Bill was discussed in the Standing Committee also. I understand that some amendment has come in the right direction. But it has not been placed in a comprehensive manner as discussed in the Standing Committee. So, while supporting this Bill, our request will be that on the required changes, as discussed in the Standing Committee, the whole set up of Income- Tax, Customs, and Central Excise, you will bring a legislation in a very comprehensive manner. That is my request to the Minister. Sir, it is good that the Amendment Bill, particularly 40A, which is regarding payment with regard to charitable institutions and others, as amended, is in the right direction. We support this because it has been stated that that will be in the form of account payee cheque or in the form of bank draft. It is in the right direction. So, we support this.

(Contd. by VKK/2A)

VKK/2a/2.20

SHRI PRASANTA CHATTERJEE (CONTD.): Now, Sir, we know that so far as the PAN cards are concerned, many assessees have more than one PAN card. This point will have to be looked into. Many assessees have received the intimation, but they have not received the PAN cards. That is another problem. Sir, even many bank account holders are not having PAN cards. It is reported that on a single day and on a particular address, thousands of accounts are opened in a bank. How has that happened? This is a very serious matter which will have to be looked into by the Ministry. It was discussed in the Standing Committee also in another way.

Then, Sir, there are many important administrative posts which are lying vacant. The administrative set-up is to be strengthened by filling up these vacant and very important posts. Only computerisation will not do. That is important, but filling up of these posts is very urgently required. Then, Sir, I would like to draw the attention of the Minister that there are cooperative societies -- employees cooperatives and credit cooperatives. Their income may be treated as non-taxable, particularly the employees cooperative and the credit cooperative, from the profit side. Then, Sir, there are charitable institutions which are doing good job. But some of them are exploiting this situation. Regulated measures will have to be taken in that area. It is very important. Sir, I would like to request the Minister to look into the matter.

Then, Sir, the last point is this. I would like to draw the attention of the Finance Minister to the long-pending demand of the salaried class of people, the workers and the employees, who are at the same time the most faithful tax-payers in the country, for removal of tax on housing, medical benefits, education facilities etc. provided by the employers. I understand that the hon. Minister once himself argued in favour of this demand as a lawyer in the court. But that has not been done. It is a very serious point in the interest of our salaried employees. I would like that for the sake of propriety and fairness, the income tax on these perquisites should be removed. I would request the Finance Minister to please consider the same and give an assurance to the House. It will be very good if he can give an assurance. With these words, with my observations and with the request to bring forward a comprehensive Bill, as discussed in the Standing Committee, I support this Taxation Laws (Amendment) Bill, 2006. Thank you. (Ends)

MR. DEPUTY CHAIRMAN: Thank you. Now, Mr. P.G. Narayanan.

SHRI P.G. NARAYANAN (TAMIL NADU): Thank you, Mr. Deputy Chairman, Sir. The main object of this Bill is to rationalise and simplify certain procedures in taxation system. While widening the tax base and plugging the loopholes leading to leakage of revenue, the problems of tax-payers also have to be taken care of. The tax-payers are often subjected to undue harassment from the officials. Sir, I do admit that laws need change and alteration according to the change in the society. Sir, in spite of the efforts of the Government to improve and tighten the tax administration, black money is increasing day by day as a parallel economy. Some effective mechanism should be evolved to reduce the black money regime. (Contd. by RSS/2b)

RSS/ASC/2b/2.25

SHRI P.G. NARAYANAN (CONTD.): At the same time, tax evasion has to be stopped. In addition to simplifying the procedure, if we really want to maximise the tax collection, the Government has to take some concrete steps to create awareness among people to come forward voluntarily to pay their taxes. Some congenial and humanitarian atmosphere has to be created. Sir, I appeal to the Minister to withdraw 2 per cent tax imposed on the urban cooperative banks in the Budget. With these words, I conclude. (Ends)

