20% SURCHARGE TO BE DEPOSITED IN PMIDF (NOTIFICATION 20-6-11)

DIFFCULT WAYS OF DOING EASY THINGS

                        The state government of Punjab appears to have mastered the art of finding difficult ways of doing easy things. Gone are the days when administrators used to think not only twice but also used to invite comments by issuing draft notifications. Order of the day is first issue ordinance, then convert it into law and if people make hue and cry about it then just quash it or make it optional.

                        Continuing its vendetta with dealers in Punjab, the excise and taxation department has come out with another notification adding some more burden to already crippling trade and industry of Punjab. The notification effective from 20-06-2011, requires additional tax under section 8B under Punjab Vat Act, 2005 popularly known as surcharge @ 10%, to be bifurcated in ratio 0f 80:20, out of which 80% shall go to vat department and 20% shall go to Punjab Municipal Infrastructure Development Fund, which is a fund altogether different from Punjab Municipal Fund and Punjab Infrastructure Development Fund. This fund finds its genesis from Punjab Municipal Infrastructure Development Fund Act 2011 created on 11-04-2011 for a period of 10 years with annual commitment to contribute 200 crore.

Comparative study of PIDF and PMF Act

PMIDF		PMF
S.3(2)	Twenty percent of additional tax levied and collected under Punjab Vat Act 2005, shall be credited direct to the Fund	3(2) ten percent of amount of tax collected shall be credited direct to the fund.
s.5	Twenty percent of amount of additional tax referred to in section 3(2) shall be deposited in the fund, in the manner as may be prescribed”	Section5 (1)Ten percent of tax referred in 3(2) shall be collected by the department of Excise and Taxation in the manner prescribed by that department for collection of that tax (2)The proceeds of the tax collected under 5(1) shall be caused to be deposited by Excise and taxation department direct to the fund in such manner and with in such period as may be prescribed.
s.9(2)(b)	Government can make rules for prescribing the manner in which amount of additional tax u/s 5 is to be collected.
R.6 of PMIDF Rules	The fund under section 3(2) shall be directly credited in the Bank Account of the Director and then shall be transferred to the Bank account of PMIDC through online banking transaction on daily basis”

                        After having discussed the legal provisions of law, one gets a clear understanding that for PMIDF Act Excise and taxation department is not authorized to make rules for collection till date. The amount collected has to be deposited directly to the PMIDF but where has excise and taxation department been authorized to resort to its machinery. The credit to the account of Director local bodies is to be made and then there will be transfer to PMIDC. This can be done after collection also, then why to waste the time and money of the public for a matter which truly relates to internal allocation of government money only. The simple objective of allocating money for municipal infrastructure can be achieved through budgetary allocation also, then why resort to imposing unnecessary burden on the dealers.

It appears that government has nothing to do with real problems of the dealers and instead of providing support and encouragement to the business in Punjab every effort is being made to derail the business of Punjab by occupying them towards government compliances. We may be reminded  that industry is just like a crocodile. Put it in a basket of restrictions and get a bonsai of it or allow it to grow in an ocean of free environment and get a crocodile worth its name.