Softer norms likely for large tax payer units

Finance Minister P Chidambaram today said the revenue department would consider expanding the eligibility criteria for large tax-payer units (LTUs), instead of confining it to entities paying over Rs 5 crore excise and assessed for income tax in Delhi, Mumbai, Kolkata, Chennai and Bangalore.

Based on the current eligibility parameters, 582 top corporates are eligible to opt for the single-window tax payment facility. The eligible entities can confirm their participation by January 10.

Speaking at a roadshow for the launch of LTUs, which will be in place by April 2006, Chidambaram said he did not favour blunt steps like search and seizures. "Taxes must be paid.... I don't believe in blunt measures like search and seizures. Sometimes we have to use blunt instruments," he said.

The LTUs would help avoid litigation as senior officers with assessment expertise would be deputed at the centres which would offer all facilities for payment of corporation tax, excise, customs and service tax.

"Less dispute means greater compliance. The assessment must be of high quality so that disputes are less. What is the use of assessing if the demand goes into a dispute?" he said.

"I promise you that the LTUs will be modern offices and assessment and payment will be through electronic media. Senior officials will assist you... the cost of compliance will also come down." Chidambaram said the geographical reach and eligibility criteria could be extended. Of the 582 large corporate tax-payers, there were 191 entities in Mumbai, 145 in Delhi, 101 in Kolkata, 84 in Chennai and 56 in Bangalore.

Countries like Pakistan, Bangladesh, Sri Lanka, Nepal, the United States, the United Kingdom, the Netherlands and Indonesia already offer such facilities.