ֵ ֺ (ָӛ): ֳ֯ן , ֮֬ ׾׬ֵ (ӿ֮) ׾֬ 2006, ֳ 17 և ֯ ֤ ׸ ֕ ֵ ײֻ ִ֬Ԯ ׻֋ ֛ , , ײֻ ܵ ֠ ֵ, ߴ֠ , ߴ ׸, ߵ ֤ , ߵ ׾ ӿ֮ ֤ ָ ֮֮ ־֮֬ ֟ ָ ֮֮, ֵ ֮֜ ׻֋ ֯ ֵ ֮֜ ִ , ו ֕ ֕þ ֓ , ֡ ֟ ֯ע , Ù؛ ָָ ֲ ӿ֮ ֵ ׬׮ִֵ ׬׮ִֵ ֻ-ֻ ֤־ , , ֯ןֵ ֱ פ ִ֮ ֛ : ֮֮ߵ ӡ ׾֬ ֻ ֻ ֵ ֋ ו , ֯ןֵ ֮ ߑֻ߮ ֮ ֮֮ ֵ ֲ ײֻ ֵ ֋ ִ ֯ ֮ ֮ ֻ ןף , ߔ ןף ׾֬ ֵ , ו ֮ ָ ׮ֵԟ ֮ ֛ օ , ײֻ ֣ Ù ִֻ֯ և ָ֮ ׻״֙ ã֮֯ ֟ և ֟ ãׯ֟ ֣ Ù ֋ ֮ ֮ , ׾֢ߵ ֵ֟ ֤ ״ֻ߅ , ֟ ֵ ׬׮ִֵ ִ և , ָ ׾֢ ӡ ֮ ֟ օ ִ ׸ָ ױָ ׮֬Ը ׬ָ ״֟ ׌ֵ ֟ և , ֲֻ֟ ׸ָ ױָ, ׸ָ ׻֋ ֟ , ׮֬Ը ׬ָ ֮ ֮ ׿ ׸ָ , ӓ ָ ֋ , ׿ ֜ ִ ֵ ׮֬Ը ׬ָ ֮ ֤ ֋ ֟ ï™ ״֟ ׌ֵ , ִ ׮׿֟ ׿ ֮ ןֿ֟ ׮֬Ը ׬ָ פ ֵ ׾֬ ֵ ןֵ֤ ֋ ׮ִ ֕ ֟ ӡ , ָ ֲ ִ ֋ ׮ִ֠ ֕ , ָ ָ ֲ Ù ֱ כ ؾ әÙ ֮ ָ Ù 26 ֟ 3 ֋ 26 әÙ , ؾ ۠ (ֿ: 2Cָ)

NB/MKS/2C/2.30

ֵ ֺ (֟) : : ӡ ؾ ֕ , ֵ ״֟ ֋

ֳ֯ן , ߴ , ߴ ׸ ϟ ־֮֬ ֋ , ִ voluntary payment ֮ þꓔ ֮֟ ֵ֮ ֵ , ו ׾־֤ ߑПִ ֵ֟ ״ֻ, ־֮֬ օ

ӟ ׾֬ ߵ ׾ ׬׮ִֵ 1956 ӟָ֕ߵ ׾־֤ ׸ , ֮ ׮׿֟ ׻֋ ֳ ײ֟ ֵԾ ׻֋ ָ 24 ָ֬ (1) ߮ ׬ד֟ ׬ָ ׬ָ פ ֵ ߵ ײ ӟָ֕ߵ ׾־֤ , ׻֋ Appellate Authority ך ֟ և , ֟ ܵ ֲ ֛ ָ֮ ֕ ֮ ֟ ָ ֕ ֮ פ ß ײ , ו ֕ ֤ և , ׾־֤ ֟ ֛ ָ֮, ֮ פ ֻ ָ ֕ ײ stock transfer , ו ײ ׬׸ ׾־֤ ֟ stock transfer , inter state transaction Ϥ ײ ֵ , ִ ׮ ׻֋ ׬׮ִֵ ֵ ֵ , þ֟ ִõ Ϥ ָӛ , ָ֮ , ו֮ ָӛ , ײ ã֮, Ϥ ָ ָ ׾־֤ ֮ ֟ ׾֬ ׸ ֮ ֤, Appellate Authority ׾־֤ stock transfer ֟ inter state transaction ֟

