4.

Extension of advance ruling facility for Large Tax payer units under LTU jurisdiction or companies paying more than Rs 5 crore taxes.

Extend advance ruling facility to LTU formation.

While appreciating the move of the Hon. Finance minister towards formation of LTU in the country effective from 1.10.2006, we find it imperative that certain privileges and preferences should be given to the Large tax payers coming under the jurisdiction of the LTU.

It is understood that Central excise and Cenvat rules are amended in order to extend certain preferences and privileges to the LTU formations. However, it is also understood that the LTU policy is not brought into the rule book by legislative changes in the Act. Consequent to introduction of LTU policy by the Government without legislative amendments, it is felt that the true spirit and intention of the Government may not be forthcoming.

For instance, units falling under the jurisdiction of the LTU, as a privileged tax payer would intend the facility of advance ruling in respect of ambiguous issues basically with an intention to avoid forthcoming disputes. In the absence of the provisions of advance ruling under LTU scheme, it cannot be said that tax disputes may not be forthcoming. In fact, advance ruling on critical issues is panaceas for all tax disputes thereby the disputes are totally avoided. Therefore, the advance ruling remedy acts as a dispute avoidance mechanism rather than dispute resolution measure. Accordingly, it is imperative to extend the benefit of advance ruling to the LTU formations.