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FB 2018- 25 PC TAX ON SOME COMPANIES, SHOULD BE FOR OTHER ASSESSEES HAVING TURNOVER UP TO ₹ 250 Crores

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FB 2018- 25 PC TAX ON SOME COMPANIES, SHOULD BE FOR OTHER ASSESSEES HAVING TURNOVER UP TO ₹ 250 Crores
By: CA DEV KUMAR KOTHARI
February 2, 2018
  • Contents

Tax Rates for companies having turnover within prescribed limit:

For assessment year 2018-19 tax rate was prescribed 25% in case of companies whose turnover or gross receipts in the previous year 2015-16 was within ₹ 50 Crores. For this year that is PYE 31.03. 2018 turnover of PYE 2015-16 was considered as base year for applying lower rate of tax. Suppose in PYE 31.03.2016 and PYE 31.03.2018 is higher than ₹ 250 Crore, still  company having turnover within ₹ 50 Crore in PYE 31.03.2015 can avail 25% tax rate for PYE 31.03.2018 that is AY 2018-19.  

Budget proposal:

In FB 2018 proposal is that tax rate will be  25%, in case of companies,  if turnover or gross receipts in the previous year 2016-17 doesn't exceed ₹ 250 Crores.

From Budget Speech of the Finance Minister (with highlights added):

Incentivising micro, small and medium entrepreneurs

150. In the Union Budget, 2017, I had announced the reduction of corporate tax rate to 25% for companies whose turnover was less than  Rs 50 crore in financial year 2015-16. This benefitted 96% of the total companies filing tax returns. Towards fulfilment of my promise to reduce corporate tax rate in a phased manner, I now propose to extend the benefit of this reduced rate of 25% also to companies who have reported turnover up to  Rs 250 crore in the financial year 2016-17. This will benefit the entire class of micro, small and medium enterprises which accounts for almost 99% of companies filing their tax returns. The estimate of revenue forgone due to this measure is  Rs 7,000 crores during the financial year 2018-19. After this, out of about 7 lakh companies filing returns, about 7,000 companies which file returns of income and whose turnover is above  Rs 250 crores will remain in 30% slab. The lower corporate income tax rate for 99% of the companies will leave them with higher investible surplus which in turn will create more jobs.

 Unquote:

Personal promises vis a vis Manifesto of BJP

The FM has stated , in his speech “Towards fulfilment of my promise to reduce corporate tax rate …

One question which now public of India and also BJP party must ask as to,  whether the Government is to run on basis of personal thinking, promises and commitments  of Ministers or Even Officers of Government or they must follow promises of Government and promises made by ruling parties in their manifesto before they came into power?

What about promises made by BJP party in its manifesto announced before last general election? I am not recalling them now and putting into writing, but public is very well aware of the same.

Why basic exemptions and tax rates are not reduced for other assessee?

Why 25 % rate is not prescribed for other entrepreneurs carrying similar business in other forms like proprietary concerns, partnership firms, AOP. BOI , Co-operatives etc.

No intelligible differentia:

When total  turnover or gross receipts  is taken a basis, to prescribe lower rate of tax of 25% we find that there is no intelligible differentia between an individual or partnership firm  or other assessee having turnover not exceeding 50 or 250 crore and a company.

Therefore, the reduced rate of 25% should be applied to all assesses having similar conditions.

Jyadatiyaa of NAMO government:

NAMO SARKAR is in habit of own praise.  अपने मुँह मियाँ मिट्ठू बनना

APNE MUHU MIYA MITHU - To praise one own self. This is to such an extent that even failures of Government on many scores and  aspects, is being shown as if there was success.  For example ,  in recently held  BJP had very detoriation and shown  poor results, in spite of being in power. Still ministers and spokespersons of BJP  are considering  winning situation and as if there is no problem.

However,

Ye jo public hei ye sab janti hei , ye jo public hei.  BJP and NAMO Government  must recall and learn from the very popular following  Hindi  song:

ये जो पब्लिक है - Ye Jo Public Hai (Kishore Kumar, Roti)

Movie/Album: रोटी (1974)
Music By: लक्ष्मीकांत-प्यारेलाल
Lyrics By: आनंद बक्षी
Performed By: किशोर कुमार

ऐ बाबू ये पब्लिक है पब्लिक
ये जो पब्लिक है सब जानती है
पब्लिक है..
अजी अंदर क्या है, अजी बाहर क्या है
ये सब कुछ पहचानती है
पब्लिक है..

ये चाहे तो सर पे बिठा ले, चाहे फेंक दे नीचे
पहले ये पीछे भागे, फिर भागो इसके पीछे
अरे दिल टूटे तो, अरे ये रूठे तो
तौबा कहाँ फिर मानती है
ये जो पब्लिक है...

क्या नेता, क्या अभिनेता, दे जनता को जो धोखा
पल में शोहरत उड़ जाये, ज्यों एक पवन का झौंका
अरे ज़ोर ना करना, अरे शोर ना करना
अपने शहर में शांति है
ये जो पब्लिक है...

हीरे-मोती तुमने छुपाये, कुछ हम लोग न बोले
अब आटा-चावल भी छुपा तो, भूखों ने मुंह खोले
अरे भीख ना मांगे, अरे कर्ज़ ना मांगे
ये अपना हक़ मांगती है
ये जो पब्लिक है...

The public , particularly poor people and middle class has faced many excessiveness  ( jyadatiya) of   NAMO SARKAR. They have suffered on many score. Wherever there is scope of harassment, public is facing harassment by government machinery. Even at legislative levels, provisions government is trying to increase more harassment by making unreasonable provisions and giving more power to public servants to harass public.

The provisions being made in name of curbing black money, are giving more scope of black money to public servants ignoring the fact that tax laws are very complex and even experts ( including judges) have difference of opinion on many complex provisions and even  we find difference of opinion even after the Supreme Court had rendered judgment it can be reviewed by a larger bench.  

Author hopes that NAMO SARKAR will have an introspection, will stop practice of अपने मुँह मियाँ मिट्ठू बनना  and start doing real good for public and avoiding false promises.

 

By: CA DEV KUMAR KOTHARI - February 2, 2018

 

 

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