ֳ֯ן , ָ ֌ ֮֮ߵ ӟ ֛פ stock market ָ ֟ ֳ ֮ ֌־ ׾֢ ӡ IPO scam ָ ָ ֤ ֟ , stock market index ֜ ֙ ֲ ֤ ֟ , ֳ , ׯ֔ 3 פ stock market 2,000 ָ־֙ և , ֲ ֤ ߅ , ֻ֟ 6 ֋ market capitalization ָ , ӓ IPO ֻ פ SEBI ׮Ե פ IPO ֻ ו֮֟ ӟٻ֯ , ֱֻ ֵԾ ֋߅ ֟ ֵ֮ פ ָ פ market 5 ״֮֙ ӟָֻ 500 ևә ָ ֵ, ֤ ױ ï™ פ market, 200 ևә ֜ ֵօ ָ פ 700 ևә ָ-֜־ ִ֮ ֟ ׯ֔ 3 פ ֤ ָ NDA ֮ ֻ ֲ market, 200 ևә ָ ֵ , ֌ ִֵ ֟ ׾֢ ӡ ֮ ß߱ ׯ֔ ߮ פ ֲ market capitalization, 2,000 ևә ָ ֟ , ִ֮ ֟ : ӓ ׾֢ ӡ ָ ֮ ï™ , ֣ ׾֢ ӡ ֮ ß߱ ֲ ֣, ׾֬ þ֟ ִ֣Ԯ (ִ֯)

THE MINISTER OF PARLIAMENTARY AFFAIRS (SHRI PRIYARANJAN DASMUNSI): Sir, I just like to draw your attention for half-a-minute to an item in the revised List of Business. I want to inform through you, Sir, the House that the Constitutional (Amendment) Bill has been passed by the Lok Sabha. Sir, at 4 o'clock, whatever be the progress of other Business, we should take up this Bill. Exactly at 4 o'clock, Sir, we should take it up because the Members are on a whip. So, they will all assemble here at that time. Unless there is a definite time intimated to them, I will have some problem. So, I appeal to you to have the sense of the House that whatever be the progress of other Business, at 4 o'clock, we should take up the Constitutional (Amendment) Bill.

MR. DEPUTY CHAIRMAN: I think, we will finish the Taxation Bill.

SHRI PRIYARANJAN DASMUNSI: No; I am not saying that.

MR. DEPUTY CHAIRMAN: Then there is a small Bill on.....(Interruptions)...

SHRI PRIYARANJAN DASMUNSI: Sir, at 4 o'clock, whatever be the progress of other Business, please take up the Constitutional (Amendment) Bill.

MR. DEPUTY CHAIRMAN: At 4 o'clock, I think, we can take it up.

SOME HON. MEMBERS: Sir, please take it up. We have no objection.

MR. DEPUTY CHAIRMAN: Okay. (Followed by 2D)

-MKS-TMV-AKG/2D/2.35

֮ ֻ ӛ (ײָ) : , ֱ ו֋, ִ ֲ ִ ָ ֵ , ֲ ֤ օ , ֮֬ ׾׬ֵ (ӿ֮) ׾֬, 2006 ֵ , ֳ 12 և 2005 ֵ 13 և ֳ ֮֮ߵ ãֵ ״ן (׾֢) ѓ ׻֋, ָ ׻֋ פ ֲ ׾֬ ֵ , և 2005 ׾֬ ׾֯ ֲָ ֟ , ֟ ֿ־ӟ ֲ ֮ ֟ ꅠ ׾֬ ӿ֮ ֋ ֮֮ߵ ׾֢ ӡ ֵ֟ ֵ ׬׮ִֵ, 1961, ߴ ׬׮ִֵ, 1962, ߴ ׸ ׬׮ִֵ, 1975, ߵ ֤ ׬׮ִֵ, 1944 ߵ ײ ׬׮׵ִ, 1956 ӿ֮ ִ ß־ ֳ 17 և 2006 ׸ օ

