Union Budget: A tale of missed opportunities, say tax and industry experts in Gujarat

Written by Avinash Nair | Ahmedabad | Updated: Jul 12 2014, 04:26am hrs
Budget(Suggestive Image) They were also critical of some of the 'draconaian laws' contained in direct and indirect taxes sections of the budget. Reuters
Captains of the industry and taxation experts who had gathered in Gujarat on Friday to discuss the fine-print of Union budget, felt that it was a "missed opportunity" for the Modi-government in making an impression within the country and "putting the vision of India" across to the world. They were also critical of some of the "draconaian laws" contained in direct and indirect taxes sections of the budget.

"It is been over 20 years since any single political party got a clear mandate. There was a lot of expectations. But I believe it was a missed opportunity. We missed putting the vision of India out to the world, especially at a time when the entire world was watching us," said Richard Rekhy, Chief Executive Office (CEO) of KPMG while addressing an interactive session on "Budget & I" organised by KPMG and FICCI in the city here.

Rekhy who described finance minister Arun Jaitley speech as "too long", felt that there was "no co-relation" between the Socio-Economic Survey and the contents of the budget speech.

Appreciating the provisions made in the budget for smart cities, industrial corridors, transfer pricing, etc, the senior official from KMPG felt that government did not do away with the Minimum Alternate Tax (MAT) that had crippled Special Economic Zones (SEZs) in the country and had not fixed a timeline for the roll-out of Good and Services Tax (GST) which according to him could have given the GDP a boost by 1.5 to 2 percent.

"Though some provisions for solar energy has been made, there is not enough emphasis. Solar can do for power what mobiles did for telecom," Rekhy added.

Speakers who analysed the budget for a large number of businessmen, traders and entreprenuers who had gathered for the event felt that the Union Budget was completely silent on the issue of "black money", an issue that was used by the BJP to hit out at the Congress during elections. They also criticised the continuation of the "retroactive amendment"

Sujit Ghosh, Partner & National Head of Advaita Legal pointed out "draconian impact" some of the provisions of the indirect taxes mentioned in the budget held. Ghosh was particularly critical about the "variable rate of interest (ranging between 18-3- percent)" introduced to encourage prompt payment of service tax. Through the variable rates of interest the NDA government is not only asking the business establishements to pay taxes, but is also discouraging them from appealing against the taxes.

"The variable rates of interest is a threat to you... If this is not tax terrorism then what is it," said Ghosh while explaning how business entities will from October 2014 will be liable to pay 18 percent interest for a six month delay in service tax payment and 24% for period beyond six months and 30 percent delay beyond a year. "Faced with such high rates of interest, who will dare litigate," said Ghosh who felt that the Union government was trying to "curb tax litigations by terror rather than by facilitiation".

Chandan Purohit, CFO, Claris Lifesciences felt that the withdrawal of service tax exemption given to clinical research organisations involved in human trials with act as a dampner for the pharmaceutical sector. Meanwhile, Sunil Parekh, strategic advision to Zydus Cadila Group and Jubilant Group and a member of FICCI summed it up in his speech saying, "Acche din aayenge, lekin thoda time lagega."