The KPMG in association with the Confederation of Indian Industry (CII) and the Asian School of Business (ASB) held a post- budget analysis session here on Monday.
Tax specialists from KPMG, Sachin Menon, partner and All-India head, Indirect Tax, and Srinath S, director, Indirect Tax, made detailed presentations on the economic aspects of the Union Budget 2012 and the key direct and indirect tax proposals, regulatory amendments and policy announcements for the year 2012-13.
Sachin Menon touched upon the wide ramifications brought in by the budget with an intent to neutralise various judgments of the courts including the decision on the 2G scam.
He stated that this trend followed by the government to nullify judicial pronouncements by way of retrospective amendments creates uncertainty thereby making India an uncomfortable territory for foreign investment. With regard to direct taxes, the speakers said that the corporates which were spared from tax hikes, were bestowed with tax sops to borrow overseas and given relief from cascading Dividend Distribution Tax in a multi-tier structure.? ?
The removal of the list of permitted sectors for investments by Venture Capital Funds was a welcome move. However, Alternate Minimum Tax at 18.5 percent was extended to all non-company taxpayers claiming profit linked deductions. On the Indirect Taxes front, Srinath discussed the impact of implementation of Goods and Services Tax (GST), the increase in the rates of excise duty and service tax rates. He went on to elucidate the proposed implementation of a negative list regime under the service tax, which would have wide complications on the industry. ? The presentation was followed by a panel discussion attended by V K Mathews, executive chairman, IBS Group and C Padmakumar, executive chairman, Terumo Penpol Limited along with the KPMG tax team.