LARGE TAXPEYER UNIT- AN ITRODUTION OF THE CONCEPT: - CA SUDHIR HALAKHANDI
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THIS IS AN ARTICLE WRITTEN BY ME FOR CIRC NEWS LETTER KANPUR
AND I AM SENDING IT FOR THE BENEFIT OF MEMBERS OF CACLUBINDIA.
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There is a system in most of the countries to treat their big taxpayers in a special way and give them extra facilities to fulfill their procedural responsibilities with respect to payment of taxes related procedural matters. Most of the developed European countries have this system. In recent years some of the Asian countries including our neighbors Pakistan, Sri- Lanka, Nepal Bangladesh have adopted this system. In all 13 Asian countries have already adopted this system.
In 2005, the Budget speech of Hon. Finance Minister has a mention of this system. Let us see what he has said at the time regarding LTU: -
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179. As a measure of facilitation, I propose to follow international practice and establish large taxpayer units (LTUs). To begin with, these units will be set up in major cities. I would like to invite large taxpayers, whether of corporate tax or income tax or excise duties or service tax, to participate in the programme and avail of the single window service. For small taxpayers, I propose to set up Help Centres in cooperation with industry associations, professional bodies and NGOs.
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Recently first Indian LTU was set up in Bangalore and there are plans to set up the LTUs in Chhennai, Delhi, Kolkata and Mumbai during the current Financial Year followed by in other cities in the coming years. .
THE CONCEPT OF LTU
Large Taxpayer unit i.e. LTU can be understood as a combined tax office acting as a single window clearance point for the three taxes i.e. Income Tax (personal and corporate), Central Excise and Service Tax in which returns of all these three taxes can be filed and assessed. LTU are administered by the Department of Revenue.
These units are set up to reduce the tax compliance cost of the Big tax payers and give them facility to fulfill their tax responsibilities at single place.
Big and eligible taxpayers who have more than one units working under them at different geographical sites and cities can file their returns at the LTU covering all such units irrespective their locations. The Formalities related to Assessment, rebate, refunds and appeals will also be completed at LTUs.
WHO IS ELIGIBLE
Only big and single PAN based tax payers who are presently assessed to income tax in any one of the five cities Bangalore, Chhennai, Delhi, Kolkata and Mumbai can avail this facility at LTU.
WHO IS BIG TAX PAYERS
To avail the facility of LTU, the criteria are the cash tax paid during the financial year 2004-05 and the units, which have paid: -
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1. Excise duty in cash (account current) of Rs. 5 Crore or More; or
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2. Service Tax in cash (account current) of Rs. 5 Crore or More; or
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3. Advance Income Tax or corporate tax of Rs.10 Crore or More.
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THE MEMBERSHIP TO LTU
The taxpayers eligible for membership of the LTU have to submit a consent form in this respect. The consent form can be e-mailed at ltu@incometaxindia.gov.in or can be presented at: -
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Dy. Secretary
Central Board of Direct Taxes,
Ministry of Finance,
Room Number 243- F
North Block
NEW DELHI.
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The consent form can be faxed at 011-2309 3902 also.
Here one should note that no new registration is required for existing units for membership of the LTU though and filing of “Consent form” is sufficient but it is also stated that new factory/ service provider/registered dealer comes up after the tax payer has opted for LTU, the new registration for the same will be provided by the LTU where the tax payer has taken the membership.
THE FIACILITIES
The major Facilities at LTU are: -
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1.The tax payer will file all his return i.e. Income tax return, Central excise return and Service Tax return to the LTU only i.e. at a single window. After getting membership of the LTU the units will file their quarterly TDS returns at LTU only.
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2. Facility to pay service tax, income tax and central excise at LTU through Internet.
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3. Inter unit transfer (Under the same PAN) of transfer of Cenvat credit, excess payment of service tax and excise duty under the same accounting head will be allowed.
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4. All the rebate and refunds claims will be settled and disposed off within 30 days of their filing.
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5.Digital signature certificate will be issued to the Taxpayer on his request free of cost and after that there will be no requirement to file the paper documents.
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6. The taxpayer can take the help of the “Client executive” appointed at each LTU for tax matters connected with these three taxes. At every LTU a “Client executive” will be appointed and this client executive will help the taxpayers so that they need not to go every department of LTU for help.
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7. The erstwhile jurisdictional field officers would not suo motuvisit or interact with the units having membership of the LTU.
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THE ORANISATION
The officers from the Customs and central excise department / Income tax department will manage the administration of the LTU. A chief commissioner from either of these two departments will head the LTU. The chief commissioner will be assisted by commissioners and additional/joint commissioners who will also be supported by the Deputy / Assistant commissioners and other supervisory and managerial staff.
THE CLIENT EXECUTIVE
At each LTU a “Client executive” is being appointed to assist the taxpayers and this client executive will be an officer of the level of Assistant/ Deputy/ joint/Additional Commissioner.
Here one should note that the “Client executive” shall either be from the central excise department or form the Income tax department and how he will assist the taxpayer on Income tax, central excise and Service tax is an unanswered question.
THE INITIAL RESPONSE
First LTU is established at Bangalore and at the initial stage the units opting for it are around 33 to 40 and they include mostly the IT sector. The next destination it is reported is Chhennai. Further LTUs will be established in Mumbai, Kolkata and Delhi in the current financial year itself and in phased manner this scheme will be introduced in whole country in coming years.
One more problem is attached with LTU and it is laying in the fact that Income tax department and central excise department is already short of officers hence how they will relieve their officers for LTUs. The problem is also reported from the first LTU in Bangalore.
THE SCHEME IS OPTIONAL
It is not mandatory for the eligible units to get the membership of the LTU and if they want they can file the application in this respect. Since in most of the case the corporate office of the taxpayer does not handle the indirect tax work specially central excise of the individual factories/units established separately except filing a single IT return (which is mandatory) hence it is not practically feasible for all the eligible tax payers units to get the membership of LTU.
END
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