Our Bureau

Visakhapatnam , March 22

THE small-scale sector, contributing 25 per cent of the industrial production in the country, is being subjected to slow poisoning by successive governments for reasons best known to them and the much-acclaimed budget of Mr Chidambaram is no exception, according to Mr G. Prabhakara Sastry, convener of Tax Law Research Group here.

He was speaking here on Sunday at a seminar on the budget organised by the group. He said amendments relating to the SSI sector would make the sick units sicker. He contended that the proposed enhancement of turnover limit from Rs 3 crore to Rs 4 crore for calculating excise duty would hit the really small units with a turnover of Rs 1-2 crore and only the bigger ones would get the benefit. The former would face closure, he said.

He said there were a number of anomalies in the law relating to mineral oil products. There were many grey areas in the budget, he said, citing the proposed levy of service tax on computer institutions and denial of cenvat credit for jute units.

Mr K. Vijay Kumar, editor of taxindiaonline.com, said the Government in its zeal to bring as many services as possible under the tax net was at times overdoing it. "If you go abroad and have a hair-cut in Paris or London, you may have to pay service tax for it in India," he remarked in a lighter vein.

In response, Dr T.V. Sairam, Chief Commissioner, Excise and Customs, Visakhapatnam zone, observed that the tax system in India was much better than the systems in vogue in the west.

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