Online edition of India's National Newspaper
Friday, Oct 21, 2005
Online edition of India's National Newspaper Friday, Oct 21, 2005 |
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Tamil Nadu
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Chennai
Special Correspondent
CHENNAI: Chief Minister Jayalalithaa has urged Prime Minister Manmohan Singh to take immediate steps to amend Finance Act, 2005 for exempting State Governments and their entities and public sector undertakings (PSUs) from the purview of Banking Cash Transaction Tax (BCTT). In a letter to Dr. Singh on Wednesday, she pointed out that exemption had recently been granted for inter-bank transactions. The BCTT had come into effect on June 1 last and was being levied at the rate of 0.1 per cent of the value of the taxable banking transactions. The Union Finance Minister in his Budget Speech for 2005-2006 had said that he proposed to levy a tax on withdrawal of cash on a single day of over Rs. 10,000 or more from banks at the rate of 0.1 per cent as one of the two anti-tax evasion measures, Ms. Jayalalithaa recalled. "I am at a loss to understand why any office or establishment of the Central Government or the Government of a State is defined as a taxable entity under the BCTT. So cash withdrawal by whatever mode from an account other than Savings Bank Account by the State Government or its entities has become taxable. The reason given for the introduction of BCTT was to unearth black money in the economy," she pointed out. The Chief Minister said any withdrawal from the Consolidated Fund and the Public Account of a State or by PSUs and local bodies was purely administrative in nature. "It is obvious that levy of this tax on cash withdrawals by a State Government and its entities does not have any connection with the stated objective of the BCTT. This kind of tax is totally regressive in nature and will only cause further stress on the finances of the State Governments." Though offices or establishments of the Central Government were also liable to pay this tax, "it goes without saying that this only amounts to collecting revenue from one pocket and putting it in another pocket," she said.
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Other States |
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