Union Finance Minister Pranab Mukherjee created a history of sort today by virtually rolling back every new tax he proposed in his March 2012 Union Budget.
In the process, he surpassed his predecessor Yashwant Sinha (BJP) who was termed as the “Roll Back Minister” during the NDA regime.
Mukherjee rolled back not one but almost all controversial proposals in the finance bill today in the Lok Sabha and buckled under the pressures of the Opposition, ruling party members, corporate and businessmen across the board.
Leader of the Opposition in the Rajya Sabha Arun Jaitley jokingly said after Mukherjee’s speech, “ I wonder if he had to do all this why did he bring the Budget for.”
The proposals that Mukherjee withdrew or deferred:
1. Will delay the General Anti-Avoidance Rule (GAAR) until next fiscal 2013/14. Directed the Central board of direct tax not to re-open cases of all Merger and acqvition of Indian companies by foreign MNCs whose assessments have already been completed. But he offered no concessions to Vodafone involved in tax dispute;
2. He rolled back the proposed one percent TDS on transfer of immovable property as the government received various representations. The Finance Bill proposes that every transferee of immovable property (other than agricultural land), at the time of making payment for transfer of the property, shall deduct tax at the rate of 1 percent of such sum. This has been withdrawn completely and will be big boost to the real estate companies and infrastructure;
3. Provide relief to the jewellery sector by withdrawing extra excise duty on jewellery making;
4. halved the capital gains tax for private equity investors to 10 per cent. Earlier this was 20% and had a cascading effect on the share market and other financial market for the past 15 days. Even the FIIs had withdrawn heavily from the Indian markets;
5. Mukherjee also agreed to roll back the norms for arrest of persons involved in violation of Customs Act. Now instead of stringent non-bailable offence, the custom violation will be treated as a bailable offense;
6. A Securities Transaction Tax at the rate of 0.2 per cent will be levied on the sale of unlisted securities, or shares that are not bought or sold on a stock exchange. Mukherjee proposed extending tax exemption on Long Term Capital Gains tax to the sale of unlisted securities that go in for an initial public offer (IPO) to get listed on an stock exchange.
