This is with regard to Crosshairs (Moneylife, 22 August 2013) by Sucheta Dalal. She has very rightly lamented the policy of UPA-2 of aggressively hounding legitimate businesses by quoting senior counsel Arvind Datar—“unpredictable, unfair and arbitrary tax system.”
In India, the State is the most litigious of all—either as petitioner or as respondent. The taxation authorities lead the pack. From the assessment stages, income tax, sales tax, trade and entry tax, value added tax, service tax, central excise and customs duty departments are adept in raising hyped-up demands with an eye “to meet the collection targets.” Then, begins the litigation journey! It requires the taxpayer to knock the doors of the departmental appellate authorities to the tribunals, thence to the High Court and, ultimately, the apex Supreme Court.
A selection of the amounts of tax disputes reported of public and private sector is given in the Auditors’ Reports for the year 2012-13. Annual accounts—Indian Oil Corporation Ltd—Rs17,959.53 crore; Shree Renuka Sugars Ltd—Rs.68.91 lakh; Titan Industries Ltd—Rs232.19 crore. There is an urgent need to close these disputes in order to relieve pressures on the judicial system to let it deal with more pressing concerns of the citizens.
Also, Sucheta Dalal has hit the nail on the head on the half baked ‘quick ordinance with minimal (?) public discussion’ conferring sweeping powers to SEBI (“Different Strokes”, Moneylife, 22 August 2013). She rightly points out: “The effectiveness of a statute depends on how well it is implemented.” I entirely agree with her subsequent statements: “Unfortunately, neither SEBI nor any of the other independent regulators modelled on it have really delivered. SEBI is seen as slothful, non-transparent, arrogant and corrupt bureaucracy packed with officials on deputation, looking for their next sinecure. Its senior appointees are on a career extension and have little interest in making a mark or fulfilling their primary mandate of protecting investors and developing markets. They rarely interact with public stakeholders, probably afraid of exposing their sketchy knowledge about markets, financial products and investors’ issues. They get away because there is almost no accountability to the finance ministry, parliament or the people. Very few MPs have either domain knowledge.” The sad truth of the state of affairs has been put down most effectively.
Not that IRDA, the latest regulatory kid on the block, is any better. First, it was embroiled in a spat with SEBI in a turf war on ULIPs (unit-linked insurance plans). Now, it has permitted banks to go ahead with insurance brokerage by giving a go by to the Cobrapost exposé where the main thrust of laundering of black money and KYC (know your customer) norm violations arose from bank employees hawking insurance products as a laundering device. When it comes to the Reserve Bank of India, it had put out a discussion paper on cheque-less banking which had to be moth-balled, as a result of the spirited opposition by Moneylife Foundation.
Who says Sucheta’s, and financially literate peoples’, voices are not heard? The powers that be jolly well sit up and take cognisance, or face the adverse consequences!
Nagesh Kini, by email
This is with regard to “False Advertising & Corporate Governance” by Sucheta Dalal (Moneylife, 5 September 2013). Our government only believes in covering fictions under regulations. As ASCI (Advertising Standards Council of India) has no teeth to punish the wrongdoers, it can only direct them to desist from releasing the advertisements with false claims (that too, only those who have voluntarily subscribed to the Advertising Code). What happens to actual users and consumers who have lost money by buying such products with false claims?
Even the statutory regulators have no power to punish for such false claims or award suitable compensation to the consumer complainant. If s/he wants to claim compensation, it can be availed only from consumer courts, that too only when it falls under ‘deficiency in service’. All such false claimants/ advertisers know that nobody will go through the laborious and time-consuming process of litigation. Hence, there is a free reign for falsehood. No Indian law has even been made effective, so far, in this respect. As far as the corporate social responsibility (CSR) is concerned , it is a mere 2%-3% of the company profits, and for that, too, the corporates manage to frame schemes on paper which only benefit either their own protégées and family members of staff. The consumer interest is never a part of CSR. Consumer is only a ‘milch cow’ for them.
