ANALYSIS OF TAX NEWS

st 1

FEB

th 7

FEB 2010
GROUP 5: Ankit Agarwal Tirath Broker Grishma Chheda Piyush Deora Urvi Desai Divya Jain Pritesh Shah

401 405 406 407 409 414 446

700 cr which accounts for 8% of fiscal deficit .EXCISE DUTY ON DRUGS 1ST FEB 2010 ² ECONOMIC TIMES News: 4% excise duty on drugs likely to stay Higher excise relief for small pharmaceutical units y Excise abatement limit may be increased from 35.5% to 60% No further cut in excise duty expected Implications: Sustainable growth rate for pharma sector at 15% y 40% of the retail price will be subject to tax Resolve the problem of migration of pharma units from non-tax exempt states to tax-exempt states Less tax collection for government y Government revenue will be reduced by 1.

To become eligible for exemption. The linking of Pan Card with Bank account would bring in accountability. Utilization of PAN and bank account data.BRING MEDICAL. EDUCATIONAL INSTITUTIONS UNDER TAX NET News: Assocham wants the government to bring educational and medical institutions under tax net. institutions to operate as charitable trusts. 1ST FEB 2010 ² ECONOMIC TIMES . Implications: Educational institutes will pass down the burden of tax The government can balance the development spending with the yawning fiscal deficit. No recognition given to these institutions by the Education Board.

Implications: ALL anti-cancer and HIV drugs are likely to become cheaper for patients.GOVT MAY REMOVE CUSTOMS DUTY ON CANCER. 3RD FEB 2010 ² ECONOMIC TIMES . Patients find most of the new generation drugs for both cancer and HIV too expensive. The 2009-10 Budget totally exempted influenza vaccines. The Centre·s AIDS programmed offers three anti retro viral drugs free of cost. HIV DRUGS News: The finance ministry is considering hiking the weighted deduction on expenditure on research and development (R&D). The proposal is aimed at encouraging research. nine life saving medicines and two bulk drugs.

terror funds and other illegal activities . hold assets in another.ANOTHER STEP FORWARD IN CURBING TAX EVASION 4TH FEB 2010 ² ECONOMIC TIMES News: Power to access and share information on the ownership. identity and accounting of all entities A taxpayer can reside in one country. Implications: The tax evasion would be thing of past and also would erase hawala. and manage them from a third location for various reasons including tax arbitrage India will be able to track down tax evaders who have stashed away thousands of crores in numbered Swiss bank accounts.

000 crore a year. estimated at around Rs 30.FICCI DEMANDS TAX SOPS FOR FOOD PROCESSING 6TH FEB 2010 ² ECONOMIC TIMES News: FICCI on Friday demanded tax concessions and waivers for the food processing sector to help minimise wastages. Excise duty on the refrigeration machinery components and material handling equipment (used in the food processing sector) should be totally waived Sustained development in agriculture and large investments in technology and infrastructure development Implications: It would stimulate the growth of the food processing sector and minimise waste .

including education cess and surcharge Domestic firms earning total income of over a crore in a year have to pay 33. .99 per cent and others 30.CORPORATE TAX CUT NOT LIKELY IN BUDGET 6TH FEB 2010 ² ECONOMIC TIMES News: Government may not tinker with the corporate tax rates in the Budget 2010-11 Industry has been clamouring for corporate tax rate to 25 per cent from the current over 30 per cent. if exemptions and concessions given to various sections are lowered Implications: There are speculations that the budget to be tabled in Parliament on February 26 could partially roll back fiscal stimulus given to the industry. These could only be pruned.9 per cent.

up from Rs.6% in 2007-08 but to 11% in 2008-09 The economy grew 0.9% YOY during the July-September period ² it·s strongest in 6 quarters GDP growth has slowed to 6. 3. Implications: The short objective is to bring back the ratio to about 13% in 2012-13 In India 80% of revenues are spent on non-productive sectors like defence .CENTER BETS ON DIRECT TAX SURGE 3RD FEB 2010 ² MINT News: Government is banking on a rising direct tax receipts to fund a growing expenditure budget Direct tax collections for 2010-11 set at over Rs 4 lakh crore.7% in 2008-09 after clocking the average of 9% for four straight years.7 lakh crore The tax-to-GDP ratio rose from 9.2% in 2003-04 to 12.

service tax collections were down 6% i. Increase in collection of indirect tax by the govt. Rs 36. The government has fixed a target of 2. while excise duty collections were down by 13% at close to Rs 70.SERVICE TAX RATE MAY BE RAISED TO 12% IN BUDGET 4TH FEB 2010 ² HINDUSTAN TIMES News: There are chances of service tax rate being restored to 12 % During April-December this fiscal. .7 lakh crore from indirect tax collections for the current fiscal which seems difficult Implications: Lead to reduction in fiscal deficit.000 crore.000 crore.e.