Saturday, April 16, 2016

Cement Industry Association prebudget memorandum-crossing the line to ask for policy changes!

In 2012, I had blogged about how prebudget memorandums by professional associations were blatantly self serving

However, the same is true of those circulated by industry associations-of course the very act of a memorandum is to ask for a change-so one should not be surprised. But when the logic of that change is so blatantly self serving, then one is surprised. For example, the Cement manufacturer's association  desire free fly ash as raw material, restriction on participation in e-auctions and making it mandatory for the indirect tax administration body CBEC to reply to their clarifications within 60days OR else have the industry version deemed to be accepted. All these are quite rich from an industry accused of cartelism. The full version of the memorandum is below 

but I have taken the liberty to put extracts in italics, with my comments then.
  • Cement Industry’s initiative of popularizing PPC has helped thermal power plant in overcoming the menace of fly ash. However, what started off as a free offering has now been converted into a revenue stream by certain power plants. This is leading to a situation wherein an innovator is being penalized and a polluter is profiteering. It is high time that cement industry is supplied fly ash ‘free of cost’ on long term basis on the worldwide principle of ‘Polluter pays’ Cement industry wants free fly ash!
  • Spot E-Auction Scheme Under E- auction any entity (irrespective of actual user, trader etc) can participate. It has been experienced that the traders are able to get substantial quantities of coal under E- auction which are then sold to actual consumers at higher margins. This unnecessarily increases the cost of coal for actual consumers. It is suggested that only actual consumers are allowed to participate under E- auction with some mechanism for monitoring which may include self-declaration & stringent action on diversion of coal etc.  Want coal auctions to be restricted to end users, so that they can pay less!
  • It is suggested that a suitable provision may be incorporated in the Rules making it mandatory for the CBEC to give clarification sought for by Association of the industries or an individual assessee on the point within 60 days from the date of such communication. It should also be provided in the Rules that if no communication is issued by the Board within the stipulated period, the interpretation understood by the Association of industry or assessee will prevail upon the department. Insistence on a ‘RTI’ for Government to address policy representations, even though private sector reserves the right not to address shareholder questions!  When even advance rulings reserve the right to avoid answering possible tax evasion questions, then why should a free service have this SLA? 

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