The situation is very grim in the realty sector and the upcoming Real Estate (Regulation and Development) Bill 2013 pending in Parliament will hardly be helpful in its present format.
Mohan Siroya, by email
This is with reference to the letter to the editor by Ramesh Kapadia (Moneylife, 25 July 2013). The problem is mainly in raising of demand for unmatched items and then in adjusting the refund of other years against such demand by sending intimation under
Section 245 of the Income-tax Act.
The unmatched items are in respect of the tax deducted by employer for which the assessee has Form 16 (tax deduction certificate) issued by the employer. But demand notice was issued to the assessee by the income-tax department.
Section 205 of the Income tax Act reads as under: “Bar on direct demand on assessee; Where tax is deductible at the source under the foregoing provisions of this chapter, the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted.”
Hence, as per Section 205, there is a bar on income-tax authorities to call upon the assessee to pay the tax himself to the extent to which tax has been deducted. So issuing a demand notice in respect of the amount of tax already deducted is not authorised by the law and such action is illegal. So there is no question of adjusting any refund against such demand u/s 245. When the Income-tax authority cannot send a demand notice in respect of tax already deducted, there is no question of charging interest. As many of the readers may have come across such problems, I am writing this letter to the editor.
Moneylife is doing a wonderful job of spreading financial literacy through the magazine.
A Soorianarayanan, by email
Unbiased and Genuine
I just bought the three-year subscription to Moneylife magazine and started reading the 22nd August issue. Since I was in office at that time, I just read 3-4 pages. As I lay down on my bed later, there was something which didn’t let me sleep. I picked up my laptop and started reading Moneylife again. It’s 4am now and I have finished reading it. What a marvellous effort you guys are putting together. Thanks for everything (I know I have paid for the same, but still you guys deserve a standing ovation). Once again, thanks for the true, unbiased and genuine work and efforts.
Sunny Arora, by email
Only Term Insurance!
This is with regard to “Will RBI allow banks to sell any insurance product?” by Raj Pradhan. Reserve Bank of India (RBI) should allow banks to sell only term insurance and no other policy. All these banks must pay for the mis-selling done by them. They pocket huge commissions from insurance companies and their relationship managers get huge incentives.
Economic Independence of India?
This is with regard to “India’s misery index persistently higher first time since 1991.” Misery index indicates the deterioration of living conditions of the masses but it does not entirely reflect the miseries people suffer from for want of shelter, food, clothing, healthcare, schooling, etc. Our 67th Independence Day was recently celebrated but the economic independence of the masses is still far off. The way the economy is drifting, one cannot have any hope to achieve this for another 60 years.
This is with regard to “Rescuing rupee: How NRIs can play a positive role” by AK Ramdas. Enjoy NRIs, at the cost of resident Indians! Our entire exports have been bailed out by the depreciating rupee. Why can’t we aim at quality-oriented export instead of depending upon labour arbitrage? Why can’t we have Indian Google, Microsoft, Apple etc. in many fields?
Vinayak Bhimarao Mudholkar
‘Duped by an Illiterate Agent’
This is with regard to “Insurance grievance redress is heavily against the common man: Finance Secretary.” The finance secretary, Rajiv Takru, who is not only literate, but also an eminent economist, was duped by an agent of the Life Insurance Corporation of India. Similarly, although I am a banker, I was duped by an illiterate agent of SBI Life who used to market insurance on behalf of his wife.
S Bhaskara Narayan
This is with regard to “Bajaj Allianz Life refunds Rs30,000: Another Moneylife Helpline success” by Raj Pradhan. Mr Pradhan, congratulations and keep up the good work. In today’s dog eat dog world, Moneylife stands out and does a wonderfully honest job.
Investors read nothing
This is with regard to “NSEL’s warehousing receipts similar to banker’s receipts of Harshad Mehta scam?” I hope you do not regret writing the book after all these years! It would almost seem that they are studying your book minutely and using the same method and tragically successfully! The regulators, it would seem, have not read your book and if they have they have refused to learn any lessons. You have also written for them.
Investors read nothing but seem to think they know everything.