New Delhi : In a pre-Budget meeting with the Finance Minister Mrs Nirmala Sitharaman, ASSOCHAM has suggested extending a scheme the ‘Vivad Se Vishwas’ (VSV) for highly regulated sectors like telecom, power, mining, and a dispute resolution scheme for issues related to customs.   

We appreciate the government for the Vivaad se Vishwas scheme which has gone a long way in reducing the long pending litigations and resulted in greater success.   Several infrastructure and service sectors such as Telecom, Power, Mining etc., which were privatized to drive investment and growth are highly regulated/licensed. Hence there are many legacy court cases, often arising from interpretation of regulations/policies. These cases drag on for 10-15 years. Given the condition of imposition of penal rates of interest, penalties, and interest on penalties, by the time these cases are decided, the due amounts may become 5x to 6x of the disputed principal amount, ASSOCHAM President Mr Vineet Agarwal said in his presentation in the pre-Budget meeting.

He suggested VSV-type of a scheme for these sectors ” The settlement of these cases will add some revenue to the government as well as unleash huge positive gain in investor sentiments”, Mr Agarwal said.

Likewise, the chamber has recommended a Dispute Resolution Scheme for Customs. Mr Agarwal said in the Union Budget 2019, the Government had introduced the Legacy Dispute Resolution Scheme to facilitate quick closure of pending disputes under the Central indirect tax laws. This scheme received good response.

”A similar scheme could be introduced for Customs, in order to provide an opportunity to taxpayers to clear past baggage and reduce litigation. This will help the industry in considerably reducing the baggage of litigation and will also help the Government in unlocking the tax dues”.

He has suggested that an exercise be started to examine the definition of industry and infrastructure status as well as Priority Sector Lending so as to bring it in line with the current state of development in India.

He also said that the limit for tax deduction for health insurance products under Section 80D should be further increased. There needs to be a tax deduction for pure term insurance products to encourage a wider section of the population to opt for it. In addition, annuity income earned from pension products should be made tax exempt, the ASSOCHAM presentation pointed out.

In order to pluck the low-hanging fruit, it recommended that the government  capex allocation should focus on projects which are more than 80% complete or at near completion. ” This would mean that the benefits of these projects would start accruing faster”   In addition several such projects may qualify upon completion for monetization to generate additional resources.

He also suggested to provide additional incentive to the businesses fulfilling the ESG commitment. He said, “In view of our focus and commitment in respect of our environment, we should consider encouraging businesses by allowing the higher depreciation or amortisation on capital expenditure; and adoption of technology and change in business model”.