In a pathbreaking move, the finance ministry has implemented a scheme for Large Taxpayer Units (LTU) at Bangalore that will reduce hassles, harassment and corruption for those who opt for the scheme and also give them more flexibility in their operations.
The Bangalore LTU office will provide single point interface with the tax administration to the large tax payers and deal with all central excise/service tax/ income tax/corporate tax issues of all units holding a single Permanent Account Number (PAN).
The scheme is available for those who pay excise duty or service tax of minimum Rs 5 crore in cash or through account current (PLA) or advance income/corporation tax of minimum Rs 10 crore in 2004-05 or later and assessed to income tax in Bangalore.
Eligible tax payers who opt for LTU will have to file their consolidated returns for their units, refund/rebate claims, proof of export, intimations, request for permissions etc with the LTU for all their units, factories, divisions or branches and any show cause notices will be issued and adjudicated only at the LTU. They will not be required any more to dance to the whims of the local excise officials at various factories or branches. Even their audits and appeals will be dealt with at the LTU.
The LTU will have all-India jurisdiction in respect of all the units of the assesssee. The interaction of these units with local officials will be limited to specific functions requiring physical presence of the officers for purposes as warehousing, sealing or any other work as assigned by the LTU.
A client executive from the LTU will interface with the tax payer for all their requirements such as clarification, intimation, permission, grievance redressal etc. The LTU will handle all investigations. The Chief Commissioner in-charge of the LTU can even grant any procedural relaxations.
A big advantage in opting for the scheme is that Cenvat credit lying unutilised in one unit can be transferred to another unit through a transfer challan. The condition is that the recipient unit should not be enjoying any area-based exemption. Moreover, any inputs, other than motor spirit, can be transferred from one unit to another without duty payment. The sender need not reverse the credit but the recipient must use the inputs in manufacture of dutiable final products and clear them on duty payment or export without duty payment within six months. On failure to do so, the recipient unit has to make payment equivalent to the credit taken by the sender and interest on that. Here again, the facility is not available where the recipient unit is enjoying any area based exemption.
The taxpayer opting for the scheme can adjust in the subsequent period any excess duty paid due to arithmetical error. The instructions issued by the Central Board of Excise and Customs (CBEC) encourage the large tax payers to file the returns electronically and opt for self-sealing of the export containers.
Anyone who wants to opt for the LTU scheme has to give a consent letter and anyone who has opted for the scheme can opt out of the same from the beginning of a financial year after giving thirty days notice. The government expects to establish LTUs in a phased manner in Chennai, Delhi , Kolkata and Mumbai very soon.
T N C Rajagopalan