New Delhi: Government on Tuesday ruled out imposition of wealth tax on agriculture land as the Lok Sabha completed the budgetary exercise in an unusual way with Finance Bill and Demands for Grants for various ministries being passed without debate after Opposition walkout.
Finance Minister P Chidambaram also exempted Railways from payment of service tax for period between July, 1, 2012 (rpt 2012) to October 1, 2012 to avoid burden on the state-owned carrier.
Making a brief statement while moving the Finance Bill for voting, he introduced an amendment on the issue of wealth tax in view of misapprehensions as to whether it will apply to agriculture land.
“There was apprehension that wealth tax was being imposed on agricultural land. Let me make it absolutely clear that the policy of the UPA government is not to impose wealth tax on agriculture land,” he said.
The apprehensions arose on account of judgements following Punjab and Haryana High Court rulings, Chidambaram said, adding he had worked hard yesterday to prepare the amendment and obtain the approval of the President and “the matter should come to an end.”
The passage of the General and Railway budgets was rushed through as the guillotine had to applied to meet the constitutional requirements.
BJP staged walk out over the coal issue, while Left, BJD and AIADMK left the House to protest against passage of important bills without discussion. DMK too walked out demanding removal of the JPC chief P C Chacko.
After the walkout, Speaker Meira Kumar said the passage of crucial bills without debate was being done in a “very difficult condition” and it was “immensely painful” for her.
The Speaker said: “The circumstances are such that we have to dispense with discussion and pass these bills.”
As regards other changes in the Finance Bill, Chidambaram said the government is seeking authorisation to raise customs duty on cashew to 70 per cent with a view to protecting the domestic industry.
“We are taking …a tariff cushion to raise the import duty from 30 per cent to 70 per cent so that, if necessary, we can impose a higher duty on imported cashew,” he said.
Referring to the proposal to impose Commodities Transaction Tax (CTT) on non-agriculture items, he said, “Trading in commodity derivatives will no longer be considered as a speculative transaction.”
The Minister also announced changes in the tax laws to attract foreign investments.
“In order to attract investment in long term infrastructure bond, I propose to amend Section 194(H)C so that foreign currency routed through designated account by NRI in such bonds is deemed to be borrowing in such currency,” the Minister said.
He clarified that PAN requirement and consequently higher withholding tax of 20 per cent will not apply to interest paid to non-resident in respect of investment in long-term infrastructure bonds.
“These amendments will attract more investments in long-term infrastructure,” he said. (PTI)