ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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ASSAM-In Commemoration of a Peasant Revolt

than any scheme of concessions and incentives. The government, however, continues to harp on concessions for export promotion. Instead of strengthening the exporter, it turns him into a businessman who uses his talent to twist laws to his advantage. The story of section 35B which provides for weighted deduction of expenditure on export promotion needs retelling here. The original section provided a list of eight loosely worded broad heads of expenditure, which led to years of misuse and litigation with the Central Board of Direct Taxes. The list had to be reduced to only three heads last year to prevent further misuse. It is clear that the experience of the new section will repeat the earlier story on a larger scale. Exporters will buy turnover from one another to minimise tax liability and the purpose of linking tax incentives to additional exports will be lost. The new section will thus lead to considerable loss of revenue without achieving the desired results. There is implicit recognition of the possibility of misuse in the stipulation that deduction under this section will not exceed 10 per cent of the tax otherwise payable on income or gains derived from exports.

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