| Auto maker Toyota Kirloskar Motors, engineering major ABB India, truck maker Volvo India, Falcon Tyres and HMT will be among the companies to join the first large taxpayer unit (LTU) in the country, said a senior revenue department official.
An LTU is single-window facilitation centre where large taxpayers can file all their direct and indirect tax returns, irrespective of the geographical location of their units. It will also reduce compliance and transaction costs for these companies.
Rubbing shoulders with these manufacturing companies will be Vijaya Bank, Canara Bank, ICICI Venture Capital, ING Vysya and a few real estate firms. The countrys first LTU will be operational in Bangalore from October 1 this year.
At least 31 companies have agreed to participate. For all practical purposes, they will be assessed to all direct and indirect taxes at the LTU. This list also includes 3M India, Bentley and Remington, Kemwell, Kennametal India and express cargo service provider TNT India, among others.
BEL and State Bank of Mysore, too, are set to join the LTU in Bangalore. Large domestic companies may, at a later stage, be offered the facility of seeking an advance ruling on their tax liability. An advance ruling mechanism will lend certainty to their tax liability and minimise valuation disputes.
Right now, only non-residents and a few categories of residents can seek an advance ruling on their tax liability. Companies have the option to join the LTU and can exit after one year, if they are not satisfied.
Such flexibility will provide comfort to industry associations which had vehemently opposed LTUs saying it would lead to more disputes between tax payers and revenue authorities.
India is, in fact, a late-starter as quite a few countries have special systems to administer large tax payers. The proposal to set up LTUs was announced in the 05-06 Budget, but the rollout was delayed due to the resistance from industry associations.
While Bangalore and the four metros will be covered in the first phase of rollout, cities such as Pune and Hyderabad will be covered in the second phase. Some 83 companies in Bangalore are eligible to join the LTU. The company has to be assessed on income and corporation tax in Bangalore.
It should have paid excise duty of Rs 5 crore and above, or service tax of Rs 5 crore and above or income/corporation of Rs 10 crore or more in FY05. The assessee will be able to address all his tax problems in the LTU.
Official sources said disputes, if any; between the tax payer and revenue authorities will be resolved on one-to-one basis. This will avert indiscriminate issuance of show-cause notices.
|