, ֮֮ߵ ׾֢ ӡ ֮־֤ ד֮ ָ֬ ֯ ֮֮ ִ ״ֵ , ו ֻ֟ ӓ֮ , ״ֵ , ӓ֮ ß׾ 滵 , 滵 ֟ , ֻ ֮ ֜ þֵ ׾֢ ӡֵֻ ־ ֵ , וִ Ù և 15 ָ ׸ ִ ֲ ׸ָ ׻֋ י ִ߻ ֟ , ִע ßӟָ פ ֟ , ׸ָ , ֵ ׿ ֮֟ ֛ ָ ߕ ׻֋ ׾֬ ܟ ־ã և , ָָ ֤ ״ֻ , ӓ֮ loopholes , ׻ֵ , ו ׮ ֟ , ָָ ֕þ , ִִ ߕ , ״ֵ ׻֋ ֯ ֮ß ֵ ָ֟ ֮ ֣-֣ ֮֮ߵ ׾֢ ӡ ֲ ׾֬ ִ֬ ָ tight , Ӿ֨ , ֿ֌ ֮֮ߵ ֳ֯ן , ׻֋ ׾֬ ֵ , ֯ ָ-ָ ָ , ִ֣Ԯ ׻֋ ֮֮ߵ ׾֢ ӡ : ֬և ֮־֤ (ִ֯)

THE MINISTER OF FINANCE (SHRI P. CHIDAMABARAM): Mr. Deputy

Chairman, Sir, I first apologise for not being present in the House for a greater part of the debate, but my colleague has been here and I have read through his notes and I will deal with the issues raised by the hon. Members.

Sir, as I said in my opening statement, this is largely procedural, but some amendments are important amendments having regard to the difficulties that we have faced in administering the tax laws. When we make a law or pass a Bill, the intentions are quite clear. But in their application, sometimes, we find that there are difficulties and it is to address these difficulties that we are introducing these amendments and I brought them compendiously as Taxation Laws (Amendment) Bill.

Sir, a question was raised by hon. Member, Shri Bhardwaj, about black money, VAT, etc. But some of the provisions made in this Bill are intended to curb the use of unaccounted money. For example, the requirement of paying any some above Rs.20,000, which is a business expenditure, by an account payee cheque is intended to curb the use of unaccounted money. Unfortunately, in this country a large number of people continue to do business partly with accounted money and partly with unaccounted money. We have to curb that tendency because that is a menace. We have to urge everyone to keep one book of account and deal with money which is brought into the books of accounts. The incentive to evade tax is very high when the tax rates are very high. Today, tax rates in India are very competitive and comparable to tax rates worldwide.

(Contd. by 2E/RG)

RG/2.40/2E

SHRI P. CHIDAMBARAM (contd.): Now I would urge everyone to comply with it now that there is simply no incentive to the people in this field to deal with unaccounted money. But if any instance of dealing with unaccounted money comes to our notice, we will take serious steps. It is because we have tightened the tax administration that the revenues have increased by 20 per cent in 2004-05, by another 20 per cent in 2005-06, and the Budget projects a similar 20 per cent increase in the gross tax revenues for 2006-07. I am happy to report that compliance in the corporate sector has improved; compliance among taxpayers under personal income-tax has also improved. What has not improved, to my satisfaction, is the number of people who come into the PIT net. As we raise the exemption levels, people go out of the net. But a large number of people ought to come into the net; I concede that they are not yet in the net. But the steps that we are taking will bring them into the net.

As far as VAT is concerned, it is a success story. I compliment the State Governments for coming on board on VAT. I also compliment the five States which have joined VAT on the 1st of April, 2006. 'Better late than never'. You may have seen a report in the newspapers regarding the Delhi Administration's VAT collections in the month of April. They have exceeded the sales tax collections of any year earlier. I think VAT is a very progressive tax. There is a tax on value addition. It is not a cascading tax. It also brings out a large measure of discipline to the manner in which trade carries out its transactions. There are only two States and one Union Territory which are holding out against VAT. I will take this opportunity to urge upon the two States -- I won't name them...

AN HON. MEMBER: Let us know the names.

SHRI P. CHIDAMBARAM: Everybody knows them. I would urge upon the two States to come on to the VAT. The Union Territory has promised that once their neighbouring State comes on to VAT, then, they will also come on to VAT on the same day. The Central Sales Tax is in consistent with VAT. It has to be phased out. It will be phased out, but we are still in discussion with the Empower Committee on State Finance Ministers. We have to arrive at an appropriate phase-out timetable, and an appropriate compensation package. We are working on it, and with the support of the House, I am confident that we will succeed in arriving at a consensus with the States. Once that consensus is arrived at, the beginning of phasing out of CST will start.

Sir, Shri Bagrodia, with his usual knowledge and eloquence, touched upon a number of subjects. I don't wish to deal with each one of them. He asked: "Why an account payee cheque?" I can turn around and ask him: "Why not an account payee cheque?" If a crossed cheque is acceptable, then, why not an account payee cheque? Should the amount be raised above Rs.20,000, we will keep that in mind. Yes; maybe, it is necessary to consider that. I will keep that in mind. Then, Sir, clauses 23 and 38 are only attaching provisions. Provisional attachment does not mean that possession will be taken, unless there is an attempt to fraudulently alienate the property or dissipate the property or allow the property to deteriorate. If such conditions don't apply, then, provisional attachment will simply be a provisional attachment under which the person holding the property is prohibited from alienating or dissipating the property. The hon. Member wanted to know what the purpose of clause 27 is. Now, clause 27 introduces Section 114 AA, after Section 114 A. If you read 114 A of the Customs Act and then, clause 27, which introduces Section 114 AA, it will become clear. What we are trying to do is that there are a number of cases where people make, or cause to be made, a declaration or a statement or a document which is false, in the transaction of any business for the purpose of the Customs Act. It could be a false import manifest or a false bill of entry. (Continued by 2F)

2F/2.45/ks

SHRI P. CHIDAMBARAM (CONTD.): Now, that, unfortunately, was not punishable. Therefore, we are introducing this provision to provide for penalty in such cases. Sir, five times is not on the higher side because the penalty being five times the value of goods is a similar scale in several other sections of the Customs Act. We have simply applied the same scale to this section also. As far as Clause 38 is concerned, again, power is being taken in order to publish names of persons who have been prosecuted under the Act. Now, I think, one way in which we can curb the tendency to avoid excise duty is to publish chronic defaulters' names. If somebody is a chronic defaulter, then, clearly, his name should be known to everyone. If you read sub-section (2), it will be very clear. It says that no publication should be made until the time for presenting an appeal has expired without an appeal having been presented, or, the appeal, if presented, has been disposed of. `Disposed of' means once the final order comes. Once the final order comes, then, of course, we must have the power to publish those names.

Sir, some question, I believe, was raised about the CBDT circular. It does not arise out of this Act, but let me take the opportunity to clarify. There was a circular in 1989 which culled out the principles laid down by the Supreme Court and the High Courts on how a person should be classified either as a trader or as an investor. There is nothing new about the circular. That circular caused no problems at all. Seventeen years have passed. There have been several other judgments. All that the CBDT did was to put out a draft circular -- underline the words `draft circular' -- on the website, updating the earlier circular, asking people to give their comments and views. It is a perfectly democratic exercise, a transparent exercise, carried out by CBDT in the normal course of business. Unfortunately, there was some misinformed or uninformed reporting. I have mildly chided the newspapers concerned that they should not indulge in such uninformed reporting on sensitive matters. These are extremely sensitive mattes. They could have easily checked back with the Ministry. They could have checked back with me. Correspondents call me all the time on my mobile phone. They could have easily checked back with me. Now, without checking back with any one, it was an uninformed report and it led it a spate of reports. What is causing me some disappointment is that there continues to be such uninformed writing. I would request the media to be more restrained when talking about sensitive matters. Anyway, I have clarified it. As hon. Deputy Chairman and other Chartered Accountants like my good friend know, there are separate provisions in the Income-tax Act, dealing with foreign institutional investors, there are section 115AD, section 90, and there are any number of judgments which deal with the matter. So, a circular issued in the normal course of business to elicit public opinion before it is finalised ought not to have stimulated such inspired reports. Anyway, that matter has come to a rest now. I don't want to continue to debate that further. The law is very clear. Whether a person is an investor or a trader, it is a question of fact. It will be decided according to a established criteria laid down by the courts. And that is how it is decided. Nobody can a priori say whether a person is an investor or a trader; it is a question of fact.

SHRI SANTOSH BAGRODIA: I am sorry to interrupt you, Sir. So, there will be no ambiguity about this. That `15-point' or something you have mentioned -- no officer can go with any discretionary power. He will go by the rules.

