Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: VAT Audit :: ACCOUNTING STANDARDS :: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment :: cpt :: articles on VAT and GST in India :: TDS :: ACCOUNTING STANDARD :: VAT RATES :: empanelment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: Central Excise rule to resale the machines to a new company :: list of goods taxed at 4%
General »
 Tax and the dilemma of the self-employed
 Banks warn share tax hike threatens Paris' post-Brexit appeal
 PMC may decide on property tax rebate for IT firms this week
 I-T Dept is giving out certificates of appreciation. Have you received yours?
 Government works on ironing out benefits refund mechanism for exportersa
  Tax officials are using an IDS provision to question transactions beyond six-year-limit
 Tax-free bonds rally like midcap funds
 Senior citizens do not have to pay advance tax on salary and interest income
 GST: Audit commissioners to get adjudication powers
 Interest on NRE rupee account can be exempt from tax under FEMA
 Impact of GST on Real Estate Sector

Lose tax-haven tag
April, 01st 2010

The curtain has finally come down on the popular tax exemption scheme in the hill states of Himachal Pradesh and Uttarakhand that had drawn millions in investments from a range of industries such as pharmaceuticals, FMCG and automobile.

A number of companies, including Hindustan Unilever, makers of Dove and Lifebuoy soaps, and motorcycle maker Hero Honda have invested in the two states.

Despite the intense political pressure and lobbying from these two states that have non-Congress governments, finance minister Pranab Mukherjee allowed the tax holiday to lapse as he looks to clean up the exemption-ridden tax regime in run-up to the launch of a comprehensive goods and service tax regime.

The governments of these states had written to the prime minister and finance minister and had also lobbyied with the Planning Commission for an extension of these sops.

Henceforth, new investments in these states will not be eligible for 100% excise duty holiday provided as a part of the industrial development package for the uplift of these industrially backward states.

However, all investments made until March 31, 2010, will continue to enjoy the benefit for another 10 years.
This tax holiday has come under severe criticism for reasons such as misuse, flight of capital from neighbouring states and skewed development in these states.

The Union finance ministry had tightened the eligibility norms for availing excise exemption in these states to ensure only companies carrying genuine manufacturing activity enjoyed the benefit. Companies merely labelled, packaged or did sorting instead of manufacturing were no longer eligible for the tax holiday.

The Centre incurred a revenue loss of over Rs 10,000 crore in the current financial year on account of area-based exemption that is available to states such as Jammu & Kashmir and north eastern states.

With comprehensive indirect tax reform, goods and services tax (GST), on its way, both the Centre and states are looking at replacing the complete duty exemption with a tax refund scheme. The empowered committee of state finance ministers had also recommended replacing area-based and industry-based exemptions with direct subsidy.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Internet Marketing Website Marketing Internet Promotion Internet Marketing India Website Marketing India Internet Promotion India Internet Marketing Consultancy Website Marketing Consulta

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions