FM hardsells new tax scheme to corporates

Union Finance Minister P Chidambaram on Monday urged the business community to opt for the large taxpayer unit (LTU) due to its many benefits.

The Centre has proposed the formation of LTU, a single window facilitation counter for large entities to pay excise duty, corporate tax, income tax and service tax.

"Under LTU, the filing of returns can be made at a single place irrespective of the location of the units. This is beneficial to large taxpayers with multi-locational units and factories. I promise the business community that LTU will be efficient, modern and a hassle-free system,'' the minister said.

He was speaking at a seminar on 'Formation of LTU in India', organised by the central excise department here.

He pointed out that India was way behind in implementing the LTU. "Considering that Pakistan, Nepal, Sri Lanka and Bangladesh have already established the LTU, we can be called laggards when it comes to paying tax. In fact, we should have implemented the LTU long ago."

He promised the gathering that "if the business community finds that the LTU does not serve the purpose, I will not have second thoughts on abolishing it."

Chidambaram stated that there were 843 large taxpayers in the country of which 96 belonged to Bangalore.

"We intend to start LTUs at Delhi, Mumbai, Chennai, Bangalore and Kolkata in the 2006-07 financial year. I am confident that the business community will find the LTU an easy option," he added.

The minister warned revenue department officials against harassing the business community.

"I know that the business community has to pay 'rents' to officers apart from paying the taxes. Under the LTU, there is no need to pay rent. If I find that any officer is overstepping the limits, the punishment will be severe," he noted.