Financial Daily from THE HINDU group of publications
Wednesday, Mar 02, 2005
Industry & Economy
Industry, trade unhappy over tax on bank cash withdrawals
Chennai , March 1
INDUSTRY and traders associations have expressed dissatisfaction over the Finance Minister's announcement in the Budget to levy tax on cash withdrawals of Rs 10,000 and more from banks.
A senior official in a manufacturing company pointed out that the company engaged over a hundred trucks every day to move the finished product from the factory and the payment had to be made only in currency and not in cheques. For this the company had to withdraw large sumof money daily and it would end up paying a tax on this.
While the proposal to frame a separate legislation for small and medium enterprises is welcome, it is unfortunate that the Budget has not addressed the requirements of tiny enterprises, representatives of the small-scale sector have said.
The Madurai Oil and Oilseeds Association has welcomed the proposal to waive excise duty on edible oil refiners and vanaspati manufacturers.
It has urged the Government to reconsider the proposal to levy tax on cash withdrawals of Rs 10,000 and more from banks. The Industrial Estate Manufacturers' Association, Guindy, has welcomed the proposal to frame a separate legislation for the small-scale industry.
However, the allocation of Rs 175 crore for upgradation of small and medium enterprises was insufficient.
The association has expressed disappointment about the absence of any proposal to set up a regulatory commission on steel prices as promised by the Steel Ministry last year.
The National Confederation of Small Industry feared that the move to lump small and tiny enterprises with small and medium enterprises would prove adverse to the tiny units.
The tiny industries, more than 96 per cent of them involving investments of less than Rs 10 lakh, need a separate financial package for upgradation and credit delivery. But this has not been addressed.
Mr D.E. Ramakrishnan, President, National Confederation of Small Industry, said a financial package, similar to the one proposed for the sugar industry, could have been announced for the small and tiny industries
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