SHRI P. CHIDAMBARAM: I am glad you raised it. Instead of leaving it to the arbitrary discretion of officers, these guidelines are to provide for a greater clarity, a greater transparency. Therefore, there will be a greater degree of uniformity in the system. (contd. by 2g/tdb)

TDB/2G/2.50

SHRI P. CHIDAMBARAM (CONTD.): I cannot still say that one assessing officer will not make a wrong assessment, but that is to be corrected in appeal. The point is, these guidelines are for the purpose of greater clarity and greater transparency. In fact, investors must be reassured that the Board has issued a circular which brings about greater clarity, greater transparency and greater certainty.

Sir, this circular applies to all investors. If an Indian is buying and selling shares and securities in the market, he could either be a trader or could be an investor. The criteria will apply to him and, in his case, his assessing officer will decide whether he falls under the category of a trader or the category of an investor. That is how all assessments are made. This is not the only circular which lays down guidelines. There are any number of circulars of the CBDT for the last 50 years which lay down guidelines for assessing officers. In fact, that gives power to the CBDT to issue such circulars.

Sir, there was some reference to PAN Cards, some reference to the IPO Scam. These are all quite outside the scope of this Bill. But, let me assure you, on PAN Cards, yes, there have been some instances of duplicate PAN Cards having been issued. Corrective measures have been put in place, but the number is miniscule; the number is very small compared to crores of PAN Cards that we have issued.

Sir, as far as the IPO is concerned, as I have already answered in this House -- I believe, I answered only a few days ago -- we have identified the investors, the bank branches, the Branch Managers, the depository participant where the failure has taken place. Stringent actions are being taken. The interim order of the SEBI, which I urged you to read from the Website, is a detailed order. Now, they have been given a post-decisional hearing. A final order will be passed. Everything will be done according to the law, but nobody who has indulged in that malpractice will go unpunished. In fact, the severest penalties will be visited upon them. And, I have requested the SEBI to examine how we can make them disgorge the illegal gains that they have made through multiple applications under an IPO. This is under examination. If that is legally permissible, as I believe it is, we will make them disgorge their illegal gains. But the ordinary investor has nothing to worry because the fundamentals of the economy are strong. When we have a discussion on prices or any other subject, I will deal with the fundamentals. The reserves of the country stand at 163 billion US dollars, the inflation is being contained at four per cent, the manufacturing sector is growing at 9.1 per cent, the GDP growth for 2005-06 is estimated at 8.1 per cent and the growth story, I am confident, will continue this year too. In fact, all of us can legitimately take pride that, as Parliament, we are putting in place policies which continue to stimulate growth. This is not a matter for which only a party will take credit, or, a Government will take credit. As a nation, we must take credit that the economic fundamentals of this country are strong. And, I want all of us to share that pride that the economic fundamentals are strong. That does not mean that the issues which deserved to be addressed are neglected. But as I have said repeatedly, we can address those issues only when we have the revenues, and the revenues will come only when there is a strong growth. I repeat, the economic fundamentals of this country are strong and it will be my endeavour, the endeavour of our Government, to keep the economic fundamentals strong. Thank you, Sir. (Ends)

MR. DEPUTY CHAIRMAN: The question is:

That the Bill further to amend the Income-tax Act, 1961, the

Customs Act, 1962, the Customs Tariff Act, 1975 and the

Central Excise Act, 1944, as passed by Lok Sabha, be

taken into consideration.

 

The motion was adopted.

MR. DEPUTY CHAIRMAN: We shall now take up clause-by-clause consideration of the Bill.

Clauses 2 to 39 and the Schedule were added to the Bill.

Clause 1, the Enacting Formula and the Title

were added to the Bill.

 

SHRI P. CHIDAMRABAM: Sir, I move:

That the Bill be returned.

The question was put and the motion was adopted.

(Ends)

(Followed by 2h)

kgg-sch/2.55/2h

THE MICRO, SMALL AND MEDIUM ENTERPRISES

DEVELOPMENT BILL, 2006

֑ ӡ ֣ ִ ӡ ( ־߸ ֤): , ß־ :

, ֑ ִ֬ Ӿ֬Ԯ ׾ ֮֮ ִ ןï֬ ֮֜ ֣ Ӳ׬֟ ֮ ׾ֵ ֲӬ ֻ ׾֬ ָ, ֳ ָ ׸ ׾ָ֓ ֋ ...(־֮֬)

 

SHRI C. RAMACHANDRAIAH: Sir, we should have been given time before the Bill was introduced. (Interruptions)

־߸ ֤: ֯ כ ׸

ֳ֯ן: ײֻ כÙ߲

SHRI C. RAMACHANDRAIAH: Sir, micro, small and medium industries are the worst sufferers in this country; at the same time, these are the biggest employment creators. (Interruptions)

MR. DEPUTY CHAIRMAN: The Bill has been distributed earlier itself. ....(Interruptions) ײֻ פ The Bill has been distributed on Saturday. ֯ ײֻ ׾̮֕ ֯ ו֋

־߸ ֤: ֟Դ֮ ֑ (׾ ׾׮ִֵ֮) ׬׮ִֵ, 1951 ֻ ֲӬ Ԯ ֲӬ ־ֵ, Ծ־ã ןֿ߻ ïӤֿ߻ ꌙ ׻֋ ׾׬ ӓ ֕ ָָ ָ ִֵ-ִֵ ָ ׮ֵ㌟ ׾ֿ ִ ״ןֵ ֣ ֑ ꌙ þֵ, ꌙ Ӿ֬Ԯ ׾ ֮֮ ׻֋ ֑ ׻֋ ִד֟ ֯ ߵ ׬׮ִֵ ־ֿ ָ ֻ פ

׾ ã֮ ָ ֜ ֵ ן׸ ֜ ־ֿ ֑ ׻֋ ן֟ ִ֣Ԯ ׾ßָ ֋ ו ִ֬ ßָ ׾֟ ָ ֮֮ ִ֣ ֜ ֟־ָ ׾ ןï֬ ֮

ֳ֬ (. .. ׸֮) ߚ߮

֣ , (և) ׾ßָ ָ֬ , : ׾֟ ׾ֿ߻ ־ֿ , ָ ִß , ֑ ִ֬ ֮ פ ֋ ꌙ ׻֋ ׾׬ ӓ ֲֻ ֋

׸ãֵ֟ ֮ ֟ , ׾֬ , ֑ ִ֬ Ӿ֬Ԯ ׾ ֮֮ ֣ ןï֬ԟ ר ׻֋ ֲӬ ׾֬ ָ ֟: ֚ :

1.     , ֑ ִ֬ ֮ ׸ֆ ׻֋ ֲӬ ;

2.     ™ߵ , ֑ ִ֬ ׾ ׻֋ ןֵ ֵ ֻ ָ ֱ׸ ׻֋ ßָߵ ӓ ã֮֯ ׻֋ ֲӬ ;

3.     ӵ֡ ָֿ߮ ׾׮֮֬ ָ֬ ָ , ֑ ִ֬ ֣ ־ ׾ Ӳ֨ ׾ֵ ָ ֱ׸ ׻֋ ָֻ ״ן ã֮֯ ׻֋ ֲӬ ;

4.     , ֑ ִ֬ Ӿ֬Ԯ ׾ ֮֮ ֣ ִ ןï֬ ֮֜ ׻֋ ֵ, Ԥ ֨ӟ ׬ד֟ ׮׬ ו֟ ׻֋ ߵ ָָ ֿ֌ ;

5.     ָߵ ׸̾ Ԥ ֨ӟ ָ , ֑ ִ֬ ׻֋ ִ ֟ ֲ֯֟ ִֵ ֺ Ͼ ׮׿֟ ןï֬ԟ ֮֜ ׻֋ ֲӬ ;

6.     ӡֵֻ, ׾ֳ ָ ֑ ָ פ ֻ ֲֻ և և ֆ ֣״ ָ ָߤ ׻֋ ןֵ ׬ד֟ ׻֋ ߵ ָָ ֕ ָָ ֿ֌ ;

7.     , ֑ ֮ ׾ֻײ֟ ֮֟ ָ ֕ ׬׮ִֵ, 1993 ָ ֣ ׬׮ִֵ ß׾֟ ׾֮֬ ֮֮; MCM/2J ָ ֿ:

 

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